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Questions And Answers August 10




Economy—Protection from Global Market Volatility

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Why did he flag labour market reforms as a way to protect New Zealand against global volatility, instead of flagging up-skilling New Zealanders and introducing a tax regime that does not load investment incentives in favour of property rather than the productive and export sectors?

Rt Hon JOHN KEY (Prime Minister): Because I was asked only about labour-market reforms. In relation to those other matters, the Government has changed the tax system to more heavily tax property relative to other investments. In Budget 2010 we increased the effective tax on property around investment borrowing by $1 billion a year. We are upskilling New Zealanders: the Government will be funding around 13,000 more core tertiary places across all sectors in 2012 than we were in 2008.

Hon Phil Goff: Why is it smart to cut KiwiSaver and to introduce labour-market changes that cut wages and conditions in New Zealand, when in the last 2 months a record number of New Zealanders, the highest ever, have fled New Zealand to Australia because superannuation benefits and wages are higher in that country?

Rt Hon JOHN KEY: I think the member makes an interesting point about superannuation. In Australia the payments are actually made by companies. They are at 9 percent and on their way to 13 percent. What the Government did in Budget 2011 reflected the fact that the Government could not afford to be the major contributor to KiwiSaver on an ongoing basis, and that at that point $1 of each $2 in KiwiSaver accounts had been contributed by the Government. Quite simply, we did not want to run as much debt as that. As we know from the financial markets in the last few weeks, running a lot of debt is not a very smart thing to do. We know Labour wants to run more debt, and that is what they will do if they ever become the Government.

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Hon Phil Goff: When youth unemployment is at record proportions and there is a looming skills shortage crisis in New Zealand, why has his Government cut $145 million from skill training in the Budget?

Rt Hon JOHN KEY: As I said, I think, in my earlier answer, we are spending nearly $300 million more in terms of tertiary education in 2012 than in 2008. Again, there is a difference between this Government—and I actually accept that difference—and the previous Labour Government. This Government, when it gives taxpayers’ money for a particular project, expects to see results. When the completion rates are so low that taxpayers’ money is effectively being wasted, then in our view changes have to be made.

Hon Phil Goff: What does he say to Major Campbell Roberts of the Salvation Army, who, in commenting on the sharp cuts that his Government has just announced in its successful training programmes, said “There’s a harsh irony when the political conversation emphasises the need to

prepare beneficiaries for work, yet the training that equips these people to enter the workforce is being slowly killed off.”?

Rt Hon JOHN KEY: I think we would reject that. The Government is putting in more money. We expect results from those training programmes. The other comment I would make to Major Campbell Roberts—as I have commented on numerous occasions, actually—is to say this Government takes its responsibilities towards vulnerable New Zealanders very seriously. That is why through the depths of the global financial crisis we continued to fund all sorts of payments, not the least of them being Working for Families.

Hon Phil Goff: Why has he cut the funding for the Salvation Army job training programmes, when its work outcome and training outcome from those programmes is at a very high level: over 65 percent?

Rt Hon JOHN KEY: I do not have the details of the specific Salvation Army programmes, but if the member wants to put that question down to the appropriate Minister or as a written question, he will be given an answer.

Hon John Boscawen: Given that he has just told the House that it is smart not to run too much debt at a time of financial crisis, why did his Government wait until this year’s Budget to make the changes to KiwiSaver, when they could have been made in two previous Budgets?

Rt Hon JOHN KEY: Because the Government addresses different themes in different Budgets. If we look at Budget 2010, we see that its particular theme was about rebalancing the tax system. Personally, I think we made some good changes there. We also came in with Budget 2009, and I may be wrong, but from memory that would have reflected the changes to KiwiSaver that we had campaigned on in 2008. So in that regard, in two of the three Budgets we have made changes. I personally think that we now have KiwiSaver on to a platform where it is enduring, where it is affordable, and where New Zealanders will participate.

Hon Phil Goff: Given the Prime Minister’s statement of commitment to skills training, why has his Government in the last couple of weeks, without consultation, imposed sharp cuts on the YMCA’s successful job training programme, which its chief executive officer, Ric Odom, says puts the future viability of its programmes at risk?

Rt Hon JOHN KEY: Again, I would say the same thing about that programme as about the Salvation Army programme: I do not have those details to hand. If the member wants to put that question down as a written question or as a primary question, then I am sure we can answer it, or he could give it to the appropriate Minister. But I go back to the earlier point I made, which is that the Government is spending more money in this area and it expects to see value for money.

Hon Phil Goff: When upskilling New Zealanders is core to creating a stronger and more resilient New Zealand economy, why has his Government in the last 2 years cut industry trainee numbers by nearly 31,000 and cut building and construction trainees by over 5,000, or by almost a third, when there is a shortage in the building trades?

Rt Hon JOHN KEY: Because some of those programmes just simply were not delivering results. There were a variety of reasons for that, and again, if the member wants to direct that question to the Minister for Tertiary Education, I am he could give an answer to him, chapter and verse. But I think it is worth making one point, which is that yes, of course skills training is critically important, just as education is. That is why the Government has been committed to everything from national standards to improving the quality of the teaching that we have in this country. But that is just one factor. I tell members that the other thing that makes a difference to delivering jobs and growth in the economy is having a competitive tax system, not one that would have a top personal rate with a yawning great big gap within it, and not one that would apply a capital gains tax—

Mr SPEAKER: I think we are departing a little now from the question.

Hon Phil Goff: When 77,000 young New Zealanders are not in work, education, or training— which is not funny—and there is a desperate skills shortage in New Zealand, why has he not

introduced new programmes to provide skill training for young people, particularly in the trades area, instead of simply relying on bringing people in from overseas while New Zealanders stay out of work?

Rt Hon JOHN KEY: Well, the member is just plain wrong. I mean, the Youth Guarantee is one good example of that. I myself was in Christchurch some months ago, announcing the increase in skills training there specific to the rebuild of Christchurch. What the Government has done is to say New Zealand taxpayers deserve to see value for money, and we will deliver them value for money by focusing on courses that actually have good outcomes.

Hon Phil Goff: You’ve just cut the skills training, and not replaced it.

Rt Hon JOHN KEY: Well, you see, Labour wants to run more debt; Labour wants to waste taxpayers’ dollars. That is what Labour does. Labour has a PhD when it comes to education. Labour has a PhD when it comes to waste. On this side of the House, we deliver results. That is the difference.

Hon Phil Goff: I seek leave of the House to table a document prepared by the Parliamentary Library, showing that $145.885 million has been cut out of skill training.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon Phil Goff: I seek leave of the House to table from the Tertiary Education Commission website performance information dated August 2011 on the number of industry trainees, which shows there has been a reduction of 31,000 in the last 2 years.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon Jim Anderton: Can the Prime Minister tell the House how it reduces New Zealand’s longterm national debt to sell assets that earn hundreds of millions of dollars a year in perpetuity, for a one-off asset sale that realises only a limited amount of cash for the short term?

Rt Hon JOHN KEY: I think the member raises a good point. Firstly, let us understand the facts. The Government intends, it is re-elected as the Government, to purchase about $33 billion worth of assets over the next 5 years, and it will be releasing capital of in the order of $5 billion to $7 billion. So, actually, the Crown balance sheet will rise. Secondly, if one looks at the dividend stream one gets from the current State-owned enterprises, one sees it is about equal, actually, to the funding cost of those State-owned enterprises. Thirdly, the Government intends to retain majority control. By retaining majority control but having outside investors, the Government will, in our view, deliver State-owned enterprises that actually expand their economic activities. If one was to look at the dividend stream that comes from assets that is greater than the normalised dividend, one sees that is when special dividends are paid, and special dividends are paid only when those State-owned enterprises have embarked on, generally, overseas activities, as in the case of Meridian Energy with Southern Hydro, and when the sale of those assets has taken place. As we have seen with Air New Zealand, that is the very reason why that company has operated in the way that it has: because it has had a mixture of ownership. To be honest, the member was a member of a Government that sat around forever and despite the fact that it had lots of surpluses, never ever got up one morning and said “Let’s buy back Air New Zealand.” If it was such a failed model, maybe the member should have done that, rather than become engaged in a failed and hopeless project down on the Hobsonville base that has just been wound up.

Economy—Minister’s Statement

2. Hon JOHN BOSCAWEN (Leader—ACT) to the Minister of Finance: Does he stand by his statement that “this Government is resolved to running responsible fiscal policy and building an internationally competitive economy”?

Hon BILL ENGLISH (Deputy Prime Minister): Yes.

Hon John Boscawen: How does he reconcile his stated intention to run responsible fiscal policy, and build an internationally competitive economy, with the comments of the New Zealand Institute of Economic Research chief executive that New Zealand has a “rotting fiscal core” and that unless New Zealand changes its fiscal strategy, it will have to “borrow and push public debt levels to that of the US or Greece.”?

Hon BILL ENGLISH: Well, I think the chief executive of the New Zealand Institute of Economic Research would agree that the Government has, in the last 3 years, substantially changed its fiscal strategy. We inherited never-ending deficits and never-ending rising debt, and the decisions we have made in the last couple of years have reduced future debt burdens by numbers like $50 billion to $60 billion, compared with the previous Government’s policy. I think the New Zealand Institute of Economic Research is referring to some longer-term issues around demographic change and health care costs, and we share the chief executive’s concern, but we think we are making considered and consistent decisions that will help deal with those challenges.

Hon John Boscawen: Given that his forecasts of lower debt growth are based on GDP growth of 4 percent in 2013 and 3 percent in 2014, at a time of massive global uncertainty and when the world faces a double-dip recession, how can New Zealanders have confidence in his lower-debt projections?

Hon BILL ENGLISH: The forecast could be more or less than what was in the Budget. Just a few weeks ago most people were saying they could be more; maybe by this week they are saying they could be less. The Government is not chasing round every international event and altering its forecast; it is focusing on delivering the expenditure constraint that is so important to getting our deficit down and getting our international debt to stop rising. We are reasonably confident, though, in the growth forecasts, because they are driven by reasonably good demand for our export products and the impact of the Christchurch rebuild.

Stuart Nash: Does Treasury project this country to become more or less indebted to the rest of the world in coming years, under his policy settings?

Hon BILL ENGLISH: It is projecting us to become more indebted, because the Government will continue to run deficits for the next couple of years. But by 2014-15 New Zealand is likely to be one of the few developed countries that has a surplus, so at least Government debt will stop rising at that stage. I am more optimistic than Treasury that our households will be saving and not borrowing.

Economy—Protection from Global Market Volatility

3. CHRIS AUCHINVOLE (National—West Coast - Tasman) to the Minister of Finance: What measures has the Government taken to ensure New Zealand’s financial system is better placed to minimise fallout from current global market volatility?

Hon BILL ENGLISH (Minister of Finance): The Government has moved rapidly through a process of reregulating our financial system. This includes overhauling capital market regulations, establishing the Financial Markets Authority, and other regulations designed to give investors confidence in market rules and enforcement. We have also brought the non-bank deposit takers— that is, the finance companies—under Reserve Bank supervision with minimum capital requirements and credit rating requirements.

Chris Auchinvole: What additional steps has the Reserve Bank taken to strengthen our financial institutions?

Hon BILL ENGLISH: In anticipation of further financial volatility, the Reserve Bank has worked closely with financial institutions and introduced several new measures. For instance, it has introduced a new core funding requirement for banks that requires them to have 70 percent of their funding from stable sources such as domestic retail deposits and long-term wholesale funding. This requirement reduces banks’ dependence on volatile short-term money markets. The Reserve Bank has ensured that if there were another financial crisis, the Reserve Bank can supply temporary liquidity to sound banks, as it did in 2008.

Chris Auchinvole: What policies will the Government adopt in future to ensure that the New Zealand economy and financial system remain sound?

Hon BILL ENGLISH: The Government will continue with its policy of rebalancing this economy away from a reliance on excessive debt and excessive Government spending towards building our growth on investment, exports, and savings. This will allow interest rates to remain lower for longer, which will be a benefit to homeowners and businesses across New Zealand.

Chris Auchinvole: What spending restraint decisions has the Government taken since 2008 to reduce New Zealand’s vulnerability to global uncertainty?

Hon BILL ENGLISH: The Government has been preparing for more difficult times, and those times seem to be arising. Over the last 2 or 3 years we have made considered and consistent decisions, including reprioritising $4 billion of spending in our first two Budgets and $5.2 billion of spending in 2011, with a strong focus on maintaining front-line services at the same time as reducing deficits. We are requiring the public sector to find almost $1 billion in savings over the next 3 years in order to reduce our deficit and get to surplus more quickly.

Health Services—Community and Clinical Support for Changes

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Health: Will he approve changes to hospital and primary health services that do not enjoy community and clinical support?

Hon TONY RYALL (Minister of Health): Virtually all changes to hospital and primary health services are made at a local level by district health boards, primary health organisations, and contracted providers within the increased funding of $1.5 billion the Government has made available over the last 3 years. For a small number of significant changes proposed by district health boards, ministerial approval may be required, and on the few occasions where ministerial approval is required I do take very serious account of clinical and community support.

Grant Robertson: Why is he saying that he will not approve changes to Hāwera Hospital that do not enjoy community support when he was happy to approve the closure of Taihape Hospital, which the community strongly opposed?

Hon TONY RYALL: I think the member would appreciate that in those cases they are two quite different situations. Certainly at Taihape there is quite a range of services that are improving in that community as a result of the changes.

Grant Robertson: Given that he does not want to approve changes that do not have community support, will he step in to ensure that Rangiora people have access to after-hours general practitioner services in their town, which have been cut, despite strong community opposition, including a petition of 8,000 people?

Hon TONY RYALL: I have been to Rangiora and had an opportunity to speak with local people about those issues. As the member will well know, the decision to withdraw from afterhours services was made by the local general practitioners themselves, under a system set up by Labour. However, I can assure the House that we are well aware of that issue in Canterbury and the district health board is now working with the community to ensure a local solution. We have increased Canterbury District Health Board funding by $143 million over the last 3 years.

Grant Robertson: Will he approve the cutting of nurses from front-line service roles in the emergency department of Wanganui Hospital, as proposed by the Whanganui District Health Board,

and described by the Nurses Organisation as a danger to patients, given that he does not want to approve changes that do not have clinical support?

Hon TONY RYALL: What I am aware of, when it comes to the Whanganui District Health Board, is that it has more nurses employed there than when the Government began. It is their responsibility to see how they manage their resources. What we do know in Whanganui is that their funding has increased by about $24 million over the last 3 years, and their increase in the number of nurses is part of the extra 500 doctors and 1,000 extra nurses now employed in our public health service.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think last week you provided some useful interpretation with regard to one of the responses from the Minister of Education and said that her answer, which we could not understand, was clearly yes. I wonder whether you could provide a similar interpretation for that response, or ask the Minister to indicate whether he would approve such a change.

Mr SPEAKER: Forgive me, but it seemed to me that the Minister’s answer indicated it was a local matter, but I may be wrong there. If I am wrong I would certainly ask the Minister to correct that misapprehension. The Minister indicates that that is the case.

Grant Robertson: Will he approve the closure of Lakes District Hospital in Queenstown, in whole or in part, which has been the subject of significant community and clinical opposition given his statement that he does not want to approve changes that do not have community support?

Hon TONY RYALL: There certainly has been a lot of uncertainty around the Lakes District Health Board over some years, and a special National Health Board panel, including clinicians, is leading a process of working through with the Queenstown community to accelerate health care improvements in that area. Decisions will be made by the Southern District Health Board, and we have increased its funding by $71 million over 3 years.

Health Services—Investment in New Technology

5. JONATHAN YOUNG (National—New Plymouth) to the Minister of Health: What reports has he received about further investment in new technology to improve productivity and patient care?

Hon TONY RYALL (Minister of Health): The Government is committed to protecting and growing the public health service. We are investing more into technology to improve productivity and care for patients. Cancer patients in Wellington will soon get better, faster treatment with a new $5 million six-tonne Varian TrueBeam linear accelerator, the first of its kind in Australasia. Treatment is due to begin in October. It will provide more advanced treatment and reduce toxicity for patients. It will be faster, meaning even better access to radiation therapy throughout the Wellington region. This Government has approved 10 new linear accelerators over the past 2½ years.

Jonathan Young: What investment has there been in new technology at Gisborne Hospital?

Hon TONY RYALL: Gisborne Hospital is leading the way with new echocardiography technology. One of the first machines in the country, it produces 3-D heart scans, making it easier for surgeons to treat their patients. It was recently inspected on a tour of the hospital by the local member of Parliament, Mrs Tolley. This is very important for the East Coast as it has very high rates of cardiovascular disease. It is vital that these people get the care they need. We are also putting $12 million into stamping out rheumatic fever, as it can lead to heart disease, which is entirely preventable.

Chris Tremain: What recent investment has there been in new health technology for the benefit of the residents of Napier and Hawke’s Bay?

Hon TONY RYALL: It is more good news. Napier residents needing X-rays will now be seen more quickly in the new digital radiology suite at the Napier Health Centre. The suite opened last week and replaced old equipment that was not up to standard. The new state-of-the-art service will

mean that patients are exposed to less radiation, faster turn-round times, and reduced discomfort. It is also easier for the staff to use. I have to say that now that the Hawke’s Bay District Health Board is out of years of deficit and in a much better financial position, it is able to invest in these sorts of important projects.

Financial Position, Government—Current Position Compared with 2008

6. STUART NASH (Labour) to the Minister of Finance: In what way is New Zealand “better placed to withstand” a financial crisis than 3 years ago given that before he came in to office the Government was running a surplus and core Crown net debt was just 1 percent of GDP and now the Government is running record deficits and net debt is 20 percent of GDP?

Hon BILL ENGLISH (Minister of Finance): The member has a somewhat rosy view of the situation when the Government came into office. In fact, the forecasts published just before the election showed 10 years of deficits and ever-increasing public debt based on the policies of the previous Government. At the time we had mortgage interest rates of over 10 percent, exports actually shrinking, inflation at 5.1 percent, the New Zealand economy having gone into recession well before the global financial crisis, and people losing jobs.

Stuart Nash: With that in mind, is the Crown’s credit rating now on negative outlook, and was this the case when he took office?

Hon BILL ENGLISH: I think it is on negative outlook, and that is remarkably better than the downgrade we would have faced if we had not changed the damaging and wasteful policies of the previous Labour Government.

Stuart Nash: Is it correct that GDP per capita has fallen by 2 percent since his Government came into office?

Hon BILL ENGLISH: I cannot give the member the exact figure, but I can tell him this: if the member looks at the last Budget, he will see a page of tables that show that around 2004-05 this economy went badly off the rails, well before the global financial crisis. Debt blew out, Government spending blew out, and our export sector actually started shrinking. We have had to deal with the legacy of the previous Government’s policies, as well as the global recession. Under the circumstances, we have done reasonably well.

Dr Cam Calder: Which of those problems he noted the Government inherited 3 years ago that left New Zealand poorly positioned to withstand the financial crisis has the Government addressed and fixed?

Hon BILL ENGLISH: We have addressed all of them. We have fixed quite a few of them, but some of them were the result of 10 years of damaging economic policy and they will take 10 years to fix.

Stuart Nash: Has he seen the Government financial statements showing that net debt has risen by $36 billion since he came to office?

Hon BILL ENGLISH: Yes, I have, and if the Government had not imposed some tight spending constraints then that figure would be much worse. I know that the Labour Party has opposed every single decision this Government has made to restrain spending. I am not surprised.

Stuart Nash: Since the facts clearly show that the country’s economic position has deteriorated since his Government took office, when will he present a real plan for the economy like Labour’s, or is his only plan to sell State assets in a falling market?

Hon BILL ENGLISH: I can make this absolute commitment: we will never produce an economic plan like Labour’s.

Road Safety, Young People—Government Actions

7. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Transport: What actions has the Government taken to help lower the road toll among young drivers?

Hon STEVEN JOYCE (Minister of Transport): On Saturday night at midnight the Government introduced a zero blood-alcohol limit for young drivers under 20. Improving the safety of young drivers is a key priority for the Government because they are disproportionately represented in fatal and serious crash statistics. The Government took this action because 15 to 19- year-olds make up around 6 percent of all licensed drivers, but in 2010 they were involved in around 17 percent—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is a slightly unusual thing to do, but I think the question was about what the Government did. I think the Minister started off his reply saying what Parliament has done—

Hon STEVEN JOYCE: No, I said “the Government”.

Hon Trevor Mallard: If the bill was passed, it was not by the Government, it was by the Parliament, and he is not responsible for that.

Mr SPEAKER: If the bill was the result of Government policy and it was a Government bill, I do not think it is unreasonable to say the Government has done it. I have never heard that objection raised previously.

Hon STEVEN JOYCE: In pointing out that the Government introduced the zero blood-alcohol limit for young drivers under 20, I say that it is improving the safety of young drivers—a very big priority for this Government. I notice it was not a priority for the previous Government because it never did a single thing over 9 years, so Parliament did not get the opportunity to make any changes over that period. The Government took this action because 15 to 19-year-olds make up 6 percent of licensed drivers, but in 2010 they were involved in around 17 percent of all serious injury crashes. With a lowered limit, the message to teen drivers from this Government is simple: if they plan on drinking, they should not plan on driving.

Peseta Sam Lotu-Iiga: What else has the Government done to assist in lowering the youth road toll?

Hon STEVEN JOYCE: The Government on 1 August arranged for the minimum driving age to increase from 15 to 16. We have done this because age matters in relation to driving. Drivers who are 16 are more mature and have better judgment on the road. That is reflected in the statistics, which show that a 15-year-old on a restricted licence has a significantly higher accident rate than a 16-year-old in the same circumstances. In addition, this Government is making the restricted licence test much harder, to encourage more supervised practice. Although none of the individual measures the Government is taking is a silver bullet on its own, together they will have a significant impact over time. Again, I would contrast this Government’s approach to road safety with that of the previous Government.

Education, National Standards—School Charters

8. KELVIN DAVIS (Labour) to the Minister of Education: Does she stand by her statement from Question Time of 6 July 2011 that “Initial assessments of 1,445 of this year’s charters indicate that 87 percent were compliant”?

Hon ANNE TOLLEY (Minister of Education): Yes.

Kelvin Davis: What number of schools as at 1 July had chosen to submit their charters without national standards targets, thus making them non-compliant?

Hon ANNE TOLLEY: I do not have that information in front of me. However, I can tell the member that as of today we have received 2,044 out of 2,076 charters from English-medium schools with years 1 to 8 students. This time last year we had received only 1,274 charters. Of those 2,044 received, 1,922 have been analysed and 1,389 are compliant.

Kelvin Davis: Why would a Ministry of Education official write a letter to a school saying: “The charter meets the requirements of the legislation for charters contained in section 61 of the Education Act.” when the school had deliberately left out all reference to the national standards,

including replacing the words “national standards” and “National Administration Guidelines 2A” with the words “New Zealand curriculum”?

Hon ANNE TOLLEY: Mr Speaker—

Hon Trevor Mallard: Literacy problems—literacy problems in the ministry.

Hon ANNE TOLLEY: In fact, there were some problems in the ministry. It was regrettable that a small number of schools received that letter when, in fact, they had not complied. My understanding is that the ministry has now contacted all of those schools and informed them that they were not compliant, and it is working with them to ensure that they are.

Kelvin Davis: Why did it take the principal of Valley School, Roger Goulstone, contacting the Ministry of Education, asking how his charter could be considered compliant when he had deliberately removed all reference to the national standards, before ministry officials realised they had got it wrong?

Hon ANNE TOLLEY: We are very grateful to that principal for actually drawing that to the ministry’s attention because, in fact, we found another couple of schools where the same mistake had been made, and we were able to correct it.

Kelvin Davis: How can the Minister assure the House that her answer to my first supplementary question is accurate, when a glaring error of this sort could be so easily overlooked by her ministry?

Hon ANNE TOLLEY: If the member refers to my answer, he will see I did say: “I am advised”. We discovered a problem, we addressed the problem, and we fixed the problem.

Children, Protection—Government Actions

9. NICKY WAGNER (National) to the Minister for Social Development and Employment: What is the Government doing to improve outcomes for vulnerable children?

Hon PAULA BENNETT (Minister for Social Development and Employment): This Government has a plan for vulnerable children, and has already taken more action on their behalf than this country has seen in decades—for example, in the last Budget we announced a comprehensive support package for children in State care, who are some of the most vulnerable children in New Zealand. Last month I released the Government’s green paper, which will be a catalyst for long-term change.

Nicky Wagner: Has the Minister had any feedback on these changes?

Hon PAULA BENNETT: Yes. There has been significant support from the public and professionals, but a deafening silence from the Opposition. There are two possible reasons why the members opposite were struck dumb last night in the estimates debate, refusing to take even a single call on Vote Social Development, which represents more than 30 percent of all Government spending. Either they completely agree with everything that was in the May Budget for social development, or—

Mr SPEAKER: Forgive me, but I am not sure that whether the Opposition chooses to speak in a debate is a matter for which the Minister is responsible. If the Minister wishes to provoke disorder, it is a pretty effective way to do it. I am not sure that it is very helpful.

Copyright (Infringing File Sharing) Amendment Act—Preparation of Public

10. GARETH HUGHES (Green) to the Minister of Commerce: What steps has the Government taken to prepare the public for the Copyright (Infringing File Sharing) Amendment Act coming into force?

Hon SIMON POWER (Minister of Commerce): Quite a few. On Wednesday next week the Ministry of Economic Development intends to publish an information pack on its website that explains the regime—the wider copyright and internet safety issues. The associated regulations require that this information pack or a link to access it be included with any notices sent under the new regime. I am advised that both rights owners and non-governmental organisations such as InternetNZ have made, or are intending to make, information available to the public about the new

regime. I am also advised that some internet service providers have written to their customers to outline the changes, and I welcome these organisations’ proactive stances. In addition, I note that the new measures have received a lot of coverage in the media, and I have made several press releases—actually, 10—during the course of the development of the legislation.

Gareth Hughes: Given that copyright infringements start counting from tomorrow, why is the Minister launching an information website after the law effectively comes into effect?

Hon SIMON POWER: Because that is the timeliness around the regulation-making process, which I might say has been well signalled for considerable months. There are no surprises about what will emerge on 1 September.

Gareth Hughes: Given that the law comes into effect from tomorrow, why has it been left up to InternetNZ to educate the public or internet service providers about the law and create an educational resource because the Government’s website is coming too late?

Hon SIMON POWER: I would not say that it was left up to InternetNZ. In fact, as I said, I welcome InternetNZ’s enthusiasm and willingness to help with this public education, but, as I have explained, the Government will be taking a very active role in educating the public on the impact of the Act, not to mention the fact that it has received quite a considerable amount of media coverage in recent times.

Gareth Hughes: Has the Government provided any advice or information about the law to holders of accounts with multiple users such as, schools, public libraries, or this Parliament?

Hon SIMON POWER: Other than the extensive amount of information that is already in the public domain, I am not sure whether that specifically has been done. I will check it out for the member.

Gareth Hughes: Has the Minister or the Government provided schools in New Zealand with the information needed to ensure they can continue to operate within the law, given they as account holders will be liable for all the infringing on their networks?

Hon SIMON POWER: Broadly, I believe so, given that these issues have been in the public domain for some considerable period of time.

Gareth Hughes: The question was: “Has the Minister or the Government done anything”. The Minister said that it has been in the media, therefore he does not need to act. Could I ask the question again, Mr Speaker?

Mr SPEAKER: In fairness to the member I will let him ask his question again and I will listen very carefully because I cannot remember his opening words. I am not sure that they were exactly what he just said.

Gareth Hughes: Has the Government or this Minister provided schools with the information needed to ensure they can continue to operate within the law, given they as account holders will be liable for all infringing on their networks?

Hon SIMON POWER: As I said last time, because that was the question that was asked, broadly so, yes, given the information that has been in the media about this issue for some considerable months. That will be added to and refined by way of the specific initiatives that will be launched on, I believe, Wednesday of next week.

Gareth Hughes: What is the Minister’s advice to Unitec, which was quoted in yesterday’s New Zealand Herald as saying that if it was liable for student copyright breaches it might have no option but to discontinue the provision of internet access to all its library users?

Hon SIMON POWER: I do not give legal advice in any capacity, including my ministerial ones, but any organisation that has specific concerns would probably find it worthwhile to read the legislation and go to the Ministry of Economic Development’s website on Wednesday.

Gareth Hughes: What is the Government doing to encourage legal file-sharing or downloading, for example, Netflix?

Hon SIMON POWER: That is a good question because I have no idea what the member is referring to in respect of that second initiative.

Clare Curran: Does he agree that a convergence of the information and communications technology and broadcasting sectors will be crucial in developing new business models that make content more readily available, and illegal downloading unnecessary; if so, what has the Government done to encourage new business models?

Hon SIMON POWER: The last time I looked at the primary question new business models were not exactly within its ambit. What I can say is that there is a lot more certainty in this very difficult area of lawmaking now, and from 1 September, than there has been for all of those months and years prior to that, and under the last Government. I am sure that is the sort of certainty that businesses will look to in order to develop the models that the member refers to.

Gareth Hughes: I raise a point of order, Mr Speaker. I seek your advice on an issue of importance to this House regarding the impact of the new law coming into effect tomorrow, which could leave the Speaker’s office liable for infringing by members of Parliament, by staff, by people on our Wi-Fi internet account—

Mr SPEAKER: This is not a point of order. It is not a matter to do with the order of the House. The member can seek guidance from the Parliamentary Service or the Office of the Clerk, but it is not a point of order.

Gareth Hughes: I raise a point of order, Mr Speaker. I seek your consideration on how your office, which is responsible for the running of Parliamentary Service, and therefore responsible for the running of the Parliament internet connection, will deal with this law.

Mr SPEAKER: That is not a point of order to be dealt with in this House in that manner. The member is perfectly welcome to approach me or my office to seek advice on those sorts of things, but it is not a matter for the order of the House.

Government Procurement—Minister’s Statement

11. CLARE CURRAN (Labour—Dunedin South) to the Minister of Finance: Does he stand by his statement “we don’t actually have a procurement policy. We have a set of assumptions, prejudices, habits and an Auditor-General.”?

Hon BILL ENGLISH (Minister of Finance): Yes. We inherited a set of procurement guidelines that are deficient in a number of areas. In particular, they make it very difficult for people with innovative ideas to do business with the public sector, at a time when we need the participation of the private sector and its good ideas. As a result, we have set about making significant improvements to Government procurement.

Clare Curran: Does he support a procurement policy that requires Government departments and agencies to consider the wider economic impact on the country of their procurement decisions, rather than a narrow financial analysis considering only the cost to themselves; if not, why not?

Hon BILL ENGLISH: We support a procurement policy that will enable us to deliver highquality public services to New Zealanders, and do so at lower cost. That is the Government’s top priority. In respect of its impact on economic development, we share the views of the previous Government—that is, it is not a significant consideration for Government procurement.

Clare Curran: Can he name any trade agreements breached by Labour’s recently announced procurement policy and explain how it breaches those agreements, given that most of New Zealand’s trading partners have internal procurement policies themselves?

Mr SPEAKER: As much as the Minister may like to answer the question, I am not sure that he is responsible for Labour Party policy. Rather than deprive the member of a supplementary question, I invite her to reword her question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a question about whether he could name any breaches. It goes to his mind, not the policy.

Mr SPEAKER: I am prepared to allow the Minister to answer the question. I am sure he will probably quite enjoy answering a question in relation to Labour Party policy.

Hon BILL ENGLISH: I have not bothered looking at the Labour procurement policy, because I have made the same assumption that everyone has—that is, it will be backward-looking and it will signal big spending, more waste, and more debt. Why would I worry about that?

Mr SPEAKER: Since I allowed the Minister to answer the question, maybe he should make just a little bit of reference to trade agreements, because the question asked whether Labour’s policy would breach any trade agreements. It does give the Minister a fair bit of licence, but some mention of trade agreements would perhaps be helpful.

Hon BILL ENGLISH: I have not bothered looking at Labour’s policy, so I cannot comment on whether it would breach trade agreements. But it is likely to breach common sense.

Clare Curran: Does he agree with Business New Zealand Executive Director, Catherine Beard, who said in Monday’s Dominion Post that agencies were tilting the field “slightly against local participation”; if not, why not?

Hon BILL ENGLISH: No. We want to tilt the field in favour of companies who have innovative and forward-looking ideas about how they can work with Government to supply better public services. That is quite different from the approach of the previous Government, which tried to have as little as possible to do with the private sector, and which managed to kill off any innovative thinking in the Public Service with a combination of fear and bullying.

Clare Curran: I seek leave to table a written transcript of Bill English’s speech at the NetHui conference in Auckland on 30 June, and an electronic version of that speech.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Overseas Investment Rules Review—Sale of Forestry Blocks

12. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Minister of Finance: Does he stand by his responses to Oral Question No 6 on Overseas Investment Rules Review on 6 April 2011; if so, what regulations are in place to prevent sensitive forestry land from being sold on the open market into foreign ownership?

Hon BILL ENGLISH (Minister of Finance): Yes, I do stand by my response. In terms of regulations for investment in forestry land, investors must obtain consent to invest in any forestry block greater than 5 hectares as it qualifies as sensitive land under the Overseas Investment Act. Part of that test is that investors must show they are of good character and their investment must be likely to benefit New Zealand. Over the years foreign investment has played a significant role in New Zealand’s economic development, but recently the Government has introduced some extra tests into the regulations to ensure that such investments do benefit New Zealand.

Rahui Katene: What consultation was undertaken with mana whenua before approving the sale of forestry blocks in the Waiau, West Ho, Moonlight, Tolaga, and Merriwa forests for $95 million to the Tiong family of Malaysia?

Hon BILL ENGLISH: My understanding is that at least some of those transactions occurred as private transactions between an existing foreign owner and a new foreign owner, and they followed all the processes. By and large, the assumption the system runs on is that if, for instance, mana whenua have an interest in particular assets, then they should approach the owners as the best way of understanding where the opportunities might arise for them to purchase those assets. The Government introduced regulations last year that mean that those sales have to go through further tests to ensure their benefit to New Zealand.

Rahui Katene: Is he aware of concerns expressed by Te Rūnanga o Ngāti Porou chairman Api Mahuika that prior consultation was not undertaken with iwi about the sale of the five forestry sites in their rohe, and what process will he instigate to address the concerns and establish consultation with iwi as a matter of course?

Hon BILL ENGLISH: I am familiar with the concerns. The Crown has done business with Ngāti Porou and also any number of other iwi on the issues between the iwi and the Crown. It is not really the Crown’s role to protect or enhance the iwi’s commercial interests over and above the way it would protect the commercial interests of anyone else in New Zealand. Once iwi have their own assets and they have their own governance and commercial processes, then fundamentally it is up to them to advance those interests. The Crown does not have a particular obligation, at least in our preliminary thinking, to protect those ongoing commercial interests.

Stuart Nash: If the Minister is genuinely concerned about New Zealanders becoming tenants in our own country, why is he determined to sell shares in our publicly owned energy companies, a significant proportion of which Treasury says will be bought by foreigners?

Hon BILL ENGLISH: One reason is this: while Mr Nash might be happy to have New Zealand indebted up to its neck paying interest to foreigners, we would rather pay dividends to New Zealanders who own those companies if we get the opportunity to do so. That is the choice. I cannot understand why Labour is so worried about foreign ownership of assets and so reckless about foreign ownership of debt.


Manukau City Council (Regulation of Prostitution in Specified Places) Bill—Report-back


1. Hon GEORGE HAWKINS (Labour—Manurewa) to the Chairperson of the Local

Government and Environment Committee: When will the Manukau City Council (Regulation of Prostitution in Specified Places) Bill be reported back to the House?

CHRIS AUCHINVOLE (Chairperson of the Local Government and Environment

Committee): The bill has a reporting-back date of 8 September 2011.

Hon George Hawkins: Has the committee decided to call for further submissions on the Supplementary Order Paper supplied by the Auckland Council?

CHRIS AUCHINVOLE: I understand the Auckland Council has developed a Supplementary Order Paper that it will publicly advertise soon. Any decision to call for submissions on that would be a matter for the committee to consider.

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