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Questions And Answers Sept 6




Earthquakes, Canterbury—Cost to Crown and Cost Impact for Earthquake Commission

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: What is the cost impact for the Earthquake Commission following Friday’s High Court decision, and what now is the total cost to the Crown of the Canterbury earthquakes?

Hon BILL ENGLISH (Minister of Finance): We do not yet know the impact of the High Court decision, but the judgment would be likely to shift some of the costs from private insurers towards the Earthquake Commission, so there are likely to be extra costs for the Government. The important thing is that the judgment does not affect Canterbury residents, as their claims will still be met. The total cost to the Crown of the earthquakes, including the increased Earthquake Commission liability estimate issued last week, is currently around $12.9 billion. That excludes any impact from the court decision.

Dr Russel Norman: Does he recall telling this House on 16 June this year that had the costs of the earthquake been larger, raising an earthquake levy is something he could have looked at, and given that the costs are now in the order of $13 billion or possibly $14 billion, will he now look at it?

Hon BILL ENGLISH: I would distinguish between two sorts of costs to the Government. One is the general Government contribution, for instance, to the purchase of homes in the red zone. Those costs are over and above any insurance claims, and they are being financed by borrowing, because that spreads the cost across all taxpayers. The insurance-related costs, which are the costs that are now looking significantly larger, have always been financed by the Earthquake Commission levy. It is, of course, possible that in the future those levies will increase, because any increase in insurance costs should fall on those who benefit from it, and that means the insured party.

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Dr Russel Norman: Does he accept that his decision not to raise an earthquake levy will, overall, lead to greater levels of Government debt?

Hon BILL ENGLISH: Any Government at any time has the opportunity to put up taxes, which is what the earthquake levy would be. The Government made the decision, which it stands by, that an increase in taxes at the time of a significant earthquake and a recession would not have been helpful for the economy.

Dr Russel Norman: Does he agree with AA Insurance head of corporate affairs Suzanne Walton, who recently said that in light of the earthquake cost blowout, the Government might have to seriously look at the Green Party’s proposal to restock the emergency fund through a levy?

Hon BILL ENGLISH: Again I go back to distinguishing between different costs. The general contribution of the Government to the earthquake recovery is funded through debt. That cost is therefore spread across all New Zealanders. Costs related to insurance, in the Government’s view, should fall on those who are insured. Now that the Earthquake Commission fund is likely to be

cleaned out, of course it is quite possible that Earthquake Commission levies will be considerably higher, and those would be borne by homeowners.

Dr Russel Norman: Is he aware that the Christchurch City Council is raising a 1.76 percent earthquake levy on ratepayers, and is it not a cruel paradox that the very people least able to pay for the levy—the ratepayers of Christchurch—will have to pay one when the rest of us will not?

Hon BILL ENGLISH: The rest of us are contributing. There is a Government fund of $5.5 billion, and all of that $5.5 billion will ultimately be met by the taxpayer. The Government is working closely with the Christchurch City Council to look at how to achieve fair sharing of the costs between the council and the Government. We will continue those discussions, because decisions have not been made, but certainly part of our consideration is the ability of Christchurch ratepayers to pay.

Hon John Boscawen: Would the Government be more or less able to fund the earthquake recovery if Government spending as a proportion of GDP had been reduced to 2005 levels of 29 percent over the last three Budgets, as ACT proposed last month?

Hon BILL ENGLISH: We would be more able to pay.

Hon John Boscawen: How many more billion-dollar increases in the cost of rebuilding Christchurch will it take for this Government to realise the need to reduce Government spending as a proportion of GDP to avoid New Zealand becoming the next Greece, Ireland, or Portugal?

Hon BILL ENGLISH: We would hope there are not too many more multibillion-dollar additional costs as a result of the earthquake. The Government has been working to strike a balance between getting New Zealand in shape to deal with external shocks, on the one hand, which means controlling our debt and getting our deficits down, and, on the other hand, meeting the very real costs of the earthquake and the recession, and, to the extent that it is possible, protecting the most vulnerable through that period.

Economy, Stimulus—Government Policies

2. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: What steps has the Government taken to build a more competitive, export-focused economy?

Hon BILL ENGLISH (Minister of Finance): The Government has taken a number of steps, including getting control of Government debt and laying out a track to return to surplus faster. We have undertaken the largest tax reform in 25 years, invested heavily in productive infrastructure, managed the economy responsibly, and made the public sector more efficient. If re-elected in November, the Government will also extend the mixed-ownership model to four energy Stateowned enterprises, and reduce its shareholding in Air New Zealand.

Peseta Sam Lotu-Iiga: How will the mixed-ownership model be positive for both taxpayers and New Zealand savers?

Hon BILL ENGLISH: It will be a win-win. New Zealanders who are now starting to save for the first time in a decade will get the opportunity to invest in good New Zealand companies, and the Government will get access to between $5 billion and $7 billion to buy new assets, such as the rolling-out of ultra-fast broadband and schools and hospitals, without having to borrow from overseas lenders and increase our debt. At the same time the Government will retain a 51 percent control of these five State-owned enterprises, using the same model as that used regarding Air New Zealand and the Port of Tauranga Ltd.

Hon David Cunliffe: Given that New Zealand is currently enjoying a 37-year record in export prices, why is his Government still running a current account deficit, why is the unemployment rate 6.5 percent, and why is he racking up the biggest Government deficit in New Zealand’s entire history?

Hon BILL ENGLISH: Because we are still recovering from the severe damage inflicted on this economy by 9 years of a Labour Government.

Peseta Sam Lotu-Iiga: How will the companies in the mixed-ownership programme remain firmly in New Zealand control?

Hon BILL ENGLISH: In the first place, the Government will retain at least 51 percent control on behalf of all New Zealanders, and New Zealanders will be at the front of the queue for shares. We would expect that the combination of keen Kiwi mums and dads, KiwiSaver funds, Crown financial institutions, and other New Zealand investment managers will mean that New Zealanders will own at least 85 to 90 percent of these companies.

Hon John Boscawen: How can the Minister credibly argue that the Government is getting debt under control, when the deficit to the year ended June 2011 would have been over $10 billion excluding the effect of the Christchurch earthquake; and does he agree that if he really wanted to create a more competitive and export-orientated economy, he would take meaningful steps to reduce Government borrowing and Government expenditure, to take the pressure off our overvalued exchange rate and to make our industries and our employers more competitive?

Hon BILL ENGLISH: The member’s analysis of the economy is correct. Under the previous Government the economy was dominated by construction and financial services in Government— all of which were far too much funded by debt. The Government took a number of decisions in Budget 2011 to achieve just what the member has said, although we are going about it in a more balanced and incremental way than perhaps that member’s party would like.

Peseta Sam Lotu-Iiga: What reports has the Minister seen that support the Government’s plans to offer New Zealanders a minority shareholding in these companies?

Hon BILL ENGLISH: I have seen a number of reports that support our policy. Tower Investments chief executive, Sam Stubbs, who manages funds on behalf of thousands of New Zealanders, said last week that in fact Tower Investments will be selling overseas shares in order to invest in these State-owned enterprises. I notice also that iwi leaders’ spokesperson Mr Tuku Morgan confirmed that iwi would be long-term investors in these companies, for the benefit of future generations.


3. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “New Zealand simply can’t afford a future where 20 percent of our workforce does not have the skills necessary for modern jobs”?

Hon STEVEN JOYCE (Minister of Transport) on behalf of the Prime Minister: Absolutely. That is why this Government has increased the output of industry training by 14 percent since 2008, that is why we have created 16,500 more full-time places across the tertiary sector since 2008, and that is why we have introduced the Youth Guarantee, which will provide 7,500 places next year. That is why we are establishing 21 trade academies—a number double, in an announcement made only today by the education Minister—and that is why we have more than trebled the number of people participating in level 1 and 2 courses with embedded literacy and numeracy in just the last 3 years.

Hon Phil Goff: Is it not actually true that the number of people in industry-based skills training has dropped by 31,000 under this Government’s watch and that the number of apprenticeships has declined, particularly in the area of building and construction where those skills are desperately needed to rebuild Christchurch?

Hon STEVEN JOYCE: What has actually happened is the Government is no longer funding imaginary trainees like the previous Government did. In 2008 more than 96,000 people—in fact, 96,831 people—were listed and were funded by the previous Government as being in industry training where they did not achieve a single credit. In 2009, which was the last year before we changed the rules, more than 100,000 people were funded to do industry training and did not achieve a single credit. In fact, across those 2 years there were 44,000 people who were tax-payer

funded in the settings made by Labour who were there for 2 years and did not achieve a single credit. That is not industry training. That is imaginary training.

Hon Phil Goff: Why has he not acted on the advice given to him by the Tertiary Education Commission in March of this year to double the amount of funding going into training building and construction workers, to overcome a massive skills shortage, perhaps using some of the money— the $145 million—that he cut out of industry training in the Budget this year?

Hon STEVEN JOYCE: I point out to the member that in Budget 2011 we made available $48 million more for industry training and for trades-related training in polytechnics. Those numbers are growing and considerable places are still available. On top of that, we announced $55 million for job opportunities placements with the Ministry of Social Development and employers, to subsidise people into industry training for trades-related training. They are all available now. If there is anybody interested in taking up trades training opportunities, there are hundreds and thousands of those available right now for trades training in Christchurch.

Hon Phil Goff: In view of the fact that we have a very high rate of young people who are unemployed in New Zealand alongside a skills shortage, why does he not pay an incentive, such as the unemployment benefit to young people who are currently unemployed, that would go to the employer, on the basis that it makes a hell of a lot more sense to pay the employer to train a young person in lifelong skills than to have that person rot on the dole?

Hon STEVEN JOYCE: Well, in fact we do exactly that with the Skills for Growth programme, and the Job Opps with Training programme makes subsidies of $5,000 available for employers for exactly that thing. I have seen other suggestions from other parties about how we could improve industry training. I can tell the member opposite that we are already doing pretty much all of them.

Hon Phil Goff: Does he agree with the Canterbury Employment and Skills Board chairman, Carl Davidson, that rebuilding Christchurch would take as long as 15 years because of the shortage of skilled labour in that city?

Hon STEVEN JOYCE: I can tell the member that the Minister for Tertiary Education was meeting trades trainers in Christchurch yesterday, and he spoke with a number of them on the training that is going on at the moment. I can tell the member that trades-related training for institutes of technology and polytechnics is up 2½ thousand since April 20 this year; that the numbers in industry training are increasing steadily, as well; and that as businesses get more confidence in terms of the construction work coming through, I am reliably informed that they will take up trainees at an increasing rate.

Hon Phil Goff: When he launched the Kia Ora Mai training programme 2 years ago and said that that would raise the skills of 10,000 service industry workers in time for the Rugby World Cup why, 3 days out from the Rugby World Cup, has he achieved only 10 percent of that number?

Hon STEVEN JOYCE: I think it is important to say that these are demand-based programmes making the places available. It is important that the demand has the opportunity to be met. But the point is that this Government has made thousands more places available in tertiary training and there is no shortage of places available right now.

Surgery, Elective—Average Annual Increase in Discharges

4. TIM MACINDOE (National—Hamilton West) to the Minister of Health: What was the average annual increase in elective discharges from 2000/2001 to 2007/2008, and how does this compare to the average annual increase in elective discharges over the last three financial years?

Hon TONY RYALL (Minister of Health): Official reports from the Ministry of Health advise that the average annual growth in elective discharges over the 7 years 2000-2001 to 2007-2008 was 1,432 a year. This was less than the population growth over the same period, meaning there was cut in access—[Interruption]

Mr SPEAKER: I apologise to the Minister, and I apologise to the House. My hearing is terrible today—a bug has got into my ears. I can hear clearly when there is not a lot of noise, but when there

was a high level of interjection I found I could not hear any of the numbers the Minister was giving. As the question was from a National backbencher, it is reasonable that he should be able to hear the answer too. I think the level of interjection was just unreasonable. I ask the Hon Tony Ryall whether he would not mind starting his answer again for me please, and I want to hear it.

Hon TONY RYALL: Official reports from the Ministry of Health advise that the average annual growth in elective discharges over the years 2000-2001 to 2007-2008 was 1,432 a year. This was less than the population growth over the same period, meaning there was a cut in access to elective surgery. Over the last 3 years the average annual growth in patients benefiting from elective treatment has risen by an average of 9,000 a year. This is an annual increase of over six times that of the previous Government.

Tim Macindoe: What does this record increase in elective surgery mean for patients?

Hon TONY RYALL: Well, this outstanding performance by district health boards means that many more people are getting the care they need to have a better quality of life. It means an extra 500 patients a week—for example, an extra 23,000 people aged 65 and over have had operations for things like hip replacements and cataracts, and there has been an extra 4,900 operations to fix ear, nose, and throat conditions. This has been delivered as part of the Government’s $1.5 billion investment of new money into health over 3 years, and the Government would like to thank the many doctors, nurses, and other health professionals who have delivered this fantastic result for New Zealand patients.

Grant Robertson: I seek leave of the House to table the September 2008 case-weighted discharge monitoring report that shows that over the term of the last Labour Government there was a 38.6 percent increase in case-weighted surgery.

Mr SPEAKER: The source?

Grant Robertson: The Ministry of Health. [Interruption]

Mr SPEAKER: Not good enough. Senior members of the House know that when points of order are being heard they do not interject, and they should not. 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.

State-owned Assets, Sales—Ownership of Shares

5. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in relation to part-privatisation of State-owned assets that “there will be some wholesale investors from overseas who will want to buy a little bit of these shares”?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes. New Zealanders will be at the front of the queue and will have substantial capacity to invest, but we expect there will be some interest from wholesale investors overseas. That will help ensure that we get good value for taxpayers’ money, but the amount left for overseas investors is likely to be small.

Hon Phil Goff: Why did the attendees at the recent National Party conference totally disbelieve their Minister of Finance when he made that same claim?

Hon BILL ENGLISH: They did not.

Hon Phil Goff: The newspaper was wrong, was it?

Mr SPEAKER: Order!

Hon Phil Goff: What restriction, if any, will there be on those buying shares in State assets from onselling those shares to foreign investors?

Hon BILL ENGLISH: As I pointed out on the occasion the member is referring to, the Government does not intend to bring in ongoing selling restrictions, because if we are going to have a market, we may as well have a market. But I point out to the member that in the last 4 or 5 years there has been a trend towards greater New Zealand ownership of the New Zealand Exchange and less foreign ownership. In the case of the Port of Tauranga, which is under mixed ownership, New

Zealand’s ownership proportion of the Port of Tauranga is growing. We believe that with the success of the Government’s policies encouraging New Zealanders to save, New Zealanders will want to buy these shares and they will hold on to them.

Hon Phil Goff: When there is no restriction at all on people onselling the whole 49 percent of those shares to foreign investors, how can he make the claim that 85 to 90 percent of those shares will be in Kiwi hands long term, or is that just wishful thinking?

Hon BILL ENGLISH: We believe that New Zealanders will retain the shares. That is the track record of the last substantial float directly to New Zealanders. As I pointed out, with New Zealanders now saving more, there is a trend towards New Zealanders buying back the foreign ownership of shares.

Amy Adams: What recent evidence has he seen of strong local demand for domestic assets?

Hon BILL ENGLISH: There was an example just last week. Air New Zealand, which was set up as a mixed-ownership company by the previous Labour Government and has operated in that way for—

Hon Trevor Mallard: No, no—rescued. Rescued when it was a private company that went broke.

Hon BILL ENGLISH: Well, I presume the Labour Government knew what it was doing. I presume the Labour Government knew it was setting up Air New Zealand as mixed ownership. It raised $150 million of 5-year bonds from the local market. There was obviously very strong demand. There was no need to sell through a public pool because there was such strong demand for Air New Zealand bonds. We believe there to be the same kind of strong demand for Air New Zealand shares.

Hon Phil Goff: Is he prepared to give an absolute guarantee that a future National Government would not sell 100 percent of the shares in any State-owned asset, and would that guarantee be as reliable as the Prime Minister’s promise that “We will not be increasing GST.”, and the other one; that the Government share going into KiwiSaver would remain intact?

Hon BILL ENGLISH: The Government is doing exactly what it said it would do. Before the last election the National Opposition said that it would retain all State assets and that it would not sell any until or unless it had a mandate from the New Zealand public to do so. In this election campaign we are campaigning on the mixed-ownership model, and New Zealanders will have the opportunity to vote on a very clear proposition. As part of that we have guaranteed that the Government will retain 51 percent ownership.

Hon Phil Goff: Does he stand by his earlier statement that dividends from the State-owned assets that will be sold, or part sold, helped pay for social services such as health care, and does it follow that if he is selling half of the shares in those companies, then half of the dividends—which, the previous financial year, would have been $800 million, and the last financial year $900 million—will no longer be available for that purpose?

Hon BILL ENGLISH: Certainly, of the $800 million that the member refers to in the last year, about half of it will not be available again, because it consists of the proceeds of the asset swap that was done between Meridian Energy and Genesis Energy, which effectively released $500 million to the Government. Of course spending will be tight over the next 3 or 4 years, because we are still trying to get hold of the rapid upsurge in spending that occurred under the last Government.

Afghanistan, Bamiyan Provincial Reconstruction Team Base—United States Personnel

6. KEITH LOCKE (Green) to the Minister of Defence: Was he briefed as to the presence of United States personnel at the Provincial Reconstruction Team base in Bamiyan and their duties; if so, what are the duties of the United States personnel at Bamiyan?

Hon Dr WAYNE MAPP (Minister of Defence): I am well aware of the presence of the United States personnel at the provincial reconstruction team base in Bamian as, in fact, I have seen some of them at the base on the two occasions on which I have visited. As Mr Vernon Small noted in the

Dominion Post last Friday, this is, in fact, no secret. A number of personnel from other countries also currently use the base, including Malaysia, which has the largest contingent; the United States; and the European police contingent. Singapore has been a partner in the past. In relation to the second part of his question, United States personnel are involved in many different duties, ranging from supporting military operations through to Department of State personnel supporting aid and infrastructure projects and civilian contractors involved in local facilities maintenance.

Keith Locke: Prior to the recent articles of Vernon Small, did the New Zealand Defence Force ask media it facilitated going to Bamian not to report the presence of United States personnel and their role; if so, why?

Hon Dr WAYNE MAPP: The answer to that is no.

Keith Locke: Are any New Zealand Defence Force personnel at Bamian required to report to United States personnel?

Hon Dr WAYNE MAPP: New Zealand Defence Force personnel are accountable to the New Zealand Defence Force and our command system, and that is exactly what I would expect.

Keith Locke: I raise a point of order, Mr Speaker. The Minister said that the New Zealand Defence Force reports to New Zealand command, but the Minister did not answer my—

Mr SPEAKER: If the Minister’s answer was not no, then the Minister had better correct my understanding of his answer.

Hon Dr WAYNE MAPP: I would also add that there is obviously a certain sharing of information between New Zealand and the United States, but the accountability is, in fact, to the New Zealand Defence Force.

Keith Locke: Are the United States personnel based at Bamian collecting intelligence to help the United States fight the wider war in Afghanistan?

Hon Dr WAYNE MAPP: The NATO International Security Assistance Force mission is, in fact, a coalition operation, and clearly all the partners are engaged in sharing information relevant to the overall operation.

Keith Locke: Does the Minister not think that this conflicts with the public relations defence force statement back on 15 July 2003 that the provincial reconstruction team in Afghanistan is “not going to war”, and that its “focus … is on reconstruction”?

Hon Dr WAYNE MAPP: No, I do not think there is a conflict.

Keith Locke: I seek leave to table chapter 17, headed “Bamiyan”, of Nicky Hager’s Other People’s Wars, which is subtitled “Public relations vs reality at the Kiwi base”.

Mr SPEAKER: Leave is sought to table that chapter from Nicky Hager’s book. Is there any objection? There is objection.

Children, Welfare—Policy Priorities

7. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he stand by all his answers to Oral Question No 1 on 16 August 2011?

Hon PAULA BENNETT (Minister for Social Development and Employment) on behalf of the Prime Minister: Of course.

Hon Annette King: Given his statement in Parliament on 16 August that the report from Every Child Counts—a report that estimated the cost of poor child outcomes at $6 billion per year—was rubbish, what is his estimation of the actual cost of child poverty in New Zealand?

Hon PAULA BENNETT: In the context of the Prime Minister’s statement that it was rubbish, it was quite clear that he was saying that six of the key indicators were not available. So the ranking becomes kind of relative. Two of the ratings used—the indicators—were wrong, so that is the context of his making that statement.

Mr SPEAKER: I invite the Hon Annette King to repeat her question. It was a very interesting answer, but I am not sure that it was actually an answer to the question asked.

Hon Annette King: Given his statement in Parliament on 16 August that the report from Every Child Counts was rubbish—a report that estimated the cost of poor child outcomes at $6 billion per year—what is his estimation of the actual cost of child poverty in New Zealand?

Hon PAULA BENNETT: It is entirely appropriate to put context around the Prime Minister’s statement that the report was rubbish. The member has gone on to make an assumption as to why he made that comment—that it was about the $6 billion—whereas his comment was made in the context of the fact that six of the key indicators were not available, two of the figures used for the indicators were wrong, and the report did not include Government spending, such as spending on health and other social investments.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think you got it right last time when the supplementary question was asked.

Mr SPEAKER: With respect, I think that the Minister did clear up misunderstanding with that answer, because she pointed out in more detail that the Prime Minister’s dismissal of the report, or his description of the report, was not related specifically to the cost. It was not the cost that he was arguing was rubbish; it was other aspects of the report that he was questioning, and that is a perfectly fair answer. It would seem that the Minister is not disputing the cost side of it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although you interpret the answer as the Minister not disputing the costs, it was a very specific question about the cost, which the Minister did not refer to. Normally in this House I think we have an arrangement where Ministers say if they do not dispute it.

Mr SPEAKER: I invite the member to look at the Hansard. I seem to recollect the member referring to the cost not being what the Prime Minister was disputing. I accept that my hearing is not great today at all, but I believe I heard that, and that is why I think the second answer was a better explanation and a reasonable answer.

Hon Annette King: In light of the report from Every Child Counts, which estimates the cost of poor child outcomes in New Zealand at $6 billion per year, what is his estimation of the actual cost of child poverty in New Zealand?

Hon PAULA BENNETT: In all fairness, there are a number of reports, a number of evaluations, and a number of estimates going on, which are discussing whether we have a problem, its magnitude, and what the actual cost of that might be. That is both commendable and actually predictable for this point in the election cycle. Members of this side of the House are not getting into an argument as to whether we have a problem. We think we do. Hence we are putting such a massive investment into children in this country.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although, again, I respect your interpretation of the supplementary answer before this one, I think I might have just been proven right. You indicated that the Minister had not disputed the figure. She was asked on this particular occasion “if the figure was not right, what was it?”. I thought it was clear that she was now disputing it.

Mr SPEAKER: The member makes a perfectly reasonable point. If I recollect the question correctly, it was actually a pretty precise question. It contained no criticism of anything the Prime Minister had said; it just asked, if I recollect correctly, what the Government’s current estimate of that cost was. I invite the member to repeat her question in case I have it wrong.

Hon Annette King: In light of the report from Every Child Counts, which estimated the cost of poor child outcomes at $6 billion per year, what is his estimation on the actual cost of child poverty in New Zealand?

Hon PAULA BENNETT: The point I am making is that there has been a number of reports over the last 12 months in particular. That is both commendable and quite predictable at this point of an election cycle. There is merit in the statement that there is child poverty, and that is why this Government is actually putting in the investment, particularly investment in the early years, which matter most.

Hon Trevor Mallard: I raise a point of order, Mr Speaker.

Mr SPEAKER: I can anticipate the member’s point of order, but there does not seem much point in pursuing the matter, because it appears that the Prime Minister does not have an estimate— at least the Minister answering on behalf of the Prime Minister does not.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Again, going back two questions, it might appear that way, but when a direct question is asked, if the Prime Minister does not have an estimate, then I think he is obliged to say so, not just waffle around the edge of it.

Mr SPEAKER: It is—[Interruption] Does the member wish to speak to the point of order?

Hon PAULA BENNETT: If you would like further clarification, I am quite happy to give it.

Mr SPEAKER: The question asked what the Prime Minister estimated the cost of child poverty to be given that the figure in the report being referred to was $6 billion, from memory. If the Minister can help clarify that, so that the House can make progress, it would be helpful.

Hon PAULA BENNETT: My point is that there have been a number of reports and they actually go from a low figure to a relatively high figure. I do not have those numbers in front of me, and I am not prepared to just pick one out.

Hon Annette King: Does he stand by the statement in the Government’s green paper on vulnerable children that the Government will ensure ongoing research and evaluation to identify vulnerable children and to ensure interventions are effective?

Hon PAULA BENNETT: Yes. Not a lot of that work has been done, particularly in the last 10 years, so we are having to pick up evaluations that have not been done as to which children are vulnerable, where they are, and what programmes are effective. We have put a number of initiatives in place. The Minister of Health and the Minister of Education in particular are focusing on those early years, as is my own department. There are positive behaviour programmes and Family Start, just to name a couple of examples. But there are a lot more as well.

Hon Annette King: In light of that answer, why is the Growing Up in New Zealand multidisciplinary study, which produced its first report last year—which the Minister for Social Development and Employment acknowledged showed that those on lower incomes are not accessing the services and help they need—having its funding cut by his Government; and does it not make a mockery out of his claim that policies should be evidence-based when he cuts the very ability to gather such evidence?

Hon PAULA BENNETT: I do not have the actual number in front of me, but I know that millions of dollars are going into the Growing Up campaign. When Labour left office it had not fully funded it through to subsequent years. It had set it up but not actually funded it going forward. This Government has put forward literally millions more into it, and that funding is going in.

Public Transport, Auckland—Commuter Rail Network

8. NIKKI KAYE (National—Auckland Central) to the Minister of Transport: What progress has the Government made on improving Auckland’s commuter rail network?

Hon STEVEN JOYCE (Minister of Transport): It has made good progress. Last Thursday the Government and Auckland Council agreed to a funding and ownership arrangement that will dramatically increase the number of electric trains able to be purchased. The deal, which includes an additional grant of up to $90 million from the Crown, means that 57 three-car trains will be able to be purchased, which is 50 percent more than the 38 trains planned for previously by the Auckland Regional Council. This means that the entire fleet of trains on the three lines in Auckland will be electric. Having an all-electric fleet will result in significant operational savings, helping to reduce the previously identified operational deficit. A contract for the purchase of the new trains will be signed at the end of this month, with the new trains arriving progressively from 2013.

Nikki Kaye: What are the advantages to Aucklanders from this deal?

Hon STEVEN JOYCE: There are many. Aucklanders will have a brand new electric train fleet on all three lines, thanks to the Government making an additional grant of up to $90 million to

ensure Auckland transport can take advantage of the current favourable purchase conditions. Commuter rail is an increasingly important way for Aucklanders to get to work, and this package will complete a massive $1.6 billion Government-funded upgrade of Auckland’s network. It is very important to note that these rail upgrades are all being completed without recourse to the 10c a litre regional fuel tax planned for Auckland by the tax-hungry previous Labour Government. I would like to thank the mayor and his council for their constructive engagement on this issue.

Phil Twyford: Can he point to one major initiative for Auckland rail that was not planned for, and committed to, by the last Labour Government?

Hon STEVEN JOYCE: Well, actually, if the member had been paying attention, he would realise the half-billion-dollar electrification was to be paid for by the 10c a litre regional fuel tax, as was the $500 million investment in trains. This Government has done it much more cost-effectively, and done it without a 10c a litre regional fuel tax for Auckland.

Phil Twyford: Will he confirm that the following achievements were all planned for, and committed to, by the last Labour Government: the upgrade and extension of the existing metropolitan rail network, the electrification of the rail network, the purchase of the new passenger rolling stock, the investment in new and upgraded rail stations in Newmarket, New Lynn, and Grafton, the reopening of the Onehunga branch line, and the building of the Manukau rail line?

Hon STEVEN JOYCE: The answer to that question from the member is, on the first one, yes. The second, third, and fourth projects were all unfunded by the previous Government, unless one counts the regional fuel tax, and the answer in relation to the fifth and sixth projects is no on both occasions.

State-owned Assets, Sales—Ownership of Shares

9. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: If he expects at least 85 to 90 percent of the State-owned assets he intends to privatise would remain in New Zealand’s ownership, including the Crown’s holding, what percent of the shares he plans to sell would be bought by foreign buyers?

Hon BILL ENGLISH (Minister of Finance): It is hard to say, because the percentage acquired by overseas buyers will depend on demand from local investors. We expect the demand from local investors will be strong between households, KiwiSaver funds, Crown financial institutions, and other funds to have the capacity to buy and hold most, or all, of the stock offered if they choose to do so. Moreover, many local investors are likely to take a buy-and-hold approach. For this reason, we expect that the portion eventually bought by overseas bidders is likely to be small, but, as I said, we cannot say for sure what it would be.

Hon David Cunliffe: If, by his own admission, it is 10 to 15 percent of the total and he is selling only half, is that not 20 to 30 percent of what is actually sold?

Hon BILL ENGLISH: Well, it is a bit like the member counting the number of people who are not voting for David Cunliffe in the Labour caucus, is it not? Of course, mathematically that is possible, but when the member puts it that way it makes me realise that the 85 to 90 percent may be too conservative.

Hon David Cunliffe: Has “Minister 2 Percent” reassessed the business case for asset sales in light of the increased $900 million in dividends, excluding Genesis, which is yet to report; and can he confirm that this recent increase in the dividend stream would be lost to the New Zealand taxpayer if his sale programme goes ahead?

Hon BILL ENGLISH: No, I cannot. The Government would be the 51 percent owner, so the Government would receive 51 percent of the dividends. The $900 million figure that the member quotes includes a one-off payment associated with the asset swap in the South Island, as do a lot of the previous dividend figures that he quotes. In fact, the underlying dividend is only about $380 million.

David Bennett: What successful examples of firms operating mixed-ownership models has he seen?

Hon BILL ENGLISH: I have already mentioned Air New Zealand, which has operated as a mixed-ownership company for some years, because it was set up that way by the previous Labour Government. Another similar case is the Port of Tauranga, which is 55 percent owned by the Bay of Plenty Regional Council and which has experienced, in recent years, a growing proportion of New Zealand ownership because it is a well-run and profitable company. Its share price has almost doubled in value over the past 3 years, making it close to the best-performing stock on the New Zealand Exchange. The Government would expect that if these companies are floated, they will also be high-performing stocks on the New Zealand Exchange.

Hon David Cunliffe: Given that the carnage of international sharemarkets has seen New Zealand’s listed energy stocks fall by 20 percent already this year, and given that is a number the Minister is well acquainted with, has he revised downwards the expected proceeds of selling Genesis, Meridian Energy, and Mighty River Power; if so, by how much?

Hon BILL ENGLISH: I think the volatility in those sharemarkets underlines the wisdom of the Government’s decision, which that member has opposed, to borrow billions of dollars and invest New Zealanders’ money on those foreign sharemarkets through the Superannuation Fund. With regard to guesses about the funds that might flow from a float, Treasury made a best estimate sometime ago and the Government would want to make the best of conditions at the time, but no, we have not revised that estimate.

Hon David Cunliffe: How much lower would equity markets have to plummet before the Government suspended its asset sales programme, or would it sell at any price because it is driven by ideology, not value for taxpayers?

Hon BILL ENGLISH: The Government is not driven by ideology in this case. In this case it wants to provide opportunities for New Zealand savers to invest and to source capital to invest in hospitals, schools, and broadband, so we do not have to borrow it from foreign lenders and pay them interest.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has not addressed the question, which asked by how much lower would equity markets have to fall before—

Mr SPEAKER: Yes, but if the member had stopped his question at that point, it would have been fine, but he went on to talk about whether it was driven by something or ideology and the Minister quite appropriately answered that part of the question, at least in his judgment.

Trades Academies—Christchurch

10. NICKY WAGNER (National) to the Minister of Education: What recent announcements has she made regarding trades academies?

Hon ANNE TOLLEY (Minister of Education): Great news. I am pleased to inform the House that this Government is doubling the number of new trades academies. In this year’s Budget, we promised another five new academies; we are now doubling that to 10. With the current eight and the three that are already scheduled to open next year, this will bring the total number of trades academies in New Zealand to 21. In addition to this, we announced yesterday that we are trebling the number of places at the Canterbury Tertiary College from 148 to 550. This is keeping even more 16 and 17 year-olds engaged in education and practical skills training who would otherwise be at risk of dropping out of the system.

Nicky Wagner: Where will the new trades academies be?

Hon ANNE TOLLEY: This is quite a long answer. They are spread around the country. The 10 new trades academies that will open during 2012 are based in Nelson-Tasman, west Auckland, Manurewa, central Otago, and Taumarunui, as well as trades academies led by the Universal College of Learning covering Manawatū, Horowhenua, Wairarapa, and Whanganui, the National Trade Academy in Christchurch, Tāmaki College, Kelston Girls’ College, and The Correspondence

School. This is on top of those new trades academies already announced for Hawke’s Bay and the East Coast, Taranaki, and the West Coast. By 2014, 12,500 places will be available—

Hon David Parker: I raise a point of order, Mr Speaker. You have previously ruled in this House that we are not allowed to table press releases. I suggest that the answer is tantamount to reading one out. It is just a listing of each of these—[Interruption]. It is a serious point of order. Can we get around rulings as to the filing of press releases just by reading them out in answers?

Mr SPEAKER: Members are entitled to ask questions they choose so long as they are in order. The question was in order and it did ask for that information. I would have stopped the Minister had she made any disparaging comments about any other parties at all, but she was actually delivering the information sought by the questioner. I think, though, we did hear probably sufficient in the answer, t because it was going on for quite a while.

Carol Beaumont: Will increasing the number of young people in trades academies translate into greater numbers of apprenticeships without providing employers with greater financial certainty and confidence to commit to employing an apprentice; if so, how?

Hon ANNE TOLLEY: The answer to that is yes, and in talking to students and their tutors at the Christchurch Polytechnic Institute of Technology yesterday, the feedback they are getting from employers is that these students having come through the trades academies are much better prepared to go into the workforce, and employers they are working with are coming to the Christchurch Polytechnic Institute of Technology in order to get those apprentices first before going out to the broader community.

Brendon Burns: Given that the House heard again earlier today that 30,000 jobs are needed to rebuild Canterbury, and given we have 10,000 18 to 24-year-olds alone not in work or training in Canterbury, why are only a few hundred net new skill training places being funded for our region this year?

Hon ANNE TOLLEY: I would have to check that member’s figures, but what I can say is that this Government is concerned that too many young people have been dropping out of school for too long, and that is why we are delivering on our promises and providing more places. We have announced a considerable package in Christchurch to focus on training young people in those necessary skills—part of that was the announcement yesterday. Labour promised to fix this problem back in 2003—

Mr SPEAKER: We do not need to go down that track. The member asked pretty specifically about a certain numbers of places in Canterbury but I think we heard quite a sufficient answer.

Hydro-electricity Dams, Waitaki River—Sale by Meridian Energy to Genesis Energy

11. Hon DAVID PARKER (Labour) to the Acting Minister of Energy and Resources: Does she stand by the Government’s decision to require Meridian Energy to sell some of its hydroelectricity dams on the Waitaki River to Genesis Energy, and how have the proceeds of the sale been used?

Hon HEKIA PARATA (Acting Minister of Energy and Resources): Tēnā koe, Mr Speaker. To the first part of the question, yes, and to the second part of the question, that is a matter of responsibility for the Minister for State Owned Enterprises. But the Minister of Finance has already referred to it in a couple of his answers this afternoon, and my understanding is that a special dividend of around $520 million was returned to the Crown.

Hon David Parker: Could steps like the requirement to sell those assets from Meridian Energy to Genesis Energy have been taken if Meridian Energy and Genesis Energy had been in partial private ownership; if so, how would the Government have achieved that?

Hon HEKIA PARATA: That is not the situation we have, and speculating on what might happen under what is proposed does not seem to me to be a reasonable question.

Hon David Parker: Is the Minister then now giving notice to anyone considering buying shares in these companies if they are sold that National might, for market reasons, intervene, with repercussions on the value of shares?

Hon Craig Foss: It’s a finance question.

Hon David Parker: It is an energy question.


Hon David Parker: Is the Minister then now admitting that following the privatisation of shares in Meridian Energy and Genesis Energy, the Government’s ability to intervene in the market in order to get better prices is to be constrained?

Hon HEKIA PARATA: No. [Interruption]

Mr SPEAKER: I want to hear the question.

Hon David Parker: Given that following the privatisation of the shares, the Crown would have fewer options for controlling excess electricity prices, why does the Minister dismiss the concerns of Grey Power that her Government’s privatisation plans would lead to higher power prices?

Hon HEKIA PARATA: First of all, those suppositions are incorrect. But if I may, I will refer the member to the consumer switching statistics, which have doubled from the end of 2009 to July this year in terms of the number of consumers who have switched companies to find a more competitive power price for themselves. I think that Grey Power will find that is very helpful to its members.

Offenders—Rehabilitation and Reduction in Reoffending

12. JONATHAN YOUNG (National—New Plymouth) to the Minister of Corrections: What reports has she received about efforts to cut re-offending rates and rehabilitate offenders?

Hon JUDITH COLLINS (Minister of Corrections): I am pleased to report that the Department of Corrections is making significant progress in its efforts to reduce reoffending. Over the last 3 years there has been a 159 percent increase in the number of New Zealand Qualifications Authority qualifications achieved by prisoners. In the last financial year 711 national certificates were awarded to prisoners, compared with 495 in the previous year and just 275 in 2008-09. The qualifications include certificates in horticulture, building, construction, mechanical engineering, and crane operation. National certificates are real qualifications that will help prisoners to get real jobs when they are released from prison.

Jonathan Young: In what other areas are prisoners receiving training?

Hon JUDITH COLLINS: Over the last financial year prisoners engaged in employment training have achieved a further 2,000 qualifications. This includes trade certificates, vocational driving licences, and first aid certificates. The department is also teaching prisoners to read and write at the same time as they are in work training. Forty-six employment structures have been upskilled to provide this training, which has so far benefited 600 prisoners. In the next few months the department will also be opening new workshops at Christchurch Men’s Prison. This will see a further 130 prisoners undertake trade training in areas where there are likely to be major skills shortages as we move towards rebuilding Christchurch. All good news.


Railway Workshops, Petition—Request for Submissions

1. CLARE CURRAN (Labour—Dunedin South) to the Chairperson of the Transport and

Industrial Relations Committee: Has he requested any submissions of evidence about the petition to the Transport and Industrial Relations Committee signed by nearly 14,000 people calling on the Government to retain the Hillside and Woburn workshops?

DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee): I have not requested any submissions on this petition.

Clare Curran: Have no—

Mr SPEAKER: I must hear this supplementary question.

Clare Curran: Did the committee consider asking for submissions?

Mr SPEAKER: That is not the kind of question that can be asked of the chair, because were that to be the case, it would be a decision of the committee.


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