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Questions and answers - Feb 28

(uncorrected transcript—subject to correction and further editing)




Government Financial Position—Government Debt

1. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What reports has he received on Government debt?

Hon BILL ENGLISH (Minister of Finance): Net Government debt has increased from $6 billion in 2008 to $50 billion at the end of 2011, and is forecast to grow by another $25 billion to $75 billion at its peak in 5 years’ time. The Government is confident that its plans to stop debt rising and start reducing it will mean that Government net debt will peak at $75 billion and start falling.

Maggie Barry: What steps has the Government taken to responsibly manage its finances and reduce the build-up in debt?

Hon BILL ENGLISH: Given the scale of increase in the Government’s net debt, it is important that we take decisive steps to slow the rate of increase and stop it increasing. We have committed to a faster return to surplus in 2014-15, so that we can stop the increase in public debt, reprioritised $9 billion of spending over the last three Budgets, and committed to selling minority stakes in some State-owned assets, which will raise between $5 billion and $7 billion over the next 3 to 5 years, so that we do not have to drive that Government debt even higher than its $75 billion peak.

Maggie Barry: Why is it important to keep Government debt under control?

Hon BILL ENGLISH: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I apologise to the Minister, but I do want to hear the answer, and I am sure the House does.

Hon BILL ENGLISH: You only need to watch TV any night of the week currently to see the impacts of excessive debt on some of our communities. The best reason to get on top of debt is to protect our most vulnerable, because our most vulnerable are most dependent on sustained support from the Government, and Governments with too much debt cannot sustain support for their most vulnerable.

Rt Hon Winston Peters: Given that the Minister’s service in his tenure as Minister of Finance has led to these unparalleled, disastrous results—

Hon Dr Nick Smith: Here’s the big spender.

Rt Hon Winston Peters: No, we had a surplus, son. We had a surplus.

Mr SPEAKER: Order!

Rt Hon Winston Peters: Remember?

Mr SPEAKER: Order! The member will resume his seat.

Rt Hon Winston Peters: Yes; thank you.

Mr SPEAKER: I am on my feet, I say to all members. But I should point out to the right honourable gentleman that inserting his opinion into questions is not actually within the Standing

Orders. The reason why that question elicited an interjection was that questions should ask questions, not express the member’s view about whether something was disastrous or not.

Rt Hon Winston Peters: It is a locative situation, sir. The thing speaks for itself, for goodness sake!

Mr SPEAKER: The member will just ask his question.

Rt Hon Winston Peters: Does the Minister of Finance think it is a moot point that his time as Minister of Finance has seen the most disastrous economic outcome in this country’s history, and if not, why has he not long ago resigned?

Hon BILL ENGLISH: I know that the member—[Interruption]

Hon Trevor Mallard: I raise a point of order, Mr Speaker. As someone yourself approaching the age range of the Rt Hon Winston Peters, I think you will find, as I did, the offensive comments about older people from Paula Bennett just very, very objectionable.

Mr SPEAKER: Forgive me—I was so focused on the question being asked that I did not even hear what was said. If the member said anything offensive, then I will ask her to withdraw. If it was not offensive, I will take the member’s word for it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I rise to say that I do not take offence at that. I am happy to challenge her to a 100-yard race any day of the week.

Mr SPEAKER: Order! The House should just take a deep breath. If the Hon Bill English remembers the question that was asked, he may now answer it.

Hon BILL ENGLISH: I am pleased that the member shares our concern about the level of debt, and I will look forward to his support for the measures the Government takes to prevent that debt rising to excessive levels.

Maggie Barry: Has the Minister seen any reports of alternative approaches to managing debt?

Hon BILL ENGLISH: I have heard reports that indicate that other political parties do not believe that it should be managed at all. In fact, they are proposing that the Government should not sell shares in some assets, because they would rather go to volatile international financial markets and borrow billions more, paying interest to overseas lenders rather than dividends to New Zealanders.

Hon David Parker: Did the Minister say, following his election in 2008, that in New Zealand “We have room to respond. This is the rainy day that Government has been saving up for.”, and when he said that, had he inherited in New Zealand amongst the lowest Government debt in the OECD?

Hon BILL ENGLISH: The problem with what we inherited was that that level of debt was unsustainable, because Government expenditure was rising very rapidly—

Mr SPEAKER: Order! The member’s question was quite specific in the first part of the question. Admittedly, there were two parts to the question, but it would be helpful if the answer really addressed at least one part of the question. If the Minister did not hear the question, I invite the Hon David Parker to repeat it.

Hon David Parker: Did the Minister say, following his election in 2008, that in New Zealand “We have room to respond. This is the rainy day that Government has been saving up for.”, and when he said that, had he inherited in New Zealand amongst the lowest Government debt in the OECD?

Hon BILL ENGLISH: Yes, I did say that, and that is why I am surprised that the new version of the Labour Party has no particular concern about debt at all.

Welfare Reforms—Availability of Jobs

2. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement in relation to the Government’s welfare reforms announced yesterday that “… there are plenty of jobs out there for people if they look really hard”; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes, I stand by my full statement, which was: “… it’s worth pointing out that in all of the changes we are making, it is about people, if they can, being work ready. If they don’t get a job, if there isn’t a job there for them, then nothing changes in terms of their entitlements. But there are plenty of jobs out there for people if they look really hard. Now obviously not for every single person … but people do find work, and the economy is constantly creating new jobs …”.

Metiria Turei: Why is his Government intent on forcing single parents with little babies as young as 12 months old to abandon their children and compete with the 150,000 New Zealanders who are already desperately looking for work?

Rt Hon JOHN KEY: Firstly, I think it is worth pointing out what the Government’s proposed changes are when it comes to women on the domestic purposes benefit—that is, full-time worktesting when the youngest child is 14, and part-time work-testing when the youngest child is 5. The only requirements for a mother to go back to work when the youngest child is 1 would be in the event that the child is born while the mother is already on the domestic purposes benefit, of which last year there were over 4,000. Why do we think it is better for them to go to work? Well, if you look at the system that has been in place now through a number of Governments, you see that that system supports high levels of income for people in work. Let us take somebody who works 20 hours a week and leaves the domestic purposes benefit. They get the minimum family tax credit, which is $22,204 a year, and on top of that they get the in-work tax credit, which is $3,120 a year— all of which adds up to about $25,300 a year for 20 hours. The domestic purposes benefit for that person would be $15,000. That household will be considerably better off. This Government is also investing $130 million in support for those mothers, whether it is in retraining or in childcare facilities.

Metiria Turei: What kind of guarantee can the Prime Minister give to parents who are forced to abandon their children under the work-testing regime, in terms of efficient quality childcare, given the Government’s $400 million cuts to early childhood education?

Rt Hon JOHN KEY: The member has made a number of mistakes in her question, so let me take this moment to correct her. For a start off, when National became the Government at the end of 2008 expenditure on early childhood education in this country was approximately $800 million a year. This year it is $1.4 billion—that is a $600-million-a-year increase. I think it is also worth pointing out that a large proportion of New Zealand women with children do go to work, and they go to work and rely on the childcare facilities that are in place right across the country, and in fact I do not think it is right or fair to accuse those women of abandoning their children. What they are doing is trying to support their home.

Metiria Turei: Has the Prime Minister looked at the last Ministry of Social Development analysis of the last work-testing regime that showed that young children were put at risk of being abandoned, left alone at home, left alone with other children, or left in the hands of unsuitable carers, and what guarantee can he give that children will not be put in that situation under the current work-testing regime?

Rt Hon JOHN KEY: As I said earlier, the Government is investing an enormous amount of money in childcare facilities and supporting, amongst other things, 20 free hours’ care and a whole bunch of other systems that enable people to actually go to work. If the member is making the case that for this specific group, which is quite small in nature, that is abandonment, then the member is making the case that every New Zealand mother or father is abandoning their child when they go to childcare, and frankly, if that is the case, the member is speaking rubbish.

Jacinda Ardern: Does he plan to evaluate his Government’s Job Summit in light of the National Employment Indicator figures released today that show there are fewer jobs now than when the summit was held, and almost 40,000 fewer jobs since he took office?

Rt Hon JOHN KEY: I do not have those numbers to hand, but let me take the opportunity to update the member if she is concerned about whether there are jobs for people to go to. The ANZ

jobs report for January showed there were jobs on offer in every region of this country. There were 30,000 jobs there. If you go and have a look at Work and Income, they receive 1,300 to 1,500 vacancies a week and on average they have 3,500 jobs on offer. Last year 80,000 people went off a benefit and into work. In the last 2 years under the household labour force survey—

Mr SPEAKER: Order!

Rt Hon Winston Peters: Where are—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am not aware that the Prime Minister said anything objectionable in his answer. He was answering a question very factually, which you have repeatedly required Ministers to do. He certainly was not—

Mr SPEAKER: Order! The honourable Leader of the House does not need to make that interjection. The Prime Minister, in opening his answers, did not actually have the information, the figures, the member was referring to in her question and went on to offer perfectly reasonable information that he did have and that is why I allowed it to go on for some time, but there is a limit to how long an answer that is not directly answering the question should go on, and that is why I intervened.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think the Prime Minister was being polite, because the member was misleading the House with that question.

Mr SPEAKER: Order! The honourable Leader of the House knows that he must not make that kind of allegation under a point of order. Members are honourable members and the figures can be disputed by the Minister answering, but no other member under a point of order can question the accuracy of what a member in this House says.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think we do need to go a bit further. The member did source her quote—

Mr SPEAKER: Order! No, we are not going to debate this matter by way of point of order. That is totally out of order. We have got into this trouble because it was a spurious point of order raised by the honourable Leader of the House, and we are not going to go any further down that path.

Rt Hon Winston Peters: Remembering his May 2010 statement—170,000 new jobs would be created by 2015; that is, 34,000 a year—where, then, are all these new jobs when fewer than 14,000 were created in 2011, according to Statistics New Zealand, or was he talking about Australia?

Rt Hon JOHN KEY: If one looks at the household labour force survey alone, 62,000 new jobs were created over the last 2 years. As I said, there are 30,000 jobs currently, in the ANZ survey, on offer at the moment. If one looks at the number of people who went off benefits and into work last year, there were 80,000.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I specifically referred him to the latest figures from Statistics New Zealand of 13,945—that is dramatically less than 34,000 a year— and he is quoting from a whole lot of other pieces of paper, none of which are to do with Statistics New Zealand.

Rt Hon JOHN KEY: The household labour force survey is put together by Statistics New Zealand.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear the Rt Hon Winston Peters.

Rt Hon Winston Peters: Statistics New Zealand reported that 13,945—

Mr SPEAKER: Order! We are not going to debate this matter further by way of point of order. The member asked a question where he inserted what he alleged to be information from Statistics New Zealand. The Prime Minister answered the question, likewise using information from Statistics New Zealand, and that is the end of the matter. There is nothing further to pursue by way of points of order.

Rt Hon Winston Peters: I seek leave to table those papers.

Mr SPEAKER: No, we do not table stuff that is already available to members via Statistics New Zealand.

Metiria Turei: How does the Prime Minister reconcile the advice of his Chief Science Advisor, Sir Peter Gluckman, that early and intensive support for vulnerable children and their families is critical for their long-term success, with his policy of coercion, forcing sole parents into low-paid, insecure work and, thereby, abandoning their children to the care of others?

Rt Hon JOHN KEY: Well, let us take the simple example I gave the member earlier—that is, somebody who goes into 20 hours’ work a week, or more. Because of the structure of Working for Families, that means that their income in that household is $25,000 a year minimum, and the person on the domestic purposes benefit would be getting $15,000. If you add to that the fact that the Government is providing enormous support around these families and individuals in terms of retraining and help, I personally think it is actually helping those families to give them the assistance, to give them the training, to give them the childcare facilities, and to actually make sure that they get an opportunity to fill their lives. And if anyone thinks that that is going to come through a lifetime on welfare, then they should go all the way back to the architect of the welfare system, Michael Joseph Savage, whose exact words were: “Welfare will never be an armchair ride to prosperity.”

Rt Hon Winston Peters: Could the Prime Minister tell the country which set of figures does he believe: the 13,945 new jobs created in 2011 according to Statistics New Zealand, or the household labour force survey that he said reported 63,000 new jobs being created in the last 2 years? Which of those two figures does he expect the country to believe?

Rt Hon JOHN KEY: Well, for a start, I said 62,000, and I am not questioning the member on the other; I am simply saying the household labour force survey quite clearly shows that 62,000 jobs were created in the last 2 years.

Metiria Turei: Can the Prime Minister assure this House that his work-testing regime of sole parents of very young babies—as young as 12 months—will not put a single child at risk of harm or abuse or neglect?

Rt Hon JOHN KEY: What I can say is, firstly, it is important to understand that anybody who is required under the new system to be available for work is literally that—needs to be available for work. If there is not a job, then there are no changes to their benefit entitlements. Secondly, no one can ever have 100 percent confidence in the system, because from Kaitāia to Bluff there are many, many, many households who rely on the quality of early childhood facilities, or caregivers, or others to support them. I think we all know that the system is not perfect, but there is no reason to believe it would be any different for those potentially up to 4,000 mothers from what it is for the hundreds of thousands of others across the country who rely on the system.

Metiria Turei: Will the Prime Minister commit to abandoning the work-testing regime if there is any evidence that shows that any child—even one child—is harmed as a result of the coercion of sole parents into work?

Rt Hon JOHN KEY: What I will give a commitment to is ensuring that, as far as the Government can, the policies and legislation that this Government is responsible for do the best to protect every New Zealand child. That is not something that should be applied to one group of New Zealand parents and not to others. That is my expectation, as Prime Minister, of every parent in this country. But for the member to argue that somehow the 4,800 mothers—largely teenage mothers— who last year had another baby on the domestic purposes benefit are somehow different as far as the expectations the Government would have for any other mother or father in the country is just plain wrong.

Metiria Turei: I seek leave to table two documents. The first is the Ministry of Social Development’s 2001 evaluation of the work-testing regime from the 1999 reform showing that children were put at risk.

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.

Metiria Turei: I raise a point of order, Mr Speaker. My apologies. I just want to get some clarification. I was going to seek leave to table a document from the Ministry of Social Development showing benefit numbers. Is that a publicly available document under the rules such that it would not be able to be tabled?

Mr SPEAKER: If it is from the Ministry of Social Development, if it is a document that is readily available, yes. We do not waste time in the House on that. But for the first document the member sought leave, leave has been granted.


3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Is he confident that Landcorp’s shareholding Ministers’ letter of expectation is being adhered to, when Landcorp helped facilitate the sale of New Zealand land to foreigners?

Rt Hon JOHN KEY: Yes.

David Shearer: Were he or his Ministers aware that Landcorp had entered into a management agreement with Shanghai Pengxin in September last year?

Rt Hon JOHN KEY: I was not, but the Minister may have been.

David Shearer: How can he have confidence in the Minister of Foreign Affairs, when he is unavailable for comment on the restructure of his ministry, unavailable for comment on the situation in Syria, and unavailable for comment on his stolen emails, which included comments about relations with China and the location of air force planes?

Rt Hon JOHN KEY: I am glad the member is not playing 8gotcha politics, as he has not got anyone yet. Here is Mr McCully’s statement on the restructure of the Ministry of Foreign Affairs and Trade. Here is Mr McCully’s statement on Syria. Quite frankly, the Minister comments where he believes it necessary.

David Shearer: Is the Prime Minister showing us these statements because he is unaware of where Mr McCully might be?

Rt Hon John Key: OK, you got me; I don’t know where he is most of the time, but that is just the way it goes. I do not have GPS on the bloke, I do not follow him around the world, and I do sign off on his overseas travel but weeks before he goes. But he is Foreign Minister, and I do expect him to be overseas an awful lot.

David Shearer: Has he received—

Mr SPEAKER: Order! I apologise to the Leader of the Opposition. I must be able to hear the question; a little more reasonableness, please.

David Shearer: Has he received an assurance that there has been no security breach or revealing of items contrary to the national interest as the result of the hacking of Murray McCully’s emails; if so, does he expect Murray McCully to give that assurance to New Zealand?

Rt Hon JOHN KEY: What I have been advised is that the Minister’s personal account was used for that—for personal matters—and unclassified information was also sent to the account.

David Shearer: How can he have confidence in the Minister of Finance, when the Prime Minister has stated that one of the driving goals of his Government is to create an economy with more jobs and higher incomes, yet his finance Minister says “A government can’t have a lot of impact on the job market. It is what it is.”

Rt Hon JOHN KEY: Well, I, I—[Interruption] I will paraphrase the Minister of Finance. Well, I was going to say that if the member wants to ask the Minister of Finance a specific question, he should do that. But what I can say, and what I assume the Minister of Finance was saying, is this: that, actually, what really makes the difference to an economy that has about 2.2 million or 2.3 million jobs in it is when you have the right policy settings that encourage people to invest and encourage people to take on work. Despite the worst global recession since the Great Depression,

we have created 62,000 jobs in the last 2 years, we have a situation where the unemployment rate is falling, and we have a situation where we are one of the most highly rated countries in the world. Nothing I have seen from the Labour Party would do anything to support that position. If the member thinks I am wrong, he should go back and look at Labour’s 1970s style of industrial relations policy that it campaigned on in 2011, and let us see whether that is one of the things he decides to reverse when he eventually does give a state of the nation speech. [Interruption]

Mr SPEAKER: Both sides of the House are fairly noisy today.

Welfare Reforms—Recent Announcements

4. MIKE SABIN (National) to the Minister for Social Development: What changes has the Government recently announced for those on welfare?

Hon PAULA BENNETT (Minister for Social Development): We have announced that we will fundamentally change the way welfare is delivered in New Zealand. We will work with youth and parents on welfare far better than we currently do. These changes do set clear obligations, but they also offer substantially more assistance.

Mike Sabin: Is the Government privatising welfare, and if so, why?

Hon PAULA BENNETT: I hear lots of reports that we are wanting to privatise welfare. Let me say that if you call contracting out to service providers—as we currently do, and will continue to do, to support those young people on welfare into education, budgeting their finances, and attending parenting classes—privatisation, then yes, I suppose we are. Every year Work and Income spends more than $280 million on contracting out services, predominantly to those community organisations—such as the Salvation Army, Presbyterian Support, local iwi, and our chambers of commerce—that are best placed to work with those who need these services.

Mike Sabin: How will the changes ensure young people complete education, budgeting, and, for teen parents, parenting courses?

Hon PAULA BENNETT: Overall the package will work with up to 14,000 teens; 3,000 of them are on a benefit. From July young people on a benefit will be able to earn incentives for making the right choices. This will include an extra $10 per week when they have shown 6 months’ continued commitment to education, training, or work-based learning; $10 for undertaking a budgeting programme; and, for parents, $10 per week for undertaking a parenting programme. I think that this will make a big difference to them, and that bit of money can make a difference, as well.

State-owned Assets, Sales—Government Policy

5. Hon DAVID PARKER (Labour) to the Minister of Finance: Is it his normal practice to “guess” when determining the business case for selling billions of dollars’ worth of assets?

Hon BILL ENGLISH (Minister of Finance): No. The business case for the mixed-ownership model is very clear. It frees up capital on the Government’s balance sheet to invest in priority assets without having to borrow an extra $5 billion to $7 billion on top of the already considerable Government borrowings. It gives New Zealanders the opportunity to invest in strong Kiwi companies rather than in finance companies and housing, and it is going to improve the performance of the companies, because they will be more transparent and accountable.

Hon David Parker: Is he aware that the forgone dividends and profits to the new shareholders are predicted to total $1.4 billion gross over the 4 years to 2016, and that even after deducting the interest savings, the Budget Policy Statement—his own document—shows the operating balance before gains and losses as $815 million worse because of the sales?

Hon BILL ENGLISH: As we pointed out when the Government released the Budget Policy Statement, there are a number of ways of measuring what the member is referring to. You can measure it as a change in the cash flows, in which case the Government is a bit ahead; a change in the accounting profit, in which case we would be a bit behind; or include the net proceeds of the sale, in which case we would be a bit ahead. The outcome of all that is that it is roughly fiscally

neutral, but we avoid a further $5 billion to $7 billion of debt. That member will have to justify to New Zealanders why he wants to borrow that $7 billion of debt.

Hon David Parker: Does the Minister think the billion-dollar hole in his operating balance before gains and losses should have been included in his Government’s pre-election fiscal update, given that the sale proceeds were included, and if not, why not?

Hon BILL ENGLISH: Well, there is no billion-dollar hole, and in respect of the accounting for the decisions the Government is making, we have had to follow the requirements of the Public Finance Act. Those are administered by Treasury, and we have been quite transparent, including in the Budget Policy Statement, about the accounting impacts. One of the impacts that is clear is that if we can sell some of these shares to New Zealanders and pay them dividends, it means we avoid borrowing an extra $5 billion to $7 billion and paying interest to overseas lenders.

Hon David Parker: Did he have ministerial responsibility for the pre-election fiscal update, and if so, why did he allow it to include the proceeds of sale and interest savings from State-owned enterprise sales, but not include the reductions in revenue?

Hon BILL ENGLISH: That is not correct. What the pre-election fiscal update included was a decision by the Government at the time of a sufficient certainty that Treasury recorded it, and that was that we would have zero capital allowances. It could not record any effect of the mixedownership sales, because no decisions had been made. It simply had a promise from a political party. It was not until Cabinet had made decisions that it reached the threshold of certainty for being booked. The member might not like the Government following the rules, but that is what we did.

Hon David Parker: When will the Minister accept that including the proceeds of sale and interest savings in the pre-election fiscal update, but not the revenue forgone from the shares sold, was wrong?

Hon BILL ENGLISH: Well, what the member is saying is incorrect. The pre-election update included a decision that the Government would have zero capital allowances for the next 5 years, and that is what Treasury recorded. All I can say to the member is what I said before: we followed the rules. The Government did not get ahead of its undertaking to New Zealanders, which was that it would take no action on the sale of shares until or unless it had campaigned on the issue and been re-elected as a Government.

Health Targets—Progress

6. Dr JIAN YANG (National) to the Minister of Health: What improvements have there been in the National Health Targets?

Hon TONY RYALL (Minister of Health): I am very pleased to advise the member that the latest national health targets show record achievements in all six areas. Of the 16,600 kids who turned 2 in the last quarter, 15,200—that is, a record 92 percent of them—were fully immunised, against the target of 95 percent. That is virtually no gap between Māori, Pacific, and Pākehā children. In fact, on Thursday I visited the Porirua union health centre in Cannons Creek, and they told me that 94 percent of their 2-year-olds are now fully immunised in that community. It is clear that the district health boards are focusing even more strongly on patients, and they are benefiting from the Government’s $1.5 billion of extra funding over the past 3 years.

Dr Jian Yang: What improvement has there been to hospital services in the national health targets?

Hon TONY RYALL: Emergency departments recorded their best result ever: in the last quarter, 238,000 New Zealanders turned up at hospital emergency departments, and 92 percent of them were treated or transferred within the 6 hours, which is a very significant achievement. Every cancer patient ready for radiation treatment started within the world gold standard of 4 weeks. The district health boards are treating and caring for a record number of patients, and I think we would all like to thank them for the outstanding work of their management and clinical teams in meeting the health targets.

Welfare Reforms—Availability of Jobs

7. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by her statement “There are jobs”?

Hon PAULA BENNETT (Minister for Social Development): Yes, and the authentication shows that the statement was from last year, 4 February 2011. This was when the unemployment rate was at 6.8 percent and benefit numbers were at 354,058 people. I am pleased to inform the member that since then, 78,810 working-age beneficiaries have cancelled their benefits specifically to go into work, and the unemployment rate is now at 6.3 percent.

Jacinda Ardern: Does she attribute the 96.5 percent increase in unemployment benefit figures since 2008 to the lack of jobs or a sudden, dramatic change in attitude to work?

Hon PAULA BENNETT: That member might have her head in the sand, but we actually went through the worst global recession that the world had seen in some time.

Mr SPEAKER: Order! The question was not exactly without some loading, and therefore some response from the Minister was not totally unexpected, but I think starting in the way that the Minister did was not that helpful. It would be better to get some answer out before making a political comment.

Hon PAULA BENNETT: Thank you, Mr Speaker. It just seems that the Opposition wants to ignore, actually, the implications of a worldwide recession, which has had an effect in New Zealand. What I will say is that over the last 12 months we have seen more people come off benefits. We see that unemployment levels are at a lower level than they were 12 months ago. Certainly, under that Government in the 2000s we saw the sickness benefit going up by 17,000 people, and the invalids benefit going up. You know, what we have done is have a better focus on what people can do instead of what they cannot, and that is making a difference.

Jacinda Ardern: Does she agree with the Ministry of Social Development’s briefing to the incoming Minister that the key driver in the increase in the number of people on the domestic purposes benefit from the low in 2008 was “New Zealand’s weak labour market”?

Hon PAULA BENNETT: I obviously believe that there is a combination of things that have an effect on the numbers that are on benefits. So for some it is because they simply cannot find a job and are looking, for others it is because the policy settings are wrong and we have not got them right, and for others I think it is because we are not giving them the right sort of support and training, and are not wrapping the right kind of support around them. So it is a combination of factors that lead to people being unemployed.

Jacinda Ardern: Does she, then, agree that the 96.5 percent increase in unemployment benefit numbers, and advice from the Ministry of Social Development on the domestic purposes benefit, show that the larger issue the Government is yet to address is the performance of the New Zealand economy?

Hon PAULA BENNETT: I think when we particularly look at teen parents—and I think it has been overlooked that the emphasis is going on them in these welfare reforms—we do also need to look at young women who are going on the benefit with very little support for them. So we are putting far more support around them, and I think that will make a difference to their getting into the workforce and actually having the training and the skills they need so that they can make a difference.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That was a question with a political edge, but it was quite specifically about labour market issues; it was nothing to do with teen parents, at all. [Interruption]

Mr SPEAKER: Order! The question asked whether the Minister agreed with a certain statement, and the answer indicated that she did not totally agree with it, at all, and she gave a dimension that she rather more agreed with. In asking whether Ministers agree with something, there is no specific answer to that kind of thing.

Question No 3 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I know there has been some concern, and suggestions about the need for a global positioning system, so I would like to report that Mr McCully has been found in the buildings.

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. Fortunately, I am in a good mood today, because members should not raise points of order like that.

Electoral System—Review

8. ALFRED NGARO (National) to the Minister of Justice: What progress has been made on the MMP review triggered by the referendum at last year’s election?

Hon JUDITH COLLINS (Minister of Justice): In the referendum last year the majority of voters elected to keep MMP, triggering a review. Recently, the Electoral Commission launched that review, which will consider a number of issues that affect how Parliament operates. These include the 5 percent party vote threshold, whether a list MP should be able to stand as a candidate in a byelection, and whether a candidate can stand both for an electorate seat and on the party list. I encourage all New Zealanders to take part in this review, which is an important function of our democratic system.

Alfred Ngaro: How can New Zealanders get involved in the MMP review?

Hon JUDITH COLLINS: There are a number of ways. The Electoral Commission will hold public meetings around the country in April and May for people to make submissions in person. Alternatively, New Zealanders can make either a full submission or a 5-minute submission online at They can also send submissions via email or post. The Electoral Commission has also prepared a consultation paper, which can be downloaded from the MMP review website. This gives a full outline of the issues being considered. New Zealanders are already having their say, and submissions on the review are open until 31 May.

Budget 2011—Appropriation for District Health Boards

9. Hon MARYAN STREET (Labour) to the Minister of Health: How much funding for district health boards in the 2011-12 Budget was new money for additional services and cost of living adjustments, and how much was the result of reprioritisation of funding which had been maintained from previous budgets?

Hon TONY RYALL (Minister of Health): As stated in the Budget released last May, $585 million was made available for new health initiatives, made up of $420 million in new money and around $165 million from savings. In the Budget released last year we also advised that district health boards received around $400 million of this amount, made up of $350 million of new money and an estimated $50 million from the Ministry of Health for population-based contracts. Despite these difficult economic times, the Government is determined to protect and grow the public health service.

Sue Moroney: What does he understand to be the reasons for the Waikato District Health Board having to find savings of $20 million in the forthcoming financial year and another $5 million in both of the next two financial years?

Hon TONY RYALL: All district health boards strive to live within their budgets, and looking for efficiencies really is business as usual. They are often moving their money around to improve services. That funding has been increasing year in, year out. In the last 3 years the Waikato District Health Board had funding of $129 million extra.

Sue Moroney: Did he provide Waikato District Health Board with funding to cover its $3.2 million KiwiSaver obligation, which was previously funded centrally by the Crown, and if not, what does he expect the district health board to shed in order to find that money?

Hon TONY RYALL: I think the district health board will be expected to meet that obligation in the next financial year. That budget will be announced at an appropriate time. But I have to tell you

the Waikato District Health Board has a budget in excess of $1 billion, and I am sure that with prudent management of its finances it will be able to meet those challenges.

Sue Moroney: I wish to table two documents. The first is a memorandum to the Waikato District Health Board, dated 22 February 2012.

Mr SPEAKER: From whom?

Sue Moroney: It is the chief executive’s report. It indicates that savings of about $25 million are required in 2012-13 and of a further $5 million in each of the two out-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.

Sue Moroney: The second document, then, is a memorandum from Craig Climo to all staff of the Waikato District Health Board, in which he states that if the savings cannot be found elsewhere, they would have to come from reducing staff numbers.

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 Maryan Street: Why is the Hawke’s Bay District Health Board having to look at cutting up to 35 jobs, some of which are likely to be in front-line services?

Hon TONY RYALL: The Hawke’s Bay District Health Board, in the last 3 years, has received an additional $45 million from the Government. It is expecting to remain in surplus, but, as the chief executive said, it is looking at ways that it can make savings so it can balance its budget and meet important projects in its area, such as a new health centre in Wairoa, a new renal and endoscopy suite, an improved rheumatology service, a new lecture theatre, and a number of other projects. So it is all about providing better services for the people of Hawke’s Bay within an increasing budget.

Hon Maryan Street: Can he explain why Auckland District Health Board is reported to be attempting to save $60 million in its budget, and does he think a possible cut of that magnitude might affect front-line services?

Hon TONY RYALL: Auckland District Health Board’s budget over the last 3 years has increased by $125 million. It will be getting additional money in this year’s Budget. I think in response to that question I had best quote the chairman, Dr Lester Levy, who, in respect of the media reports of those savings, said “These service cuts are categorically not on the agenda.”

Hon Maryan Street: Can the Minister confirm his media release of last Budget day, when he indicated that there was $420 million worth of new spending for district health boards, when his own ministry had advised him that $576 million was required simply to keep up with cost growth, leaving a shortfall in funding to the district health boards of $156 million, and that any additional services this year will have to be funded from the cutting of existing services?

Hon TONY RYALL: That is absolutely consistent with the very first answer that I gave. We have got $420 million of new money; the additional $165 million came from reprioritisation. That adds up to $585 million, which is more than the $576 million that the member just quoted.

Treaty of Waitangi Settlements—Progress

10. KATRINA SHANKS (National) to the Minister for Treaty of Waitangi Negotiations: What progress has recently been made towards the completion of historical Treaty of Waitangi settlements?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations): Very good progress. In fact, the Human Rights Commission recently reviewed the last 5 years of Treaty settlements, and noted that the pace had increased dramatically, from 10 milestones achieved in

2007 to 60 in 2011. In January the Crown signed its first deed of settlement with far north iwi in the Te Hiku Forum with Te Aupōuri. This represents a very important step toward resolving that region’s complex and longstanding grievances. It demonstrates this Government’s commitment to achieving historical claims in a just, a timely, and a final manner, for the benefit of iwi and the country as a whole.

Katrina Shanks: How has this progress been assisted by recent changes to the Standing Orders?

Hon CHRISTOPHER FINLAYSON: Under the new Standing Orders, the Business Committee extended sitting hours on Thursday, 16 February, without the House going into urgency, in order to progress eight bills, including six Treaty bills, and a number of very important bills received their second readings. I think it is a great credit to this House and its members that they have agreed on innovative approaches to address the issue of delay in legislating these settlements, and I want to record my gratitude, and that of the iwi concerned, for this approach.

Medical Equipment, Subsidised—Glucose Testing Equipment

11. BARBARA STEWART (NZ First) to the Minister of Health: Does he agree with the proposal by Pharmac to limit diabetic New Zealanders’ access to subsidised glucose-testing equipment?

Hon TONY RYALL (Minister of Health): As the member knows, Pharmac makes independent decisions. However, I understand that, look, any potential change can be unsettling for people. I am advised that Pharmac is currently consulting on having a sole supplier of blood glucose meters and test strips, and that more people with diabetes will have fully funded access under its proposal. The Pharmac board will make a decision in late March or April, after considering all the advice and submissions. Pharmac estimates that moving to a sole supplier, as well as providing fully funded access to increased numbers of people, will save approximately $10 million a year, which will go towards funding better access to new and existing medicines for patients.

Barbara Stewart: Why should New Zealand’s 200,000 diabetics be forced to use the CareSens glucose monitor, when the only possible benefit will be greatly negated by the cost of implementation?

Hon TONY RYALL: As I said earlier, Pharmac is currently consulting on a proposal, and it takes into account all those matters. If the proposal is agreed by Pharmac, there will be comprehensive education and training for clinicians, pharmacists, and patients. That will certainly be a big feature of any proposed transition. However, the board has yet to make a decision on that.

Barbara Stewart: Is the Minister not concerned about comments from the Diabetes New Zealand President, Chris Baty, that “no-one uses these meters” since they have been available in New Zealand since at least 2009?

Hon TONY RYALL: As I said to the member, it is always unsettling whenever there are these sorts of changes. But what we do know is that there is an opportunity for Diabetes New Zealand to make submissions and comments about the process, as there is for clinical diabetologists to have their input. The Pharmac board will make a decision, and it is my understanding that if it proceeds with that proposal, there will be full training and education support for those who use these meters and strips.

Welfare Reforms—Study Support

12. JAN LOGIE (Green) to the Minister for Social Development: Does she agree with the statement in her Cabinet paper that “Evidence shows that support for beneficiaries to undertake study, such as the Training Incentive Allowance, can be effective in increasing the time participants spend off benefits.”?

Hon PAULA BENNETT (Minister for Social Development): At times, yes. I have always been, and will continue to be, a staunch advocate that for some people study can change their lives.

The argument is how much should people invest in their own study, and how much should the Government subsidise that study.

Jan Logie: Does she believe that the Government should provide extra support for beneficiaries for whom tertiary study at level 4 or above is the best way to reduce their long-term cost to the Government?

Hon PAULA BENNETT: We currently do, through subsidies for extra childcare for them. With the extra support they get they can also access an additional interest-free student loan, which other students actually cannot get, so they do get that sort of assistance. But, as previously said in this House, we are actually putting in investment through the training incentive allowance for the more than 50 percent of those on the domestic purposes benefit who have absolutely no qualifications and cannot even get a foot on the first rung of that ladder.

Jacinda Ardern: Why is a sole parent with exactly the same set of circumstances eligible for more assistance if they train to become a hairdresser than if they train to be a nurse, as set out by her training incentive allowance policy?

Hon PAULA BENNETT: As I said, the assistance they can get is based on the level, so for level 4 and above they do not get the training incentive allowance, but for level 3 and under they can. So there are different ones. I am not sure exactly what qualifications fit in with them, but that is the way that the system is set up.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question was quite specific. It did not ask what the policy was; it asked for the rationale behind the policy—why is there the difference that the Minister just outlined.

Mr SPEAKER: Order! I thought I heard the Minister answer that. She said some courses are above level 3, and some are level 3 and below, and that is why there is the difference. That may not be the explanation that the member wanted, but it is certainly an explanation of the difference.

Jan Logie: Then why does her Cabinet paper say: “I believe that we need to provide some extra support for the small group of beneficiaries that may be identified by the investment approach as those for whom higher-level tertiary study at level 4 or above is the best way to reduce their longterm liability.”?

Hon PAULA BENNETT: It is true that the investment approach is going to fundamentally change the whole way that we offer support through the benefits system. I am not going to pre-empt the Work and Income board, which is yet to be appointed, or its investment approach—where it will decide it needs to put the most investment. But as the paper quite rightly says, it could be that it looks at level 4 and above and decides to do things differently. It will look at level 3 and below and try to do that differently, I am sure, as well. So, without pre-empting it, it could decide that there could be extra assistance needed for level 4 and above.

Jan Logie: To clarify, is the Minister saying she has not ruled out implementing the Green Party’s policy to reinstate the training incentive allowance for study at level 4 and higher?

Hon PAULA BENNETT: What I was saying was that the system is going to look fundamentally different as we move forward. I am not sure that everyone kind of grasps the difference that the investment approach is going to make—

Dr Rajen Prasad: Oh, we’re so dumb, aren’t we?

Hon PAULA BENNETT: —well, it is incredibly complex—and it could actually look at that. Who knows, it may actually be in line with the Green Party’s policy.

Jacinda Ardern: Why is a sole parent with exactly the same set of circumstances eligible for more assistance if they train to become a hairdresser at level 3 than if they train to be a nurse at level 5, as set out in her current policy?

Hon PAULA BENNETT: You will find that that training for a hairdresser is actually the pretraining that they do, up to level 3. They do not actually leave once they have done those few weeks of study, or those 6 months of study, and become a hairdresser; they then go into apprenticeships,

and have a long time in work-based learning. They do not actually walk out with the qualification, ready to be a full-time hairdresser.


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