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Questions and answers - March 1




State-owned Energy Companies, Sales—Mixed-ownership Model

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he stand by his statement that “the mixed ownership programme will be good for … the economy as a whole”; if so, will it be good for the economy as a whole if these mixed ownership companies then sell New Zealand electricity generating assets into foreign ownership?

Hon TONY RYALL (Minister of Health) on behalf of the Minister of Finance: Yes, I do stand by that statement that the mixed-ownership programme will be good for the economy. That is because the alternative is to borrow billions and billions of dollars on volatile financial markets. You have only to look at what is happening in Europe, where countries are being forced to slash spending and public services, to see the problems that too much debt creates. In terms of the second part of the question, the member’s theory is misplaced, as none of the shareholding and directors rules will change in that regard.

Dr Russel Norman: Will the legislation to establish these partially privatised energy companies include explicit provisions that prevent these companies from selling major New Zealand electricity-generating assets?

Hon TONY RYALL: The legislation will pretty much reflect the existing situation, where directors of State-owned enterprises not only operate under the requirements of the Companies Act but also are expected to act within the confines and requirements of listing requirements on the New Zealand stock exchange.

Dr Russel Norman: Will the legislation to establish these companies include explicit provisions that prevent those companies from selling major New Zealand electricity-generating assets?

Hon TONY RYALL: The proposed legislation does not need to include any additional features to address the concern that the member has, because the Companies Act already requires that any significant transactions would involve consultation with the shareholders. The Government is retaining 51 percent majority ownership.

Dr Russel Norman: Is he saying that his Government will provide no legislative guarantee that major New Zealand electricity-generating assets will not fall into foreign ownership after partial privatisation?

Hon TONY RYALL: There are requirements in the Companies Act that significant transactions require the support of the majority shareholder, and there are similar requirements in respect of the listing requirements of companies. So the Government is retaining 51 percent majority control.

Dr Russel Norman: Does the Minister agree with the recorded comments of the revenue Minister, Peter Dunne, who said: “The law must be very clear that the partial privatisation programme won’t lead to the sell-off of dams and other important New Zealand generating assets.”?

Hon TONY RYALL: I have not seen the exact details of what Mr Dunne has said in respect of that matter. I do know what is in the coalition agreement, and I also know that there are requirements in the Companies Act in terms of the powers that majority shareholders have in respect of significant transactions, and now, similarly, listing conditions also give majority shareholders those sorts of controls.

Hon David Parker: Does the Government’s expectation that 10 to 15 percent of the Stateowned enterprises will be in foreign ownership after the Government’s sales programme mean, in effect, that up to 30 percent of the shares being sold are expected to end up in foreign ownership?

Hon TONY RYALL: The Government has always been very clear that at the end of this programme we expect, when those companies float, that there will be 10 to 15 percent of the overall shareholding potentially in foreign ownership. The member needs, as he has done, the maths in respect of other relativities.

Hon David Parker: I raise a point of order, Mr Speaker. My question asked whether the effect of that is that up to 30 percent of the shares being sold are expected to end up—

Mr SPEAKER: The Minister did not question the member’s mathematics. I think he agreed with the member.

Dr Russel Norman: Does he accept that there is now a conflict between the Minister of Revenue and the rest of the Government over this issue as to whether there will be legislative protection for the sale of New Zealand assets; and that if he cannot solve this problem, he no longer has a majority in this House to progress the asset sale programme?

Hon TONY RYALL: No, there is no conflict. What there is total agreement on between United Future and the Government is that we need to make sure that our country controls its level of debt. What is being proposed is an important part of making sure that our country does not face the challenges that so much of Europe happens to face when Governments let debt get out of control.

Dr Russel Norman: Can his plans for partial privatisation proceed without the support of the Hon Peter Dunne?

Hon TONY RYALL: I think the Government has made it absolutely clear that it is obvious what the numbers are expected to be in this legislation. We have a coalition agreement with the United Future party, which quite clearly sets out the term of that agreement. It is quite clear also that the Companies Act already has provisions that involve shareholder engagement on significant investments. I think the member is creating a Green fantasy in respect of this issue.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. What impact has the consultation with Māori regarding section 9 had on the Government’s position regarding its mixed-ownership programme?

Hon TONY RYALL: I think it is already clear. It has been indicated that the Government is looking, in respect of section 9, at the transmission of it into the new legislation, and at clarification that it does not apply to private shareholders.

Dr Russel Norman: Is it his understanding that section 131 of the Companies Act requires directors to act in the best interests of the company, whereas if it is determined that it is not in the best interests of New Zealand to sell those assets, those directors will be required to act in the best interests of the company, not in the best interests of New Zealand?

Hon TONY RYALL: The directors’ acting within the best interests of the company also requires them to act within the other provisions of the Companies Act. The Companies Act, in respect of the question that the member asked in the first part of this exchange, does provide express provisions for majority shareholders to have a say in significant transactions, and the directors will be aware of that.

Hon David Parker: What percentage of the company’s assets have to be sold before it is a major transaction that requires shareholder approval?

Hon TONY RYALL: The Companies Act sets that out to be around 50 percent.

Transport Projects—Waikato

2. LOUISE UPSTON (National—Taupō) to the Minister of Transport: What important transport projects are underway in the Waikato region?

Hon GERRY BROWNLEE (Minister of Transport): Tomorrow will mark the commencement of replacing State Highway 1’s Ātiamuri Bridge, which crosses the Waikato River 39 kilometres north of Taupō. This $24 million project is essential for improving traffic flow on one of New Zealand’s key freight routes and is a great example of investment in the country’s regional roading network.

Louise Upston: What benefits will the new bridge bring?

Hon Member: Re-election of the local member.

Hon GERRY BROWNLEE: First, I would expect re-election of the local member, but it will also allow for the free flow of traffic, which has become of significant volume. This is important given the 70 percent to 75 percent increase in freight that is forecast over that part of the State highway in the next 25 years. The project also includes the construction of a 1.5-kilometre northbound passing lane, which will improve safety and reduce driver frustration, therefore voter frustration.

Louise Upston: What other regional roading projects are focused on delivering increased productivity and improving safety?

Hon GERRY BROWNLEE: There are many important and beneficial roading projects under way. To name a few, there is Reid’s Canal Bridge, State Highway 2, east of Bay of Plenty; the start on the construction of the Papakura Interchange Upgrade; State Highway 2, the Tauranga Eastern Link; State Highway 2, Muldoon’s Corner, Wellington; State Highway 35, Maraenui Bluff, 30 kilometres east of Ōpōtiki. These and many, many others will contribute to increased productivity and increased safety.

Sue Moroney: Will he consider funding the proposal for a commuter passenger rail service between Hamilton and Auckland, a service that is supported by 11,500 people who signed a petition turned down by a select committee dominated by members of his Government?

Hon GERRY BROWNLEE: I think the select committee reached a solid and sound conclusion.

Government Financial Position—Current Account Deficit

3. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Economic

Development: Does he stand by his statement, in his answer to Oral Question No 8 yesterday, that the current account deficit is forecast in the PREFU to deteriorate by “about just under $5 billion over the next 4 years”?

Hon STEVEN JOYCE (Minister for Economic Development): As I said in my statement to the House earlier this afternoon, the Pre-election Economic and Fiscal Update forecast the current account deficit to go from $7.2 billion in 2011 to $12.6 billion in 2014, which was a difference of about $5 billion over 3 years rather than 4 years as I said yesterday. Over 4 years from 2011 to 2015, the forecast is to widen by $8.4 billion.

Hon David Cunliffe: Can the Minister tell the House whether the country’s net international liabilities are forecast to grow in the next 4 years, and, if so, how much to the nearest $10 billion?

Hon STEVEN JOYCE: I do not have those exact numbers, but they are forecast to grow over the next 4 years, and the member is aware of that, as it was stated both in the Pre-election Economic and Fiscal Update and in the recent fiscal update.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has not addressed the question, which was could he tell the House to the nearest $10 billion.

Mr SPEAKER: The Minister said he did not have the figures, and given that the primary question was about the current account deficit, it is not unreasonable if the Minister does not have the figures on net liabilities.

Hon David Cunliffe: Does he know whether his Government has achieved any of the economic growth forecasts projected since it came to office, including the Budget 2009 scenario, written during the darkest days of the recession?

Hon STEVEN JOYCE: Some of the forecasts since we came to office have changed, and the member may well be aware—I am not sure—that the global financial crisis and the Canterbury earthquakes were not projected in any of those forecasts in 2009 to the extent that they have occurred. That is the nature of forecasts. The Treasury in fact makes forecasts and Governments go on to deal with the real world, which, as we know, has changed quite dramatically in the last 3 years.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is a pretty straightforward question. It was: has the Government met any of its forecasts. The fact that forecasts have changed was not the question. The fact that circumstances have changed was not the question. It was: has the Government met any of its forecasts, including, I think, the one that was made in the depths of the recession.

Mr SPEAKER: If the Minister could assist with that, because the question did specifically ask that.

Hon STEVEN JOYCE: I did answer it. I was asked whether the forecast had changed, and I said yes, and I went on to give some reasons.

Mr SPEAKER: If there is dispute over what the question was, I will invite the Hon David Cunliffe to repeat his question.

Hon David Cunliffe: To repeat the question, has the Government achieved any of the economic growth forecasts projected in any of the official forecasts since it came to office, including the Budget 2009 scenario, written during the darkest days of the recession?

Hon STEVEN JOYCE: My response is the same, and that is that the forecasts have changed and that the reality has changed, and that is what happens when you go from forecast to reality, given the level of changes, including the nature and ongoing uncertainties associated with the global financial crisis, and also the fact of the Canterbury earthquake, which occurred after the forecasts the member mentions?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That was the same answer to the same question, and he did not answer it, in exactly the same way. It is a question of whether it met the forecast, not whether the forecast changed. Any of them—one would do.

Mr SPEAKER: My understanding from the Minister’s answer is the answer is no. If that is not the answer that the Minister is giving there, he should correct me, and he is not correcting me.

Hon David Cunliffe: I seek leave to table a graph of Treasury data showing that the Government has not, in fact, met any of those forecasts.

Mr SPEAKER: The source of the graph?

Hon David Cunliffe: Treasury data.

Mr SPEAKER: Who prepared the graph—the source of the document?

Hon David Cunliffe: My staff.

Mr SPEAKER: Leave is sought to table a document prepared by the member’s staff. Is there any objection? There is objection.

Hon David Cunliffe: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I cannot hear the member. Is he seeking a supplementary question?

Hon David Cunliffe: A point of order. I seek leave to table this graph showing that GDP—

Mr SPEAKER: Order! Before the member says what is in it, he must say the source of the document.

Hon David Cunliffe: Treasury data.

Mr SPEAKER: But the source of the document.

Hon David Cunliffe: The source of the document is my office—Treasury data.

Mr SPEAKER: OK, the source of the document is established: the member’s staff. He may seek leave.

Hon David Cunliffe: I seek leave to table this table, which shows that the Canterbury earthquake—

Mr SPEAKER: Order! No, the member must identify—

Hon David Cunliffe: —was responsible for only—

Mr SPEAKER: Order! The member must establish the source of the document.

Hon David Cunliffe: The source is the Parliamentary Library.

Mr SPEAKER: The member may proceed.

Hon David Cunliffe: It is data that shows that only 26 percent of the loss or the variance of those forecasts could be attributed to the earthquake, not 100 percent, as said yesterday by the Minister.

Mr SPEAKER: Leave is sought to table that document prepared by the Parliamentary Library. Is there any objection?

Hon STEVEN JOYCE: Point of order, Mr Speaker.

Mr SPEAKER: Well, we should deal with this first.

Hon STEVEN JOYCE: I just have an objection to the way that was described, because—

Mr SPEAKER: Well, we can deal with that. Leave is sought to table the document, then I will deal with the point of order. Is there any objection to the document being tabled? There is objection. Now, the member had a point of order.

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. It was just to clarify that the description by the member of what I said yesterday was incorrect.

Mr SPEAKER: That is not a point of order. But, of course, the problem arose because in seeking leave to table the document, the member went on to express a view about the relationship of what the document said and what some other member said. That is not in order when seeking leave to table a document. The leave should be sought describing simply the source of the document and what the document is, not whether or not it is consistent with what anyone else said. That is why we got into this trouble.

Hon David Cunliffe: I seek leave to table the Hansard of question No. 8—

Mr SPEAKER: Order! We do not do that; the member will resume his seat.

Hon David Cunliffe: Mr Speaker—

Mr SPEAKER: Does the member now have a supplementary question?

Hon David Cunliffe: Supplementary question.

Mr SPEAKER: I am very grateful.

Hon David Cunliffe: I raise a point of order, Mr Speaker. May I inquire of the Speaker whether it is customary for him to express his gratitude for supplementary questions?

Mr SPEAKER: Order! The member will resume his seat right now, and if he wishes to ask his supplementary question, he will cease trifling with the Chair. He has been using a process of seeking leave to table documents—a perfectly valid process—when he knows that some of the documents he was seeking to table were not valid documents for which leave could be sought. Then he went on, when describing a document, to make comment about another member of the House, which is, again, outside the Standing Orders. I am just asking the member to be reasonable, and please just ask his supplementary question.

Hon David Cunliffe: Does he know what the benefit-cost ratio of allowing Skycity Casino to operate 350 to 500 extra pokie machines would be, and if so, what is it?

Mr SPEAKER: How on earth does that relate to the primary question? If I have missed the point, I will give the member the chance to explain to me.

Hon David Cunliffe: The explanation is very simple. If there is a net economic benefit—for example, from incoming tourism—then that would contribute to an increase in the current account.

Mr SPEAKER: I think that is a long way from this primary question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This casino project was a major feature of the Government’s pre-election promises, and its economic delivery—

Mr SPEAKER: Order! I have heard sufficient. All sorts of things were major features of many parties’ pre-election promises. This question asked about whether the member stood by his statement in answer to oral question No. 8 yesterday about the current account deficit forecast in the Pre-election Economic and Fiscal Update, and how much it was going to deteriorate—a very specific question—and the supplementary questions should relate to that. And that one clearly did not.

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

Mr SPEAKER: Well, I have actually ruled it out, so I am not sure what the point of order is.

Hon Trevor Mallard: I am going to ask you to take some time afterwards to reconsider whether a major economic project can or cannot make a different to the current account deficit. We work on the basis that major projects are meant to help with that deficit. You, Mr Speaker, might have a different basis.

Mr SPEAKER: I have heard sufficient. It is a very specific primary question, and to ask details about a certain particular project is unreasonable. The Standing Orders were never designed to facilitate that. I am very liberal in allowing most supplementary questions, but that one is clearly well wide of the primary question.

Hon David Cunliffe: Can he confirm whether New Zealand Trade and Enterprise’s priorities for addressing the current account deficit exclude casinos and media companies formerly owned by himself; and if so, can he explain why he has made it a priority to do private deals with those companies?

Hon STEVEN JOYCE: I confirm that New Zealand Trade and Enterprise has a number of priorities to deal with the balance of payments deficit, but it is not particularly addressed to the two things the member raises.

Rt Hon Winston Peters: Having been asked three times whether the Government has met any of its 2009 forecasts, a point discerned by the Speaker, thankfully, as being no, why could he not rise in this House and just say that, rather than try to dissemble as he did?

Hon STEVEN JOYCE: It is sort of “pot black” territory, is it not—the pot calling the kettle black. But—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. What can that possibly do towards the answer?

Mr SPEAKER: The member should reflect on his question. He accused the Minister of dissembling, and the Minister is perfectly at liberty, when faced by a question like that, to offer some views in return. The Minister was perhaps being quite modest in the view he was offering in return.

Hon STEVEN JOYCE: The point I was making is that in terms of the best laid plans of mice and men a number of things occurred that changed those growth patterns, such as the Canterbury earthquakes.

Criminal Justice System—Measures to Address Drug and Alcohol-related Offending

4. Hon DAMIEN O'CONNOR (Labour—West Coast - Tasman) to the Minister of Justice: What initiatives is the Government planning in the justice system to help reduce drug and alcohol related offending?

Hon JUDITH COLLINS (Minister of Justice): The Government will set up a drug and alcohol court pilot to deal with carefully selected offenders with severe alcohol and drug dependencies. The 5-year pilot is due to be up and running later this year in Auckland. The aim of the pilot is to deal with 100 offenders a year who have severe addition problems and need more intensive treatment to help them break the cycle of substance abuse. The drug and alcohol court pilot will deliver on priorities under the Government’s Drivers of Crime work programme, which include reducing

alcohol-related harm and improving the availability and accessibility of alcohol and drug treatment services.

Simon O'Connor: How would an alcohol and drug court work?

Hon JUDITH COLLINS: Offenders who are facing up to 3 years’ imprisonment for crimes where alcohol and drug abuse is a contributing factor will be assessed by a specialist under the direction of a District Court judge. The specialist will determine the most appropriate treatment programme from a range of options. There will be ongoing judicial supervision of the treatment. We know that alcohol and other drug abuse contributes to a wide range of harm, including public disorder, accidents, violence, child abuse, lower productivity, and illness.

Iain Lees-Galloway: Given that alcohol abuse is such a devastating driver of crime, why has she allowed progress on the Alcohol Reform Bill to grind to a halt, and will she make sure that that half-hearted piece of legislation is strengthened so that it can achieve its purpose and reduce the incidence of alcohol-fuelled crime?

Hon JUDITH COLLINS: Contrary to grinding to a halt, it has got a whole new lease of life since I became the Minister of Justice. I have to say I am enjoying—[Interruption] That member is clearly not in the loop in terms of justice issues.

Question No. 5 to Minister

Hon DAVID PARKER (Labour): I seek leave to carry my question over to the return of the Minister of Finance.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.

Government Financial Position—Current Account Deficit

5. Hon DAVID PARKER (Labour) to the Minister of Finance: What current account deficit, in dollars, was projected in the pre-election fiscal update by the Treasury for 2012 and for 2016; and does he agree with Hon Steven Joyce’s answer in Oral Question No 8 yesterday, that “the preelection update last year forecast the current account deficit to widen by about just under $5 billion over the next 4 years”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The Pre-election Economic and Fiscal Update states that the 2012 forecast deficit is $5 billion and for 2016 it is forecast to be $17.6 billion. The two main reasons for this are the rebuild of Christchurch following the earthquakes and an expected easing of commodity prices for our exports. The second half of the member’s question has been dealt with earlier in question time.

Hon David Parker: Did the Minister of Finance require or expect his Associate Minister of Finance Mr Joyce to read Treasury’s briefing to incoming Minister, which also sets out the projected rise in the current account deficit to $17 billion in 2016, and does he know whether Mr Joyce read it?

Hon STEVEN JOYCE: The answer is yes, and we have readings in the Minister of Finance’s office where we read pieces of the briefing to incoming Minister to each other of an evening, to enjoy the opportunity to read the wisdom of Treasury.

Hon David Parker: Can the Minister of Finance assure the House that the Associate Minister of Finance Mr Joyce now understands it?

Hon STEVEN JOYCE: Absolutely, he is confident that Mr Joyce understands it, and he finds him a very good Associate Minister of Finance.

Hon David Parker: If the Associate Minister of Finance Mr Joyce did not previously understand the seriousness of New Zealand’s deteriorating current account deficit, can the Minister assure the House that the rest of his Cabinet does understand that under his policies the current account deficit is projected to increase every year to 2016?

Hon STEVEN JOYCE: The Minister rejects the first part of the premise of the member’s question. The Associate Minister does understand. I have to say, in relation to the second part, there is a little bit of irony there, because it is forecast to widen, but that member was actually part of a Government between 2005 and 2008 where the current account deficit averaged more than 8 percent of GDP over that period.

Hon David Parker: Did Treasury’s Pre-election Economic and Fiscal Update predict that the worsening current account under his Government’s policies results in New Zealand’s net international liabilities increasing to 77.6 percent of GDP by 2016, and is he aware that that equals an increase in New Zealand’s liabilities to foreign lenders and foreigners of approximately $50 billion?

Hon STEVEN JOYCE: Yes, and again I have to say it is interesting because we have had a significant decrease in international liabilities in terms of the actual recorded numbers since this Government has been in office. Yes, it is projected to increase again, which is why the Government is working very hard on a range of matters, including its 120-point economic development action plan, to have an impact on those matters.

Foreign Charter Fishing Vessels—Ministerial Inquiry

6. IAN McKELVIE (National—Rangitīkei) to the Minister for Primary Industries: Has he received the report of the Ministerial Inquiry into Foreign Charter Vessels?

Hon DAVID CARTER (Minister for Primary Industries): Yes, Minister Wilkinson and I received the report from the panel last Friday, and we have released the report today. I thank the panel, chaired by the Hon Paul Swain, for its excellent report. It is clear from the report that there have been issues of abuse on some foreign charter vessels. This is completely unacceptable and a risk to New Zealand’s reputation. The Government will not tolerate the abuse and exploitation of crews on foreign charter vessels.

Ian McKelvie: What steps will the Government take in light of the report into foreign charter vessels?

Hon DAVID CARTER: The report contains 15 recommendations. The Government has already accepted in principle, and is acting on, the inquiry panel’s first six recommendations. These include such measures as tightening the code of practice and moving to 100 percent observer status on the foreign chartered vessels. The remaining recommendations, which the Government is still considering, cover legislative amendments, ratifying international conventions, and significant policy changes. The Government wants to understand the wider economic impacts before making any decision on these.

Darien Fenton: Will there be extra funding for his department or the Department of Labour so that they have the staff and equipment necessary to properly monitor and enforce foreign charter vessels’ compliance with the recommendations that this Government has accepted today, or will they be expected to do that within current baselines?

Hon DAVID CARTER: I am confident that all ministries and departments can initiate the recommendations accepted so far by the Government within current funding arrangements.

Auckland City Council—Confidence

7. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Local Government: Does he have confidence in the financial management of Auckland City Council?

Hon Dr NICK SMITH (Minister of Local Government): Financial management of the new Auckland Council is the responsibility of its elected mayor and council, and if the member has a concern, he should take it up directly with them. If he is not satisfied with their response, he should lay a complaint with the Auditor-General. There is a high test for intervention by the Minister in the financial matters of a council, and it generally follows a complaint to, and negative report by, the Auditor-General.

Rt Hon Winston Peters: Is it correct that Deloitte is doing significant consultancy work on behalf of the Auckland Council, including senior managers of Deloitte charging $3,400 per day plus GST—

Mr SPEAKER: Order! The Minister is not responsible whatsoever for the operational activities or decision making of the Auckland Council. The primary question was allowed because the member needed to have the opportunity to ascertain whether or not the Minister was contemplating any particular actions in relation to the Auckland Council. The Minister made it very clear in his answer that he was not. The only other matters that the Minister is responsible for are the appointments to the council-controlled organisations and any Crown investment being made by those—how many are there—six council-controlled organisations. But matters outside that are certainly not the responsibility of the Minister. I would have to rule that question out.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. It is well known that the Auckland Transition Agency was appointed by this Government. The Auckland Transition Agency chose the chief executive, Mr McKay, and other executive officers were all chosen by the Auckland Transition Agency, a Government-appointed body. That was clearly manifest in press statements at the time. That is the linkage that makes this council unique, and that is why this Minister is responsible for those appointments. This happened—

Mr SPEAKER: Order! I regret to disagree with the member. Had the member questioned the Minister about appointments, that might be the case, but the member was seeking to question the Minister about the detailed operations of the Auckland Council. The Minister is in no way responsible for them, and the Minister made that very clear in his answer. There was nothing in the Minister’s answer—I mean, the member could have had a track for supplementary questions had the Minister widened his answer to allow the member to do so, but the Minister’s answer was quite constrained. The supplementary questions available to the member are very constrained, because we cannot have Ministers being questioned about the detailed operations of the various councils around the country. That is not in order.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I had this matter out with your staff this morning. Your staff member made the same statement you are making now. I pointed out the case of Ecan—Environment Canterbury—and the tracing of appointments by the Auckland Transition Agency, a Government-appointed body, and officials appointed by this Government. That, she accepted, was the linkage, which presumably was the reason why she accepted this question. It having now arrived on the floor, you are now ruling it out. What is consistent about that?

Mr SPEAKER: Order! I will hear from the honourable Leader of the House.

Hon Gerry Brownlee: Mr Speaker, you did not rule out the primary question, for the reasons that you outlined, which could have led to a series of supplementary questions that were appropriate—given the primary question. The point here, though, is that Parliament passed an Act to put the greater Auckland Council in place, and the financial responsibilities for that organisation lie with that organisation. There are other remedies for the member to follow if he is unhappy with the way in which that council is conducting its financial matters.

Mr SPEAKER: I will hear first from the shadow Leader of the House, the Hon Trevor Mallard.

Hon Trevor Mallard: Mr Speaker, I want to take a slightly different tack to the one that the right honourable gentleman has taken on this. Your having accepted the original question about whether the Minister had confidence in the financial management, I think a following question asking the Minister whether he was aware of a fact that might cause him to change his mind as to whether or not he had confidence is a legitimate supplementary question.

Mr SPEAKER: I appreciate the members’ contributions, because this is an interesting issue. But the primary question was allowed only on the grounds that I explained: that it was possible that the Minister was contemplating some actions that the Minister could have been responsible for, and it would be wrong to prevent the House from being able to ascertain that. But the Minister having

replied in the way he did—that he was not contemplating any actions in respect of initiating any reviews or reports, or taking any actions to put in place a review authority—very much narrows the scope for supplementary questions, and, really, leaves the only range of supplementary questions available questions in relation to the Crown appointments to the council-controlled organisations or the Crown’s investment in those organisations. To go as far as the honourable member has suggested, I think, is really taking things a step too far altogether, because question time is not designed for that purpose. The member can easily make his concerns public. He does not need question time, with questions outside the Standing Orders, to do that. The Minister can be questioned on matters in the future, but to use question time in that way, I think, is quite outside the Standing Orders. The primary question was allowed—and a lot of thought was given to whether or not it should be allowed—only because of the possibility that the Minister might have been contemplating initiating certain reviews or reports, or taking certain actions, in relation to the authority, the authority being the Auckland Council. The Minister has made it clear he is not, so that narrows the supplementary questions very significantly.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You have just said something that is cause for grave concern. Our rights here go back to 1688. Those rights are for a member of Parliament—

Mr SPEAKER: Order! The member will resume his seat. We are not going to waste time today with the right honourable member lecturing me on our rights. I have been around this House just as long as that member has, and I have upheld the rights of members across this House with some degree of conscientiousness. But the Standing Orders must be complied with. The member may like to raise all sorts of points during question time, but if they are not within the scope of the Standing Orders, they are not allowed, and I have to uphold the Standing Orders equally for all members. I have required Ministers to answer questions where I believe that the Standing Orders require them to do so. I will uphold that member’s rights, all right, but his questions must be within the Standing Orders, and I have ruled that that supplementary question is not within the scope of the Standing Orders.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I invite you to consider where we have got to now, and that is, effectively, if a Minister knows about an issue and is contemplating a change, then a question is within the Standing Orders, but if a member is bringing up information in Parliament—in the way that he has a right to do—that is new to the Minister and inviting him to change his mind, that is outside the Standing Orders. I do not think that can be right.

Mr SPEAKER: No. The point the member is missing is this: the point the member seeks to bring up is not the Minister’s responsibility. The Minister can be responsible only for actions he might be taking, or those Crown decisions on appointments. The detail that the member was seeking to raise, and that the Hon Trevor Mallard has suggested should be allowed by way of a supplementary question, is definitely not the Minister’s responsibility. That is definitely not the Minister’s responsibility, and that is why the supplementary question cannot be allowed.

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

Mr SPEAKER: Well, I am not going to take more time on this, because I have made it very clear. I can assure the honourable member that I consulted in some detail on this matter during the process of the approval of this primary question. I, in fact, have a full ruling here. I have been quoting bits from it. I am prepared to deliver the full ruling to the House, because this matter has been given a lot of thought, and I will not have question time hijacked by questions that are simply outside the Standing Orders. The member has further supplementary questions, and—

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

Mr SPEAKER: It had better be a good one.

Hon Trevor Mallard: Yes, Mr Speaker. At the risk of inviting you to breach the Standing Orders, can I invite you to read your ruling.

Mr SPEAKER: It is totally the Speaker’s prerogative what he does, and I want to get on with question time, rather than take up time doing that.

Rt Hon Winston Peters: Does the Minister have confidence in Mr Doug McKay, the chief executive appointed by the Auckland Transition Agency, which was a Government-appointed body, and his knowledge about gifts and travel from Deloitte to the chief financial officer of the Auckland Council?

Hon Dr NICK SMITH: It is not for me as the Minister of Local Government to have confidence in the chief executive of the Auckland Council, any more than in that of any one of our other 78 councils. That is the due—

Rt Hon Winston Peters: You appointed them. You appointed them. That’s the difference.

Hon Dr NICK SMITH: —and proper role of the mayor and council. I would point out to the member with his interjection that the council and the mayor have confirmed Mr Doug McKay as their chief executive. If the member has concerns about any financial impropriety involving that council or any other, the proper process is for him to take those matters to the Auditor-General.

Rt Hon Winston Peters: Does the Minister still have confidence in the chief executive, Doug McKay, who was appointed as I said before, and his allowing a senior financial officer to receive an expenses paid trip to the US from Deloitte—

Mr SPEAKER: Order! The member will resume his seat. I have to rule that question out, because the Minister in his answer made very clear that the position of the chief executive is no longer the position of a Crown appointee. The position is now one confirmed by the council and not a normal Crown appointee, so the Minister has no responsibility for confidence in that person. It is the council that has that responsibility. The Minister has no responsibility for it, whatsoever. So I have to ask the member to—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Everyone knows that this council is not like the Bay of Plenty council—

Mr SPEAKER: Order!

Rt Hon Winston Peters: Can I finish my point of order?

Mr SPEAKER: No, because it is not a point of order. The member will resume his seat. The member should know, having spent 27 years in this House, that points of order relate to the proceedings of this House. What the public might know about a certain individual is nothing to do with the proceedings of this House. I am prepared to hear the member if he has a Standing Order that he feels the Speaker is not upholding appropriately or correctly. I would be happy to hear from him then. But if he wants to make some comment about what the public might know, I am afraid he will be sat down very promptly, because that is nothing to do with the proceedings of this House, and points of order cannot be used to raise such issues.

Dr Russel Norman: I raise a point of order, Mr Speaker. I appreciate what you are saying, but it seems to me that, surely, the period between when the Government appointed this person and when the council appointed him as its chief executive should be open to questioning, because during that period he was a Government appointee, appointed by the Minister. We should be able to ask the Minister about at least that time period.

Mr SPEAKER: That is a very interesting point of order the member has raised. I will hear from the Hon Dr Nick Smith.

Hon Dr NICK SMITH: The point made by the co-leader of the Greens is not completely correct. The Government was responsible for the appointment of the transition authority. The transition authority then appointed an interim chief executive. The council, once elected, then confirmed the appointment of the chief executive. It is not correct that the Government appointed the chief executive, either during the transition stage or once the council was elected.

Mr SPEAKER: I—[Interruption] Order! This is a serious issue. The right honourable member wants to ask questions, and I want this issue taken seriously because there are important issues. But I appreciate the point raised by the Hon Dr Nick Smith, because he clarified what I as Speaker had

no way of knowing were the facts of the matter. I think that makes it even more clear that the supplementary question that the member was seeking to ask was not in order. The member has a further supplementary question, should he wish to exercise it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I have virtually lost all my questions here today, but my real point is this. The circumstances that led to, for example, the removal of Environment Canterbury show that despite it being an elected body, the Minister had a responsibility. All I want to know is whether he has received any reports of these matters—

Mr SPEAKER: Order! The member is now trying to pursue further supplementary questions by way of a point of order. I allowed the primary question just in case the Minister was initiating any reviews or reports, and the Minister made it very clear that he was not. In the case of Environment Canterbury, the Minister was taking action, and he could certainly have been questioned on the actions he was taking—no doubt about that. If the Minister was taking actions, or initiating reports or reviews, or anything like that, he could be questioned on that. But he cannot be questioned on the operations of the Auckland Council or its chief executive, because he is not responsible for those matters. The member could question him about Crown investment by some of the councilcontrolled organisations, he could question the Minister about Crown appointments to those council-controlled organisations, but that is about the limit of that kind of questioning. If the member does not wish to have a further supplementary question, I will proceed to the next question.

Rt Hon Winston Peters: Has the Minister had any reviews or any investigations, or does he intend to initiate any inquiries, into reports of significant financial mismanagement and conflict of interest where Deloitte is involved in the Auckland Council, to the extent that it is picking up money as consultants whilst also doing the auditing work for Audit New Zealand—another Government-responsible body?

Hon Dr NICK SMITH: No, I have not received any reports or concerns, but, equally, I would say to the member that if I did receive concerns about any financial impropriety involving any of our 78 councils, my advice to those people would be to refer them to the Auditor-General. The intervention powers that I have as a Minister are quite limited, and only in serious situations, and around financial matters have only followed negative reports by the Auditor-General.

Rt Hon Winston Peters: Supplementary question—

Mr SPEAKER: The member has used New Zealand First’s allocation of supplementary questions.

Rt Hon Winston Peters: You have ruled them all out.

Mr SPEAKER: That does not mean they are not supplementary questions.

Industrial Action, 1 March 2012—Government Response

8. DARIEN FENTON (Labour) to the Minister of Labour: What action, if any, does the Government intend to take in respect of industrial action currently occurring in New Zealand?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Labour: The industrial actions taking place at the moment are matters that are between the employers and the employees. The Government has not been asked to intervene and does not intend doing so.

Darien Fenton: Will her Government’s planned legislation to remove the requirement to conclude collective bargaining not mean workers have no options left but to strike in order to achieve fairer wages and working conditions?

Hon GERRY BROWNLEE: No, the vast majority of collective agreements are signed without problem.

Darien Fenton: Does she agree Oceania Group’s aged-care workers would not need to be striking at the moment if her Government had provided them with a fair $15 an hour minimum wage?


Darien Fenton: Does she agree that her Government’s policies undermining workers’ rights have encouraged employers to pay less, and if not, how does she explain her answers to written questions yesterday, which show that almost half the number of jobs created in the last year have been minimum-wage jobs?

Hon GERRY BROWNLEE: In answer to the first part of the question, no. In relation to the second part of the question, it is important that new jobs are created in the economy. They are opportunities for people to progress.

Broadband Initiatives—Progress

9. MICHAEL WOODHOUSE (National) to the Minister for Communications and

Information Technology: What recent progress has the Government made to improve New Zealanders’ access to broadband?

Hon AMY ADAMS (Minister for Communications and Information Technology): I am happy to report that the Government’s Ultra-fast Broadband Initiative is now under way in Dunedin. By July of this year there will be new fibre past 1,400 homes and businesses and providing connections to 14 schools in North Dunedin. Along with the ultra-fast broadband builds under way in Ashburton, Christchurch, Rangiora, and Blenheim, this will provide real opportunity to boost economic growth and increase productivity in the South Island.

Michael Woodhouse: What recent progress has been made in the Government’s Rural Broadband Initiative?

Hon AMY ADAMS: A launch was held at Eureka in the Waikato last week to mark the first five of 154 new broadband wireless towers being delivered under the scheme. As well as the new tower at Eureka, new towers are now also up and running in Motueka, Waitakere, Kūmeu, and Puketaha, and 44 existing towers have also been upgraded to date. This means the first rural New Zealanders are now enjoying the benefits of the Rural Broadband Initiative, with the added benefit of better cellphone coverage, as well. I am proud to be part of a Government delivering real results for rural New Zealand.

Ship Grounding, Rena—Government Response

10. GARETH HUGHES (Green) to the Minister of Transport: Will he commit to holding a Royal Commission or a Commission of Inquiry into the Government’s response to the grounding of the Rena?

Hon GERRY BROWNLEE (Minister of Transport): The current focus remains on the salvage and clean-up efforts. The independent Transport Accident Investigation Commission is investigating the grounding and can be expected to make any recommendations required on matters to improve shipping safety. Meanwhile, Maritime New Zealand’s regulatory investigation has already seen Rena crew facing charges before the courts. In due course we will consider the nature of any independent inquiry, should it be required.

Gareth Hughes: Why now, 148 days after the Rena grounding—described by environment Minister Nick Smith as New Zealand’s worst environment disaster in decades—has the Government not yet announced a royal commission of inquiry or commission of inquiry, considering the Pike River inquiry was announced 20 days after that incident, the Canterbury earthquake inquiry was announced 48 days after that crisis, and the average for all royal commissions and commissions of inquiry is 41 days?

Hon GERRY BROWNLEE: There is no competition here to see who can get the inquiry in the shortest period of time. We have two investigations going on at the moment. One of those has led to court action being taken; that is progressing at the present time. The Rena is still on the reef and the clean-up operation continues, as will the salvage operation.

Gareth Hughes: Does the Minister stand by the Prime Minister’s statement to Gary Taylor of the Environmental Defence Society that it is his expectation to have some sort of independent

inquiry into the aftermath of the Rena grounding; if so, in what time frame will we see an announcement of a royal commission or a commission of inquiry?

Hon GERRY BROWNLEE: The Prime Minister made the commitment to an independent inquiry, but at the moment there are inquiries taking place by the Transport Accident Investigation Commission and by Maritime New Zealand itself, and of course there is a massive clean-up going on there, as well. There is a natural sequence to these things that will unfold, and in time we will make a decision about the nature of an inquiry that might be required to further find out what happened.

Grant Robertson: Can the Minister confirm the statement made by officials at the select committee this morning that undertaking work to draft legislation to ratify the bunker convention, which would significantly limit the liability for taxpayers in situations like the Rena grounding, was not a priority; and if so, will he instruct his officials to make it a priority?

Hon GERRY BROWNLEE: I was not at the select committee this morning, so I would be very unwise to agree with anything that was quoted by the member.

Grant Robertson: Does the Minister think it should be a priority for his officials to draft legislation to ensure that the bunker convention is ratified and implemented by New Zealand?

Hon GERRY BROWNLEE: I think that my officials should be engaged in, firstly, ensuring that we get a good outcome from the discussions with the owners of the vessel about what they will contribute to the very significant cost that the New Zealand taxpayer has had to meet, and then, of course, we will considering what the best position for New Zealand might be, moving forward.

Mr SPEAKER: It would have been quite helpful had the Minister made some reference to the substance of the question in relation to legislation in relation to the bunker—

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. I thought I was very clear. If you could understand the vagaries of the Rt Hon Winston Peters’ questions, it seems to me you should have been able to—

Mr SPEAKER: Order! The member knows that that is no way to use a point of order, and because he did that I invite Grant Robertson to repeat his question, for all to hear it clearly.

Hon Member: Point of order, Mr Speaker.

Mr SPEAKER: No, no. I have invited Grant Robertson to repeat his question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That sort of insult really requires an apology, particularly from some illiterate woodwork teacher.

Mr SPEAKER: Order! The member just heard me tell the Hon Gerry Brownlee that his point of order was totally out of order. OK, I did it in reasonably good humour. The member knows he cannot use points of order to abuse other members. He will now leave the House. I will not tolerate the point of order process being used to abuse other members. Rt Hon Winston Peters withdrew from the Chamber.

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. With respect, I was asked whether I considered it a priority for officials to advance the bunker provisions, which the member was questioning on. I said I thought the priority should be, first, engaging with the owners to conclude negotiations over what they will pay for the costs that the taxpayers have been encumbered with, and then we would look to what would be the best options for New Zealand to protect itself in the future. I think that is a perfectly clear answer.

Mr SPEAKER: With respect, I have invited the member to repeat his question. I will hear his repeated question.

Grant Robertson: Does the Minister think it is a priority for his officials to undertake the work to draft legislation to ratify the bunker convention, which would limit the liability of New Zealand taxpayers in situations like the Rena grounding?

Hon GERRY BROWNLEE: I will expand a little on what I just said on the previous question. I think it should be a priority—and it is a priority—for my officials to work towards getting a good

outcome from negotiations with the owners of the Rena, so that the expenses that the taxpayers have incurred to date are minimised. Going forward, I would like to point out that any convention we might sign will have its own limitations. We do not know yet where we are going to end up out of this negotiation, therefore cannot know what would be a good level of limitation that might be put into legislation.

Mr SPEAKER: I thank the Minister.

NZ On Air and Broadcasters—Minister’s Role

11. CLARE CURRAN (Labour—Dunedin South) to the Minister of Broadcasting: What duties, if any, does he believe he has to protect the Broadcasting Commission, also known as NZ On Air, and broadcasters from political interference?

Hon CRAIG FOSS (Minister of Broadcasting): Is that actually the question that is on notice?

Mr SPEAKER: The changed word was instead of “also known” the member said “colloquially known” as NZ On Air. But I do not think that changes the substance of the question.

Hon CRAIG FOSS: I believe that the board has the professionalism and the ability to resist political interference. But were the chair of the board to be concerned about any potential political interference, I would expect the chair to raise this with me. This has not occurred. My duty is to not interfere in operational matters of the board.

Clare Curran: How did appointing Mr Stephen McElrea, the chair of the Prime Minister’s National Party organisation in his Helensville electorate, help protect NZ On Air and broadcasters from political interference?

Hon CRAIG FOSS: I did not appoint that particular member.

Clare Curran: Does he think it was appropriate for Mr McElrea to try to stop the broadcast of an NZ On Air - funded documentary about child poverty in New Zealand prior to the election?

Hon CRAIG FOSS: I feel confident in the board. I would always expect all board members, if they have concerns about any matter, to raise any issues they have with the chair of the particular board. In this particular instance the chair of the board did not raise such matters with me.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This again was a commendably direct question of the Minister, asking him whether he thought a particular action was appropriate. I think the only interpretation you could take, if we are using your relatively liberal way of interpreting things, is yes, but I think most people in the House or the public could not tell that is what the Minister actually said.

Mr SPEAKER: The member knows the question was seeking opinion from the Minister, and where an opinion is being sought on an issue like this, there is no particular answer. The Minister gave the House information that there had been no complaint to him that would have required him to exercise any view on the matter, and therefore he is not obliged to answer any more specifically than that.

Clare Curran: Does he believe it was proper for Television New Zealand (TVNZ) in what was interpreted by Fair Go journalists as an instruction to ask Fair Go journalists not to report stories that upset their advertisers?

Hon CRAIG FOSS: I am comfortable that Fair Go has always given all participants a fair go. [Interruption]

Mr SPEAKER: Order! Unless some other member wants to have an early shower, there will be order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This was nothing about what was on TV. The question that the Minister was asked to give an opinion on was not what was on TV, but on what Fair Go journalists interpreted as a direction not to criticise their advertisers. This does go right to the core of the Minister’s responsibilities, both as Minister of Broadcasting and as Minister in charge, to make sure that TVNZ is ethically proper.

Mr SPEAKER: Order. I think it is highly debatable whether some of these matters go right to the core of the Minister’s responsibilities. Certainly they are responsibilities of the board, but the Minister has very constrained responsibilities in respect of this for very good reason—to avoid political interference by a Minister. The question was asking the Minister about something that I do not believe he does have direct responsibility for. The way the Minister answered it, I think, was not unreasonable given the nature of the question.

Clare Curran: Can he not see that this is the latest in a long list of slippages in media standards in Government controlled organisations caused by his Government’s lack of principles?

Hon CRAIG FOSS: I think many members do not see what that member purports to see in many of the questions that she asks.

Contaminated Sites—Moanataiari

12. SCOTT SIMPSON (National—Coromandel) to the Minister for the Environment: What action has the Government taken to assist local councils to deal with the possible contamination of residential and community properties in Moanataiari?

Hon Dr NICK SMITH (Minister for the Environment): The Government has agreed to provide $238,000 to assist the Thames-Coromandel District Council and the Waikato Regional Council with the issues arising from arsenic contamination of this subdivision in Thames, following representations by the local member. The funding is being used for additional tests on the 212 residential properties, and for the immediate remediation of hotspots at the Moanataiari School, and the local childcare centre.

Scott Simpson: What steps at a national level is the Government taking to improve management of health risks from contaminated sites?

Hon Dr NICK SMITH: The Government last year adopted a national environment standard for managing contaminated soil, setting out safe levels across 12 contaminants, including arsenic. This is seen as a more efficient process than having each one of our 78 councils engage in the necessary expertise to determine safe levels. The new standard took effect on 1 January this year. The Government is also advancing a programme of work as part of the memorandum of understanding with the Green Party on further steps that would have New Zealand better manage the environmental risks from contaminated sites.


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