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Questions and Answers - February 26


Skycity, Convention Centre—Expressions of Interest Process and Television New Zealand


1. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Why did he say last week in relation to SkyCity “Its architects designed such a thing, realised they needed more land, worked out who owned the land, and approached Television New Zealand”?

Rt Hon JOHN KEY (Prime Minister): Because I believed it to be true at the time.

Rt Hon Winston Peters: Well, if the Prime Minister believed it to be true at the time—and this is his third apology that he’s given to New Zealand First on matters in the House—who advised him that Television New Zealand (TVNZ) had been approached by Skycity?

Rt Hon JOHN KEY: I was aware at a press conference I went to when we launched the successful conclusion of the expressions of interest process of the architect’s drawings, which clearly showed the proposed convention centre be built on the land owned by Television New Zealand. I made a pretty fair assumption that that had been the case.

Rt Hon Winston Peters: Is it not correct that his staff had a meeting with Ministry of Economic Development officials on 9 November 2010, 2 months after Skycity first signalled its interest in the TVNZ land; if so, how can we be expected to believe that the subject of the TVNZ land was not raised?

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Rt Hon JOHN KEY: I have no record of what happened at that meeting—I would be prepared to go and look at it, but I do not have it—but I will make the point that the member made some pretty strong assertions last week in the House, which have actually been proven to be incorrect. He said that there was a secret side-deal. Well, what we now know is that there was actually no deal; secondly, there was no approach; and, thirdly, I was not involved in the process.

Rt Hon Winston Peters: Does the Prime Minister expect us to believe that he goes to meetings where the taxpayer is funding the meeting in the first place and his attendance and that of his staff, and no one keeps a record during the meeting, and no one records what happened after the meeting, or, for that matter, no one prepared any notice about what the meeting was being held for in the first place? [Interruption] Tell us about what?

Mr SPEAKER: Order!

Rt Hon Winston Peters: This is not about ACC—no.

Mr SPEAKER: Order! Could the—[Interruption] Could the Rt Hon Winston Peters complete his supplementary question.

Rt Hon Winston Peters: Well, I am trying to, Mr Speaker, but all I am asking—is the Prime Minister expecting New Zealanders to believe that he goes to a meeting, and there is no preparatory notice as to why he is going, that when the meeting occurs, no one takes any notice at all, not even

the other side, which he could consult with later on, or that when the meeting is over, no record is kept of what happened at the meeting in the first place, when the taxpayer is funding that meeting?

Rt Hon JOHN KEY: In certain instances, yes.

Rt Hon Winston Peters: How can he expect the House to believe that he and his staff never discussed the TVNZ land with Skycity or Ministry of Economic Development officials, when the Auditor-General says the Ministry of Economic Development began doing preparatory work for the sale as early as 2010, including Treaty of Waitangi clearance?

Rt Hon JOHN KEY: Because it is correct. As Television New Zealand has pointed out, it actually has not had an approach from Skycity. What I was aware of was what I said earlier: I went to a press conference on Sunday afternoon—

Hon Annette King: Just made it up.

Rt Hon JOHN KEY: Well, I went to a press conference on Sunday afternoon with the Mayor of Auckland, Len Brown. At that press conference were presented the drawings from the architect. What was presented was that they would require more land. The place where it was going to be built, it was quite clear, was Television New Zealand’s land. Yes, I made an assumption, but, I would have thought, probably a pretty sound one.

State-owned Assets, Sales—Prime Minister’s Statements

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in relation to asset sales “I spent my life starting in investment banking. I know how these things work”?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Will he confirm that he had concerns about the effect of Solid Energy’s business plans on its financial position as far back as 2009?

Rt Hon JOHN KEY: No, that is not what I have said. What I have said is in 2009-10 there was a proposal brought to the Government for a natural resources company, which the Government rejected. Our first major concerns about the company were after the scoping study was completed in, I think—it was presented to us in 2012, but undertaken in 2011, from memory.

David Shearer: Given those concerns in 2011, what was he doing making a statement that “companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion”?

Rt Hon JOHN KEY: Quite correct, I did make that statement. I also made that statement some months before the scoping study was undertaken. And I happen to think, actually, there is the potential for lignite development in New Zealand.

David Shearer: Given that he said that he had “robust discussions” around Solid Energy’s direction, why did his Ministers not object to $23 million being paid out to senior executives of that company during those robust discussions?

Rt Hon JOHN KEY: As I understand it—and the member may be better to put the question to the Minister for State Owned Enterprises—the payment was actually made to a wide range of participants, not just the way it has been characterised by the Opposition. But I think it is worth reflecting on this point: when it comes to—[Interruption] No, we are not questioning the number; we are questioning who got the number. As I said, my understanding is it was paid to a wide range of employees at Solid Energy.

Grant Robertson: Oh, that’s OK then.

Rt Hon JOHN KEY: Actually, they are called the workers, and the last time I looked, I thought Labour liked those people.

Mr SPEAKER: Order! [Interruption] Order! That was quite sufficient an answer.

David Shearer: What does he believe his asset programme will now raise with the collapse of Solid Energy, given that he has previously claimed it will raise $5 billion to $7 billion and his finance Minister today said that it would have to be revised downwards?

Rt Hon JOHN KEY: Firstly, the Minister of Finance tells me he did not make the last comment that the member has come to the House and said, which is so often the case with what we get from Opposition members. They just make this stuff up as they go along, but that is OK. If they want to be absolutely word perfect, that is cool; we can run that on both sides. The second thing is that it has not actually collapsed, although we will need to wait and see the Supreme Court ruling. The third point is this: in fact, a Cabinet paper from April 2011 said—

Iain Lees-Galloway: Read the New Zealand Herald.

Rt Hon JOHN KEY: No wonder you have got a lot to say, when you do not rank even in the top 20. No one else wants to listen to you.

David Shearer: What does he believe his asset sales programme will now raise from the sale of those assets; what can he tell the people of New Zealand?

Rt Hon JOHN KEY: Firstly, I think it is worth remembering that they are partial sales. The Government is retaining 51 percent.

Iain Lees-Galloway: Just answer it.

Rt Hon JOHN KEY: You just answer how many of you did not vote for David Shearer and—

Mr SPEAKER: Order! Would the Prime Minister please answer.

Rt Hon JOHN KEY: OK, is it 10, 12? I do not know the answer, whatever you guys—

Mr SPEAKER: Order! Would the Prime Minister please answer the question.

Rt Hon JOHN KEY: Of course I will. If they would give me just a moment to get the answer out, I am more than happy to answer the question. A Cabinet paper from April 2011 said that Solid Energy had a commercial value of $1.7 billion. That was for 100 percent of the company. Based on this sell-down, where the Crown kept the majority ownership, it would raise somewhere between $0.68 billion and $0.85 billion. In other words, that is the amount that theoretically could have come from Solid Energy. But, for a start-off, there is a 3 to 5-year period that the Government set, so that is one issue. Secondly, we do not actually know what we will actually get for the other shares that we sell, so it could easily be $5 billion to $7 billion. We will let you know after we have completed the programme.

David Shearer: Given that he said yesterday that Solid Energy was now effectively worthless, is he unable to tell New Zealanders approximately what they are likely to get for assets that they themselves own?

Rt Hon JOHN KEY: The member was not listening, so let us run right through it again, so that he can get the answer. A Cabinet paper from April 2011 said Solid Energy—

Chris Hipkins: Show us the money!

Rt Hon JOHN KEY: —had a commercial value of $1.7 billion. Yeah, that worked real well for you in the last election campaign! If you want to have that debate again, feel free, sunshine. OK, going back to what may not come out is $0.68—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. It must become obvious to you that the Prime Minister cannot go on like a giggly schoolboy in this House when he is answering questions. It is outrageous the way he is behaving, and you should stop him and tell him to get back to his job—if he can do it.

Mr SPEAKER: It would certainly be helpful to the order of the House if the Prime Minister would give a concise answer to the question, but it would be equally helpful if there were not loud objections coming from the Labour Opposition benches.

Rt Hon JOHN KEY: So the $1.7 billion that was in the Cabinet paper from 2011 would indicate that if that company was not part of the mixed-ownership model, then somewhere around $0.68 to $0.85 billion would not be released, but because we do not know the time period under which Solid Energy may potentially be back in the programme, and, secondly, because we do not know what we will actually get for the other companies, it is quite possible it would be between $5 billion and $7 billion. In other words, nothing has changed.


3. PAUL GOLDSMITH (National) to the Minister of Finance: What reports has he received on the economy?

Hon BILL ENGLISH (Minister of Finance): In the accounts for the first 7 months of the 2013 fiscal year, the Inland Revenue Department reports that PAYE receipts were $12.66 billion. This is $208 million higher than forecast by Treasury in its half-year update, and $748 million, or 6.3 percent, higher than the same period last year. This higher PAYE revenue of $748 million, compared with a year ago, indicates that more people are being paid, or that those who are in employment are being paid more. So when we try to reconcile increases in PAYE with changing employment figures, it could point to more people moving out of self-employment into wage and salary jobs, or it could point to changes in retirement patterns. But there is no doubt that more people are being paid and we are collecting more PAYE.

Paul Goldsmith: How does this growth in tax revenues compare to levels of investor and consumer confidence?

Hon BILL ENGLISH: It could be perhaps the good weather, but recent confidence surveys have shown some increase in consumer and investor confidence. In fact, rates for the investor confidence survey are the highest they have been in 3 years. But, probably more important than that, it is pleasing to see that the ANZ’s regional survey showed that all 14 regions of New Zealand expanded in the December quarter, and that is the first time that has happened since 2005. However, we remain concerned about the ongoing effects of increasing drought conditions, particularly in parts of the North Island, and we are also concerned that this year could follow the pattern of previous years, with higher levels of confidence in the first half of the year tailing off in the second half of the year.

Paul Goldsmith: How will improved confidence affect investment and productivity in the economy?

Hon BILL ENGLISH: At a time of prolonged uncertainty it is important that we do whatever we can to lift the confidence of firms and companies, so that they can invest another dollar and employ another person, and do so in a way that is going to be of benefit to them. Clearly, the increase in PAYE payments of $750 million since this time last year indicates that at least some businesses are taking the decision to employ more people and back that with more investment.

Paul Goldsmith: What other plans has he seen for building investment and creating jobs?

Hon BILL ENGLISH: There are two sets of plans that I think can be compared. The first is the Government’s plans articulated in some detail in the Business Growth Agenda publications. I have also seen other plans that include opposition to reduced taxes, opposition to major roading projects, opposition to improvements in the Resource Management Act, opposition to work expectations on beneficiaries, and opposition to responsible investment in oil and gas exploration. These, I understand, are the plans of the Opposition parties.

Unemployment—Current Rate

GRANT ROBERTSON (Deputy Leader—Labour): My question is to the Minister for Tertiary Education, Skills and Employment. [Interruption]

Mr SPEAKER: Order! Would the member like to start again?

GRANT ROBERTSON (Deputy Leader—Labour): I would, Mr Speaker. Thank you.

4. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister for Tertiary

Education, Skills and Employment: Does he agree with the Prime Minister “the number one thing New Zealanders need to rely on is that they have a job, so they can provide for their families”; if so, how many New Zealanders are currently unemployed?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Yes, I do agree with the Prime Minister’s statement, and that is why the Government is working very hard to provide the conditions for businesses to invest and grow jobs in the New Zealand economy. There

are a number of ways to measure unemployment. For example, benefit numbers show that the number of people on the unemployment benefit dropped by more than 13,000, from 67,000—

Mr SPEAKER: Order! I am having trouble hearing the answer to this part of the question.

Hon STEVEN JOYCE: For example, benefit numbers show that the number of people on the unemployment benefit dropped by more than 13,000, from 67,000 in December 2010 to 53,700 in December 2012. Another indicator is the household labour force survey, the latest of which estimated that 163,000 New Zealanders are unemployed, which is 10,000 fewer than in the previous quarter. That is a drop in unemployment from 7.3 percent to 6.9 percent.

Grant Robertson: Is it correct that there has been a net loss of 30,000 jobs since he became the Minister for Tertiary Education, Skills and Employment?

Hon STEVEN JOYCE: No, I do not accept that number, because, actually, the quarterly employment survey, the latest of which came out a couple of days before the household labour force survey, showed a net increase of 54,000 new jobs across the country over the last 2 years.

Grant Robertson: Is it correct that the household labour force survey, which the Minister described as “the standard internationally recognised measure of employment and unemployment”, tells us that there has been a net loss of 30,000 jobs since he became the Minister for Tertiary Education, Skills and Employment?

Hon STEVEN JOYCE: Well, there has been an increase, actually, in the number of full-time jobs but a decrease in the number of part-time jobs, according to the household labour force survey. But I think it is important to point out to the member, because he is new to the portfolio, that there are a range of measures to determine the health of the economy and the creation of jobs. He mentioned the household labour force survey. The quarterly employment survey, of course, showed a net increase of 54,000 new jobs over the last 2 years. The numbers on the unemployment benefit are an important indicator of jobs in the New Zealand economy. PAYE taxes collected by the Inland Revenue Department are also important, and job vacancies are important, as well. I note that the Ministry of Business, Innovation and Employment online survey released last week showed that skilled vacancies were up by 8.5 percent on the same time last year.

Grant Robertson: I raise a point of order, Mr Speaker. That was a very specific question. It included the idea that it was the household labour force survey that was suggesting that there had been a net loss of 30,000 jobs—

Mr SPEAKER: Order! It was a specific question, and I invite the member to repeat that question.

Grant Robertson: Thank you very much, Mr Speaker. Is it correct that the household labour force survey, which the Minister has described as “the standard internationally recognised measure of employment and unemployment”, tells us that there has been a net loss of 30,000 jobs since he became the Minister for Tertiary Education, Skills and Employment?

Hon STEVEN JOYCE: As I said in my previous answer, I was not aware of the exact number but I do know that there has been a decline in part-time jobs and an increase in full-time jobs. I said I did not know the exact answer. But I also point out to the member—and I think it was helpful— that there are a range of measures, and I am happy to go through them again for the member, because there are different indicators of the number of jobs in the New Zealand economy.

Grant Robertson: To assist the Minister, I seek leave of the House to table a document prepared by the Parliamentary Library on the basis of the household labour force survey that shows a drop—

Mr SPEAKER: Whom was the document prepared for?

Grant Robertson: It was prepared by the Parliamentary Library.

Mr SPEAKER: No, whom was it prepared for?

Grant Robertson: For me, Mr Speaker.

Mr SPEAKER: Leave is sought to table that document. Is there any objection to that? There is objection.

Grant Robertson: Is the Minister prepared to advocate for a change to monetary policy to give exporters a fair go and help New Zealanders find jobs so that they can feed their families?

Hon STEVEN JOYCE: No, although it is interesting to see the member going down the line of printing money. But the important thing is that on the one hand the member is arguing for artificial depreciation of the New Zealand dollar, and on the other hand Mr Parker will be along shortly arguing for closing the income gap between here and Australia, which, of course, an artificial reduction in the New Zealand dollar—

Grant Robertson: Point of order, Mr Speaker.

Mr SPEAKER: Point of order, Grant Robertson.

Grant Robertson: He has sat down now, but that would have been the point of order.

Mr SPEAKER: Has the member got further supplementary questions?

Grant Robertson: Supplementary question, Mr Speaker.

Mr SPEAKER: Then ask them.

Grant Robertson: Who is correct: the Prime Minister, who said today about the high dollar that “Even for a lot of manufacturers, it’s a big help.”, or Keith Whiteley from HamiltonJet, Gordon Sutherland from A W Fraser, Mike Eggers from Pacific Helmets, and all the other manufacturers who have said that the high dollar and the Government’s monetary policy are strangling their business and stopping job growth?

Hon STEVEN JOYCE: The Prime Minister is correct, and I will point out for the member—

Grant Robertson: Oh, the manufacturers know nothing?

Hon STEVEN JOYCE: No, I will point out for the member that he needs to go and look at something called the TIN100, which is the index of high-value manufacturing companies in New Zealand—which, again, he may not yet be aware of—which shows the companies that are doing very well. Different companies are struggling and different companies are doing very well, and the reality is that companies gain also from the benefits of imports from input prices—

Grant Robertson: So the manufacturers know nothing? They know nothing, do they?

Hon STEVEN JOYCE: No, Mr Robertson, it is pretty obvious that you are the one who knows nothing.

Solid Energy—Prime Minister's Statements

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his statement reported in the Southland Times in June 2011 that, “At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion”?

Rt Hon JOHN KEY (Prime Minister): Yes, and I also said at the time: “We know there is lots of resource there and we know they potentially have the capability [to convert lignite to urea or diesel] and so we will see how that progresses,”. I note that my comments were made 4 months before an independent scoping study on Solid Energy was completed in October 2011. This raised questions about the company’s coal price assumptions and its strategic direction, which led to escalating action by the Government and a change of business strategy by Solid Energy.

Dr Russel Norman: Why, then, did he say yesterday “we didn’t agree with the massive expansion of the company.”, when manifestly not only did he agree with the massive expansion, he actually encouraged a $2 billion investment into lignite?

Rt Hon JOHN KEY: See, again, this is where the members want to come into this House and misrepresent comments, and make them out to be there and try to fool some people. Here is the answer. The exact question I was asked was in relation to the natural resources expansion of $1 billion, and this Government did reject that, for all of the right reasons. But in terms of the expansions that Solid Energy made under its own balance sheet, that is right, the Government allowed that to take place. I will make the point, though, that it is worth remembering this time line. In 2003 there was the acquisition by Solid Energy of Nature’s Flame wood pellet business. In 2004 Solid Energy began investigating its coal-seam gas. In 2005 it started the acquisition of land in

Southland for lignite development. In 2006 it began the investigation of coal to liquid conversion and it started the development of underground coal gasification technology. In 2007 it started the research into lignite briquetting. In 2007 it expanded its renewable businesses into biodiesel. In 2006 Trevor Mallard took to Cabinet a paper that—

Mr SPEAKER: That is plenty long enough.

Dr Russel Norman: Why did he encourage Solid Energy’s expansion into the billion-dollar lignite project when he had never ever seen a business case for this investment?

Rt Hon JOHN KEY: Well, I think it is worth remembering that Treasury says a business case note is not required, because the only specific proposal that was advanced by Solid Energy was the briquette plant, and that was beneath the required threshold. Treasury sets a threshold of $125 million—or did; this Government actually reduced that to $50 million, and the briquette plant was $20 million to $30 million. I happened to hold the view that there is the potential for lignite. There are many ways, actually, lignite conversion could take place, and Solid Energy could have advanced those, either because it made super-profits in certain areas or it formed a partnership with other partners, which was certainly one option it was considering. To sit there and say that it had to do it purely by itself, on its own, off its own debt, is actually not an accurate statement.

Louise Upston: Has the Prime Minister seen any statements offering advice on the role that the Government might play in encouraging State-owned enterprises like Solid Energy to get into new business areas?

Rt Hon JOHN KEY: Yes, I have. I have seen this statement: “While the government is now actively encouraging SOEs to consider this opportunity, ministers don’t intend telling them how they might do this. It will be up to SOEs to come up with robust business plans that can preferably be funded off their own balance sheet and that meet the criteria.” Of course, those profound words came from the Minister for State Owned Enterprises at the time, the Hon Trevor Mallard—No. 21 these days.

Mr SPEAKER: Supplementary question, Dr Russel Norman.

Dr Russel Norman: Thank you, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I have called Dr Russel Norman for a supplementary—[Interruption] Order! Dr Russel Norman, supplementary question.

Dr Russel Norman: Is it not prudent that the owner of a company faced by plans by that company to spend up to $2 billion on new investments would ask that company for a business plan to justify those investments?

Rt Hon JOHN KEY: If the company was coming to the Government with a proposal for a $2 billion investment, of course it would require that, because it would trigger the Government’s threshold of $50 million. But, in fact, that is not the case. What is true is that this company back in 2003 embarked on a diversification programme of a number of assets under a Labour Government. It carried on all the way through until we became the Government in 2008. In 2008-09 this company was producing record profits, was being revalued up, and the coal prices were high. The Government, I think, was entitled to accept the assurances made by the directors and by the management that they were going in the right direction. By 2011 this Government then said, because of part of the mixed-ownership programme, that it should undertake a scoping study. What that actually proved was that there were a number of issues, and it comes to the very point of why New Zealanders rejected Labour’s opposition to the mixed-ownership model—

Dr Russel Norman: I raise a point of order, Mr Speaker. This has nothing to do with attacking the Labour Party.

Mr SPEAKER: I think that the answer has been very sufficiently given and need not go on.

Dr Russel Norman: Given the Prime Minister’s ringing endorsement of Solid Energy’s expansion plans into lignite, which at the time were indicated of a multibillion-dollar order on the public record, why did he endorse those plans publicly when he had never received a business plan from Solid Energy?

Rt Hon JOHN KEY: It is quite self-explanatory if you look at the comments I have made. I have said to the House this afternoon I genuinely believed that there is the potential for a business opportunity for lignite conversion. The Greens do not agree with that, because they are fundamentally opposed to lignite. But it is really important that the member does not try to misrepresent the situation. Solid Energy never came to the Government with a $2 billion proposal. Solid Energy did come to this Government and propose a vastly expanded Solid Energy into a natural resources company. This Government rejected that. This Government undertook a scoping study in 2011. This Government actually stood up to the issues that we saw in that scoping study—

Mr SPEAKER: Order! That answer is quite sufficient.

Dr Russel Norman: Is the Prime Minister asking the Parliament to believe that in June 2011, when he came out and gave a ringing endorsement of the lignite plans by Solid Energy, he was unaware that those plans involved a multibillion-dollar investment, and he was very happy to give a ringing endorsement of those plans, even though he had never seen a business plan?

Rt Hon JOHN KEY: Firstly, the member comes to the House and again makes assumptions that there is a ringing endorsement. That is not correct. No, I have not seen a plan, to the best of my memory, from Solid Energy for a $2 billion expansion. What I have seen, and what I was aware of, is that the company was keen on expanding its lignite conversion. It had lignite opportunities in Southland. It had many ways it could potentially do that. It started that programme under Labour, as I have been saying during the weekend. Clayton Cosgrove is saying it is nothing to do with Labour. They are up to their necks in it. [Interruption]

Mr SPEAKER: Order! Would the Hon Annette King allow the supplementary question, please.

Dr Russel Norman: How can the Prime Minister ask us to believe that he did not give a ringing endorsement for the lignite plan, when his actual statement when he was in Southland was that “we want [Solid Energy] to expand in areas like lignite conversion.”? How could the management and board of Solid Energy take that as anything other than support from the Prime Minister of New Zealand?

Rt Hon JOHN KEY: Because the fact that someone may think that there is a business proposal and an opportunity to expand in an area does not quantify that. I might happen—[Interruption] Well, I might happen to think that people should vote for National, but it does not mean the numbers should be 50 percent or 65 percent; it just means I happen to think they would do that. I have never seen a $2 billion proposal. What I do know is that it started under Labour, and this Government has been working hard to resolve those issues.

Dr Russel Norman: I seek leave to table an Official Information Act response from Treasury of 13 February 2013, which says: “Solid Energy never submitted a business case to the Treasury on lignite developments.”

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

Welfare Reforms—Progress

6. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister for Social

Development: What impact have the Government’s welfare reforms had to date?

Hon PAULA BENNETT (Minister for Social Development): The Government’s welfare reforms are seeing real gains for New Zealanders. Future Focus, implemented in September 2012 as a precursor to our current major reforms, introduced clear obligations and greater fairness to the benefit system. Since Future Focus started, more than 171,000 benefits have been cancelled because people found work, which is a good result in spite of a tough local market and a global economic recession. Over the last 2 years benefit numbers are now reducing by 165 net every week, on average, which equates to about 34 people every working day.

Peseta Sam Lotu-Iiga: What changes has she seen as a result of the annual reapplication requirement?

Hon PAULA BENNETT: One simple policy change requiring unemployment beneficiaries to reapply if they remain on the benefit after a year has seen more than 21,400 people come off that benefit, with savings of more than $74 million to the taxpayer.

Peseta Sam Lotu-Iiga: What results have there been to date by increasing expectations and obligations for those receiving benefits?

Hon PAULA BENNETT: Prior to National’s Future Focus changes, 79 percent of beneficiaries had no work-test obligations at all. Because of Future Focus, it is now around 64 percent and will reduce further with the changes coming through in the second welfare bill. There is no doubt at all that expectations mean that we see better results for people.

Skycity, Convention Centre—Expressions of Interest Process

7. Hon DAVID PARKER (Labour) to the Minister for Economic Development: In light of the view of the Deputy Auditor-General that “… the work through to August 2009 was … reasonable and careful”; did the Prime Minister’s intervention in August 2009 result in an approach that was no longer reasonable and careful?

Hon STEVEN JOYCE (Minister for Economic Development): I am sorry, I was actually expecting another David, but—

Mr SPEAKER: Order! Would the Minister just answer the question.

Hon STEVEN JOYCE: Sorry, I am just a little bit confused—not that one but not that one either. The full quote, which the member chooses to ignore, is that “the work through to August 2009 was a reasonable and careful exploration of the possibilities presented by an international convention centre.” The report makes clear that the initial exploratory and feasibility stage—the stage the Prime Minister was involved in—along with the current negotiations, has been deemed by the Office of the Auditor-General to be appropriate. The report notes procedural issues with the second stage of the process—the expressions of interest phase—primarily that officials did not do enough planning, and that the assessment of the expression of interest process went on too long.

Hon David Parker: Was the Prime Minister’s handwritten annotation directing officials to “… close off the SkyCity angle …” dated August 2009?

Hon STEVEN JOYCE: That is my understanding, and that forms part of the period that, as I will just say again, the Deputy Auditor-General said of in paragraph 3.32 of the report: “We have no concern that the Government took steps to find out whether SkyCity’s development plans might be relevant to the discussions about an international convention centre.”

Hon David Parker: Is it not the reality that the August date was chosen by the Deputy Auditor- General because it was the subsequent negotiations with Skycity, advanced by Mr Key and his chief of staff, that the Deputy Auditor-General found to lack transparency and were unfair to other interested parties?

Hon STEVEN JOYCE: No, that is not correct. Paragraph 3.32 is perhaps helpful to the member. I have read the first sentence, but if I could indulge the House, it went on to say: “Nor is it unusual for a company like SkyCity to approach government officials and Ministers to explore whether there might be government interest in, and support for, its development ideas.” The paragraph finishes by saying: “Our investigation confirmed that the discussions between August 2009 and March 2010 remained high level and preliminary in nature.” At the end of that chapter of the report it talks about what the ministry should be considering, but again it says that it had no concerns about what the Government was doing at that time.

Hon David Parker: Given that the Minister maintains that it was not unwise for the Prime Minister and his chief of staff to pursue negotiations with Skycity in and after August 2009, including possible regulatory breaks that other parties were not aware of, why did the Attorney- General conclude: “… we do not consider that the approach adopted was appropriate.”—

Hon Christopher Finlayson: Auditor-General.

Hon David Parker: —sorry, the Auditor-General—“… we do not consider that the approach adopted was appropriate. The result was that one submitter was treated differently from the others during the evaluation process.”?

Hon STEVEN JOYCE: It is obvious from the end of that quote that the member is quite deliberately seeking to conflate the two different parts of the discussion. The parts referred to that the Prime Minister was involved in were in 2009-10, and the Deputy Auditor-General indicated no concern with those parts of the process. The quote that the member has just said was obviously in relation to the expressions of interest process, which the Prime Minister had no part in. I think the member is being a little bit disingenuous, if I may say.

Hon David Parker: Was the reference to the Treasury warning about probity contained in the Department of the Prime Minister and Cabinet briefing note to the Prime Minister on 3 December 2009 expressly limited to public-private partnerships, and when will the Government release the still suppressed Treasury advice to the Ministry of Economic Development, the Ministry of Economic Development or Ministry of Tourism report to the Department of the Prime Minister and Cabinet, and the briefing note from the Department of the Prime Minister and Cabinet to the Prime Minister?

Hon STEVEN JOYCE: Well, some of those items that the member raises are affected by the convention by which the executive and Parliament operate. But just in relation to the member’s point, I would perhaps quote to him from the report itself, because it talks about if matters were to proceed to a public-private partnership, and that was the concern. So just going on the report, the reality is that it makes it clear that it was about a public-private partnership that it was concerned. The report notes in 3.44: “the matter became moot because SkyCity did not produce a proposal at this time. Instead, the Minister directed officials—”

Hon David Parker: I raise a point of order, Mr Speaker. My question was whether the reference to the Treasury warning about probity—

Mr SPEAKER: Order! There were two clear parts to your question, and I consider that the Minister has adequately addressed the second part.

Hon David Parker: I raise a point of order, Mr Speaker. Then, with respect, the Speaker should take care that he does not allow the Minister to ramble on about things that were not in any part of the question.

Mr SPEAKER: I do not think that on that occasion the Minister did, although there have been some very lengthy answers today that were not helpful.

Irrigation—Irrigation Company Establishment Board

8. COLIN KING (National—Kaikōura) to the Minister for Primary Industries: What progress can he report on increasing New Zealand’s economic and environmental performance through investment in irrigation?

Hon NATHAN GUY (Minister for Primary Industries): Last week I announced the appointment of an establishment board for a new Crown company to invest in irrigation projects. The new company, which is to be established by 1 July this year, will act as a bridging investor for regional water infrastructure development. Earlier this year this Government announced that $80 million will be set aside in Budget 2013 for the initial stages of the company’s operation. This is the first step in this Government’s commitment to invest up to $400 million in regional-scale schemes to encourage further capital investment.

Colin King: Why is the Government investing in regional water infrastructure development?

Hon NATHAN GUY: The development of a well-designed storage and irrigation infrastructure has the potential to develop significant economic growth and support, importantly, new jobs. A New Zealand Institute of Economic Research report states that a Government could support the development of over 340,000 hectares of new irrigation. This could boost exports by $1.4 billion a

year by 2018, and $4 billion a year by 2026. Reliable irrigation would also be better for the environment, allowing for more efficient water use, replenishing aquifers, and restoring stream and river flows.

State-owned Enterprises—Commercial Expertise

9. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Does he agree with his predecessor Hon Simon Power that in 2009 the Government was “looking carefully” at the make-up of SOE boards and “commercial expertise is at the forefront of our minds”?

Hon TONY RYALL (Minister for State Owned Enterprises): Yes.

Hon Clayton Cosgrove: Given that his Government refused a capital injection for Solid Energy’s expansion plans in 2009 and the board moved ahead to progress those plans anyway, two independent valuations in 2010 found that Solid Energy was worth half what the company claimed, and, further, the scoping study that he received in 2011 revealed serious problems with the company, why, given all this information, did he take no action to deal with the precarious financial situation Solid Energy found itself in?

Hon TONY RYALL: The premise of the member’s question is quite incorrect. When Ministers became aware of issues raised in the scoping study, they took the appropriate steps. There were discussions with the board, we commissioned additional advice, and, as the member knows, the chair has changed and the board has changed.

Hon Clayton Cosgrove: Given that answer, why does he keep misleading New Zealanders that he could take no practical action to intervene regarding Solid Energy’s financial position, when, in fact, he had at least three options: firstly, under section 13 of the State-Owned Enterprises Act shareholding Ministers may from time to time direct the board of a company to take actions via the statement of corporate intent process; secondly, he could have sacked the board—they resigned, he did not sack them—and thirdly, he could have called the chair in and provided direction in the same way that Bill English, and his predecessor Simon Power, called in the chairs of State-owned enterprises in 2009 and demanded additional dividends for the Crown? Why did he do absolutely nothing of any practical nature?

Hon TONY RYALL: The member can repeat whatever he likes. The simple fact of the matter is when Ministers became aware of the issues raised in the scoping study at the end of 2011 we took the appropriate steps to address the issues that were raised. As the member knows, the company now has a new chair and new board, and we are currently dealing with the banks to resolve those issues.

Hon Clayton Cosgrove: Is it correct that the former Solid Energy chairman John Palmer, after announcing his resignation in November 2012 but immediately prior to his official departure, signed off the renewal of the chief executive’s contract, which included a substantial salary increase, and as such led to a far larger amount of taxpayers’ money being spent on the chief executive’s severance package, and why did he take no action, even though he and the Minister of Finance were from June 2012 receiving, at their request, monthly reports on the state of that company?

Hon TONY RYALL: First of all, the premise of the member’s question is quite incorrect. Mr Palmer had ceased being the chairman in November 2012. My understanding is that the allegations that that member is making are not correct.

Hon Clayton Cosgrove: I seek leave to table a photograph from the National Party Flickr site, which details Solid Energy—

Mr SPEAKER: Order! [Interruption] Order! As I have ruled last week in a considered ruling on the tabling of documents, it has to be something that adds to the quality of the debate—that informs the House. I do not consider that that photograph does.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. You have ruled that it does not add to the debate.

Mr SPEAKER: Add to the value of the debate.

Hon Clayton Cosgrove: Add to the value. Well, I put it to you that this is absolutely—

Mr SPEAKER: The member is now disputing my ruling. He will resume his seat.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I just want to make it clear, because I think I and a number of members last week were quite surprised at your ruling. Because of events last week, we thought we would let it run at the time, but are you ruling that you are the judge of whether something adds to the debate in the House? That is something that no Speaker has done before. They have always given considered rulings or groups of areas. If you are taking that power to yourself, I am sure that there are going to be negative consequences.

Mr SPEAKER: I thank the member. [Interruption] Order! The member is trying to assist in that ruling that I made. It was a ruling about the availability of information. I am happy that the member rereads the ruling. It was around the ready availability of the material that members were seeking to debate. It was also around whether the information would be of value to the House, and therefore there was definitely a quality issue in it. It is a considered ruling that was given to the House. At any time I invite any member to come and discuss that, but my predecessor the Rt Hon Dr Lockwood Smith had moved to the extent where we did not have incessant tabling of documents, so that when members actually sought to table documents, they actually had more chance of those documents being accepted by the House. If you consider question time last week, where there were a significant number of documents tabled, they were tabled with the agreement of the House. If you go back some time in the past, it became almost automatic that when Opposition members in particular sought to table documents, leave was inevitably denied. So I am trying to get to a situation where what is tabled is useful to the House. Certainly, that is what I ruled.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Speaking further to the same issue, the changes that the former Speaker introduced were a result of a discussion at the Standing Orders Committee and consistent with that report, in that there were objective criteria set out. What you have done is introduce a subjective area that says that you are the judge of that, rather than, as the Standing Orders Committee and the whole House agreed, that there would be groups of areas that would be ruled out.

Rt Hon Winston Peters: The fact is that I think most members agree that we do not want to waste the House’s time with frivolous tabling of documents, but we are going to make ourselves look rather ridiculous when courts of law accept photographs as being critical parts of evidence and this House says that they are not. So all I am saying is: use caution in your judgment, because that absolutist judgment I do not think we can live with.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: The Hon Clayton Cosgrove has raised a point of order. I will take one more point of order on this matter, and then I will rule further.

Hon Clayton Cosgrove: From Mr Peters’ point of order, the item that I sought to table is evidence of both culpability in and support for the expansion of Solid Energy’s lignite programme in Southland. That is evidence of it, and I would have thought that if it is good enough for a court, it is good enough for you.

Mr SPEAKER: I accept that point. At the end of the day, I think that it is a long bow, but the easiest way to resolve this matter is to actually allow leave to be sought. I am going to do that in a second, but I invite the Hon Trevor Mallard at any time to discuss a ruling that I make. I am quite happy that the matter be further discussed at the Standing Orders Committee, because what we are trying to do is to deliver to the House the opportunity of tabling relevant documents and eliminating the tabling of irrelevant documents. But on this particular occasion, to resolve the matter, I will allow the member to put his leave to have a photograph tabled. Is there any objection to that course of action? There is objection to that course of action.

Rt Hon John Key: Is it true that in 2004 the then Labour Government started allowing Solid Energy to expand into lignite operations in Southland; is it also true that in 2005 it allowed it to acquire land for lignite conversion in Southland; and is it also true that in 2008-09 when National became the Government—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. When did that Minister whom Mr Key is addressing the question to become responsible for Labour’s actions or policy?

Mr SPEAKER: The question was not anything about responsibility—and I think the question has been quite long enough. The question was not about any responsibility; it was about whether the Minister was aware. Would the Minister—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I do want to reinforce that, and ask you to consider that the Prime Minister asked a series of questions—is it true that a Labour Government did this; is it true that a Labour Government did that; is it true—

Mr SPEAKER: Order! It is getting to the stage—

Hon Trevor Mallard: —none of which, I think, can be answered.

Mr SPEAKER: Can I suggest the quickest way forward, without asking the Prime Minister to repeat his question, is to ask the Minister to succinctly answer the question that has been put forward.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker.

Mr SPEAKER: Would the member beside Clayton Cosgrove please put that paper down.

Hon Clayton Cosgrove: You have already heard a submission by the Hon Trevor Mallard that the question directly referred to the Labour Government and alleged actions in that respect. The way to deal with it is not to allow the Minister to answer a question that is out of order.

Mr SPEAKER: Ministers may be asked historical information or questions about previous Governments. They should not stray—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The question I have for you is: if you were to follow the logic of Mr Mallard, then it would mean that if a Minister is new to a portfolio, then any activities undertaken by a previous Minister in that portfolio cannot be questioned by the House. I think that would be a very backward step.

Mr SPEAKER: I thank the member. In this case the question—

Hon Trevor Mallard: Point of order—

Mr SPEAKER: No, I am not taking any further points of order on this matter. The question is in order. The Minister can and should answer it, but should not stray into anything beyond his own responsibility. The question is: what is he aware of?

Hon TONY RYALL: I can confirm to the Prime Minister that I am aware of that information, and, further, I am also aware that in September 2008 Solid Energy started an at-risk payment system to its staff, where 90 percent of its staff got some of this so-called $11 million that only executives have got. The fact is that that all started under the Labour Government as well.

Hon Clayton Cosgrove: I seek leave to table the financial statements of Solid Energy from the period 2000 to 2008, showing the huge profits that it was making, and I think it also mentions that it won a few export awards as well back then.

Mr SPEAKER: Because of the long period of time of the documents the member is seeking to table, I will put the leave—2000 to 2008 financial reports from Solid Energy. Is there any objection to that course of action? There is none. The material can be tabled. Documents, by leave, laid on the Table of the House.

Question No. 10 to Minister

Mr SPEAKER: Question No. 10, Mojo Mathers. [Interruption] I ask the House to please give some silence so that Mojo Mathers can have her question heard.

KiwiRail—Safety for People with Disabilities

10. MOJO MATHERS (Green) to the Associate Minister of Transport: What steps, if any, has he taken to ensure that KiwiRail does not skimp on safety for people with disabilities?

Hon MICHAEL WOODHOUSE (Associate Minister of Transport): KiwiRail is responsible for developing initiatives to improve safety across the entire rail network. Specific initiatives when improving or constructing infrastructure include ensuring pedestrian mazes and ramps are wheelchair-access compliant, the installation of bells and signs for those who are hearing and visually impaired at higher-risk crossings, and the installation of tactile ground surface indicators. KiwiRail has an established track record of engaging with representatives of the disabled community when new and upgraded infrastructure is planned, and investing in improvements to help the disabled community.

Mojo Mathers: Does he have any concern that cutting $200 million from KiwiRail’s spending will have a negative impact on the safety and accessibility of our rail transport system for disabled users; if not, why not?

Hon MICHAEL WOODHOUSE: The Government has invested considerably in KiwiRail, almost three-quarters of a billion dollars in this 3-year period, as part of a $4.6 billion Turnaround Plan. I am satisfied that safety initiatives have a high priority in that Turnaround Plan.

Mojo Mathers: I seek leave to table KiwiRail’s Infrastructure and Engineering Business Plan 2013-2015, which says that KiwiRail will be cutting $200 million in spending over the next 3 years.

Mr SPEAKER: Leave is sought to table that document. Is there any objection?

Hon Gerry Brownlee: It’s previously tabled.

Mr SPEAKER: It is previously tabled, I am advised. I take that as an objection. No? It can be tabled. Document, by leave, laid on the Table of the House.

Mojo Mathers: Does he believe that amending the Land Transport Management Act so that regional transport committees are no longer required to have access and mobility representatives to advocate for safety and disability issues will make our rail system safer?

Hon MICHAEL WOODHOUSE: I am very satisfied that the engagement with the disabled community remains high. KiwiRail, in conjunction with the New Zealand Transport Agency, has developed the traffic control devices manual, part 9 of which concerns level crossings. That plan includes the specific requirement to progressively improve disabled access at level crossings.

Mojo Mathers: Will he ask KiwiRail to work with representatives from the Disabled Persons Assembly to ensure that everything that can be done is being done to make our rail transport network safe for all New Zealanders?

Hon MICHAEL WOODHOUSE: I am advised that that engagement is under way, but given the tragic events at the Morningside Railway Station yesterday morning, I am sure that KiwiRail will be redoubling its efforts to engage with the disabled community to ensure that identified risk areas for them are addressed.

Brendan Horan: Will he release the KiwiRail track inspector’s report from late 2012 that revealed serious safety concerns about the Morningside crossing over 3 months before yesterday’s dreadful accident?

Hon MICHAEL WOODHOUSE: I am quite sure that all information that is able to be released in respect of rail safety will be, if the member puts the request in the right way.

Education, Minister—Statements

11. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she stand by all of her statements?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes.

Chris Hipkins: Does she stand by the commitment she gave to parents in Christchurch that students beginning intermediate this year would be able to finish their 2 years at intermediate school before any closure decisions would take effect; if not, why not?

Hon HEKIA PARATA: As I have said repeatedly, in every school meeting that I held at the 35 schools I repeated that they were proposals in front of them and that they would have the opportunity to make submissions on them, which 31 schools did.

Chris Hipkins: Is she calling the parents, principals, teachers, and members of the public who attended those meetings and who claim that they were given that commitment liars?

Hon HEKIA PARATA: No, I am not. Look, this is a very difficult situation in Christchurch, and schools are naturally, some of them, disappointed. But I can unambiguously say that I made it clear on every occasion that these were proposals, and that is reflected in the fact that we received 31 submissions.

Chris Hipkins: If she is not calling those people liars and accepts that she did make that commitment, why has she broken her promise by now deciding to now close three Christchurch intermediate schools at the end of this year, only 1 year after many of those students started there?

Hon HEKIA PARATA: Well, that member can attempt to reframe what I am saying as many times as he would like, but I am very, very, very clear that I told every school community that these were proposals. We funded the consultations. We received the submissions. I did not give a commitment other than these were proposals.

Chris Hipkins: Will she give parents, teachers, and students in Christchurch a commitment that appropriate facilities at least equivalent to what they have now in their present schools will be available to the students at their new schools at the beginning of next year; if not, why not?


Chris Hipkins: Does she stand by all of her statements to Cabinet recommending that Wanganui Collegiate School not be integrated; if not, why not?

Hon HEKIA PARATA: I sought Cabinet input on a difficult decision, and I appreciated that, and I am comfortable with the decision I then made to integrate Wanganui Collegiate School.

Chris Hipkins: I raise a point of order, Mr Speaker. That was not actually the question that I asked the Minister. I asked whether she stood by all of the statements that she made to Cabinet.

Mr SPEAKER: I think on this occasion the Minister has adequately addressed your question.

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is the member questioning my ruling?

Chris Hipkins: I am, indeed, Mr Speaker. How could that possibly be addressing the question?

Mr SPEAKER: I spoke last week to the House, and I am not going to relitigate and reinterpret questions and answers, because that would attempt to bring the Speaker into the debate. I will listen very carefully to every question, I will listen very carefully to every answer, and I will determine whether I think that question has been satisfactorily addressed. On this occasion I think the Minister has satisfactorily addressed the question. It is not for me to design the answer to the satisfaction of the member.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Can you give the House an assurance that you will also follow your predecessor’s practice of watching the video replays of these rulings, to ensure that you get them right?

Mr SPEAKER: No, I cannot give that assurance. I certainly do go back and study the Hansard very carefully. Is there any further point of order on this matter?

Dr Russel Norman: I raise a point of order, Mr Speaker. Your predecessor actually used the language of “answer” the question, rather than “address” it. I am just wondering whether we should read anything into the fact that you are saying you are requiring Ministers to address the question, whereas Dr Lockwood Smith said Ministers must answer the question.

Mr SPEAKER: If the member wants to refer to the Standing Orders, he will see it is a requirement that the question be addressed. To try to attempt to design the answer to answer the

question to the satisfaction of the member asking is something that would be beyond the previous Speaker and probably beyond the current Speaker as well.

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is it on this matter?

Chris Hipkins: It is. I raise a point of order, Mr Speaker. The previous Speaker indicated that members on this side of the House could expect an answer in accordance or in line with the type of question that was asked. So if it was a very straight question, we could expect a very straight answer. If it was a political question, it would be a political answer.

Mr SPEAKER: And I have ruled that the Minister has satisfactorily addressed the question.

Information and Communications Technology Industry—Government Contracts

12. JACQUI DEAN (National—Waitaki) to the Minister of Internal Affairs: What announcements has he made recently regarding New Zealand companies securing key government ICT contracts?

Hon CHRIS TREMAIN (Minister of Internal Affairs): I recently announced that SilverStripe, a Wellington information and communications technology company, secured the contract to create a common web platform for Government agencies. Another New Zealand company, Revera, will manage technical infrastructure. This is a great win for New Zealand businesses, and proves that Kiwi information and communications technology companies can compete with the rest of the world.

Jacqui Dean: What are the benefits of a common web platform?

Hon CHRIS TREMAIN: There are a number of benefits. Firstly, it will reduce the number of web platforms in use across the public sector. Currently, there are 50 in use. Secondly, it will improve consistency and enable Government departments to share website features, leading to higher-quality websites. Thirdly, there will be significant potential savings of up to $50,000 per website.


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