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Questions and Answers - May 9


State-owned Assets, Sales—Progress

1. JACQUI DEAN (National—Waitaki) to the Minister of Finance: What progress is the Government making with its share offer programme?

Hon BILL ENGLISH (Minister of Finance): The Government is making good progress on the share offer programme. Last night the Government set the price for the Mighty River Power share offer at $2.50 per share. The 113,000 New Zealanders were allocated today shares through the retail sales pool, and by Friday night, tomorrow night, the Government will have collected $1.7 billion in proceeds, which will be available to the Government for investing in other public assets.

Jacqui Dean: How much did the Mighty River Power share offer raise for taxpayers, and how will that money be invested?

Hon BILL ENGLISH: There has been, I think, a misunderstanding that somehow in selling shares the Government and the taxpayer are losing an asset. In fact, we are swapping shares for cash, and by tomorrow night, the Government will have $1.7 billion in its bank account ready to invest in those projects that will be outlined in the Budget through the Future Investment Fund. Future proceeds of asset sales will also go into that fund. Parties that want to buy back the assets, or not sell them, will have to borrow the same amount of money from foreign bankers if they want to invest in the same way this Government plans to invest in infrastructure, in hospitals, in schools, and in better public services.

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Jacqui Dean: What are the benefits of the Government’s share offer programme?

Hon BILL ENGLISH: There are many benefits. In the first place, the Government achieved its objective of widespread New Zealand ownership, so 86.5 percent of this company remains owned by New Zealanders. Secondly, it has provided an opportunity for New Zealand savers to invest their money in the share market, many of them for the first time. Thirdly, we have collected $1.7 billion in cash proceeds, which are available to the Government for reinvestment in public assets. And, finally, it is a significant move in reinforcing our public capital markets, where Mighty River Power will list as the fifth-biggest company on the stock exchange. A strong public capital market is one of the ingredients for higher incomes and more jobs.

Dr Russel Norman: Is it not true that Treasury told the Government in the Budget Policy Statement that as a result of the Government’s privatisation programme, the Government would be worse off by $90 million to $100 million every year on a net basis?

Hon BILL ENGLISH: No, that is not correct. Treasury provided a range of measures of the fiscal impact of the sales, some of which were slightly positive, some of which were slightly negative. The Government has debated this issue for several years. We came to the view, which I believe has been vindicated, that the sale of 49 percent of this company will be good for the

company, good for the economy, good for the Government’s books, and help us to avoid the kinds of high levels of debt that the Opposition seem to favour.

Dr Russel Norman: I seek to leave—I seek leave to table—[Interruption]

Mr SPEAKER: Order! I want to hear what the point of order is. [Interruption] Order! The member has called for a point of order. I want to hear what it is. It will be heard in silence.

Dr Russel Norman: Thank you, Mr Speaker. In light of the Minister’s denial, I seek leave to table the Budget Policy Statement, which shows Treasury says—

Mr SPEAKER: Order! The Budget Policy Statement is available to all members.

Rt Hon Winston Peters: Will the Minister tell the country what the likely dividends are going to be from the replacement investments he has just mentioned, in comparison with those dividends now lost from Mighty River Power; and if there is nothing that is—

Hon Steven Joyce: It’ll be the interest on the wonderful schools and hospitals, sunshine.

Rt Hon Winston Peters: Oh, so it is interest now, is it?

Mr SPEAKER: Order! Would the member please—

Rt Hon Winston Peters: Well, “big ears” keeps opening his mouth when I’m talking.

Mr SPEAKER: That is true, it is not helpful for there to be interjection. Would the member please ask his supplementary question.

Rt Hon Winston Peters: What will the likely dividends be from the replacement investment that he just referred to with respect to the cash he is getting from Mighty River Power, as opposed to that lost from Mighty River Power; and, if it is not in any way an equivalent, why does he expect the public to believe the bulldust he is giving us now?

Hon BILL ENGLISH: Well, because it is not bulldust; it is a simple fact. The $1.7 billion collected will be invested through the Future Investment Fund and other public assets. Some of those assets will not pay dividends, such as new schools, new public buildings in Christchurch, new hospitals, and other infrastructure that the Government needs to invest in.

Jacqui Dean: What reports has he received on alternative policies to the successful share offer programme?

Hon BILL ENGLISH: I have seen reports—

Chris Hipkins: Not to sell them?

Hon BILL ENGLISH: That is right. I have seen reports of policies not to sell them, and reports of a referendum to be held to try to prevent the Government from selling them, which has so far failed because one in four of the signatures was dodgy.

Hon Clayton Cosgrove: Will he give New Zealanders a guarantee that as a result of this float, excessive power prices will not occur, as Mighty River Power looks to pay out up to 110 percent of its profits as dividends to its previous owners, as stated in the 2012 statement of corporate intent?

Hon BILL ENGLISH: I can guarantee the member that the fact that the company has floated has no direct effect on power prices, and that in fact the process of bringing it to the market has turned it into a very efficient, cost-effective company that will need to compete in the market against other companies in a way that will tend to hold prices down from the very high increases that occurred under that Minister’s model for the electricity market.


2. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister for Economic

Development: Does he agree with the Prime Minister’s statement “The reality is even Wellington is dying and we don’t know how to turn it around. All you have there is government, Victoria University and Weta Workshop”?

Hon STEVEN JOYCE (Minister for Economic Development): As the member knows, the Prime Minister himself has said that he could have chosen his words better and that he was referring to the fact that the head offices of large corporates have migrated from Wellington to Auckland over the past 45 years, which of course I agree with because it is true. However, we are very fortunate to

have a number of thriving, innovative, and successful businesses in Wellington, like, for example, Weta Workshop, which may not have been the case, of course, if the Labour Party had gotten its way and we had driven the Hobbit films offshore.

Grant Robertson: Further to the Minister’s answer, if the Prime Minister does not think Wellington is dying, why did he say it was?

Hon STEVEN JOYCE: I think I did answer that in the opening question, which was to note that the Prime Minister himself says he could have chosen his words better. But I have more good news for the member, because the household labour force survey came out this morning and Wellington’s regional unemployment rate has fallen by 0.9 percent, with an additional 14,000 more people in jobs in Wellington than in the previous quarter. So the good news is that Wellington is picking itself up and growing well.

Grant Robertson: What responsibility does he take for Wellington dying or being under pressure, or whatever the Prime Minister’s latest phrase is today, after his Government slashed thousands of public service jobs and failed to support manufacturing or other sectors in this city?

Hon STEVEN JOYCE: It is very interesting, the world that member lives in. But the reality is that this Government is investing—[Interruption]

Mr SPEAKER: Order! I am sorry to interrupt the Minister but we must have the ability to hear the answer.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a pretty straightforward question, and the answer was prefaced by abuse of the member.

Mr SPEAKER: The difficulty was that it was a relatively straightforward question, I agree, but I was not able to hear the answer because of the noise. [Interruption] Order! I will now ask the Minister to continue with his answer.

Grant Robertson: Responsibility, Steven, that’s it—what responsibility?

Hon STEVEN JOYCE: This Government is taking responsibility for working very hard alongside Wellington to grow the Wellington economy in areas such as infrastructure, with the ultra-fast broadband; roading, which, incidentally, the member could help with if he gets some of his friends on the council to start supporting some of the transport projects around Wellington; innovation, with our investment in Callaghan Innovation, our research and development co-funding for businesses in Wellington, the Hutt Valley, Porirua, and so on; the development of Victoria University, which is going very well and has just got an excellent result out of the Performancebased Research Fund; and, of course, industry development in areas like the movie industry, tourism, and international education.

Grant Robertson: When the Prime Minister said “We don’t know how to turn it around.”, is that a reflection on his Minister for Economic Development’s complete lack of any plan to help grow the Wellington economy?

Hon STEVEN JOYCE: It is always difficult when I end up answering the question before the member asks it in his next supplementary question. I have just given him a huge list of things that the Government is working on to develop the Wellington economy. If it is helpful for the member, I will repeat that list for him. There is the infrastructure we are investing in, the ultra-fast broadband, the roading, and, in fact, the commuter rail—we were helping Greater Wellington get a 100 percent modern fleet as a result of this Government’s investment. There is our investment in Callaghan Innovation, which, of course, is headquartered in this city, our involvement in National Science Challenges, where organisations like the National Institute of Water and Atmospheric Research, and so on, are participating. There is our involvement in the city’s business incubator, the development of Victoria University, the refocusing of the polytechnics to make sure they are—

Mr SPEAKER: Order! That answer is quite sufficient. Thank you very much.

Grant Robertson: What is his response to Wellington property developer Ian Cassels, who said that John Key should resign because he is not representing New Zealand or valuing what Wellington has to offer?

Hon STEVEN JOYCE: Mr Cassels, of course, represents the commercial property industry, which has struggled with the fact that the Government has not kept building brand new office buildings in Wellington every 5 minutes, like it used to under the Labour Government when it was setting itself up, under Labour, for a decade of deficits because of the amount of public sector spending it was doing. We are not doing that any more. We are not able to do that any more. What we can encourage are private sector investment and the encouragement of the growth of industries in Wellington, and if the member would like, I am more than happy to go through the list one more time.

Hon Annette King: Does he stand by his comments this week on Newstalk ZB about Wellington when he said: “Annette’s right. There’s very big investment going into the IT sector and the high-tech manufacturing sector. There are lots of staff based here.”, and has he thought about how he could turn round the Prime Minister’s ill-informed views about Wellington?

Hon STEVEN JOYCE: Well, I do stand by my comments on Newstalk ZB this week, including my offer to support Annette King in her campaign for the mayoralty. I have run a couple of campaigns in my time, and I have to say Annette that you would do a moderately better job than the current mayor.

State-owned Assets, Sales—Cost

3. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: How much has the asset sales programme cost, including but not limited to the expenditure on brokers’ and bankers’ fees, the bonus shares, advertising costs, the Treasury’s internal costs, the costs borne by the companies slated to be sold, the water dispute costs, extra fees to board members and CEOs, and listing fees?

Hon BILL ENGLISH (Minister of Finance): Treasury is currently pulling together information on brokers’ fees and other recent costs, and, like all other costs associated with the programme, they will be released when they are ready. I can tell the member that the most recently published information on the costs reports spending by Treasury of just over $16 million and by all mixed-ownership companies of $8.4 million. The member may also be aware that this has been part of a process that will mean the Government in the next day or so collects $1.7 billion, which will enable it to invest in other public assets.

Dr Russel Norman: Given that the best estimate of the cost of the brokers’ fees is about $50 million—

Rt Hon Winston Peters: How much?

Dr Russel Norman: —$50 million, that the best estimate of the bonus share giveaway is about $25 million, and that the Minister has just identified about another $25 million worth of costs, has the asset sale programme not so far cost around $100 million?

Hon BILL ENGLISH: That may be possible. The Government has said right from the start that the costs of the programme would represent 1 to 2 percent of the proceeds. We are on track for proceeds within the range that the Government laid out some 2 years ago of $5 billlion to $7 billion.

Dr Russel Norman: How does the Government justify spending around $100 million selling Mighty River Power when just 2.5 percent of New Zealanders took up the offer? How does he justify spending around $1,000 per retail investor on this sale?

Hon BILL ENGLISH: That is a bit rich coming from the member who tried to stop the sale, which would have wasted the however many millions he thought that it might cost. The Government justifies it on the basis that we will get a better performing company, a better performing electricity market, and better investment opportunities—not just for those who bought shares directly but also for the 2 million New Zealanders who have KiwiSaver accounts. We also justify it on the basis that by the end of the week we will have $1.7 billion available to us in the Government accounts to invest in public assets. That is $1.7 billion we have not had to borrow from

the foreign bankers whom this member seems to be sticking up for. Would he rather have us borrow it from his mates in foreign banks?

Louise Upston: Has he seen any reports on the costs of the Labour-Greens referendum?

Dr Russel Norman: I raise a point of order, Mr Speaker. I fail to see the ministerial responsibility.

Mr SPEAKER: I accept that. I do not believe there is any ministerial responsibility at all.

Louise Upston: Has he seen any other costs associated with a Labour-Greens referendum?

Mr SPEAKER: Again, I do not believe that is a responsibility—[Interruption] Order!

Dr Russel Norman: Given that the average retail purchase of—[Interruption]

Mr SPEAKER: Order! We have still got a level of noise here that it is making it hard for me to hear the supplementary question.

Dr Russel Norman: Given that the average—[Interruption]

Mr SPEAKER: Order! Would the member please start for a third time.

Dr Russel Norman: Given that the average retail purchase of Mighty River Power shares was $8,220, according to the Government, yet the typical family has less than $2,000 in the bank, does he think that the less than 3 percent of Kiwis who bought shares in this company are a representative slice of middle New Zealand?

Hon BILL ENGLISH: No, they probably are not, but that member did his best to make sure that people with $2,000 to spend on this did not do so, by scaring them with his stupid nationalisation policy. However, we are not opposed to average New Zealand households having investments, so we are going to offer them another opportunity to buy shares, and we would hope that the member will this time encourage people with $2,000 to invest in the share floats, instead of showing his contempt for their aspiration to make their own decisions.

Dr Russel Norman: What is his Government’s message to the 97.5 percent of Kiwis who have not bought shares in Mighty River Power and who now face higher power prices in order to increase dividends to the 2.5 percent?

Metiria Turei: I raise a point of order, Mr Speaker. My apologies to my colleague. The barracking that is coming from behind me is making it impossible to hear the question. I am sitting right next to the questioner. It would be much easier for the whole House to hear if this barracking was made to stop.

Mr SPEAKER: There is a level of noise today from all parts of the House that is unacceptable. I do not want to ask anybody to leave—[Interruption] Order! But if the level of noise continues, then I am going to have to ask somebody to leave the Chamber. I would be reluctant to do that, but at this stage the noise coming from many quarters of the House is unacceptable, and I think Russel Norman should be allowed to start that supplementary question again.

Dr Russel Norman: What is his Government’s message to the 97.5 percent of Kiwis who have not bought shares in Mighty River Power and who now face higher power prices in order to pay dividends to the 2.5 percent who have bought shares in this company, and is not his Government now a Government just for the 2.5 percent and showing contempt to the 97.5 percent?

Hon BILL ENGLISH: Our message to them is, first, the Government owns 51 percent of this company on their behalf, and I expect that within a matter of weeks that 51 percent will be worth considerably more than it was at the beginning of this year. Secondly, our message to them is that those who manage their KiwiSaver accounts have probably made an investment in this company, and it looks like that could probably be a successful investment. My third message to them is that if they are approached by parliamentary funded Greens staff looking for their signatures, do not sign, because it is a dodgy petition.

Dr Russel Norman: Is it a fair statement of the Government’s policy to say it cut $2 billion a year in taxes on the wealthy, it then found that the cupboard was bare because there was not enough money, so it told us it had to sell assets in order to pay for schools, and then it sold those assets to the very same people to whom it gave the tax cuts?

Hon BILL ENGLISH: No, that is not the case, because none of that is true. But what we would say to them is that even if that was true—even if it was true—the alternative of printing money, nationalising the electricity industry, nationalising the housing construction industry, and shutting down our primary production industry would probably lead to less income and fewer jobs. Those are Labour-Greens policies.

State-owned Assets, Sales—Mighty River Power

4. KANWALJIT SINGH BAKSHI (National) to the Minister for State Owned Enterprises: What reports has he received on the sale of a minority of shares in Mighty River Power?

Hon TONY RYALL (Minister for State Owned Enterprises): Last night the finance Minister and I were pleased to confirm the completion of the book build of the Mighty River Power share offer, which will see 113,000 New Zealanders become individual shareholders in the company on Friday, not to mention those thousands who will own the shares indirectly through KiwiSaver accounts and suchlike.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That question asked him about what reports he has received. Now we are getting a recitation of last night’s history, but nothing about a report.

Mr SPEAKER: I thought the Minister was addressing the question quite adequately.

Rt Hon Winston Peters: He is asked by the question to give a report, it is the No. 1 objective of that question, and all we are hearing is a litany of what happened last night. That is not a report at all. I want to know why he is not answering the question now.

Mr SPEAKER: I will allow the Minister to continue the answer, and I am sure we will get the answer.

Hon TONY RYALL: Numerous reports I have read tell us that $1.7 billion will be returned to the Crown accounts, allowing the Government to control debt and invest in important public projects, such as the new Christchurch city hospitals. We are very pleased at the level of enthusiasm from New Zealand investors, despite 18 months of politicking from the Opposition. We look forward to seeing the Mighty River Power name on the New Zealand Exchange tomorrow—Friday afternoon.

Kanwaljit Singh Bakshi: Has the Government met its objectives in relation to the Mighty River Power minority share float?

Hon TONY RYALL: Yes. Despite a year and a half of the Opposition politicking and trying to convince New Zealanders that the float was off-track and that they could not be trusted to try to buy shares in these businesses, the Government has met its objectives. We have got over 86 percent New Zealand ownership. New Zealand is at the front of the queue. Now 113,000 individual investors, thousands more through KiwiSaver and the Government Superannuation Fund, and many others have had the opportunity to get a good investment experience. As a country we are controlling our debt while providing around $1.7 billion of money for the Future Investment Fund to invest in important public assets like schools and public infrastructure such as the new Christchurch city hospital.

Kanwaljit Singh Bakshi: Were there any particular matters that impacted on the offer over the course of the share float; if so, what impact did these matters have?

Hon TONY RYALL: Just 3 days into the offer period the Opposition parties set about to sabotage the offer by proposed changes to the energy sector that would strip capital and value from their investments. This economic sabotage was not thought through, and it is clear that it cost many everyday New Zealanders the opportunity to participate. It cost thousands of New Zealanders through their superannuation fund investments in already listed energy companies, and it cost taxpayers many tens of millions of dollars that could have been released in the sale of these minority shares to invest in schools and hospitals—all for political gain and all in vain.

Dr Russel Norman: If we accept the logic of the Minister’s argument that the NZ Power announcement reduced the value of those electricity companies, does it not follow from the logic of his argument that the market accepts that NZ Power will reduce the price of electricity for ordinary Kiwi families and businesses?

Hon TONY RYALL: No, not at all. I do not think that is the case at all. I think what most New Zealanders realise is that this was a case of economic sabotage, where the Opposition parties decided that they wanted to interfere with the ability of New Zealanders to make this decision. The fact is that the NZ Power proposal is not well-thought-through. The Opposition parties did not consider the consequences, and I think more and more New Zealanders, as time passes, will realise it was simply a political stunt.

Hon Clayton Cosgrove: Why does his Government insist on ploughing ahead with the sale of electricity assets when the market is not working fairly for consumers, and electricity companies are making windfall super-profits, or is the Nelson Grey Power president, Neville Male, incorrect when he says that many senior citizens cannot afford “crazy” electricity prices?

Hon TONY RYALL: This Government has made changes to the electricity market that have improved the level of competition, which was never seen when that member was in Government. Under his Government electricity prices increased by 72 percent in 9 years. The rate of increase now is much lower. The amount of switching and choice that customers have is very, very considerable. That is the benefit of having a far more competitive electricity market, and it is the benefit of a Government that is determined to give New Zealanders an opportunity to invest in good quality infrastructure assets in partnership with the Government.

Exchange Rate—Reserve Bank Governor’s Statements

5. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: What is his view of Governor Graeme Wheeler’s recent statement to the Finance and Expenditure Committee that with regard to the Reserve Bank’s recent activities “there has been some intervention” in the exchange rate?

Hon BILL ENGLISH (Minister of Finance): My view is that the statement is probably correct if the governor said it. He would be following policy that has been in place since 2004.

Rt Hon Winston Peters: Does he agree with the Minister for Economic Development, Steven Joyce, that intervention is “a bit of a fool’s paradise”, and why is his ministerial colleague making comments about matters he patently knows nothing about?

Hon BILL ENGLISH: In answer to the second part of the question, Mr Joyce, from my experience, does know quite a bit about it, and perhaps may even know as much as that member about it—possibly more. In respect of the first part of the question, as the governor has said himself, foreign currency intervention is unlikely to have a sustained impact on lowering the exchange rate, but it can reduce pressures in the short term.

Rt Hon Winston Peters: Does he recall the Prime Minister’s statement on the exchange rate that “the Government does not believe that it can influence that through intervention,”; if so, and in light of the Reserve Bank’s recent action and statement before the select committee, has he informed the Prime Minister that his belief was demonstrably wrong?

Hon BILL ENGLISH: I think the member is trying to make a mountain out of a molehill here. The fact is that the Reserve Bank—

Hon Steven Joyce: That’s a surprise!

Hon BILL ENGLISH: Not the first time—yes. At least he is starting with a molehill this time, which is quite big, really. The point here is that the Reserve Bank has always had the power for intervening. It has published the conditions under which it can make interventions. The bank itself has said that it believes the impact of those interventions is limited and short term. The member, on the other hand, and the Labour Party advocate that the Government can pick an exchange rate and

the Reserve Bank can just push the market to that exchange rate. That is simply wrong. That is the context of the Prime Minister’s statement.

Rt Hon Winston Peters: How can New Zealanders, the market, or anybody interested in this subject possibly have confidence in a Government that has such a dysfunctional relationship with the Reserve Bank in so far as the bank’s actions, though they might upset “Big Ears”, directly contradict the line spouted by senior Government Ministers?

Hon BILL ENGLISH: The public do have some confidence in the Government, and the Government has a good relationship with the Governor of the Reserve Bank. However, he operates foreign currency intervention quite independently of the Government.

Rt Hon Winston Peters: Is it not true that as the Minister of Finance he could have instructed the Reserve Bank to begin intervention in the foreign exchange markets earlier, thereby reducing the devastating impact the high New Zealand dollar has had, and is having, on our export sector, as the industries have evidenced in their public statements day after day?

Hon BILL ENGLISH: The fact is, no, I have not issued any direction to it. The decisions have been made by the governor about his intervention, and I am not always aware of whether he is or is not intervening.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am not asking whether he has done anything, because I know he has not. What I want to know is this: does he admit that he could have or that he had the power to do it?

Mr SPEAKER: Yes. The Hon Bill English.

Hon BILL ENGLISH: The answer to that is no, and in respect of the damaging impact on the export sector, the member should look at the household labour force survey figures today, which show an increase in full-time jobs across the economy despite the fact that we have had a high exchange rate. The Reserve Bank Governor would not himself claim that his actions are somehow substantially realigning the exchange rate.

Primary Sector Innovation—Support

6. NICKY WAGNER (National—Christchurch Central) to the Minister of Science and

Innovation: How is the Government working to encourage innovation in the primary sector?

Hon STEVEN JOYCE (Minister of Science and Innovation): Last week the Minister for Primary Industries, Nathan Guy, and I unveiled the concept plans for a world-class agricultural research and education facility to be located at Lincoln, just outside of Christchurch. The Lincoln Hub, which is a partnership between, and investment by, Lincoln University, Dairy New Zealand, and Crown research institutes AgResearch, Plant and Food Research, and Landcare Research, has the potential to transform New Zealand’s farming productivity by providing a one-stop shop single site that will allow information and ideas to be shared much more easily.

Nicky Wagner: How will the Lincoln Hub benefit students, exporters, and the wider economy?

Hon STEVEN JOYCE: There is obvious concern from the Opposition members about our investment in science and innovation—they are obviously thinking there is too much of it. The primary sector remains one of the powerhouses of the New Zealand economy, with a 1 percent increase in primary sector productivity equating to an extra $4 billion in export earnings. The Government has set an ambitious goal to double primary sector exports to $60 billion by 2025. The Lincoln Hub and the investment in it will help us achieve that goal by bringing together our public research institutions, private sector players, farmers, and producers to drive innovation and exports, to maximise the opportunities for student learners, to increase expertise in our research community, and to provide valuable links between businesses and the public sector.

Nicky Wagner: What other Government initiatives are supporting growth and innovation in the primary sector?

Hon STEVEN JOYCE: In the words of Maurice Williamson, more good news. Through the Primary Growth Partnership, the Government and industry are investing $657 million on a range of

primary sector research initiatives, including research into new shellfish industries, steep-land tree harvesting, high-value marbled beef for premium markets, and the reliability of supply and quality of medical-grade mānuka honey. We have created the National Science Challenges to encourage our scientists and researchers to tackle some of the biggest science-based issues New Zealand faces. A number of these directly affect the primary and rural sector. And, of course, we have increased funding for the Performance-based Research Fund to $300 million by 2016 to ensure excellent research in the tertiary education sector is encouraged and rewarded, including, of course, in the primary sector.

Hon Damien O’Connor: How much of the $161 million of taxpayers’ money he has given to the meat industry is delivering benefits, given the refusal of the Minister for Primary Industries to answer questions on any deliverable outcomes for the Primary Growth Partnership and the fact that hundreds of farmers have no confidence in the current structure of the meat industry?

Hon STEVEN JOYCE: Well, I think the world has known for a long time that there are plans to, if you like, alter the structure of the meat industry, and the Government is being very encouraging of the industry to look at its possibilities and its future, particularly around adding value and getting higher benefits for the exports that it produces. The Primary Growth Partnership is actually focused on a whole range of things that will encourage doing that, and it is actually about getting co-funded research between the private sector and the public sector that leads directly— directly—to benefits in innovation and productivity. The insurance of that—

Tracey Martin: The co-funding model is not working.

Hon STEVEN JOYCE: —oh, it is working—is that the private sector industries are putting up half the funding themselves so that they can get that benefit.

Hon Damien O’Connor: I seek leave to table 18 questions put to the Minister for Primary Industries that the Minister has refused—

Mr SPEAKER: Order! Are they questions for written answers, which are then published and available to everybody?

Hon Damien O’Connor: Yes, but the Minister has not answered them, and it is overdue.

Mr SPEAKER: If the Minister has not answered them, then that is a matter that you can certainly take up with me, and I will look—

Hon Damien O’Connor: I seek leave to table the questions, Mr Speaker.

Mr SPEAKER: The easiest way to resolve it is to allow the member to put his leave. Leave is sought to table some questions that have not, apparently, been answered at this stage. Is there any objection? There is objection.

State-owned Enterprises—Financial Sustainability

7. Hon CLAYTON COSGROVE (Labour) to the Minister of Finance: Does he stand by his statement regarding Solid Energy that “No, we are not going to let it go into receivership”; if so, is he committed to the ongoing sustainability of all State-owned enterprises?

Hon BILL ENGLISH (Minister of Finance): Yes, I stand by the statement in the context in which it was made, which was the possibility that Solid Energy could have got itself into severe financial difficulty in a hurry. The Government will certainly be there to support Solid Energy if there is a viable business to support, and we hope that that is the case. However, we would expect that a viable Solid Energy will be a smaller business with a stronger focus on mining coal, and we would expect others to help participate in the restructuring of the current entity. As I said yesterday, if Solid Energy is not viable, the Government is not prepared to create a business that is not sustainable in order to subsidise it. The same approach applies to all State-owned enterprises.

Hon Clayton Cosgrove: Who is correct, the Minister of Finance, who yesterday directly questioned the viability and sustainability of Solid Energy, or Mark Ford, the chair of Solid Energy, appointed by the Minister’s Government, who said that the core assets of the company are viable and that Solid Energy has a “good future”?

Hon BILL ENGLISH: I think that the sustainability of Solid Energy was questioned not just yesterday; it was questioned some months ago, when the company got itself into pretty severe financial difficulty. We are going through a process at the moment, which the chairman is closer to than the shareholders, of working out whether and in what form Solid Energy would be an ongoing, sustainable business. Over the next couple of months we will be able to answer those questions fully.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. My question was who was correct—

Mr SPEAKER: Yes, I heard the question.

Hon Clayton Cosgrove: Yes. It was not addressed. I asked who was correct.

Mr SPEAKER: I think it was very definitely addressed. The member may not get an answer that satisfies him, but it was addressed to the point that they may well both be correct at this stage, and that further work is ongoing.

Hon Clayton Cosgrove: On what date did he advise the Solid Energy chair, Mark Ford, that he was going to make yesterday’s public statement questioning the viability of Solid Energy, and if he did not advise Mr Ford, why not?

Hon BILL ENGLISH: I did not advise Mr Ford, because I did not make a statement of the nature that the member is saying. If the member is not aware that the viability of Solid Energy has been in question for several months, then he is not doing his job.

Hon Clayton Cosgrove: Why is he questioning the future viability of Solid Energy, and thereby undermining the efforts of the chair, Mark Ford, to give confidence to lenders, as the chair tries to forge an agreement to ensure the long-term future of the company, or is this all about the Minister’s political expediency?

Hon BILL ENGLISH: This is a serious issue, as the member will know. One hundred people in the company lost their jobs yesterday. You can be absolutely sure that there are a lot of questions in their minds, even if he is unaware that the company is in trouble. The Government is fully supporting the efforts of the chair and others to find out whether there is an ongoing, sustainable business in Solid Energy.

Brendan Horan: Will the Minister give an assurance that the $1.9 billion of coal reserves in land controlled by Solid Energy will remain in New Zealand ownership?

Mr SPEAKER: There was—[Interruption] Order! I am going to ask the member to repeat his supplementary question to the Minister of Finance.

Brendan Horan: Will the Minister give an assurance that the $1.9 billion of coal reserves controlled by Solid Energy will remain in New Zealand ownership?

Hon BILL ENGLISH: That sort of issue will no doubt be tied up with the future of the company, and I do not intend to prejudge or guarantee any outcome from the process that we are currently going through. Our focus is to see whether there is a viable business there, and, if so, to work with other parties to restructure the current version of Solid Energy into a sustainable business. I am not going to speculate on the results of that process.

Budget 2013—Rheumatic Fever Prevention

8. Dr JACKIE BLUE (National) to the Minister of Health: What investment will the Government make in rheumatic fever prevention as part of Budget 2013?

Hon TONY RYALL (Minister of Health): The Government’s campaign to reduce rheumatic fever among children will receive a budget boost of $21.6 million over 4 years as part of Budget 2013. This new money almost doubles the already substantial $24 million investment we have made to combat rheumatic fever and will allow local communities and health providers to work together to make a real difference to these children’s lives. The Government has a target to reduce the incidence of rheumatic fever by two-thirds, to 1.4 cases per 100,000, by June 2017. This money will ensure that we remain on track to achieving this. I certainly would like to acknowledge the very

strong and continuing support of my Associate Minister of Health the Hon Tariana Turia for this programme.

Dr Jackie Blue: What will the Budget funding for rheumatic fever prevention include?

Hon TONY RYALL: More than $11 million over 4 years is going to be invested in a nurse-led sore throat drop-in clinic, which will provide improved access to families whose children do not attend school or during school holidays, and access to free sore throat swabbing services. Nearly $5 million over 4 years will be invested in community awareness and home visiting support to ensure vulnerable families know and understand what they can do to help better protect their children. The Government is also going to invest almost $4 million over 4 years in supporting the Auckland-wide healthy homes referral and advice services.

Hon Annette King: Can he confirm that the rates of rheumatic fever have increased in Northland over the last 5 years—the mean annual number between 2000 and 2006 was 9.2 cases per 100,000 people, and it has now jumped to 13.6 cases—

Rt Hon Winston Peters: How much?

Hon Annette King: —13.6 cases—and that the issues that need to be addressed are poverty, overcrowding, and better access to primary health care?

Hon TONY RYALL: I do not have those specific Northland numbers with me, but I do have the numbers under the previous—

Hon Annette King: I raise a point of order, Mr Speaker. I asked a straight question, not about any other Government, but whether he can confirm they have increased. He said he does not have the numbers. That is the answer.

Mr SPEAKER: If the member is happy with that answer, then we will move—

Hon Annette King: I am happy with it.

Mr SPEAKER: If the member is happy with that, the question has been answered.

Child Poverty—Minister’s Statements

9. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by her recent statement that “there are children who are living in poverty and are doing it hard in this country”; if not, why not?

Hon TONY RYALL (Minister of Health) on behalf of the Minister for Social Development: Yes, she does stand by her statement. She also stands by her statements today where she welcomed the household labour force survey, which shows more New Zealanders are in work. It is very good to also see the continuing growth in the New Zealand economy, which will provide more opportunities for more New Zealanders.

Jacinda Ardern: Why is her Government content to measure and set a target for reducing rheumatic fever but it refuses to measure and set targets for poverty, a key determinant of this disease, or is she happy to stick with her position on this issue that “There is not a Government measurement for poverty, ha, ha, ha, ha!”?

Hon TONY RYALL: I would certainly have to check the quote that that member wants to attribute to the Hon Paula Bennett, but I can certainly say that the Minister has always made it clear that she does not believe there is one measurement of poverty in New Zealand. What the member should also know is that the Minister is very strongly supportive of the rheumatic fever programme, because under that member opposite’s Government the rheumatic fever rates increased relentlessly, particularly during the term of the Minister Annette King.

Jacinda Ardern: How many measures of poverty are there, and is the Government willing to pick at least one, or even five, of those measures?

Hon TONY RYALL: This Government is determined to take a far more serious approach to dealing with poverty, rather than participating in some argument about what is the rate of poverty measurement, etc. We do not think we should be spending an inordinate amount of time debating that issue. We would rather put our focus on to actually dealing with the issues, and this

Government’s focus has been on providing opportunity through things like education and jobs and on ensuring that we get the best out of the many hundreds of millions of dollars being spent on social services delivery in New Zealand.

Jacinda Ardern: I raise a point of order, Mr Speaker. I asked the Minister how many measures of poverty there were and whether he was willing to work with one or a range of those measures. I did not get that response.

Mr SPEAKER: Would the member please repeat the question.

Jacinda Ardern: How many measures of poverty are there, and is the Government willing to pick one, or up to five, of those measures?

Hon TONY RYALL: I would repeat what I said earlier on. The Government is not going to get into this argument of how many measures there are or on what there is and what there is not. Our focus is not on spending a whole lot of time arguing about how we are going to measure it. Surely, the focus must be on—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. If he is refusing to answer the question about the measurement of poverty, then he should sit down—that is it.

Mr SPEAKER: The member who asked the question asked for it to be repeated. It has certainly been adequately addressed this time. Are there further supplementary questions?

Jacinda Ardern: What is the argument against measuring child poverty?

Hon TONY RYALL: I think the argument against what that member is arguing in terms of the measurement of poverty is which measure one might want to choose, and how much focus you put on a single measurement. I would rather the focus was put on dealing with the issues, instead of on some argument about what measure is going to be used. This Government is focusing on the Better Public Services targets that our Prime Minister has set, which we think will make a real improvement to the situation of many of New Zealand’s children who do live in poverty and who do live in hardship, and that is our determination.

Jacinda Ardern: I raise a point of order, Mr Speaker. I still did not feel it was an adequate answer. The question was—

Mr SPEAKER: Order! That question was very adequately addressed on that occasion. Has the member got a further supplementary question?

Jacinda Ardern: I do.

Mr SPEAKER: Then I suggest you use it.

Jacinda Ardern: Do the Better Public Services targets require measurement?


Jacinda Ardern: If the Minister’s belief is that the argument against measuring child poverty is that there are too many measurements, will the Minister accept the Children’s Commissioner’s recommendation that the Government measure against five measures of child poverty; if not, why not?

Hon TONY RYALL: The Government is considering a number of the recommendations made by the authority that the member has just referred to. We think this is a very important issue. We put a lot of time and effort into dealing with poverty and we consider it far more of a priority than the members opposite, who have given their spokesman the opportunity to ask questions in this House on only three occasions this year.

Power Prices—Minister’s Statements

10. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Does he stand by his answer “no, they’re not” when he was asked whether New Zealanders are paying too much for electricity, in light of the 5.2 percent increase in power prices in the past year?

Hon BILL ENGLISH (Minister of Finance): I stand by my statement in the context in which it was made, which was in response to the following question: are New Zealanders paying too much for power, as Grant Robertson suggests? Of course, Grant Robertson’s suggestions were the usual

combination of exaggeration and illogical statement, and that is why I said “no, they’re not”. I went on to say that of course New Zealanders would prefer to pay lower power prices, but around the world the experience is that the best way to set power prices in the long run is to have a competitive market, and all countries that we know of have been moving from Government-run monopolies towards more competitive markets. The Labour-Greens policy is the only political policy we have seen heading in the opposite direction. [Interruption]

Mr SPEAKER: We will just wait until the Labour benches are quiet.

Metiria Turei: Why is the Minister continuing to defend excessive prices for power for families and excessive profits for power companies, when he knows that there is a direct link between cold and crowded homes and rheumatic fever in children?

Hon BILL ENGLISH: I am not defending excessive power prices. It is—[Interruption] Well, the power prices will be much higher under Labour-Greens policy because their climate change policies will cost the average household $500 per year. What we are arguing for is that in the long run competitive markets are the best way for consumers to get the lowest power prices. In fact, you could almost guarantee that the Labour-Greens policy will lead to higher power prices; it is just a matter of when.

Metiria Turei: Why does the Minister believe—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! Right, now we will have the supplementary question.

Metiria Turei: Why does the Minister believe that it is acceptable for a quarter of a million of New Zealand children to live in households who pay too much for their power, or, worse, live in cold homes and get sick because their families cannot afford to pay the big power bills that they face?

Hon BILL ENGLISH: Of course it is not acceptable for people to be living in poor conditions that make children ill. That is why the Government has spent hundreds of millions of dollars insulating those homes—precisely to get the health benefits. The cost of living increase in those homes is not 5 percent as the member says; it is actually 1 percent for the last 12 months—in fact, a bit less than 1 percent, which is among the lower increases in the annual cost of living that we can recall. But if that member was that worried about it, why did she support the previous Government, which pushed up power prices by 8 percent per year for 9 years?

Metiria Turei: How many cold, unhealthy homes would have been insulated for the estimated $100 million that his Government has wasted on selling Mighty River Power?

Hon BILL ENGLISH: I cannot give the member the details on that, but I would ask her this: how many homes could have been insulated for the $400,000 she has wasted on a dodgy referendum?

Metiria Turei: Supplementary—[Interruption]

Mr SPEAKER: We will just wait for Annette King. [Interruption] Order!

Metiria Turei: Does the Minister believe that it is an acceptable trade-off to allow children to live in cold, crowded homes and become ill because their families cannot afford the power bills, while companies like Contact Energy make billions of dollars in excess profits because he will not do anything about the price gouging that New Zealand families suffer every month?

Hon BILL ENGLISH: If you were going to look at the companies as a measure of what has happened to power prices and profits from it, the Contact Energy share price, I am advised, is lower today than it was 5 years ago, as is the TrustPower share price. If those companies were making super-profits, then they would have super-sized share prices, and, in fact, they do not. It does not matter how much the Greens say power prices are at some ridiculous or excessive level, it is the case that they are rising much more slowly than when she was supporting a Government that pushed up power prices for the poorest households in New Zealand by 8 percent per year and burdened them with 5 and 6 percent increases in the cost of living rather than 1 percent. So she should stop being as moralistic as she is wanting to be.


11. SUE MORONEY (Labour) to the Minister of Women’s Affairs: Does she have any positive announcements to make for New Zealand mothers, as families prepare to celebrate Mothers’ Day?

Hon JO GOODHEW (Minister of Women’s Affairs): Yes, there are a number of positive announcements. Mothers will celebrate an additional $21.3 million over 4 years to fight rheumatic fever amongst their children, and an additional $70 million extra for aged care and dementia, which will help older mothers and those mothers caring for their parents. They will also be celebrating the March 2013 household labour force survey showing an increase in female employment of 0.9 percentage points over the last year, and a drop in the unemployment rate of 0.2 percentage points in the last year—the first quarter since December 2011. I would like to take this opportunity to wish all of the mothers present in this House a joy-filled day on Sunday.

Sue Moroney: Thank you to the Minister, but has she seen the report from Save the Children on the state of the world’s mothers that shows New Zealand in 17th place in 2013, plummeting from fourth place in its 2012 report?

Hon JO GOODHEW: Yes, I have seen reports about that report and I am aware that the chair of our very own Perinatal and Maternal Mortality Review Committee has disputed the figures in that report and says that for the majority of women we have a very safe and effective system. In fact, the actual figures for New Zealand are very different from the figures in that report. In our first Budget we committed more than $103 million over 4 years to improve maternity services. In 2011 this Government committed in this area an extra $54 million, and in 2012 an extra $20.5 million. No one could say that this Government is not doing more for mothers and babies.

Sue Moroney: Well, how does she then explain Australia being—

Mr SPEAKER: Order! This time the noise is definitely coming from the far right-hand corner of the Chamber. Sue Moroney—[Interruption] Order! Now it is coming from the front bench of the Labour Party. Can we please have—[Interruption] Can we please have consideration for the member asking the question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. When a Speaker gives a ruling that seems to be unfair to some person, I think it is beholden on a member of Parliament to raise the issue as to whether it was fair. If you look at the far corner of the House, that is Mr Gilmore, and he was not making a noise at all.

Mr SPEAKER: And I was not referring to him. That is not a valid point of order.

Sue Moroney: Thank you. Does she attribute the staggering decline of 13 places in New Zealand’s ranking as a country for mothers to the fact that the 2012 report relied on data from 2007 onwards, when Labour was in Government, whereas the 2013 report used data gathered since 2010?

Hon JO GOODHEW: I can answer the member that what I am relying on to keep this report in perspective is the comments from the chairwoman of the Perinatal and Maternal Mortality Review Committee, who says that its own report shows about one in 8,000 women dying in pregnancy or childbirth, which varies greatly from the one in 3,300 in that report. The additional information that the chairperson Cindy Farquar was able to give was that we have a comprehensive data collection system, unlike Australia, which may account for why they are rated better in the report.

Sue Moroney: Does she agree with the Prime Minister when he said he thought paid parental leave will increase one day; if so, does she think that that “one day” will be while she is the Minister of Women’s Affairs, or will families need to elect a Labour Government to extend paid parental leave?

Hon JO GOODHEW: I am in agreement with what the Prime Minister said. He has said it publicly several times. The Government still plans to veto the bill to extend paid parental leave. As he has said, we are not opposed to paid parental leave. We already have it in New Zealand and more would be better. What we are saying is that an increase now in paid parental leave will mean that we either have to forgo our goal of getting back to surplus or stop spending money on something

else. We are not ruling out an extension at some stage when the books are back in surplus. We are just saying that it is not the right time to do it now.

Sue Moroney: When will the right time be, Minister?

Hon JO GOODHEW: We all look forward to the day that we are back in surplus.

School Network Upgrade Project—Expansion

12. TIM MACINDOE (National—Hamilton West) to the Associate Minister of Education: What recent announcements has the Government made regarding improving school IT networks?

Hon NIKKI KAYE (Associate Minister of Education): Last week I announced that an additional 80 schools have been invited to upgrade their IT network through the School Network Upgrade Project. This means that under a National-led Government, over 1,400 schools are now involved with the School Network Upgrade Project. That translates to over 60 percent of all eligible State and State-integrated schools in New Zealand. Our Government is focused on providing the best information and communications technology infrastructure and modern learning environments to enable better learning resources and more opportunities for young New Zealanders.

Tim Macindoe: What other recent announcements has the Government made regarding digital literacy and 21st century learning environments?

Hon NIKKI KAYE: Recently I announced that the Government will be setting up a 21st century learning reference group. This will help us provide greater learning opportunities. Alongside this, we have committed to producing a digital education strategy. Recently we released the results of the School ICT Infrastructure Survey. This is the first School ICT Infrastructure Survey to be conducted since 2002. This has given us a better understanding of schools that are embracing digital learning and those schools that need greater support. In addition, I am working with the Ministry of Education to ensure even more schools can upgrade their IT networks more quickly. By doing this, young New Zealanders will have a brighter and more connected future.

Chris Hipkins: Why was the contract for the Network for Learning—an information and communications technology project announced in last year’s Budget—not awarded by the end of last year as expected, and what delay will this mean for the Network for Learning’s target to be progressively available to kura and schools from the middle of this year?

Hon NIKKI KAYE: The Network for Learning company was formed in July 2012. It is currently working on its business plan and offerings. There was not a date given at that time, in terms of when it would sign the contract in terms of its preferred supplier. I am currently doing some due diligence on that. I have announced publicly that within the next 6 weeks there will be further announcements on that issue.


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