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Questions and Answers - May 14


QUESTIONS TO MINISTERS

Prime Minister—Statements

1. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he stand by his statement of Skycity to “think laterally” about its deal with the Government; if so, did he expect that it would tie future Governments into a 35-year contract?

Rt Hon JOHN KEY: Yes, and it is quite normal, actually, for contractual arrangements that might span from one parliamentary term to another to ensure that those contracts are honoured. We also have 35 years of obligations that we expect Skycity to honour.

David Shearer: Can he confirm that the decision to increase pokie machines in 2001 was made not by the Government but by the then chair of the Casino Control Authority, Judith Collins, and that soon after that decision was made the Labour Government legislated to introduce a sinking-lid policy on future pokies?

Rt Hon JOHN KEY: That may well be the case. I also know that in 2001, when the then Labour Government negotiated a deal with Skycity, there were 230 pokie machines for less than one-third of the size of this convention centre.

David Shearer: Why has his Government refused to release the advice it received on possible harm to the community of gambling with the additional 230 pokie machines, 40 extra gaming tables, and cashless technology for pokie machines and with allowing 17 percent of pokies to accept more than $20 denominations?

Rt Hon JOHN KEY: I am advised by the Minister that all of that information will be released in due course.

David Shearer: Will the public have an opportunity to have a say on this legislation and the shape of the convention centre, or will the Government go along with Nigel Morrison, who says that it is not necessary?

Rt Hon JOHN KEY: A few things. Firstly, the legislation will go to a select committee. Secondly, the member will be aware that in 2011 we actually campaigned on this issue and, broadly, in line with the deal that has been announced. Thirdly, this would be a way, I guess, of describing it: “In Auckland, Sky City has pumped $140 million into its new Convention Centre, and Auckland City has rebranded and upgraded its conventions facilities …” and “… it has been pleasing to see continuing investment in the quality of our tourism infrastructure.” I could not have said it better myself, except that came from Helen Clark when Labour last did the deal.

David Shearer: Is he proud that his legacy, according to the Dominion Post, will be “a flashing palace that is a shrine of misery”?

Rt Hon JOHN KEY: I really think the Leader of the Opposition should stop talking about the Labour caucus like that.

David Shearer: Given that the Auditor-General said that the tendering process was “not transparent or even-handed”, does he still believe all the other companies had the same opportunity as Skycity?

Rt Hon JOHN KEY: Yes, but Skycity clearly had some natural advantages, given that it is already operating a convention centre authorised by Labour. But I think it is worth—

David Shearer: I raise a point of order, Mr Speaker. It was adequately answered, thank you. [Interruption]

Mr SPEAKER: Order!

Hon Judith Collins: I raise a point of order, Mr Speaker. Despite what Mr Shearer said, I, who am just along from the Prime Minister, could not hear a word of his magnificent answer.

Mr SPEAKER: It was political question and a very political answer.

Rt Hon Winston Peters: If, as the Prime Minister said, National campaigned on this in 2011, when precisely during that campaign did he refer to a 35-year guarantee that would go towards Skycity?

Rt Hon JOHN KEY: I think we made it quite clear when we campaigned on the deal that there would be various concessions. It is quite obvious that if we have a 35-year expectation on Skycity—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Prime Minister made a boast in a previous answer that they campaigned on it. I am asking for a specific detail, and either they did, or they did not. Can we have that answer, please?

Mr SPEAKER: And the Prime Minister is attempting to answer it. Would the Prime Minister please complete his answer.

Rt Hon JOHN KEY: It is quite obvious that if we have a situation where we enter into a commercial contract, where a company is going to have 35 years’ worth of cost and obligation, that that would run both ways. I think it is also quite normal.

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

Hon Member: Here we go. He doesn’t like it.

Rt Hon Winston Peters: No, I do not like it—you are right—because it is a lie.

Mr SPEAKER: Order! Would the member please raise his point of order.

Rt Hon Winston Peters: Yeah, and when I am asking a question—[Interruption]

Mr SPEAKER: Order! Point of order.

Rt Hon Winston Peters: —or raising a point of order, you will shut them down.

Mr SPEAKER: It will be heard in silence.

Rt Hon Winston Peters: OK. My point of order is that I am asking a precise question on the issue of when he talked about 35-year guarantees to Skycity in the 2011 campaign—

Mr SPEAKER: Order! [Interruption] Order! The Prime Minister has adequately addressed the question that was raised.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Then, seeking clarification from you, when was that date?

Hon Member: Is he a liar, too?

Rt Hon Winston Peters: Well, he could be if he does not answer that question. When was the date that I asked for?

Mr SPEAKER: Order! That is not a point of order. What the member is now doing is challenging a decision I have made. That will lead to disorder, and the member should not do so.

Budget 2013—Main Priorities

2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What will be the main priorities of the Budget on Thursday?

Hon BILL ENGLISH (Minister of Finance): The Budget this week will be about building momentum across the Government’s clear and comprehensive economic programme. As with the Government’s previous four Budgets, it will involve careful stewardship of public money, investing wisely in skills and infrastructure, and stewardship of our natural resources in ways that improve the lives of New Zealand families and grow the economy. In particular, it will build on the four priorities the Government set for this term: responsibly managing Government finances, building a more productive and competitive economy, delivering better public services, and rebuilding Christchurch.

David Bennett: What recent progress has the Government made in its economic programme as it prepares for Budget 2013?

Hon BILL ENGLISH: A number of indicators confirm the economy is headed in the right direction. For example, the economy grew 3 percent last year, around the same rate as Australia and better than most other developed countries; real wages are growing, while cost of living increases are relatively low; around 50,000 more jobs have been created in the past 2 years; unemployment is coming down, and the Government remains on track to surplus; and, last week 113,000 New Zealanders took the opportunity to buy shares in Mighty River Power, and more than 2 million Kiwis benefit from that sale through their KiwiSaver accounts.

David Bennett: What recent reports has he received from overseas about the New Zealand economy?

Hon BILL ENGLISH: It is important for New Zealand, because of its historical dependence on borrowing money offshore, that it is regarded as a good credit risk. Standard and Poor’s has published its global sovereign debt credit risk report for the first quarter of 2013, which ranks New Zealand in the top 10 least risky sovereign countries. That means New Zealand is among the countries rated least likely to fail to honour its debt obligations over the next 5 years, even though our debt obligations as a country are relatively high.

David Bennett: What other reports has he received on the New Zealand economy?

Hon BILL ENGLISH: I have recently seen a report titled Rebalancing the New Zealand Macroeconomic Environment. It confirms that the Government’s goal to rebalance the New Zealand economy is having some success, with five of the six key measures cited in the report showing improvement—that is, more balanced growth over the last 2 or 3 years. Information released with that report confirms that the tradable sector went into recession in 2006, after being hit by the effects of the poor policy of the previous Government. It has taken some time for us to begin fixing that damage.

Question No. 3 to Minister

GRANT ROBERTSON (Deputy Leader—Labour): I raise a point of order, Mr Speaker. This question was originally set down for the Prime Minister, and, given the notoriously poor communication between Mr Joyce and the Prime Minister, I seek leave for the question to be answered by the Prime Minister.

Mr SPEAKER: That is certainly not a valid point of order. If the member is seeking leave, the easiest way of resolving it—members have a right to seek leave for just about anything in this House. The member has sought leave to transfer the question to the Prime Minister. Is there any objection? There is.

Hon Trevor Mallard: Chicken!

Mr SPEAKER: Order! The member will stand and withdraw that remark.

Hon Trevor Mallard: I withdraw.

Job Creation—Number of New Jobs by 2013

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

Education, Skills and Employment: Has he been advised whether the Prime Minister stands by

his statement about Budget 2011 that “This is a Budget that will see 170,000 new jobs created”; if so, according to the Treasury in that Budget what progress should have been made by March 2013 towards reaching that target?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Firstly, I would say that if I were the Opposition, I would not necessarily pick today to ask that sort of question, when it has opposed yet again—

Mr SPEAKER: Order! [Interruption] Order! Would the Minister just start and answer the question. [Interruption] Order! I have called the Hon Steven Joyce to answer the question.

Hon STEVEN JOYCE: A little bit tetchy, maybe. I would provide the usual caveat around Treasury forecasts: they are no more or less than the best predictions available at the time they are made, and, of course, suggesting it gets it right quarter by quarter—as the member suggests it is doing—is actually particularly fraught. Having said all of that, Budget 2011 projected job growth by March 2013 of 99,000. We have had 70,000 more people employed than 3 years ago, according to the latest version of the household labour force survey, which had unemployment down to 6.2 percent. So we do still have a way to go to meet our 4-year target, but it is nothing that a convention centre, some more aquaculture, a new mine down on the West Coast, some more investment in innovation, more oil and gas exploration—

Grant Robertson: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I apologise to the member. I have a point of order from Grant Robertson.

Grant Robertson: There were two parts to this question. The Minister addressed part of the second part. He did not address the first part, which was whether he had been advised— [Interruption] Is this a point or order, or not?

Mr SPEAKER: It is a point of order. [Interruption] Order! It is a point of order, and the point of order will be heard in silence.

Grant Robertson: The first part of the question asked whether he had been advised if the Prime Minister stood by his statement that “This is a Budget that will see 170,000 new jobs created”. He has not addressed that part of the question.

Mr SPEAKER: From my recollection of the answer, I think that is absolutely true. I do not believe the Minister has addressed the first part of that question.

Hon Annette King: I raise a point of order, Mr Speaker. On two occasions you called “Point of order” and the Minister continued with his answer, and took absolutely no notice of you calling “Point of order”. I think you need to ensure that he follows the Standing Orders.

Mr SPEAKER: I thank the member for her comments. Would the Minister please now address the first part of the substantive question.

Hon STEVEN JOYCE: Well, I am sorry, I intended to answer the first part of the question by saying: subject to the usual caveats around Treasury predictions and quarter-to-quarter variations, yes, the Government does stand by its—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was not a question about whether the Government stands by the statements; it was a question about whether the Minister has received advice from the Prime Minister. That is what the question is. It has nothing to do with the Government.

Mr SPEAKER: I think in the normal course of—[Interruption] Order! In the normal course of events there is collective responsibility, and therefore the Prime Minister, the Cabinet, any of the Ministers speak as one, but on this occasion, when the Prime Minister is specifically listed in the primary question, it would be helpful if the Minister would actually address that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. We are getting incredibly pedantic around this stuff. The Minister has answered twice now, and he has answered the question. The question does ask whether he has been advised whether the Prime Minister stands by his statement.

His answer was, given the usual caveats around Treasury forecasting, yes. It cannot be clearer than that.

Mr SPEAKER: No, I do not believe that is the case. I will certainly look back in the Hansard, but the easiest thing to move this matter forward is for the Minster to please address the first part with regard to the reference to the Prime Minister.

Hon STEVEN JOYCE: Well, I am not sure which part you are asking me to address, except to say that my understanding is that, yes, the Government, the Prime Minister, the Minister of Finance, I, and other Ministers do stand by that target.

Grant Robertson: Will he recommit today to meet the promise of 170,000 new jobs being created by 2015?

Hon STEVEN JOYCE: Well, you are making us give exact answers; I would have thought that the supplementary questions would then take account of the answers.

Mr SPEAKER: Order! Would the Minister just answer the question that has been asked? [Interruption]

Hon STEVEN JOYCE: Well, actually it is fair, but, nevertheless, the Government has not changed its commitment and is working hard to achieve it, as opposed to the Opposition, which seems to oppose every single initiative the Government takes to increase jobs in this country.

Grant Robertson: How will it be possible for the Minister and the Government to meet their target when there were only 8,000 jobs created in the last year, when projections were that 57,000 jobs were required to be created in order to meet the promise he has just recommitted to?

Hon STEVEN JOYCE: Well, my understanding is that around 54,000 new jobs were created. according to the quarterly employment survey of the last 2 years. But to answer the member’s questions more generally, the Government is focused on a huge range of things to increase investment in jobs and growth in this economy. One example from just the last couple of days is the convention centre in Auckland, which the Labour Party and the Green Party have yet again opposed—yet another initiative. I say again, if I were them, I would not have picked today to ask that question.

Grant Robertson: Why would he try to dispute that he is more than 40,000 jobs behind meeting his promise, when the data comes from the household labour force survey, which he has described as the standard, internationally recognised measure of employment and the Prime Minister has called the most rigorous form of measuring employment in the country; why will he not just admit that he is 40,000 jobs behind his promise?

Hon STEVEN JOYCE: Well, the reality is we are growing jobs. I have been quite open that we are not growing them yet, as an economy, as fast as we would wish, but the Government is focused hugely on growing jobs. Let me give you a few examples of that, to make the member feel happier about the efforts that we are putting in: one, in terms of the increased oil and gas exploration, which the Opposition opposes; two—

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

Mr SPEAKER: Order! I apologise to the Minister. I have a point of order from the Rt Hon Winston Peters.

Rt Hon Winston Peters: Forget about apologising to him, I am the one who is asking for the point of order.

Mr SPEAKER: And I am giving the member—

Rt Hon Winston Peters: Well, great—get it right. My point of order—

Mr SPEAKER: Order! The member has a right to raise a point of order. As soon as I saw the member on his feet I called that point of order.

Rt Hon Winston Peters: And, Mr Speaker, I expect you to pay more attention when people raise points of order. I should not—

Mr SPEAKER: Order! [Interruption] Order! It is that sort of interchange that leads to disorder and leaves me with little choice but to discipline the member. Would the member please raise his point of order without criticism—

Rt Hon Winston Peters: My point of order raised is very clear. The Minister was asked a specific question as to how he would reconcile the data, not to give a long-winded speech about how he cannot, and you let him go on and on and on. When a specific question was asked by Mr Robertson, he could not answer it, refused to answer it, and you did not stop him. Then when I raised a point of order, you did not recognise me—you let him carry on. That is what leads to disorder in this House.

Mr SPEAKER: Can I invite the member to have a look at the specificity of the question that was raised—

Rt Hon Winston Peters: I did.

Mr SPEAKER: Well, I invite the member to have another look at it. I think the Minister was very adequately addressing that question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The member asked about the household labour force survey, described by two senior Ministers as the most rigorous analysis of employment or unemployment in this country, and why he could not reconcile the fact that there were 40,000 jobs short. If he—

Mr SPEAKER: Order! [Interruption] Order! That is quite enough. That is why I invited the member to have a look at the question again, because it talked about why the Minister continues to dispute the figures, and that is how the question started. Has the Minister finished his answer to the question? He has.

Grant Robertson: Can he confirm that unemployment is still above the worst-case scenario that was projected in last year’s Budget?

Hon STEVEN JOYCE: No, I cannot do that for the member today, but what I can confirm is that it is the 11th-lowest right across the OECD. Nobody is arguing that there is not more work to do, and that is why this Government is out every day working on initiatives to increase growth. What is the Opposition doing?

Grant Robertson: For the benefit of the Minister, I seek leave to table the section of last year’s Budget that shows that the worst-case scenario—

Mr SPEAKER: No. [Interruption] Order! The Budget documents are well and truly available to every member in this House.

Prime Minister—Statements on Skycity Convention Centre

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement, in relation to the SkyCity Convention Centre, “it’s a day of celebration, actually, for Aucklanders and for New Zealand”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: When did he, or other Ministers of his Government, or officials, first discuss with Skycity guarantees of compensation in the event of future regulatory change?

Rt Hon JOHN KEY: Those negotiations were held by the office of Minister Steven Joyce. I do not have those details. You will need to put them down to his office.

Metiria Turei: Under the agreement, does his Government intend to dissuade New Zealanders in 20, or even 30, years’ time from changing gambling laws to provide stronger public health protections if those laws would impinge on Skycity’s profits?

Rt Hon JOHN KEY: No, but what is clear is that Skycity is putting on the table around $400 million to build a convention centre, and what is quite fair is that while it honours its obligations, we honour our obligations. That is not unusual. As a Government we came into office and inherited a contract that said that the Government of the day would give to the America’s Cup whatever the

number was—$27-odd million—and we honoured that. It was $35 million or $37 million, and we honoured that deal.

Metiria Turei: Under the agreement, what remedies could Skycity seek from a future Government if New Zealanders ask that Government to reduce the value of banknotes casino pokie machines can take?

Rt Hon JOHN KEY: The member is asking for a legal opinion and would need to look at the contract that will ultimately be signed by the two parties.

Metiria Turei: I raise a point of order, Mr Speaker. This is not a question that asks for a legal opinion. The Prime Minister has signed a heads of agreement that guarantees compensation. He is able to give an indication of the remedies that are expected under that agreement in the negotiations. This is not asking for a legal opinion—

Mr SPEAKER: Order! I also accept on this occasion the Prime Minister’s answer when he interpreted your question as him saying that he would then be required to give a legal interpretation of a contract that is at some stage to be signed with Skycity.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. It will become very apparent to you in this line of questioning that the first supplementary question from my colleague from the Green Party got an answer to go and ask Steven Joyce. Except in question No. 1, when he was asked that very question, he said he mentioned the 2011 campaign. If the Prime Minister can get up and say any old thing in this House, then question time is a total waste of time.

Metiria Turei: Is the Prime Minister now telling the House and the New Zealand public that he does not know the implications of the heads of agreement that he is signing with the Skycity convention centre that provides for it a guarantee of compensation for loss of profits for 35 years if there are regulatory changes? He does not know what that means—is that what he is saying?

Rt Hon JOHN KEY: What I am saying is that there is an expectation that both parties will honour their obligations for the next 35 years, but there will be a legal contract signed between the parties, and that contract has not been formed or signed yet.

Metiria Turei: Can the Prime Minister confirm, then, given that he has signed this agreement, that under the agreement if New Zealanders do want to have stronger protections to prevent gambling harm in the future, they could be liable to pay to Skycity up to $400 million for the privilege to make public health law?

Rt Hon JOHN KEY: Firstly, it is important that the member understand I did not sign the heads of agreement; they were signed on behalf of the Government by, I think, Mr Joyce; secondly, the answer to the last bit is no.

Metiria Turei: Can the Prime Minister confirm that the agreement that his Government has entered into with Skycity means that if New Zealanders in the future want stronger protections to prevent gambling harm, they could be liable to have to pay to Skycity up to $400 million for the privilege to make public health law?

Rt Hon JOHN KEY: The member is quite incorrect. The specifics around compensation are related specifically around the deal and the issues that were listed yesterday, not on the point the member is making.

Metiria Turei: Given that increased gambling will have a social and financial cost and that New Zealanders may, under this deal, have to pay Skycity up to $400 million if they want to improve gambling laws, why not simply be transparent and, frankly, ethical and just pay for the convention centre, which everybody wants and which is in a place where everybody can use it, but which is not attached to a dirty casino deal?

Rt Hon JOHN KEY: A couple of things: firstly, the premise that the member’s question is based on is incorrect; secondly, if we want to get into dirty and inaccurate deals, then this is a member who presents 100,000 signatures that are bogus. I suppose it was Clint who told her to do that as well, was it?

Economic Programme—Investment in Auckland

5. MARK MITCHELL (National—Rodney) to the Minister for Economic Development: How is the Government encouraging investment, tourism, and job growth in Auckland?

Hon STEVEN JOYCE (Minister for Economic Development): The Government is working hard in many ways to encourage investment in jobs and growth. Yesterday morning I announced that the Government has signed a heads of agreement with Skycity to build a $402 million, international-sized convention centre in Auckland. An international convention centre will enable Auckland and New Zealand to tap into the lucrative convention centre market, attracting an estimated 33,000 conference delegates each year and significant spin-offs for the local and national economy. The convention centre, which will be capable of holding 3,500 delegates at one time, is expected to employ 1,000 people in construction, and there will be a further 800 jobs once it is up and running.

MARK MITCHELL: What concessions in harm minimisation and anti - money-laundering measures have been agreed to?

Hon STEVEN JOYCE: In return for Skycity’s fully funding the $402 million project costs, the Government has agreed to extend Skycity’s Auckland casino licence, due for renewal in 2021, to 2048, provided it operates within its licensing requirements. There will be 230 new pokie machines—which, incidentally, is the same number granted under the previous Government for a convention centre one-quarter of the size—40 gaming tables, and 12 gaming tables that may be swapped for automated gaming tables, allowing up to 17 percent of gaming machines in restricted areas to accept notes of greater value than $20; and the introduction of ticket-in, ticket-out cashless gaming, like in Australia. Identification will be required when any amount over $500 is being loaded on to ticket-in, ticket-out tickets in non-restricted areas. There will also be voluntary precommitment systems—a modelling tool to identify players at risk of problem gambling—and double the number of host responsibility staff at the casino.

Mark Mitchell: How does the agreement compare with other convention centre agreements?

Hon STEVEN JOYCE: Very well. To contrast this agreement with another convention centre deal made under a Labour Government in 2001, that deal also involved 230 pokie machines in exchange for a convention centre, but it was a teensy-weensy bit smaller than the current one—in fact, a quarter of the size. The interesting thing about that deal, of course, was that it was struck under the previous Labour Government. It did have a number of very strong supporters. One of the most vocal supporters was pleased to see continuing investment in the quality of our tourism infrastructure—that was one Helen Clark—and one of the most silent opponents to that arrangement was the Green Party, which set up zero petitions against it and made zero threats to overturn the agreement that Labour set up.

Economic Growth—Budget 2012 Statements

6. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his Budget 2012 statement “We are moving towards growth that is driven by savings, exports, and productive investment in the parts of the economy that trade with the rest of the world”?

Hon BILL ENGLISH (Minister of Finance): Yes, and I thank the member for asking about the rebalancing of the economy. Yes, I stand by that statement. Savings are up, exports are up, and investment is up. New Zealand is one of the faster-growing economies in the OECD. That has been in the face of headwinds that have made the process of rebalancing considerably more difficult—for instance, a high exchange rate. Employment is rising, unemployment is falling, New Zealanders are saving more and paying down debt, and real wages are increasing. This is a reasonably positive backdrop for this week’s Budget.

Hon David Parker: How do double-digit house price inflation in our two largest centres and a current account deficit that is the worst in the developed world demonstrate that “We are moving

towards growth that is driven by savings, exports, and productive investment in the parts of the economy that trade with the rest of the world.”?

Hon BILL ENGLISH: Of course, those are risks to the rebalancing of the economy, which is why the Government is attacking them vigorously. I would hope that the Opposition will support the Government’s efforts to increase the supply of housing in Auckland, instead of running poster campaigns against the Minister of Housing, who understands the problem and is working with the Auckland Council to help resolve it.

Hon David Parker: Why is he claming that economic growth is driven by savings, exports, and productive investment, when in the last quarter of 2012 the tradable sector of the economy shrank and when merchandise exports declined in the year to March 2013, with non-primary exports down by another 6.4 percent, causing misery to those who have lost their jobs as a consequence?

Hon BILL ENGLISH: I cannot confirm those numbers. What I can confirm is the direction the Government has set, and some progress in that direction despite the headwinds. What I can tell the House, though, is that pursuing policies of shutting down the mining industry, strangling the dairy industry, borrowing more money, and Governments spending a lot more is not a recipe for rebalancing the economy.

Todd McClay: What is the recent history of output in the tradable sector?

Hon BILL ENGLISH: It is interesting if you look back through what were apparently the good times in the early 2000s. The tradable sector—that is, the sector exposed to the rest of the world’s economy—went into recession in 2006. This was quite an achievement, given the state of the world economy at the time. The tradable sector was then hit by the global financial crisis, and it did not start growing again, having gone into recession in 2006, until 2010. Since then it has grown at about the same rate as the domestic sectors of the economy, reflecting in part the Canterbury earthquakes rebuild’s $40 billion contribution to the non-tradable sector. The Government is playing its part in building a productive and competitive economy by backing the businesses that export, that invest, and that employ people.

Hon David Parker: Would lower power prices for businesses assist economic growth driven by exports and investment in the parts of the economy that trade with the rest of the world?

Hon BILL ENGLISH: Well, they might, but I have not seen any indication that the Opposition’s policy would achieve lower power prices. In fact, its climate change policy guarantees that power prices will go up.

Hon David Parker: Given that National’s efforts to rebalance the economy have patently failed, when will he follow the advice of the OECD, the IMF, the Reserve Bank, and the Labour Party and implement pro-growth tax reform through a capital gains tax?

Hon BILL ENGLISH: Because those other three entities that are not the Labour Party do not agree with the Labour Party. They advocate a comprehensive capital gains tax. The Labour Party advocates a capital gains tax that exempts housing and is imposed on every productive, growing business in New Zealand. So it does not become a tax on capital gains; it becomes a tax on successful businesses.

Hon David Parker: Would the Minister prefer a capital gains tax that included the family home?

Hon BILL ENGLISH: That is why this Government has not put a capital gains tax on—but that is what all those other organisations advocate. A policy of more spending, financed by a capital gains tax, by the Government, more regulation by the Government, more borrowing by the Government, and shutting down productive industries, as he advocates, would not work.

Hon David Parker: I raise a point of order, Mr Speaker. That was very interesting, but that was not my question. The Minister in the earlier answer said they want the family home included. So I asked him whether the Minister would prefer a capital gains tax with the family home included. He has not answered that question.

Mr SPEAKER: I thought the Minister said no right at the very start, and others have confirmed that that is the case. I think the question was very adequate—

Hon David Parker: I raise a point of order, Mr Speaker. I listened very carefully to that question. So did my colleague Annette King. That is not what I heard. If you are trying to interpolate the Minister’s answer, that is not appropriate.

Hon Gerry Brownlee: It is a very interesting argument being run by David Parker, but the point here is that that is their policy, and previously Ministers have been asked not to comment on it. The reality is that the Minister of Finance said that we do not have a policy on capital gains in this particular area. That has to be a full answer.

Mr SPEAKER: We are moving on. The question has been adequately addressed.

Grant Robertson: I raise a point of order, Mr Speaker. Just speaking to that contribution from the Leader of the House, it is my understanding of the rules of the House that if a Minister brings a matter into a supplementary answer, as the Minister did, it is allowable to ask supplementary questions about that material.

Mr SPEAKER: And—[Interruption] No, I do not need further—

Hon Gerry Brownlee: That is true, but it is not appropriate to use a question to ask advice from the Minister of Finance about your policy.

Mr SPEAKER: Order! On the point raised by Grant Robertson, the question was certainly out of order.

Housing, Affordable—Government Work Programme

7. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Housing: How will today’s announcement of a $377 million investment by Housing New Zealand in Project 324&5 and Simply Smart Homes help the Government achieve its social and economic goals?

Hon Dr NICK SMITH (Minister of Housing): Project 324&5 involves converting 1,000 threebedroom State houses and making them into four-bedroom homes, and converting another 1,000 into five-bedroom homes, by adding 3,000 modular bedrooms. The Housing New Zealand Corporation has too many three-bedroom houses. Some are overcrowded, some are half empty, and some have large sections that are underutilised. Simply Smart Homes involves building 500 twobedroom homes on these underutilised sections in Auckland. These projects will house an extra 4,000 people and contribute to our social goals of healthier homes, more affordable homes, and happier families. The Minister of Finance is pretty happy because it is very good value for money.

Peseta Sam Lotu-Iiga: How will these projects contribute to the housing accord that the Government reached with the Auckland Council last Friday?

Hon Dr NICK SMITH: The accord we have reached with the Auckland Council is to ramp up investment in housing to increase supply, and to do so in a balanced way that includes both greenfield and brownfield development. This $377 million investment by the Government is in infill housing over the next 3 years, and will contribute towards those goals of an extra 39,000 houses over that period. This is a common-sense and pragmatic Government that is delivering real benefits for families and for the economy.

Peseta Sam Lotu-Iiga: How do these initiatives match up with the Government’s broader programme of reform for social housing?

Hon Dr NICK SMITH: The Housing New Zealand Corporation has historically been just too focused on the number of State houses rather than the quality, or, for that matter, whether they are the right size. For instance, there was a very deliberate decision by the previous Government to reject the recommendations of the Housing New Zealand Corporation board and spend money on maintaining the houses because it said the only thing the public notice is the number. We are focused on quality houses, not just the number, and making sure that those houses are the right size for the modern and diverse families that exist today.

Phil Twyford: Now that the Government has recognised that over-crowding is a problem for 2,000 State tenants, what is he going to do to fix the situation of hundreds of thousands of New Zealanders living in overcrowded and uninsulated homes, and why will he not back a building programme that will deliver high-quality, affordable houses instead of just tinkering with the planning regulations?

Hon Dr NICK SMITH: This Government has an incredibly proud record of insulating 230,000 homes. I ask this question: how many did Labour do during its 9 years? Less than 10 percent of that. The fact is that the previous Government had a shameful record on the quality of both State houses and others. Watch this space. There will be even more action in the Budget that is announced on Thursday.

Prime Minister—Statements on Child Poverty

8. JACINDA ARDERN (Labour) to the Prime Minister: Does he stand by his statement at the start of the year that “there will be—and there are—isolated examples that are reported of a child being hungry”; if so, what does he consider to be “isolated”?

Rt Hon JOHN KEY (Prime Minister): Yes. There are examples of children being hungry at school, but not every child.

Jacinda Ardern: Does he stand by his statement in response to Labour’s proposal to introduce food in schools that it was unnecessary because “The vast overwhelming bulk are [fed] in New Zealand,”?

Rt Hon JOHN KEY: Yes.

Jacinda Ardern: How does he reconcile his position that kids are being fed and the problem is isolated with his position 6 years ago that hungry children in schools was “a major issue” when since then, and since he has been in office, material deprivation and the number of families struggling to put food on the table has gone from 15 percent to 21 percent?

Rt Hon JOHN KEY: On a number of fronts. Firstly the Government has made changes to the Fruit in Schools programme to mean that it is more efficient. Secondly, the Government has put more money into KidsCan to ensure that there are breakfasts. Thirdly, the Government has supported Fonterra, which has been running a food in schools programme. If one was to look at, say, Fonterra’s programme, as an example, my understanding is that it is in all the decile 1 to 4 schools around the country that want it. It operates 2 days a week. It basically feeds about 566 schools. That represents about a fifth of the number of schools in New Zealand. Only about 15 percent of children actually actively participate in those programmes. So if you extrapolate all those numbers, very approximately, that is about 3 percent of New Zealand kids.

Jacinda Ardern: Does he stand by his position as Opposition leader on food in schools, when he said that: “We’re going to put together the package while in Opposition. We are not waiting to be in Government, because all kids deserve the best.”; if so, what was the nature of that package that he claims to have put together?

Rt Hon JOHN KEY: Yes, and we have been doing a number of things. As I just outlined before, they are some of the examples around food. But, actually, as the Minister of Housing just announced before, we are going to be extending a number of the three-bedroom State houses in Auckland to four bedrooms. We have insulated 230,000 homes. We have been rolling out a programme on rheumatic fever, working very closely with the Māori Party in terms of the Ministerial Committee on Poverty. All of these issues are issues that lead to the well-being of youngsters.

Jacinda Ardern: Is he satisfied that all that needs to be done on food in schools is complete, or will he introduce a package as part of his Budget?

Rt Hon JOHN KEY: Oh, the member will have to wait a couple more sleeps.

Electoral System, Referendum—Response to Recommendations

9. HOLLY WALKER (Green) to the Minister of Justice: Does she intend to bring legislation to the House that will implement the recommendations of the MMP Review in time for the 2014 election?

Hon JUDITH COLLINS (Minister of Justice): No.

Holly Walker: Why did she bother to hold the MMP review if she had no intention of implementing its recommendations in the time line intended?

Hon JUDITH COLLINS: Of course, I did not hold the MMP review; that was a matter that was undertaken by the Electoral Commission. But I can also say that I have made it very clear that we need consensus on these matters for any change, and there is no consensus for any change.

Holly Walker: Given that 77 percent of the public submissions to the review and 52 percent of the general public support abolishing the one-seat threshold, how can she justify leaving this hugely unpopular coat-tailing rule in place for the next election?

Hon JUDITH COLLINS: I believe that Dr Holly Walker was correct on this matter when she wrote: “There is a tradition of legislation making changes to the electoral system being passed unanimously in Parliament, and it would be great if all parties were able to put aside their own short-term political interests and build a consensus around the Electoral Commission’s report.” Dr Walker wrote that on 6 November last year in a little-read blog called Frogblog, and I agree with her.

Holly Walker: Thank you for the promotion—[Interruption]

Mr SPEAKER: Order! Would the member like to start her question again.

Holly Walker: Thanks for the promotion, Minister. Which party or parties have blocked consensus in Parliament on the recommendations of the MMP review?

Hon JUDITH COLLINS: Actually, no party has been able to reach consensus, because consensus actually requires all parties to agree.

Budget 2013—Budgeting Services

10. MELISSA LEE (National) to the Minister for Social Development: What announcements has she made to provide extra funding in Budget 2013 to support Budgeting Services?

Hon PAULA BENNETT (Minister for Social Development): As part of Budget 2013, we are supporting people on low incomes by investing more money into organisations providing budgeting advice and support. An extra $1.5 million has been allocated for 2013-14. This is in addition to the funding that has already been allocated, and it will relieve pressure on this sector in the short term.

Melissa Lee: How can budgeting services apply for this extra funding?

Hon PAULA BENNETT: This extra funding is in recognition of the good work that budgeting services do, and is being allocated to address demand in service provision. Applications opened yesterday, Monday, 13 May, and close on Friday, 24 May, with providers being notified by the end of the month. It is a short 2-page form that all should be able to easily fill out, and I encourage people to put in their applications.

Melissa Lee: What will the strategic review look at?

Hon PAULA BENNETT: A strategic review of the overall funding model will be completed this year, with a view to implementing a sustainable funding path from July 2014. We are in the process of scoping the review, but I think it is a good idea to look at policy decisions, ensure we are getting the changes and the desired effects intended, and look carefully at the consequence of policy decisions on individuals, Governments, and our partner NGOs.

Police—Confidence

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Police: Does she have confidence in the Police?

Hon ANNE TOLLEY (Minister of Police): Absolutely. The police are doing an outstanding job of protecting our community but are always looking at how they can do things better. Crime has fallen nearly 17 percent in the last 3 years, and recorded crime is at a 24-year low. We now have more police in the right places at the right time with the right tools, working hard to stop crime before it occurs. As a result, public trust and confidence are at an all-time high, reaching 87 percent last month.

Hon Trevor Mallard: Does the Minister support the comments made in the eulogy to the late Detective Inspector Bruce Hutton by the Deputy Police Commissioner Mike Bush, including the comment that Inspector Hutton was a man of “great character”?

Hon ANNE TOLLEY: I understand that those comments were read from Mr Hutton’s service record, and that was an appropriate action to take at the man’s funeral in front of his family and friends.

Hon Trevor Mallard: Can I therefore take it that the Minister thinks it is appropriate that the Deputy Commissioner of Police describes the individual whom a royal commission found planted evidence in the Crewe murder case as being of “great character”?

Hon ANNE TOLLEY: No, that is not what I said. In fact, I thought I said very clearly that those words were read from Detective Hutton’s service record. They were not the opinion of the deputy commissioner; my understanding is they were on the man’s record prior to the Arthur Allan Thomas case.

Hon Trevor Mallard: Will she rule out supporting Mike Bush as a candidate for the soon to be vacant police commissioner’s position, in light of his appalling judgment in reading those comments out in that eulogy?

Hon ANNE TOLLEY: We currently have a commissioner, and it would be inappropriate for any politician, at any stage, to make any comments about the future employment of any of our outstanding police commissioners. I am amazed that that member would sully the name of the one of the top serving police officers in this country.

Immigration—Cap on Number of Older Immigrants

12. DENIS O’ROURKE (NZ First) to the Minister of Immigration: Does he agree that there should be a cap on the number of older immigrants; if not, why not?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes, I do. That is why there is a limit to the number of older migrants able to be approved for residence each year under the capped family stream.

Denis O’Rourke: How can the Government have a sustainable immigration policy when last year 49.5 percent of all immigrants were reunification migrants, as reported on 23 April this year by Lincoln Tan in the New Zealand Herald?

Hon MICHAEL WOODHOUSE: I cannot verify that 49 percent figure. However, I do note that the same newspaper published this: “Professor Spoonley said ‘being more generous’ with family migration would encourage more skilled migrants to come and remain here, and he did not agree parents were a burden to New Zealand.”

Denis O’Rourke: Will the Minister verify that nearly 40 percent of immigrants from China last year were 50 years of age or more, as reported in Lincoln Tan’s article in the New Zealand Herald?

Hon MICHAEL WOODHOUSE: I cannot exactly verify it. It could well be correct. But what I would note also is that the average age of permanent migrants to New Zealand is 29, compared with the general population’s age of 36. So overall there is a very young cohort of migrants coming to this country.

Denis O’Rourke: Does the Minister agree with Professor Spoonley that the ratio of all reunification migrants should be maintained at no more than two-thirds of skilled migrants?

Hon MICHAEL WOODHOUSE: I think that is an oversimplification of the issue. As I have mentioned to the member in this House on a previous occasion, the number of parent category

migrants is a function of the skilled migrant numbers 5 to 10 years ago, so it would be very difficult to maintain a strict fixed proportion of one over the other.

ENDS

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