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Questions and Answers - September 18


State-owned Energy Companies, Shares—Instalment Scheme for Meridian Energy

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for State Owned

Enterprises: What is the forecast cost to the Crown of the Government’s plan to allow buyers of Meridian Energy shares to pay for their shares in instalments and will the instalment scheme be open to overseas institutions?

Hon TONY RYALL (Minister for State Owned Enterprises): Thank you for the opportunity to talk about the Meridian Energy share offer. It is on. As I advised the member in the House last month, there is no forecast cost for instalment receipts, because any such estimate would be affected by many factors, including the final price of the shares. To the second part of his question: yes, that has been known since last month, when the Government announced the instalment receipt structure for investors.

Dr Russel Norman: I seek leave to table an estimate of the cost of about $61 million, prepared by the Parliamentary Library.

Mr SPEAKER: The source of the document is the Parliamentary Library?

Dr Russel Norman: Yes.

Mr SPEAKER: Leave is sought to table that particular estimate prepared by the Parliamentary Library. Is there any objection? There is none. It can be so tabled. Document, by leave, laid on the Table of the House.

Dr Russel Norman: For clarity, can the Minister confirm that the Government is going to make ordinary New Zealanders effectively subsidise the purchase of these shares through these interestfree loans and that these interest-free loans are going to be made available to overseas institutions such as investment banks?

Hon TONY RYALL: There is no plan to have New Zealanders subsidise the sale of shares in Meridian Energy. It is quite clear that the use of instalment receipts will help drive interest and demand in these shares.

Hon Clayton Cosgrove: If Meridian Energy is such a good buy, why does the Government need to use a taxpayer-subsidised and uncosted—apart from a costing provided by the parliamentary librarian—“buy now, pay later” scheme to entice investors to purchase Meridian Energy shares, if the company is such a good, long-term investment? Come on, “Twinkletoes”.

Mr SPEAKER: Order! [Interruption] Order! Interjections like that at the end of the questions are most unhelpful.

Hon TONY RYALL: As the member knows, the Government is pursuing a mixed-ownership model programme. It is about freeing up our investment in a minority stake in a number of these energy companies, and the proceeds that will be used are to go into the Future Investment Fund

earmarked for investment in important infrastructure: schools, roads, and hospitals. The Government has been very clear about that from the very beginning.

Rt Hon Winston Peters: How can the Government expect so-called mum and dad investors to invest in Meridian Energy when the few who invested with Mighty River Power have collectively already lost a staggering $120 million?

Hon TONY RYALL: Despite the economic sabotage of the Labour Party and the Green Party, 113,000 investors bought shares in Mighty River Power, and it has been proven very successful for the New Zealand taxpayer. We now have $1.7 billion in cash, which is earmarked for important investments such as the Christchurch City hospitals. It has been a significant win for all New Zealanders.

Rt Hon Winston Peters: Is he aware that over the last decade Meridian Energy paid over $3 billion to the Crown in dividends; if so, how on earth is he going to make up for a $1.5 billion hole in the Budget? Or, to paraphrase Sir Winston Churchill, never has so much been stolen from so many for the benefit of so few sleazy crony mates.

Mr SPEAKER: Order! Again, I am very tempted to rule that question out of order. I am going to let it go on this occasion, but imputations like that about sleazy mates, etc., do not lead to good order in this House. I leave it for the Minister to answer.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, you might draw the line on character assassination of MPs, and that is fair enough. But I am referring to somebody outside the House, and you have got no authority whatsoever on that matter.

Mr SPEAKER: Order! I have authority while I am the Speaker of this House. What I said to the member was that I was very inclined to rule the question out. I am giving him the benefit of the doubt on this occasion, but if he continues to argue with the Chair, then I will not give him that benefit any longer.

Hon TONY RYALL: A number of those dividends that the member refers to were one-offs and they cannot be repeated, because you cannot sell Southern Hydro twice. Of course, the revenue and dividend flows will all be detailed in the financial accounts and the pre-investment statement that is coming out on Friday. It is disappointing that the member did not express this view about investors when he worked with me when we privatised Auckland International Airport in the late 1990s.

Dr Russel Norman: Can the Minister confirm that if, for example, Goldman Sachs, based in the United States, was to buy Meridian Energy shares, Goldman Sachs would be allowed to access the interest-free loans in order to buy those shares?

Hon TONY RYALL: They are not interest-free loans, but certainly all investors will be able to use instalment receipts. That is what the Government has been very clear on. But I do need to make this very clear to the member. It is a very, very basic rule of initial public offering economics. If the instalment receipt structure lifts the price by even 1c a share, the taxpayer gains millions and millions and millions of dollars from the float that we would not have otherwise received. That money can be used to invest in important social infrastructure, and we do not need to print it, like that member would want to.

Dr Russel Norman: Does the Minister disagree then that, given that the buyers will be given the shares and will be taking the dividends from the shares before they have to pay for them, and they will not have to pay for them for 18 months—how is that not an interest-free loan?

Hon TONY RYALL: It is not an interest-free loan; it is instalment receipts, and members should be aware of what goes on there. But the fact is that they are two different things, and if I have to explain the difference to the member, then I think we have got a problem. But the point that the member needs to realise is that whatever the benefit is, it does go to interest and demand for the shares, and that is what gives benefit to the New Zealand taxpayers, who are retaining 51 percent of this company.

Dr Russel Norman: Does the Minister have any information as to whether the Prime Minister will be on the phone—as he was on the phone to the head of Rio Tinto recently—to his old friends

at Merrill Lynch, telling them that they can get interest-free loans to buy shares in Meridian and that the cost of the interest-free loans will be paid for by the New Zealand taxpayer?

Hon TONY RYALL: That is simply not correct—the suggestions that the member has made. What I have explained to him is that instalment receipts, and the benefits of such, will go directly to demand and interest in the shares of Meridian Energy. For every 1c increase that we get in the value of those shares as a result of the instalment receipts, there is as many millions of dollars in cash for New Zealand taxpayers. So we retain 51 percent of Meridian Energy, we get an increased value for the 49 percent, and that money goes into providing services and benefits for New Zealanders without our having to borrow. It is controlling debt that is fundamental to the mixed-ownership model programme.

Dr Russel Norman: Can he think of a more extreme case of a Government that favours the rich and the powerful over everybody else than the example of giving interest-free loans to offshore investment banks so that they can purchase shares in what is currently a company owned by the people of New Zealand?

Hon TONY RYALL: The Government has been quite clear on the reason why we have got these instalment receipts. We have also been very clear that, at float, this company will be owned 85 to 90 percent by New Zealanders. That is our goal. The reason why we are doing that is that it is part of our wider economic plan to help control debt and to invest in the schools, roads, and hospitals that New Zealanders want. That member may want to borrow the money from foreign bankers; this Government believes we can do that ourselves as New Zealanders.


2. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What recent reports has he received on the New Zealand economy and business growth?

Hon STEVEN JOYCE (Acting Minister of Finance): Quite a number of reports. For example, the Grant Thornton Global Dynamism Index for 2013 was released today, showing that New Zealand is now ranked fourth in the world in terms of the most attractive countries for enabling dynamic business growth. Our fourth placing is up from 13th last year, and ahead of countries that we traditionally think of as strong and as fostering business, including Singapore, the US, South Korea, Japan, and Germany. The index ranks 60 of the world’s largest economies on 22 indicators. Amongst those indicators New Zealand ranks particularly well in its policies around private enterprise and competition, political stability, legal and regulatory risk, broadband lines per head of population, and the quality of our overall financial regulatory system.

John Hayes: What do the reports he has seen say about the outlook for the New Zealand economy?

Hon STEVEN JOYCE: They are very positive. For example, the New Zealand Institute of Economic Research recently produced its forecast, saying that despite some risks it expects further solid growth. The New Zealand Institute of Economic Research forecast economic growth to reach 2.6 percent per year over the next 3 years, although, of course, we are all aware that the drought earlier this year means that the June GDP figure due out tomorrow will have taken a knock. That view is supported by the $2.2 billion current account deficit figure out today for the June quarter, which was a slight increase, largely due to reduced earnings from dairy exports because of the drought. However, the New Zealand Institute of Economic Research expects exports to grow at 2.6 percent per year once the drought’s effects have run through. Overall, it reports broad-based and higher growth rates over the next 3 years.

John Hayes: How are improving economic prospects being reflected in the business sector?

Hon STEVEN JOYCE: Very well, in fact—in fact, right across the business sector. A report out today by Mind Your Own Business, the MYOB Business Monitor, which surveys more than 1,000 business owners and managers, shows a significant improvement in the confidence and financial expectations of small and medium sized businesses. It is important that the survey shows

that 30 percent of small and medium sized businesses reported revenue rises over the past year, with 43 percent reporting stable revenues. Just 24 percent saw a fall, which is fewer firms than in the pervious 12 months and the 12 months before that. Interestingly, it compares with only 18 percent of Australian operators seeing revenue growth in the past year, according to a similar survey in Australia.

Rt Hon Winston Peters: Can I ask the Minister why on earth is he still the Minister of Finance when another of his misguided decisions—this time to stop investing in the Cullen fund—has missed out on hundreds and hundreds of millions of dollars of global share price rises as the fund earned a stunning 25.8 percent in the 2012-13 year? Why does he not just resign?

Hon STEVEN JOYCE: I thought the honourable member had a better grasp of economics than that. The idea that you could borrow money to invest in the sharemarket and raise money is one of those fallacies that most families decide not to do because they realise that, actually, if you could borrow your way to success, we would have done that in this country a long, long time ago.

John Hayes: What reports has the Minister of Finance seen on business confidence and jobs growth in the economy?

Hon STEVEN JOYCE: ANZ recently released its Business Outlook survey showing that a net 43 percent of firms expect their own business activity to improve—a positive signal of investment and hiring intentions. Consistent with this, the job site SEEK reports a pick-up in the Labour market, with 91,000 jobs advertised in the last 4 months, which is an increase of 8,000 over the first 4 months of this year. Last Friday ANZ released the ANZ-Roy Morgan Consumer Confidence survey, which showed a slight easing but remained above long-term averages. Together these reports show a consistent picture of steady growth and growing confidence. Both globally and domestically there remain real challenges, which is why the Government remains committed to its programme to foster business growth, in turn creating the jobs that support New Zealanders and their families.

Economy—Impact of Tīwai Point Smelter Subsidy

3. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Given that he disagrees with the advice of the Treasury on the Tiwai smelter, who advised it should not be subsidised by taxpayers because “it would result in a significant transfer of value from New Zealanders to Pacific Aluminium and Rio Tinto shareholders”, does he then agree with the New Zealand Herald that the $30 million dollar taxpayer subsidy paid to the Rio Tinto-owned smelter is “an abject piece of short sighted thinking”; if not, why not?

Hon STEVEN JOYCE (Acting Minister of Finance): No, I do not agree with the premise of that essay. Treasury advised that there was no economic rationale for a long-term Government subsidy for the Tīwai Point smelter. Treasury further advised there would be a significant transition cost in the event of any shutdown of the smelter, especially to the Southland economy and the wider electricity market. The Government agrees with that advice. In regard to the particular Treasury comment quoted by the member, it was made in July 2012 and was in relation to the renegotiation of the long-term electricity price. At that time, Rio Tinto asked for assistance worth hundreds of millions of dollars. The Government agreed with Treasury’s advice against a long-term subsidy and rejected the proposal. As to the second part of that question, the Government had to make a decision. It was not a straightforward decision, but the Government recognised the smelter’s role in the stability of the New Zealand electricity market and the value of certainty for 800 smelter workers and the wider Southland economy, and chose to make a one-off payment to help close the negotiations. I look forward to the member maintaining that position on his next visit to Southland.

Hon David Parker: If he disagrees with the New Zealand Herald that the $30 million taxpayer subsidy to Rio Tinto is “an abject piece of shortsighted thinking”, does he agree with the New Zealand Herald that the effective subsidy given to Chorus through the Government’s intervention over broadband pricing is “unfair to consumers” and “dangerous for the economy”?

Hon STEVEN JOYCE: No, I do not. The reality with editorial writers is that although they are, of course, entitled to their views, they do not actually have to live with the decisions. The Government does have to live with its decisions and it believes that it made the right decision. It is interesting that the member raises two issues in relation to interventions in the New Zealand economy, and I think it is valid of him to raise those. But if you think about them for a second, with Tīwai Point we are talking about 800 jobs, and with ultra-fast broadband we are talking about 2,000 jobs. Those members also hate the convention centre, which is another 1,000 jobs. Their new leader was out today criticising the snapper decision, which is another 1,200 jobs. That is 5,000 jobs they want to nail in 2 days. At this rate, it will be 75,000 in just a month.

Mr SPEAKER: Order! Supplementary question—[Interruption]—Order!

Hon David Parker: Why should broadband customers who cannot get fibre installed or cannot afford to connect to it effectively subsidise Chorus through higher copper broadband prices than recommended by the Commerce Commission?

Hon STEVEN JOYCE: That is simply incorrect. The reality is that nobody is proposing to put up copper prices. The question is what the appropriate way is for valuing the value of the network for which prices are determined. There are different views, as there always are in this situation, particularly between the infrastructure providers on the one hand and the retailers on the other hand. The member wants to be careful that he does not get sucked into one side of the debate.

Hon David Parker: Does he now agree with the comments made by the New Zealand Herald columnist Chris Barton in 2011 that the then information and communications technology Minister Steven Joyce “has missed a one in a lifetime opportunity.” in designing the ultra-fast broadband scheme in that “over the next eight and half years, most of the country is going to get fairly average broadband.”, and that Chorus “carries so much baggage that it will inevitably become bogged down.”?

Hon STEVEN JOYCE: No, and with the greatest respect to Mr Barton, I have never seen a worse analysis of broadband in New Zealand as in that one article, which I recall well from the Minister for Communications and Information Technology showing it to me back in 2011. The reality of it is simply this: the Government has actually done a very, very good deal with the ultrafast broadband. If you compare it with the Australian situation, which the new Government there is now having to unravel, this Government is absolutely confident in its position and is delivering ultra-fast broadband to New Zealanders along with at least 2,000 jobs in delivering that programme.

Hon David Parker: Why is it that when members of the public cannot afford to pay their power bill, it gets cut off, but when those with the money, the power, and the connections like Rio Tinto do not want to pay their bill, they get a discount and a $30 million corporate welfare subsidy?

Hon STEVEN JOYCE: The member makes a mistake. He talks about it as if it is corporate welfare, but the reality is that it is about jobs—jobs in Southland, jobs on the ultra-fast broadband, jobs on the convention centre, and jobs in the snapper fishery. If the member wants to keep going down the path he is on, I encourage him to do so because it will be disastrous for the Labour Party.

Denis O’Rourke: Why did the Government’s largesse with the Tīwai Point smelter not extend to saving New Zealand - owned productive capacity in Dunedin’s Hillside railway workshops?

Hon STEVEN JOYCE: The difficulty in relation to Hillside was that there was no long-term future for that organisation, whereas for Tīwai Point the two companies have come to an agreement that allows for the medium to long term future of the smelter. Nobody can say it is for ever, but the reality is that that is the situation. The Government has to make judgments on those every day, and this Government is comfortable with the decisions it has had to make.

Hon David Parker: Has the Minister of Finance received any criticism from the Minister for Economic Development of the Tīwai Point deal or any acknowledgment that that Minister got it wrong in the 2011 ultra-fast broadband deal; if not, is it because “Mr Fix-it” still cannot see the error of his ways, or is it because he is a flathead?

Mr SPEAKER: The Hon Steven Joyce can answer any of a number of supplementary questions.

Hon STEVEN JOYCE: I do not think the Minister for Economic Development has a flat head. You could criticise him on many levels, but I do not think you could suggest he has a flat head. The reality is simply that this Government, in relation to ultra-fast broadband, has put together a very good deal for New Zealand. The debate here is simply between the internet service providers on the one hand, which are funded and organised by an interesting gentleman whom the Labour Party seems to have recently fallen in love with, and on the other hand the infrastructure provider. We will land on a price, through this process, that works for everyone and will involve reductions in retail prices for consumers, and we will deliver ultra-fast broadband, which the Labour Opposition would never have done.

Hon David Parker: I seek leave to table the Vodafone submission in response to the Government’s intervention proposal, which shows that consumers pay more than was—

Mr SPEAKER: Order! You have described the document. I just need to check its availability. Is it freely available to members?

Hon David Parker: Well, I have got a copy.

Mr SPEAKER: So it is freely available. We are not wasting any further time.

Schools, Partnership—Criteria for Establishing

4. METIRIA TUREI (Co-Leader—Green) to the Minister of Education: Did her statement that “Partnership Schools/Kura Hourua will play their part in meeting our target of five out of five students achieving success in education. They will be established in areas where kids are currently underserved by the existing education system” reflect any selection criteria for the first partnership schools; if not, why not?

Hon HEKIA PARATA (Minister of Education): Yes.

Metiria Turei: Is Albany, where the Vanguard military charter school will be established, where the Education Review Office reports that the public high school achieves “outstanding results at all levels”, currently underserved by the existing education system?

Hon HEKIA PARATA: All over the country there are pockets of disadvantage and underachievement in places that are considered to be wealthier areas. In respect of Vanguard Military School, which is located in Albany, it already caters to over 50 percent Māori and 20 percent Pasifika.

Metiria Turei: I raise a point of order, Mr Speaker. I did not ask the Minister about whom the school serves; I asked her whether Albany was currently underserved by the—

Mr SPEAKER: And the Minister adequately addressed the question by saying that there is under-servicing all over the country.

Metiria Turei: What was the 2012 course completion rate for Advance Training Centres, the sponsor of the profit-making Vanguard charter school?

Hon HEKIA PARATA: I do not have to hand that particular detail, but I am happy to get it for the member. My understanding is that it has had a very successful rate of completion. It has been through a very comprehensive scrutiny process in order to be selected as a partnership kura, and I wish it well.

Metiria Turei: I seek leave to table a document I have received from the Parliamentary Library showing that the 2012 completion rate for Advance Training Centres is just 50 percent.

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

Hon Hekia Parata: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! I am just seeing whether there is any objection to that. There appears to be none, so that document can be tabled. Document, by leave, laid on the Table of the House.

Hon Hekia Parata: I seek agreement to table the full selection criteria and standard agreements for all five partnership kura.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? [Interruption] Is there any objection? [Interruption] Order! Is there any objection to that being tabled? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Metiria Turei: Has she given up, then, on her five out of five target for charter schools given that she has just agreed to give large sums of public money to a private charter school with a record of just three out of five?

Hon HEKIA PARATA: Not at all. We are completely committed to getting achievement up to five out of five. We have provided $19 million, which is the average for a decile 3 school. We have established the expectation with all five partnership kura that they must have a target of enrolling 75 percent of our priority learners, which is a far more stringent standard than anywhere else in the public education system.

Metiria Turei: Is the Minister at all worried about funding a military school as a solution for Māori children, when the Education Review Office has criticised funnelling Māori kids into nonacademic courses at the expense of academic programmes that may respond much better to Māori children’s strengths and aspirations?

Hon HEKIA PARATA: For a start, the premise of the member’s question is that participating in a military career does not require academic achievement, when most assuredly it does. Secondly, of the five partnership kura approved yesterday, two are going to have 100 percent registered teachers teaching the core national curriculum or Te Marautanga o Aotearoa. The targets for these partnership kura are the same national standards in National Certificate of Educational Achievement level 2 and are part of the better Public Service Targets that this Government has set to ensure we raise achievement for five out of five.

Metiria Turei: Is this really the limit of the Minister’s aspirations for our Māori and Pacific kids, that she would spend all of this time and vast sums of public money on the preparation of legislation and advice to give a few select kids military training, with an outcome of just three out of five?

Hon HEKIA PARATA: The member is wilfully ignoring the facts. One of the partnership kura includes provision for military training. No parent is compelled to send their child there. The height of my aspirations for all New Zealand children, Māori and Pasifika included, shared by this Government, is that we achieve educational success for five out of five—unlike the Opposition, which spent years wringing its hands over failure but did nothing material to address its parlous record.

Oil and Gas Exploration—Consultation on Proposed Areas for 2014 Block Offer

5. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and

Resources: What recent announcement has he made about Block Offer 2014?

Hon SIMON BRIDGES (Minister of Energy and Resources): Today I announced the start of the Block Offer 2014 consultation process. A total area of just under 434,000 square kilometres across five offshore and three onshore areas is being consulted on with relevant iwi and councils. The mixture of proposed areas offers a range of mature and frontier acreage in order to appeal to a diverse range of operators and help promote a stable path to future oil and gas production. Feedback received will inform final decisions about the make-up of the block offer tender, which I expect to open in April of next year.

Jonathan Young: How was the block offer process received by industry?

Hon SIMON BRIDGES: This morning I spoke to a 300-strong crowd at the second annual New Zealand Petroleum Summit.

Rt Hon Winston Peters: They’re still laughing.

Hon SIMON BRIDGES: They hung off every word. The summit attracted leading explorers and producers, including those currently operating here and those looking to New Zealand for opportunities. Block Offer 2014 will be the third time this Government has used the competitive tender round. Grant permits and feedback from industry on the process continue to be enthusiastic. Industry, like this Government, wants to strategically manage and maximise the returns from our resources in an environmentally responsible and safe way.

Moana Mackey: Why is he charging ahead with exploration in the exclusive economic zone when the so-called environmental protections his Government has put in place are woefully inadequate, when there are serious questions over our ability to respond in the event of an emergency, and when there is zero guarantee of any local benefits such as local jobs or procurement policies, especially given that the blowout that led to the Deepwater Horizon disaster occurred in an exploratory well?

Hon SIMON BRIDGES: The member asking the question is completely wrong and ignorant in what she says. But I agree with the new economic development spokesman for the Labour Party that actually the Government needs to assuage whatever anxieties might be there in the minds of employers or of future investors in Taranaki in oil and gas, and that actually sustainability is as much about sustaining the livelihoods of people as it is about guarding the ecological habitat of the Hochstetter’s frog.

Children’s Action Plan—Funding and Resources

6. JACINDA ARDERN (Labour) to the Minister for Social Development: Is she satisfied that all relevant government departments and agencies have the funding and resources required to implement her Children’s Action Plan?

Hon PAULA BENNETT (Minister for Social Development): Yes. The answer to every problem is not to simply throw more money at it and hope, like we have seen in the past. Resources are being committed by local agencies, and there are ongoing discussions about future funding that might be required.

Jacinda Ardern: Does she believe her new reporting requirements will lead to an increase in notifications to Child, Youth and Family on top of the 50 percent increase in cases that have required its response since 2008?

Hon PAULA BENNETT: No, and we are currently looking at those reports that are coming from the police. I just want to give a bit of an indication of that. At the moment we have a total of 70,503 family violence reports referred to Child, Youth and Family from the police. Of this number, 12,737 were actual notifications that required some form of statutory response, meaning that 57,766 of them did not come anywhere near the threshold for Child, Youth and Family to intervene. So what you actually have is a whole lot of notifications coming that do not come anywhere—

Grant Robertson: No action.

Hon PAULA BENNETT: No, that is what the Children’s Teams are about. One of the members said “No action.” Well, that is why we are forming the Children’s Teams, because what we actually have right now is a whole lot of kids who are not getting anything. Instead what we will see is them actually having somewhere to go so that they can get a response. That is what we need: a much better response that is commensurate to what the need is.

Jacinda Ardern: Is Child, Youth and Family adequately staffed to deal with an increase in reporting, given an area like the central North Island, which she considered an area critical enough to give a Children’s Team, has 60 fewer social workers now than when she came into office?

Hon PAULA BENNETT: Well, that is not actually correct. It is the way that the member has chosen to interpret the numbers. What I want to say is that we have got 96 more social workers on the front line now than we had when we came into office. They have had a 15 percent increase in their budget. But what I want to explain to the member, which is what is really important, is that we have literally, as I have just explained, tens of thousands of notifications that are going to Child,

Youth and Family that get nowhere near its threshold. So if you want to actually ask the real question, the question is what the threshold of statutory intervention should be. We think the threshold is about right. I actually do not want Child, Youth and Family in homes where it does not need to be. That is a very serious intervention, so what we need to do is have better local interventions that have the help coming on the ground through our community organisations and iwi.

Jacinda Ardern: I raise a point of order, Mr Speaker. The Minister implied—well, actually she said that my calculation was incorrect. I wonder whether she could table the evidence for that answer—

Mr SPEAKER: Order! That is not a legitimate use of a point of order. It is now a means by which the member is questioning the answers she has been given. If she has further supplementary questions, that is the way that she should question the Minister.

Jacinda Ardern: Has workload played a role in the 128 percent increase in the number of Child, Youth and Family staff who have received counselling for work-related issues since 2007?

Hon PAULA BENNETT: I am actually thrilled that those staff are getting the support that they need in the counselling. In fact, the message that I have sent out to them in the last 5 years is that there is no stigma in getting counselling, and that they are dealing with some of the most complex and the most tragic cases, day to day, on the front line. Our Christchurch staff have received more counselling, and actually I think that that is entirely appropriate. I will stand next to those staff and support them in getting it. Quite frankly, I find it quite ironic that it is that member who thinks there is a problem with it.

Jacinda Ardern: If caseload is not an issue for Child, Youth and Family, why did Howard Broad state in the report that she commissioned into Child, Youth and Family that there were doubts over whether social workers were checking on children in care, and “The reason given for non-compliance is the high level of caseloads of social workers”?

Hon PAULA BENNETT: As the member knows, we currently have a review going on into caseloads and that threshold. If it comes to light that we do need to put more staff on, then I am completely open to looking at that. But one has to see the bigger picture. That is why we have the Children’s Action Plan. We have literally tens of thousands of children notifications at the moment that are coming through that are not getting dealt with. I think we have got a much bigger picture that we need to deal with. If part of that is actually looking at the caseloads of those social workers—

Jacinda Ardern: It is.

Hon PAULA BENNETT: —that is what we are currently doing. Well, there is a review going on. The member should wake up and get with the programme. There is already a review that is happening, and the results will be made available to her.

Beneficiaries—Whiteware Procurement

7. MELISSA LEE (National) to the Minister for Social Development: What announcements has she made that will get beneficiaries better deals on white ware appliances, saving taxpayers money?

Hon PAULA BENNETT (Minister for Social Development): I am delighted. In this year’s Budget we announced we would work to get better value for beneficiaries and for taxpayers in the way that we help people purchase fridges, freezers, and washing machines. I am pleased to announce that we have finalised a whiteware purchasing agreement with Fisher and Paykel Appliances, which will provide a good deal for both beneficiaries and taxpayers. We saw secondhand machines that quite frankly were not up to standard and for which far too much was being paid. Now they can get a new machine, and I think that is really great for them.

Melissa Lee: What difference will this procurement arrangement make for beneficiaries?

Hon PAULA BENNETT: At the moment they get repayable grants for whiteware. They will still get repayable grants, but instead of getting second-hand machines for not far off the same price, they will actually be getting a new machine with a 2-year warranty. It will be delivered to them and it will last 5 years. There are significant savings for them and significant savings for the taxpayer.

Melissa Lee: What savings are anticipated as a result of this procurement arrangement?

Hon PAULA BENNETT: On average, beneficiaries borrow around $10.5 million a year to spend on whiteware. Conservative estimates put it that there will be $10 million in savings over 5 years, but also the savings to the individual and their family are, I think, really considerable.

Jacinda Ardern: Has the Minister noted the concerns raised by the New Zealand manufacturing community in the inquiry led by the Opposition; if so, what proportion of whiteware procured by the Ministry of Social Development will be manufactured in New Zealand?

Hon PAULA BENNETT: As I have said, the contract is with Fisher and Paykel Appliances. Some will be made overseas, some will be manufactured here. I do not know what the proportion is, and I am not particularly interested, to be honest, because I think—

Hon Members: Oh!

Hon PAULA BENNETT: Well, go and tell that to all the New Zealand companies that export, shall we? Well, go and tell all the New Zealand companies that export their products that, actually, those countries overseas should not be purchasing them. This is a great initiative for New Zealanders and a great initiative for beneficiaries. The member should actually take that on board.

Earthquake Commission—Response to Release of Personal Information

8. Hon CLAYTON COSGROVE (Labour) to the Minister responsible for the Earthquake

Commission: Does he stand by his statement yesterday in relation to the Earthquake Commission’s latest privacy breach “I guess when they’re dealing with that level of correspondence, things can happen”?

Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission): In the context of the nearly 3 million pieces of correspondence sent out by the Earthquake Commission, yes.

Hon Clayton Cosgrove: Given that the Earthquake Commission has just breached 260 customers’ privacy, following a series of breaches where 98,000 claims details and 2,000 cancelled cheques were released, should the people of New Zealand now accept that privacy breaches are a business-as-usual practice from the commission?

Hon GERRY BROWNLEE: What I can report to the member is that the Earthquake Commission identified a possible 263 customers who may have received incorrect information. Of 177 customers who have been corrected, 11 have confirmed they have received the wrong information. That is not acceptable and I do want a better performance, but in the context of 3 million pieces of correspondence being sent out by the commission, I do not think this is an outrageous breach. I do think, though, that there was an outrageous breach earlier this week, when my colleague and Associate Minister received a note inviting her to the Labour front-bench meeting with the Hon David Cunliffe.

Grant Robertson: She didn’t even show up.

Hon GERRY BROWNLEE: No, she did not show up, but I have got bad news for the member asking the question, because he is not on the next list.

Hon Clayton Cosgrove: I am glad he looks on these breaches with such seriousness. [Interruption]

Mr SPEAKER: Order! On the Government side of the House.

Hon Clayton Cosgrove: Can the Minister confirm that the Earthquake Commission advised him on 31 March—[Interruption] Can you not hear? The Minister cannot hear.

Mr SPEAKER: Order! Would the member start his question again, please.

Hon Clayton Cosgrove: Thank you. Can he confirm that the Earthquake Commission advised him on 31 March 2013 that the commission had identified that “170,000 Excel spreadsheets”—that is, approximately 141 spreadsheets per employee—“are still live, some of which are located on third-party computers”; if so, how can he possibly have confidence that the Earthquake Commission has the ability to protect claimants’ private and personal information?

Hon GERRY BROWNLEE: The issue of protecting people’s privacy through the Earthquake Commission has been a challenging one from the outset. The reality is that in the early days after the earthquake, that member and many of his other cronies on the other side of the House were claiming that we were not moving—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I simply asked the Minister to confirm whether he had had a set of advice from his Earthquake Commission. That is what the question was—

Mr SPEAKER: Order! That was not the question. It was far more elaborate than that. I am going to ask the Minister to complete his answer.

Hon GERRY BROWNLEE: As I said, from the outset protecting people’s privacy has been an important aspect of this work. What I will say is that in the early days after the earthquake there were many people, including members of the Opposition, who were saying: “Get things done faster, move more quickly. Why is it taking so long?”. The Earthquake Commission went to an iPad-based assessment system, which meant that some of the 1,500 engineers who were in the field did end up holding information that perhaps they should not have had. I have asked the Earthquake Commission to ensure that the privacy of people is protected. I have to say that if any system that has dealt with 3 million pieces of correspondence is looked at, there will probably be privacy breaches of this type—the number being 11, so far. As I have said, earlier this week—

Grant Robertson: I raise a point of order, Mr Speaker. That is completely irrelevant—

Mr SPEAKER: Order! And the member does not—[Interruption] Order! The member does not need to interrupt. I was standing to my feet to agree with the member.

Hon Clayton Cosgrove: I seek leave to table an Official Information Act request received on 3 September, identifying that the Minister has received the advice I outlined in my question about the 170,000 spreadsheets and the risks associated with them.

Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? No. Document, by leave, laid on the Table of the House.

Hon Clayton Cosgrove: Does the Minister recall giving a commitment to Cantabrians exactly 1 year ago today to conduct a review of the Earthquake Commission, which included in its focus the “institutional structure and design of the Earthquake Commission, including its roles”; if so, why has virtually nothing been done to progress this review apart from it receiving a few submissions, given that that review could have helped to identify solutions to protect claimants’ private and personal information?

Hon GERRY BROWNLEE: I did, and the member is wrong to assert nothing has happened. That review is ongoing. His problem is that none of the review documents has managed to leak to him.

Hon Clayton Cosgrove: Given that the terms of reference for the review stipulated that it was to be completed “by mid-2013”—that is, completion—why has so little progress been made; if there has been progress, can he outline for the House exactly what that is, in order to assist people and assist the commission with solutions to protect people’s privacy?

Hon GERRY BROWNLEE: Well, for a start, that is a review of the Earthquake Commission’s overall operation, its policy, and its cover. It is most focused on future cover. So we have of course had reviews into the privacy issues, as the member knows, and we have had 11 breaches recently against 3 million. Given that we had one this week against 34—

Mr SPEAKER: Order! That part is not necessary to the answer.

Public Transport, Auckland—City Rail Link Construction Date

9. JULIE ANNE GENTER (Green) to the Minister of Transport: What is the cost of deferring the construction of the Auckland City Rail Link from 2015, the preferred start date of Auckland Council, to 2020, the Government’s proposed start date?

Hon GERRY BROWNLEE (Minister of Transport): There was never an agreed start date for the City Rail Link, so there is no deferral.

Julie Anne Genter: I seek leave to table a report to the Auckland Council Transport Committee that states that the cost will be $100 million a year, a total cost of half a billion dollars for the delay.

Mr SPEAKER: What is the source of that document?

Julie Anne Genter: It is a report from Auckland Transport to the Auckland Council Transport Committee.

Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. I am deeply concerned. If that was the verification for this question being asked, then apparently that is some justification for the term “delay” being put in the question. There is no delay. There has been no agreed start.

Mr SPEAKER: Order! The question was ruled in order. The Minister very satisfactorily answered the question. Leave was then sought to table a particular document. No objection was raised. It has been tabled. I will now look to the member for further supplementary questions.

Julie Anne Genter: Given that forecasts state that by 2021 the existing rail and bus network in Auckland City centre will be at full capacity, will he now prioritise the City Rail Link to reduce costs and congestion sooner and receive the benefits all across the transport network sooner?

Hon GERRY BROWNLEE: Well, the first point is that the benefit-cost ratios on this rail loop in 2021 are incredibly poor. The member regularly refers to those in relation to roads but seems to want to ignore them in relation to rail. The other point would be that we have said clearly to Auckland that if the conditions that are outlined in the Auckland transport plan do start to show signs of bearing truth, then we would want to move forward the project itself. That is not an unreasonable position. But to simply stand in this House and assert that we are going to be in a certain situation by 2021, knowing that the benefit-cost ratios then will only be between 0.4 and 0.9, I think, is plain irresponsible.

Iain Lees-Galloway: Does he believe that the Congestion Free Network proposed by Generation Zero and the Auckland Transport Blog is desirable; if so, does he understand that in order for that network to be completed by 2030, components like the rail link must be prioritised now rather than deferring them to build more motorways first?

Hon GERRY BROWNLEE: What I understand is that there are lots of organisations out there prepared to spend money on behalf of the Government. We look at what is a reasonable position to reach. We are in discussions with Auckland Transport. We have set down some conditions around the funding that the Government wants to commit to this rail loop at an appropriate time. I think that is where it should lead. I am not responding to any of these various groups that will come up with any number of fast ideas about how the Government should spend its money.

Julie Anne Genter: Given that traffic volumes in Auckland have been declining steadily for 7 years now, why is his Government pushing ahead with the “Holiday Highway”, which is only going to save 2 minutes for most drivers on most days, while delaying the start of the City Rail Link, which will not only save up to half an hour for Auckland commuters every weekday but also take 50,000 cars off Auckland’s congested roads?

Hon GERRY BROWNLEE: First, the Government does not have a road on its programme referred to as the “Holiday Highway”. What we do have is concerns about access into the north. As for the issue around patronage, we have made it very clear to Auckland Transport that if we see

those patronage figures nearing the estimates, then we would be prepared to look at our funding commitment sooner.

Julie Anne Genter: So is the Government’s plan to wait for congestion to reach a critical point in 2021 before acting, rather than getting the right infrastructure built in advance that is not only going to benefit rail users but is going to provide certainty for business and benefit motorists most of all?

Hon GERRY BROWNLEE: What the Government has said is that when we see the conditions that Auckland Transport set for itself starting to resemble the numbers that it is predicting, then we will want to talk about moving forward. Other than that, we are saying business plans are starting in 2017, with construction starting in 2020.

Julie Anne Genter: I seek leave to table this graph showing the Minister that traffic volumes are declining.

Mr SPEAKER: Order! What is the source of the document?

Julie Anne Genter: The New Zealand Transport Agency, but we have turned it into a graph to be more helpful to the Minister.

Mr SPEAKER: If it is information available from the New Zealand Transport Agency, then members can get it.

Prisoners—Prevention of Reoffending

10. IAN McKELVIE (National—Rangitīkei) to the Minister of Corrections: What recent announcements has she made to reduce re-offending in prison?

Hon ANNE TOLLEY (Minister of Corrections): I recently launched a comprehensive prisoner education strategy that will give prisoners the skills and qualifications they need in order to find work when they are released from prison. For the first time, every prisoner will have an education assessment when they enter prison, which will be used to develop an individual learning and training plan. This will enable corrections to provide targeted and results-focused learning programmes to prisoners, supporting them to gain qualifications. And, for the first time, we have set ambitious education targets to ensure that we will get the results that we need. By July 2017, 85 percent of youth prisoners will be involved in National Certificate of Educational Achievement level 2 qualifications and 55 percent of prisoners aged 25 to 34 will receive support towards New Zealand Qualifications Framework qualifications at level 4 or above.

Ian McKelvie: What role does education play in reducing reoffending?

Hon ANNE TOLLEY: Research has consistently shown that offenders who are in employment and have stability in their lives are less likely to reoffend. Most prisoners cannot read or write properly, and if this is not addressed prisoners on release have difficulty adjusting to life on the outside, have difficulty finding work, and, too often, return to crime. So this new education strategy will ensure that prisoners are given the opportunity to gain the skills they need—

Rt Hon Winston Peters: If it works inside prison, why won’t it work outside? Think about it.

Hon ANNE TOLLEY: —and this complements the other work we are doing in our prisons to increase drug and alcohol treatment. I am happy to give you some advice on that, Mr Peters. Getting prisoners off drugs and giving them educational qualifications and employment training will ensure we meet our Better Public Services target of reducing reoffending—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You would have heard what that member said—[Interruption]

Mr SPEAKER: Order! No, I cannot hear—

Rt Hon Winston Peters: You would have heard what that member said, and all I want to tell her is that if she wants a free-for-all for her and her colleagues, she will get it.

Mr SPEAKER: Order! That is not a point of order. [Interruption] Order! If the Rt Hon Winston Peters is going to continue to bellow across the Chamber, I will be asking him to leave.

Le’aufa’amulia Asenati Lole-Taylor: Is the Minister aware, or does she know, of the completion rate of those prisoners undertaking rehabilitation programmes to address their sexual violence offending; if not, why not?

Hon ANNE TOLLEY: We have a number of rehabilitation interventions for offenders charged with sexual offences. I do not have the figures in front of me, but I am happy to provide them to the member if she wants to put that question to me in writing. Those offenders can in fact be very successfully trained to deal with their problems and, of course, there are quite rigorous post-release arrangements to make sure that they do not cause more harm in the community.

Health Services—Access and Affordability

11. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Does he agree that every person can afford healthcare and disability support, regardless of their income, health status, or risk profile?

Hon TONY RYALL (Minister of Health): In New Zealand we heavily subsidise primary care and have free hospital care, but for some New Zealanders cost can be an issue, and that is the reason we have a welfare system. For example, although prescription charges have gone up by $2 an item, with a 20-item cap, those who have difficulty in meeting this cost can discuss their circumstances with their general practitioner and pharmacist, or they can go to Work and Income New Zealand.

Hon Annette King: Well, in light of that answer, is he concerned with reports in the Dominion Post on Monday of pharmacists saying that people are not collecting their prescriptions, are taking only a few days of medication at a time, and are choosing some drugs over others because of the increase in prescription fees, and of health professionals now saying that it is the poorer patients who are suffering; if not, why not?

Hon TONY RYALL: I would have to say that some people not picking up their medications for cost and other reasons is not new, but the Government has made it very clear that people will be able to qualify for a pharmaceutical subsidy card after reaching 20 prescription items in a year, which means that no family need pay more than an extra $40 a year as a result of the co-payment. If they do have any troubles, they can go to Work and Income New Zealand. The use of the pharmaceutical subsidy card means that about one-third of prescriptions filled in New Zealand are filled without any co-payment.

Hon Annette King: Well, in light of that answer, if it is all OK, why did the Ministry of Health hold a meeting with a number of stakeholders in the past month where the ministry expressed concern at the growing number of people unable to afford to pick up their prescriptions because of the increased cost and asked the stakeholders to help them find a solution because “It could become an election issue.”?

Hon TONY RYALL: I am unaware of that meeting. I would have to check the facts. It could be like the member’s claim about Timaru Hospital’s various reports, with doctored Official Information Act requests. Because I am unaware of that and it is not verifiable, I cannot comment.

Hon Annette King: I will verify it later. How does he decide how serious the problem is, especially for poorer and older New Zealanders, when he has informed me that he does not receive any regular reports from any entity on the impact on patients of his increased prescription charges, when he dismisses the concerns of health professionals, and when his own ministry is too scared to tell him it is worried about the growing impact of the hiked fees on patients?

Hon TONY RYALL: For some people it is difficult, and that is the reason Work and Income New Zealand is able to support those people, and it is the reason we have the prescription subsidy card. What I can report to the member is that actually the number of prescriptions being filled in New Zealand, according to all the data that I have got, is actually increasing. The amount of money that we have made available for pharmacies is also increasing.

Hon Annette King: Is he aware that hundreds of thousands of New Zealanders who are eligible for an exemption card from the prescription charge miss out because they do not get their

prescriptions filled at the same pharmacy; if so, will he support my solution of a pharmacy card that is able to be used in any pharmacy and that records all prescriptions dispensed, ensuring that when a patient does reach the 20-script limit, they get the exemption they are entitled to, and if not, why not?

Hon TONY RYALL: I am aware that each year more than 750,000 people use the pharmaceutical subsidy card to maintain their medicines, and the Government is working on a number of options related to new electronic support in pharmacies, which will facilitate people having easier access to the issues that the member raises. What I would say to the member is that it would be helpful if when she meets anybody who is having trouble with their pharmaceutical costs, she advises them that they are able to contact Work and Income New Zealand for support.

Hon Annette King: Does he recall saying that pharmacists play an important role in primary health care, and if so, why does he not listen to their experiences of the impact of the increased prescription fees, which have led not only to problems for patients but also for pharmacists themselves, who say they are now carrying greater debt, they are throwing away hundreds of thousands of dollars of medication, and they are providing prescriptions on a drip-feed basis?

Hon TONY RYALL: Because I think the feedback from pharmacies is not necessarily as represented by that member. I think that many pharmacists will tell you there has not been much of a change in their area; others are having difficulty. Those people who do experience difficulty meeting pharmaceutical charges should contact Work and Income New Zealand for support. What I can advise is that this Government continues to invest very strongly in pharmacy services and in the health service as a whole. There is record funding of $500 million a year extra, on average, under the National Government.

Hon Annette King: I seek leave to table a letter to me from Tony Ryall received on 12 August 2013, stating that he does not receive regular reports from any entity on the impact on patients of the increase in prescription fees to $5.

Mr SPEAKER: Order! Leave is sought to table that particular letter from the Minister to the Hon Annette King. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Road Safety—Safer Journeys Strategy

12. MIKE SABIN (National—Northland) to the Associate Minister of Transport: What progress has been made as part of the Safer Journeys road safety strategy?

Hon MICHAEL WOODHOUSE (Associate Minister of Transport): In the 4 years since the Government released the Safer Journeys: discussion document there have been a number of significant policy changes to reduce the rate of death and injury on our roads, and agencies are now well joined up as they work to deliver this joint goal. We have targeted drink-drivers, put in place a zero alcohol limit for under-20s and recidivists, lifted the driving age, and made the restricted licence testing more challenging. We have got more front-line police, and sustained advertising and education campaigns are in place. A lot of work has gone in to lowering our road toll, and we are now seeing real results.

Mike Sabin: How has the road toll and injury rate changed since the start of the Safer Journeys strategy?

Hon MICHAEL WOODHOUSE: The 2013 road toll currently sits at 183—the lowest year-todate figure on record. This represents a reduction of nearly 40 percent on this time 4 years ago. The latest available year-to-date figures for crashes involving drivers aged 15 to 24 years show a 56 percent decrease in the number of fatalities and serious injuries from 2009. That means that 1,122 young people have avoided death or serious injury on the road in the past 4 years since the 2009 base. In saying that, we are certainly not resting on our laurels, and there are more safety initiatives on the way through the Safety Journeys road safety strategy.


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