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Questions and Answers - January 30



1. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What reports has he received on the outlook for the economy this year—and particularly for monetary policy and interest rates?

Hon BILL ENGLISH (Minister of Finance): There are a number of reports indicating there is an improved outlook for jobs and incomes. For instance, Treasury forecasts last month show economic growth reaching 3.6 percent in 2015 and signalled that 125,000 more New Zealanders will be in jobs over the next 4 years. I have also seen reports predicting that interest rates will rise somewhat this year as growth picks up and inflation moves towards the mid-point of the Reserve Bank’s 1 to 3 percent target range. Annual inflation remains quite low at 1.6 percent—certainly well below the 5 percent that inflation reached in 2008. However, inflation is expected to pick up as the economy gains momentum, and that will require interest rates to rise somewhat over the course of the year.

John Hayes: What did the Reserve Bank Governor say this morning about his expected path for the economy and interest rates over the next year or so?

Hon BILL ENGLISH: The governor this morning confirmed the official cash rate at 2.5 percent. It is a historic low. He noted that the economic expansion has considerable momentum, with commodity prices high, business confidence strong, and inward migration on the rise. There appeared to have been some moderation in the housing market in recent months, but other inflation indicators have been rising. In this environment the governor said that there is a need for interest rates to return to more normal levels, and the Reserve Bank expects to start this adjustment soon. I think he has indicated pretty clearly that New Zealanders should prepare for some increase in interest rates over the next few months.

John Hayes: How do current interest rate levels compare with the position inherited by this Government in 2008, and how has this benefited New Zealand families?

Hon BILL ENGLISH: The position is considerably different than it was in 2008. The Reserve Bank’s official cash rate is currently 2.5 percent, and floating home mortgage rates are at 50-year lows at less than 6 percent. In mid-2008 the cash rate peaked at 8.5 percent and floating mortgage rates were approaching 11 percent, rather than below 6 percent as they are now. For a family with a $200,000 mortgage, the significant fall over this time saves them about $200 a week in interest payments. New Zealanders can be assured that mortgage rates are not expected to return to the high levels seen in 2008.

John Hayes: What measures has the Government taken to help ensure interest rates have stayed lower for longer and to prevent a repeat of the credit cycle issue seen in New Zealand in the mid to late-2000s?

Hon BILL ENGLISH: The Government can have some influence, through its own policies, on the interest rates track. It is important that we avoid repeating the mistakes of the mid-2000s, when a doubling in house prices and large increases in Government spending put pressure on interest rates, forcing them up and also forcing up exchange rates. So the Government has moved to get its spending under control, help businesses become more competitive, and, importantly, we have moved to increase the flexibility of the supply of land for housing in order to address the issue of fast rising house prices. These measures all help to reduce pressure on interest rates, keeping them lower for longer and helping to rebalance the economy.

Greenhouse Gas Emissions—2030 Target

2. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Will the Government be announcing a greenhouse gas emissions reduction target for 2030; if so, when?

Hon TIM GROSER (Minister for Climate Change Issues): For multiple good reasons, no.

Dr Kennedy Graham: Given that the European Commission agreed last week to reduce emissions—40 percent off 1990 levels by 2030—and given that the Prime Minister’s enthusiasm for fast following, why is the answer “No”?

Hon TIM GROSER: We now come to the multiple good reasons: first, we have an aspirational target of a minus 50 percent reduction by 2050; and second, picking these figures out of the air, without reference to a country’s national circumstances, is insane. The European Union is already projected to be around about 24 or 25 percent below 1990 emissions, by 2020. So a minus 40 figure looks entirely different. You try to implement that on New Zealand and you will destroy the economy.

Dr Kennedy Graham: Is the reason the Minister is so reluctant for New Zealand to do its fair share that his Government’s policies mean that New Zealand is now on track to actually increase its emissions 50 percent around 2030, which has to be insane?

Hon TIM GROSER: It is not insane, if I could say so; it is a consequence of the forestry cycle. Our forestry cycle, which works on a 27-year rotation cycle, peaks at its maximum in 2030. If you extend this beyond 2030 to, say, 2040, then our forests begin to act once again as a very significant sink and you reach a completely different conclusion.

Dr Kennedy Graham: Given that forestry is of only secondary relevance to the issue of reducing emissions, does he agree with the Ministry for Primary Industries’ recent report, Four Degrees of Global Warming, that if we continue to sit on our hands and allow the planet to keep warming, extreme weather will wreak havoc with our primary industries, including forestry?

Hon TIM GROSER: Well, I am not sure about the specific context of this report, but if indeed it said “sitting on our hands” in respect of just New Zealand, I do not agree with it at all, since we are not. Secondly, if it is talking about, as I think it should be, the broader international response, then I think I would agree with it. So what we need is a comprehensive, internationally legally binding agreement that actually deals with the problem, not the 0.14 percent of emissions New Zealand contributes.

Hon Dr Nick Smith: Has he received a congratulatory message from the Green Party with the announcement by Genesis Energy of the closing its coal-fired turbine in Huntly, one of the biggest contributors to New Zealand’s greenhouse gases, also noting that in the previous decade the Government was subsidising the construction of new thermal generators?

Hon TIM GROSER: Long ago in life I learnt never to wait for letters that I hope might arrive but do not ever arrive. So the answer is no. But what I would say to the Minister is that, of course, the thing that the member asking the primary question left out was the failure of the commission to get agreement on its renewables targets—it was trying to achieve, I think from memory, a 27 percent increase in electricity from renewables. Well, hang on, once again that is a difficult ask of the European Union because of its actual national circumstances. For us, we have a 75 or 77 percent

return already from renewables, and we set a target for 90 percent. You need to look at the national circumstances of all countries, not just pull figures out of the sky.

Dr Kennedy Graham: Looking at the national circumstances of 27 countries in Europe and others, and having regard to all of them, and recognising that all of them are reducing their emissions collectively by 40 percent, national circumstances notwithstanding, does he then think it is right for other countries to do all this heavy lifting while New Zealand reduces its ambition and sits on its hands, and by “following” does he actually mean freeloading?

Hon TIM GROSER: Absolutely this Government is not freeloading on this. The fact of the matter is that we set last year a minus 5 commitment unilaterally—no matter what happens internationally, we are going to do minus 5 by 2020. That is the same as Australia, effectively— minus 4. It is roughly the same as the United States—minus 3. And it is somewhat better than Japan—plus 3—and Canada—plus 4. I think we are absolutely consistent with what we said to the New Zealand public. We will do our fair share.

Dr Kennedy Graham: Given how 5 percent for 2020 compares with the Intergovernmental Panel on Climate Change’s recommendation of 20 percent to 40 percent by that year—5 percent falling way short—is this Minister confident that he will be able to look his children’s children in the eye and say he did all he could to leave them a safer world, as President Obama said he was determined to do during his State of the Union address yesterday?

Hon TIM GROSER: Well, this is not an entirely theoretical question, since I have four mokopuna. I usually talk to them about The Princess and the Pea, not climate change, but I am confident that later on I will be able to look them in the eye. But the underlying point here about minus 5 is that we have left on the table an offer to do a darn sight more—minus 10 to minus 20— but only in the context of a meaningful international agreement and some other very sensible conditions we put around it.

Inequality, Economic and Social—Rate over Last 30 Years

3. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Does he agree that asset and income inequality have increased over the past 30 years; if not, why not?

Hon BILL ENGLISH (Minister of Finance): No, I do not agree with that description of events in New Zealand. Income equality increased in the 1980s and early 1990s, it peaked in 2004-05, and since then it has been relatively flat. I think a more accurate description has been that New Zealand has become more unequal in the last 30 years, but that is not true for the last 15 years, where income inequality has been pretty much flat.

Hon David Parker: I raise a point of order, Mr Speaker. There are two parts to that question. The Minister has addressed only income inequality, not asset inequality.

Mr SPEAKER: Does the Minister want to add anything further to the answer to address the question of asset inequality?

Hon BILL ENGLISH: And there are no reliable measures of asset inequality over the last 30 years.

Hon David Parker: Does he agree with John Key that New Zealand has a growing underclass, and why has John Key stopped talking about it?

Hon BILL ENGLISH: I do agree that New Zealand has an underclass. The good news is that despite the recession, it is not growing. John Key talks about it all the time in Government because much of the Government’s activity has been focused on lifting immunisation rates, fixing our social housing mess, lifting persistent educational underachievement, and reducing welfare dependency, all of which define our underclass.

Andrew Little: Why did the Minister tell Parliament yesterday that over the last 2 years “This means that families and households have, on average, had real increases in their weekly wages”, and then outside the House, say: “I think a lot of households will be looking for benefits, through pay rises, which households haven’t had much of through the last 3 or 4 years.”?

Hon BILL ENGLISH: Because some of them have not. As I was careful to say in the House, on average real wages have increased, despite the fact that on “Planet Labour” they have been cut or have gone down, or no one has had any pay rises. But you cannot know the circumstances of every individual family, and there will be some who will be looking for pay rises, if only for the reason that they have not had any in the last few years.

Andrew Little: Does he accept that the bottom 50 percent of wage and salary earners have seen no increase in pay rates, in real terms, over the last 2 years, and that his Government’s employment law changes over the last 6 years are the cause of low or non-existent real wage growth for most working families in recent years?

Hon BILL ENGLISH: I would have to check the figures on the member’s first assertion, but I would not agree with his second one. I think it is well known around the Western World that particularly for people with lower skills, there has been a lot of competition through global supply chains, which has meant downward pressure on pay in some industries, and some industries themselves have gone through extensive restructuring and reductions. I do not agree with his assertion that it is to do with the changes in employment relations legislation.

Hon David Parker: Does he agree that existing income inequality leads to ever-increasing asset inequality; if not, why not?

Hon BILL ENGLISH: I simply cannot answer the member’s question, because there is no particular evidence. What I can say is that for the largest single-asset class of housing, that member’s party should be supporting the Government’s measures to improve the supply of housing, because where it is restricted, as it has been in our metropolitan areas, insiders who already own houses benefit from price increases and low and middle income New Zealanders who cannot access the housing market miss out on that increase in wealth. So if the member believes anything that he is saying, he would support the Government on these measures, instead of attacking us on them.

Hon David Parker: Why did he claim yesterday at the Finance and Expenditure Committee that there is no link between rising asset inequality and declining homeownership rates?

Hon BILL ENGLISH: I have said that there is no obvious link between the two, and the member has not produced any. But this red herring is another distraction from the problem that Labour claims income inequality is growing, when the facts show that it is not.

Hon David Parker: Does he still say there is no link between rising asset inequality and declining homeownership rates?

Hon BILL ENGLISH: I have seen no evidence of a connection between the two, and the member has not produced any. What he does need to produce is evidence that the rich are getting richer and the poor are getting poorer. He will not be able to because it is not true. All the data shows that New Zealand’s income inequality has been roughly flat for the last 10 years.

Hon David Parker: Do the income inequality figures that he refers to include all capital income?

Hon BILL ENGLISH: They do include a broad definition of income, and one that has been used consistently. It does not matter how the member tries to reconstruct the official data on—

Hon David Parker: I raise a point of order, Mr Speaker. My question was not whether—

Mr SPEAKER: Order! Order! I am going to ask the member to please just repeat his question.

Hon David Parker: Thank you. Does the measure of income inequality that he relies upon include all capital income?

Hon BILL ENGLISH: The figures, which are not figures that I rely on, are the official calculations done by the Ministry of Social Development every year for the last 7 or 8 years. They include all income. This does not help the member get round the fact that on “Planet Labour”, the rich are getting richer and the poor are getting poorer, but in the real world, they are not. Income inequality in New Zealand is not getting worse. If anything, it is getting slightly better.

Welfare Reforms—Progress

4. MELISSA LEE (National) to the Minister for Social Development: What recent reports has she received on the progress of the Government’s welfare reforms?

Hon PAULA BENNETT (Minister for Social Development): This Government’s welfare reforms are continuing to deliver strong results, and I have received a report recently showing that more than 1,500 people are moving off welfare and into work every week. As a result there are more than 17,000 fewer people on a benefit in December 2013 than in December 2012. This is the lowest number of people receiving a benefit in the December quarter since December 2009.

Melissa Lee: What specific initiatives have led to more people moving off the benefit and into work?

Hon PAULA BENNETT: There are many. I could certainly cite the intensive case management that is going on, with more than 260,000 meetings between case managers and those on benefits just in the last few months. I would like to cite the work bonus, which allows people to keep some of their benefit in their first few weeks in a new job. So far more than 2,500 people have received this work bonus, the vast majority of them being sole parents. In addition the new requirement for people on job seeker support to reapply for their benefits once a year has meant that more than 4,500 people are no longer on jobseeker support, and that is just since July last year.

Melissa Lee: How are the welfare reforms supporting young people to ensure they do not become long-term welfare dependants?

Hon PAULA BENNETT: Ensuring that young people get the support they need is the vital part of these welfare reforms. What we are seeing is that those who want to go on a benefit are now working their way through a youth service that wraps that support around them. But we are also working with those who are not on benefits but who have been a major concern not just to this House but the public in general. These are those who are not in education, employment, or training. We now have more than 9,000 of them and 63 percent are no longer “neets”, because they are now engaged in education. That means their outlook is looking very favourable in terms of their not becoming long-term beneficiaries.

New Zealand Air Force—Purchase of American Aircraft

5. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Defence: Why did he decide to source new training aircraft for the Royal New Zealand Air Force from Wichita Kansas rather than Hamilton New Zealand despite a 40-year relationship with the New Zealand company, Pacific Aerospace?

Hon Dr JONATHAN COLEMAN (Minister of Defence): After a detailed and lengthy assessment of the Royal New Zealand Air Force’s training needs, a robust tender process was entered into, reviewed by the Defence management board, Ministry of Business, Innovation and Employment officials, and central agencies. The process was also externally audited by the McHale Group and Government procurement guidelines were followed. Beechcraft’s tender matched all the Royal New Zealand Air Force’s training requirements while representing good value for money. The T6C has a proven track record and over 850 of these aircraft are in service training pilots around the world, including for the US and NATO nations. The Auditor-General’s advice has previously been to go for proven off-the-shelf capability purchases, and this is what we have done. The Pacific Aerospace option did not fulfil the Royal New Zealand Air Force’s training needs and requirements and did not include either a simulator or a training package. The Pacific Aerospace proposal was for an aircraft that is yet to be built and, furthermore, it did not provide any detailed costings. For all these reasons we just could not go with the Pacific Aerospace proposal.

Hon Phil Goff: Would not the $100 million extra on top of what he would have paid for New Zealand - based aircraft have been better spent on repairing the damage that he has done by slashing New Zealand Defence Force personnel by more than 1,000 or 12 percent? That really is not value for money.

Hon Dr JONATHAN COLEMAN: Well, that $100 million he is talking about is not a saving, quite frankly. There were no detailed costings. They could not have put forward the package that fulfilled the New Zealand Defence Force’s requirements at the price that we ended up paying for these aircraft. It is a bit like Labour saying that there was a saving by refusing to take GST off fruit and vegetables and not having that first $5,000 tax-free. It is money that just does not exist in terms of a saving.

Hon Phil Goff: Is it not correct that the industry that he is now disparaging, Pacific Aerospace, has performed brilliantly for the New Zealand Air Force for 40 years; and is it not also correct that he will be paying $2,000 an hour to train pilots on the American aircraft, which is six times as much as it would cost for the equivalent New Zealand aircraft, and those are the figures from the New Zealand aerospace industry?

Hon Dr JONATHAN COLEMAN: Yes and no.

Hon Phil Goff: What consideration did he give to the damage that his decision will do to the New Zealand aircraft industry’s capacity to develop an innovative high-value export sector in line with what his colleague Mr Joyce is saying the public sector should be doing by creating effective partnerships with the private sector here in New Zealand?

Hon Dr JONATHAN COLEMAN: Look, the facts of the case are that the New Zealand Defence Force had some very specific requirements laid out in the request for proposal, and Pacific Aerospace just could not meet them. It did not have a simulator, it did not have a training package, and it had not built an aircraft. We have gone for a proven, off-the-shelf solution and I challenge you, Phil Goff, to get up and say that you would have made a different decision, because I do not believe you would have.

Hon Phil Goff: I am not sure I should be answering questions—

Mr SPEAKER: Order! [Interruption] Order! I reminded members yesterday that when I rise to my feet, it is important that members then resume their seat. Does the member have a further supplementary question?

Hon Phil Goff: How many jobs—[Interruption] Are you ready to listen to the question?

Mr SPEAKER: Order! I have given the member a supplementary question. [Interruption] Order!

Hon Phil Goff: How many jobs will be lost at Aeromotive Ltd in Ōhākea and how many jobs in export earnings will be lost from Pacific Aerospace in Hamilton because of his decision; or has he not bothered to ask?

Hon Dr JONATHAN COLEMAN: As I have explained very clearly, we cannot waste public money on an aircraft that has not been built, and they could not fulfil the requirements of the tender. So it is a really stupid, clown question, Phil Goff.

Primary Industries—Genetics Research in Sheep and Beef Sector

6. COLIN KING (National—Kaikōura) to the Minister of Science and Innovation: How is the Government supporting genetics research in the sheep and beef sector?

Hon STEVEN JOYCE (Minister of Science and Innovation): Yesterday I announced funding from the Ministry of Business, Innovation and Employment’s Biological Industries Research Fund of $15 million over 5 years in genetics research to improve the profitability of New Zealand’s sheep and beef sector. The funding will allow research expansion into beef genetics, and will allow both the beef and sheep industries—

Rt Hon Winston Peters: Same handful. They’ve had millions already.

Hon STEVEN JOYCE: Pipe down, Mr Peters—to further improve genetic gain in the development of new trade to satisfy the increasing trend of farming in hill country environments.

Colin King: How is the Government working with industry to achieve productivity gains?

Hon STEVEN JOYCE: A new partnership, Beef and Lamb New Zealand Genetics, will bring together New Zealand’s existing sheep and beef genetics research into one strategic programme,

consolidating Sheep Improvement Ltd, the Beef and Lamb New Zealand Central Progeny Test, and Ovita. The total funding for the new project from Government and industry sources will be up to $8.8 million per year. The total investment—up to $44 million over 5 years—is predicted to generate nearly three-quarters of a billion dollars over 20 years of additional behind-the-farm-gate productivity, equating to an extra $5.90 profit per lamb for farmers.

Colin King: Why is the Government investing more in innovation in the primary sector?

Hon STEVEN JOYCE: Innovation in all sectors is very important. The Opposition will never be quiet long enough to learn about it, but investing in genetics will help improve meat quality, contribute directly to improving on-farm profitability, and ensure we are meeting the needs of consumers internationally. As a nation, we are already leading the world in pastoral animal and plant genetics. This partnership will help us maintain and extend this critical position and to continue to build on it through future research and development in sheep and beef genetics.

New Zealand Air Force—Purchase of American Aircraft

7. RICHARD PROSSER (NZ First) to the Minister of Defence: Is he satisfied with all aspects of the Air Force deal to buy 11 American T-6C aircraft; if so, why?

Hon Dr JONATHAN COLEMAN (Minister of Defence): Yes, although it is a shame that there was not a tender from a New Zealand company that fulfilled all the RNZAF’s training needs. Over 850 of these state-of-the-art training aircraft are already in service with several countries. It is a proven, off-the-shelf solution, with a track record for safety and reliability. The Beechcraft Corporation package incorporates flight simulators and a training curriculum that no other provider was able to match. We have negotiated a very good deal to buy and support these aircraft.

Hon Phil Goff: You don’t need a turboprop plane for initial pilot training.

Richard Prosser: Supplementary question?

Mr SPEAKER: I am just waiting for Mr Goff.

Richard Prosser: Why is the Royal New Zealand Air Force purchasing a lead-in trainer for fighter jets when it does not have any fighter jets?

Hon Dr JONATHAN COLEMAN: I know this member is very militant and has previously expressed these views. The fact is this is not a lead-in trainer for fighter jets.

Hon Phil Goff: Of course it is.

Hon Dr JONATHAN COLEMAN: Sorry, it is not.

Richard Prosser: Does he think it is fair for ordinary New Zealanders that this contract will generate 550 jobs in Wichita, Kansas, and none in New Zealand?

Hon Dr JONATHAN COLEMAN: As I said, it is a real shame that there was not a New Zealand tender or proposal that fulfilled the RNZAF’s requirements. It would have been great to have those jobs here, but look, we have got to go for value for money and a proven off-the-shelf solution, and that is what the Beechcraft proposal actually is.

Richard Prosser: Does he believe that purchasing training aircraft from Pacific Aerospace could save taxpayers between $75 million and $125 million over 2 years, as claimed by Pacific Aerospace manager, Damian Camp; if not, why not?

Hon Dr JONATHAN COLEMAN: No, I do not believe it, because they did not have a simulator, they did not have a training package, and they did not have an aircraft, so we absolutely could not have gone with that proposal. They did not have detailed costings, so those figures are pie-in-the-sky figures.

Richard Prosser: Is he aware that Pacific Aerospace is able to produce a certified version of its existing CT-4 Airtrainer aircraft complete with a turboprop engine and a glass cockpit; if not, why not?

Hon Dr JONATHAN COLEMAN: Once again, their proposal did not meet the RNZAF’s needs. It is simple.

Richard Prosser: Does he believe that a “Buy New Zealand Made” procurement policy for Government agencies would benefit New Zealand businesses, and help to create jobs and generate wealth in the economy; if not, why not?

Hon Dr JONATHAN COLEMAN: No, I do not believe it would if it does not meet the requirements of Government agencies and it is not good value for money. It would be craziness.

Child Poverty—Expert Advisory Group Report

8. JACINDA ARDERN (Labour) to the Deputy Prime Minister: Does he agree with the Expert Advisory Group on Solutions to Child Poverty that “The available evidence overwhelmingly supports greater investment in the early years of a child’s life”?

Hon BILL ENGLISH (Deputy Prime Minister): I agree that the early years of life are crucial for a child’s development, but there is no evidence that overwhelmingly supports any investment of any sort in the early years of a child’s life. If a particular programme can improve outcomes for children and is cost-effective, then the Government looks very closely at that, and, indeed, has initiated a significant number of programmes that it believes fulfil that criteria, such as lifting child immunisation rates to a now record level, applying a great deal of time and resources to protecting our most vulnerable children from violence, and reaching out to those families who find it most difficult to access early childhood education. There is considerable other Government investment in the early years through maternity services, child health services, social housing, Family Start, and, of course, through extensive income support paid to parents.

Jacinda Ardern: Why does the Deputy Prime Minister oppose greater income support for parents in the first year of their baby’s life?

Hon BILL ENGLISH: It depends on which parents, of course, because some of those who thought Labour meant they would get $60 a week have found out that they actually will not get $60 a week. Labour has not yet fronted up to be honest to parents about its programme—

Grant Robertson: I raise a point of order, Mr Speaker. I ask that you have the Minister address the question. He has begun by talking about what he believes to be the Labour Party’s policy. The question was a direct question to him about his view, and he has not actually even come to that at all.

Mr SPEAKER: I am going to ask Jacinda Ardern to repeat the question, please.

Jacinda Ardern: Why does the Deputy Prime Minister oppose greater income support for parents in the first year of their baby’s life?

Hon BILL ENGLISH: We do not in principle oppose greater income support. What we support are cost-effective interventions, particularly for those children who are most vulnerable. For instance, too many of our children are subject to violence. Paying cash to their parents will not necessarily fix that. In fact, if that was the solution, then the Working for Families package would have fixed the problem. But, in fact, the Government, led by the Hon Paula Bennett, is putting significant effort and resources into reorganising the way the Government can protect our most vulnerable children from violence, and there are some early signs of success. But if more money for parents was the solution, there would be no violence against children in New Zealand.

Jacinda Ardern: Why does he support paid parental leave, but not the Best Start payment?

Hon BILL ENGLISH: Because I am still trying to work out what the Best Start payment is and who would get it. But I have come to the conclusion that I know the policy better than the leader of the Labour Party, David Cunliffe.

Jacinda Ardern: I raise a point of order, Mr Speaker. I think you will find it was a very straight question to the Deputy Prime Minister—

Mr SPEAKER: And I thought the member got a very straight answer. Does the member have further supplementary questions?

Jacinda Ardern: Why does he agree with the principle of universalism for our New Zealand superannuation, but not for the first year of a baby’s life?

Hon BILL ENGLISH: The fact is that New Zealanders had debates about both of those things and, having found myself and my party on the wrong side of that debate, we know New Zealanders strongly support universal provision for superannuitants. That is the result of 20 or 30 years of vigorous political discussion. In the case of support for children, our opinion and that of the New Zealand public is, I think, the same. Parents who are raising children and who need more cash get extensive support from the taxpayer. But I repeat again that the biggest gains to be made are for our most vulnerable children, not for those who are in the households of parents earning $150,000.

Tim Macindoe: Has the Deputy Prime Minister received any reports of investment in the first year of a child’s life being taken away?

Hon BILL ENGLISH: Yes. I understand there is a proposal to scrap the parental tax credit, which pays up to $1,200 to families of newborn babies who are on a low or middle income, who are not on a benefit, and who do not receive paid parental leave. Around 15,000 families get the parental tax credit. That is about a quarter of all families with a newborn child. So under the proposal a quarter of all families would lose $1,200 in the first year of their child’s life. This is just one of a number of omissions from the speech of the Labour Party leader, David Cunliffe. He would not tell the parents the truth.

Grant Robertson: Stop lying.

Mr SPEAKER: Order! I will not accept any member interjecting with that interjection across the House.

Jacinda Ardern: Can the Deputy Prime Minister tell the House how much better off parents who currently receive the parental tax credit will be when they all receive the Best Start payment, as Labour has proposed?

Mr SPEAKER: Well, I struggle to see how the Minister has responsibility for that, but the Hon Bill English can—

Hon BILL ENGLISH: It is hard for us to know, but I can say this. If the Labour Party leader had stated the case correctly, he would have said that about one-third of parents would get $60 a week for the first year of a child’s life, and around 15,000 would get about $23, not $60. I do not know why he did not tell them the truth in his speech.

Jacinda Ardern: I raise a point of order, Mr Speaker. That was a very straightforward question. I asked the Deputy Prime Minister what the difference was between the two—

Mr SPEAKER: Order! It was doubtful whether the question was in order, where the member is effectively asking the Minister to then comment on a proposed party policy by the Labour Party.

Grant Robertson: I raise a point of order, Mr Speaker. The difficulty with your ruling is that the supplementary question asked by Tim Macindoe invited the Deputy Prime Minister to comment at some length on the Labour Party policy, which he did, without interruption. He got it wrong. He does not know what he is talking about—

Mr SPEAKER: Order! The member makes a reasonable point, but I did not rule the question out of order. I left the question there to be answered and, in my opinion, the Minister has addressed the question.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Does he agree with the children consulted by the Expert Advisory Group on Solutions to Child Poverty about the importance of children being able to play with friends, even if they are poor; if so, what support can the Government provide to ensure free leisure and recreational activities are available, especially in disadvantaged neighbourhoods?

Hon BILL ENGLISH: The Government has helped fund around 30,000 places on holiday programmes for children who would fit that definition. I want to take this opportunity to acknowledge the persistent advocacy of the Māori Party through the Ministerial Committee on Poverty for exactly that group of children. A number of the initiatives the Government has taken up have been at the proposition of the Māori Party.

Jacinda Ardern: How positive exactly has the National Party polling on the Best Start package been to justify the ongoing attack against Labour and this policy?

Hon BILL ENGLISH: As far as I am aware there is no polling on the “Bad Start” package. There is no point in asking people about the package, because they do not know what it is. That is because the leader of the Labour Party does not know what it is. I am sure that when he makes it clear, the public will then understand, and then it may be worth asking them. But the member may have noticed that in the Stuff poll, the comments were probably a good deal more negative than she had anticipated.

Mr SPEAKER: Supplementary question, the Hon—[Interruption] Order! The Hon Annette King has every right to ask a supplementary question, and I am waiting with anticipation.

Hon Annette King: Does the Government—

Hon Steven Joyce: Can we get you a spade?

Hon Annette King: Just wait a minute, Mr Joyce; I will get it out.

Mr SPEAKER: Order! Can we just have the question.

Hon Annette King: It is not about you, Steven. Does—[Interruption]

Mr SPEAKER: Order! I have given the chance for the Hon Annette King to ask a supplementary question.

Hon Annette King: Does the Government support an antenatal policy—

Hon Anne Tolley: I raise a point of order, Mr Speaker. On two occasions now, members of the Opposition have remained on their feet while you have stood. You were very clear in the House yesterday that when you stood, we all had to sit down. I called out across the House and was told to get stuffed, but you might have a better chance. [Interruption]

Mr SPEAKER: Order! I am just checking whether the member picked up the point of order. The House will settle down. I have given a supplementary question to the Opposition.

Hon Annette King: Does the Government support an antenatal policy that would require district health boards to book the majority of pregnant women for an antenatal assessment by 10 weeks’ gestation, as recommended in a recent Health Committee report?

Hon BILL ENGLISH: Well, it is like a lot of propositions to do with supporting our families and children—there is merit in it. The question is does it balance up as the highest priority, particularly for the most vulnerable children? Often we find that these good ideas, like giving $60 a week to families on $150,000, have some merit, but the real problems are with those who are most vulnerable. So our priority for antenatal checks would be to ensure that those mothers who have the most difficulty accessing health care—because, for instance, they have a transitory lifestyle—would be the top priority, because that is where you get the return on a significant investment.

Native Birds—Protection

9. JACQUI DEAN (National—Waitaki) to the Minister of Conservation: What advice has he received about the impacts of pests on our native birds, particularly Kiwi, and how will a beech mast this year affect these birds’ survival?

Hon Dr NICK SMITH (Minister of Conservation): I am advised by the Department of Conservation and by Landcare Research ecologists that rats, stoats, and possums kill 25 million native birds a year. That is like having a Rena disaster, which killed 2,000, every hour. I am further advised that pests are reducing our kiwi numbers by 3 percent each year and that kiwis will not exist in the wild for our grandchildren without additional pest control. This year’s beechmast makes it even more urgent that we address this problem. It occurs about once every 15 years and will result, this autumn, in the dropping of about 1 million tonnes of seed, which will then spark a plague of 30 million rats and about a further 50,000 stoats. The problem will be in spring when the beech seeds germinate and the rats and stoats turn on our native birds. The last case when we had a widespread mast was in 2000, and that led to the mohua, which is on our $100 note, disappearing from the Marlborough Sounds.

Jacqui Dean: How many hectares of conservation land are covered by the Battle for Our Birds programme, and how does this compare with historic levels of pest control?

Hon Dr NICK SMITH: This programme provides for an additional 500,000 hectares of extra pest control this year, as well as ramping up our year-on-year pest control by 50,000 hectares per year for each of the next 5 years. Last year, the Department of Conservation did 150,000 hectares; that has been about the same for the last decade. This year the Department of Conservation will do 700,000 hectares. On top of this, TBfree New Zealand does about 300,000 hectares per year, meaning that this year we will do about 1 million hectares. Another way to put this is that we are moving from 5 percent of public conservation land having protection for native species from rats, stoats, and possums, and lifting that from 5 percent to 12 percent.

Jacqui Dean: What are the improvements in 1080 that have enabled the department to reduce poisoned bait application rates from 30 kilograms per hectare to 1 kilogram per hectare?

Hon Dr NICK SMITH: Firstly, there has been the technology around the pre-feeding of unpoisoned bait, which has meant that the amount of poison that is being used has been able to be very significantly reduced. Secondly, the use of helicopters with GPS rather than fixed-wing aircrafts means that we are able to be far more accurate with the distribution. There have also been big improvements in the quality of the bait, ensuring that there are no crumbs or fragments that could add to by-kill of birds, and in the use of different types of baits. So even though we are more than doubling the area of coverage for 1080 use, this programme does not involve record use of 1080.

Health and Safety, Workplace—Forestry Industry

10. DENISE ROCHE (Green) to the Minister of Labour: Will he commit to regulating the hours of work in the forestry sector immediately, given there have been 11 worker deaths in the sector in the past 13 months; if not, why not?

Hon SIMON BRIDGES (Minister of Labour): No, I will not immediately, but I am not ruling out regulation in the future. The reason for that is that I do not want to pre-empt the industry-led inquiry that was announced yesterday. I am very pleased that the industry is taking ownership, as the enduring safety solutions that are needed require the industry front and centre. Nothing is off limits to the inquiry, and I am sure that hours of work will form part of their investigation. I have encouraged a speedy process so that I can consider the recommendations as soon as possible. In the meantime, I have also instructed WorkSafe New Zealand to review the approved code of practice for forestry in light of the low level of compliance it has seen in its visits to operators, and it will also continue its strong, proactive approach.

Denise Roche: Does he think that all workers in the forestry industry are getting adequate rest breaks and that their fatigue levels and other factors that contribute to injuries and deaths are being well managed; if so, why?

Hon SIMON BRIDGES: Fatigue, of course, and its effect on workplace health and safety are complex issues. Responding, I think, to this issue goes far beyond simple regulation of hours of work. The current duties of the Health and Safety in Employment Act already require employers to manage this hazard. But, as I said, in the inquiry nothing is off limits. I have no doubt the inquiry will be looking at this and many other issues to do with forestry safety. I am eagerly awaiting its recommendations.

Te Ururoa Flavell: Accepting, as I am sure he does, the doctrine of ministerial responsibility for portfolios, can the Minister explain why it is that the forestry industry, rather than the Government, will lead the inquiry into its own malpractices, and does he acknowledge that this sort of approach may not get to the heart of the issues around malpractice?

Hon SIMON BRIDGES: I think the best thing to do in that regard is to wait for the inquiry’s recommendations. I am sure we all hope—and I certainly believe—that the inquiry will get to the heart of it. But, as I said in the answer to the primary question, I think it is very important that the

forestry industry for itself shows ownership here. That is how we will get an enduring solution. I think it is also worth appreciating that this Government is leading the most significant reform in health and safety generally in at least 20 years—$30 million more each year for inspectors, a complete legislation rewrite, and a much, much stronger enforcement approach than we have seen. All of this has far-reaching consequences for the forestry industry.

Denise Roche: Does he think that forest owners are playing their part to protect workers, given that half the logging operators visited last year by WorkSafe New Zealand were not complying with the industry code?

Hon SIMON BRIDGES: I think what is clearly implicit in the question is the answer, and that is that some owners are not. That is why, within a year and a month into its use, the Approved Code of Practice for Safety and Health in Forest Operations is being reviewed with some urgency, so that we go from the forest floor and actually into owners’ boardrooms and they take their part of their responsibility in this. I repeat again what I have said. If you actually look at the legislation that I will be introducing very soon—on which there have been consultation drafts put out—we are, I think, for the first time making people in the boardroom front these issues and have responsibilities for these issues, as never before in this country.

Denise Roche: Does he think that the current Approved Code of Practice for Safety and Health in Forest Operations, which was written by the industry itself, with limited union or worker participation, is preventing injuries and deaths in the forestry sector; if so, why?

Hon SIMON BRIDGES: I think the code of practice is a good resource for forest workers and, indeed, owners. But, again, we know that since it has been in place, there has been a number—far too many—of deaths in this industry. As I say, that is why the code is being reviewed. I think you will see significant detail, particularly around owners’ responsibilities and their obligations to their workers. The member also mentions worker participation. I think it is worthwhile again noting that the legislation that will be introduced to this House will have worker participation provisions and obligations for owners like never before in the history of this country.

Andrew Little: Why has it taken until only yesterday before he has started a review of the approved code of practice for forestry when as recently as 19 November last year, since which time there have been three more forestry deaths, he told this House that “the things that are the focus of that approved code of practice … are the big issues, and are what … [it] focuses squarely on.”, and he saw no need for change?

Hon SIMON BRIDGES: That, in fact, is the true position, in that it is tree-felling and breaking out, which are in a primary area that the code of practice deals with, where we do see the majority of deaths in the forests. But, as I say, what we also know, and what we did not know until the end of last year, almost exactly a year after the code of practice came into being, is that some 50 percent of owners are not complying with their obligations at law in this country.

Andrew Little: But we knew that last year.

Hon SIMON BRIDGES: We did not know it until the end of last year actually, Mr Little. And that is why there is a review going on and the code will have much added to it.

Denise Roche: Does he think that WorkSafe New Zealand providing a secretariat and a submission to the industry-led inquiry into forestry safety is the most his Government can do to stop injuries and deaths in the forestry sector?

Hon SIMON BRIDGES: Well, of course it is not the most that we are doing. In the meantime, while the inquiry proceeds—and, I hope, with as much haste as it reasonably can while also wanting to do an excellent job—we have got inspectors out there testing compliance with the code of practice every day. We have visited more than 2,000 players, and more are being seen. There are prosecutions ongoing, and I think more are coming. The chief executive and the chair of WorkSafe New Zealand and their workers are meeting in boardrooms around this country of foresters to make it very clear what their obligations are. There are many other things, indeed, that are going on in this

industry. This is a Government that is waiting for an inquiry to produce its findings but in the meantime is taking urgent action.

Denise Roche: Why is he refusing to use his powers right now to make changes that will save lives and stop people being hurt in our forests?

Hon SIMON BRIDGES: I do not think that is a correct characterisation of what is happening. As I say, this Government is taking urgent actions now, and we should also, I think, understand that this is the Government that is implementing the biggest, most significant health and safety reforms, as I have said in earlier answers, in a generation—probably, actually, in several generations. So I think this Government is doing a lot in this area, but it is also important that the industry stands up and takes ownership, and it is good to see that happening with this inquiry.

Internal Affairs, Minister—Statements

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Internal Affairs: Does he stand by all his statements?

Hon PETER DUNNE (Minister of Internal Affairs): Yes—in fact, I am more than happy to stand by the only statement I have made since being appointed Minister of Internal Affairs 2 days ago, which is that the New Zealand Fire Service has today deployed the first of two firefighting contingents to help fight bushfires in Victoria. This actually follows four similar deployments to Australia last year and underscores the close relationship and cooperation our two countries have when dealing with times of national adversity. I am sure that the House will want to join with me in wishing our firefighters well and that they will have a safe return home.

Hon Trevor Mallard: Does he stand by the comment he made as he welcomed his new role that he has, with his chief executive officer, responsibility for, amongst other things, proper protection of the security of information?


Hon Trevor Mallard: How does he reconcile that comment last week with his action in leaking a confidential report to a member of the parliamentary press gallery?

Mr SPEAKER: I will allow the Minister to respond to that question.

Hon PETER DUNNE: I stand by the comments that I made in the statement that the member referred to. I accept the responsibility that I have as Minister of Internal Affairs and I will honour that responsibility.

Hon Trevor Mallard: Did he leak the Kitteridge report or any draft thereof—

Mr SPEAKER: There is no ministerial responsibility for that question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I refer you to Standing Order 384(1). It does say it is at your discretion, but it says: “… a supplementary question may be asked by any member to elucidate or clarify a matter raised in a question for oral answer or in an answer given to a question.” The point that I do want to make very clearly and very simply is that this Minister has responsibility for the security of information. It is a matter of whether this Minister is a suitable Minister for having that responsibility. His history on matters that he has referred to in the House and in statements is something that goes right to whether this House should have confidence in him in his new role.

Mr SPEAKER: I still will not accept the supplementary question as asked, where the member has directly asked a question that is of a matter that occurred well before this Minister was made Minister of Internal Affairs. If the member has a further supplementary question, I am happy to listen to it.

Hon Trevor Mallard: Why should this House have confidence in him now when he has refused to deny leaking the Kitteridge report or a draft thereof, or allowing a Dominion Post reporter access to that report?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Firstly, Ministers are not required to express confidence in themselves in this House. That is a role for the Prime Minister, and the Prime

Minister’s confidence in Mr Dunne has been expressed by him by virtue of the appointment. But I would turn you to Standing Order 377, which is the content of questions, and particularly (1)(b) and (c) of that particular Standing Order. Although there may be an opportunity to make a case around any Standing Order, it has to be remembered that the Standing Orders are to provide order in the House, and the questioning process is about extracting information from Ministers about the portfolio responsibilities they hold.

Grant Robertson: Firstly, Mr Mallard sought to ask why the House should have confidence in Mr Dunne. I think that is a fully legitimate thing. It is true that the confidence the Prime Minister holds is an important matter, but Mr Mallard was asking why this Parliament should have confidence. The second point I would make is that in the first supplementary question that Mr Mallard asked, he made clear that part of what Mr Dunne had said were his responsibilities was the security of information. It is a legitimate thing for members on this side of the House to ask whether Parliament should have confidence in a Minister to perform a specific duty that they have as a Minister, and that is the oversight of the security of information of the Government. I think the question is in order. [Interruption]

Mr SPEAKER: Order! I do not need further assistance. I am going to assist the House by moving the matter forward. If the question had been asked strictly in accordance with the Standing Orders, the question would have simply been: “Why should the House have confidence in the Minister?”. I do not think that is an unreasonable question. If the Minister stands and answers that, we can move forward.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker.

Mr SPEAKER: This is a fresh point of order? I have ruled on this matter, Mr Brownlee. If the member wants to raise a new point order, I will hear it.

Hon Gerry Brownlee: It is a new point of order.

Mr SPEAKER: I have ruled that the question is in order. If the member is now disputing my ruling—

Hon Gerry Brownlee: He is not standing, and I have called a point of order.

Mr SPEAKER: That is a different matter. Point of order, the Hon Gerry Brownlee.

Hon Gerry Brownlee: Is it now a ruling from you that the House expresses confidence in Ministers, as opposed to the Prime Minister? [Interruption]

Mr SPEAKER: I do not need assistance. On this occasion a member of this House has asked a question of a Minister: “Why should the House have confidence in a Minister?”. I have declared that that question is in order. That question can be answered by the Minister. I am sure he will have no difficulty in doing so.

Hon PETER DUNNE: The House should have confidence in me as a Minister because I will carry out properly the responsibilities entrusted to me by the portfolio that I hold.

Hon Trevor Mallard: In order to ensure that the House has confidence in him, is he prepared to now deny that he leaked the Kitteridge report or any draft thereof, or allowed a Dominion Post reporter to access that report?

Hon PETER DUNNE: I have no responsibility for that report.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. He was not asked about the report. He was asked about the leak, and he cannot just dodge it that way, by saying “I have no responsibility for that report.”

Mr SPEAKER: Order! The Minister has addressed that question with relevance.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I would ask you again to think about the prospect of the House being able to question that the confidence in a Minister is whole. The reality is that the Opposition parties in this House vote “no confidence” in the Government every opportunity that they get. It is a completely “ingenuine” question that is being asked by the Opposition.

Grant Robertson: Disingenuous.

Hon Gerry Brownlee: Well, we will call it that.

Mr SPEAKER: Order!

Hon Gerry Brownlee: I should be able to finish, I think.

Mr SPEAKER: No, I have heard quite enough. What the member is really doing is asking me to reflect on a decision that I have made in this House today, and I will certainly do that and come back to him.

Hon David Parker: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, I have ruled on that point of order. [Interruption] Order! I have ruled on that point of order. If the member wants to raise a further point of order—[Interruption] Order! If the member does want to raise a further point of order, I will hear from the Hon David Parker.

Hon David Parker: A further point of order. If the Speaker was going to further reflect on the Leader of the House’s additional point, then I would think that the Speaker should allow the Opposition to respond to the new point that the Leader of the House has made, and I would seek to do so.

Mr SPEAKER: Order! The member will resume his seat. The difficulty I have is that the member Mr Brownlee has not actually raised any new points at all. He has just asked me to reflect on the matter. I am happy to reflect on the matter and I will come back to not only Mr Brownlee but also to the House, if that is so required.

Hon David Parker: Speaking to that point, how could the Speaker be willing to reconsider the matter without being willing to consider the Opposition’s view on that? There are points to be made here, arising out of the Leader of the House’s submission to you, that I think are germane and I think I should have the opportunity to do that.

Mr SPEAKER: If the member can succinctly put his point of view, I am happy to hear it.

Hon David Parker: Thank you, Mr Speaker. The problem with the Leader of the House’s position, set out in his submission to you, is that it is within the right of the Opposition not to have confidence in the Government and Ministers, as we do in respect of motions such as the motion on the Prime Minister’s statement. That same ruling applies to questions such as Mr Mallard’s question, and therefore your original ruling is correct and Mr Brownlee is incorrect.

Mr SPEAKER: I will hear from the Rt Hon Winston Peters.

Rt Hon Winston Peters: In consideration of the request by Mr Brownlee, in your further consideration, as he has invited you to undergo, do you want to know the date, the time, and the room where the leak took place?

Mr SPEAKER: And the member should go back to his office and practise raising relevant points of order.

Prisoners, Employment Training—Working Prisons Programme

12. LOUISE UPSTON (National—Taupō) to the Minister of Corrections: What recent updates has she received on the implementation of working prisons?

Hon ANNE TOLLEY (Minister of Corrections): This time last year I announced that Rolleston Prison, Auckland Region Women’s Corrections Facility, and Tongariro/Rangipō Prison would become full working prisons. This initiative will see every prisoner at these three prisons fully engaged in a structured 40-hour week that includes employment in areas like farming at Tongariro/Rangipō Prison, construction at Rolleston Prison, and manufacturing and stock management at the Auckland women’s prison, and meaningful education and rehabilitation programmes. I am pleased to advise that 90 percent of eligible prisoners at these three prisons are now engaged for 40 hours each week, and we expect all prisoners to be fully engaged by June this year.

Louise Upston: How is the working prison at Rolleston contributing to the Christchurch rebuild?

Hon ANNE TOLLEY: As part of the implementation of the working prison at Rolleston, the Department of Corrections has signed a partnership agreement with Housing New Zealand to

refurbish 150 earthquake-damaged houses over the next 5 years. Once repaired, these houses will be relocated to Housing New Zealand properties in Canterbury. This partnership will see more than 400 prisoners gain training in construction skills such as carpentry, plastering, painting, roofing, and joinery. The construction industry is likely to face skill shortages in the coming year, and training prisoners in these skills will help them find work in this area once released, and reduce the chances of them reoffending.

Louise Upston: How do working prisons help reduce reoffending?

Hon ANNE TOLLEY: Most prisoners were unemployed before they came to prison and many of them have no qualifications or work history. That is why the Government is focused on giving the prisoners skills that they need in order to find work, as part of our strategy to reduce reoffending by 25 percent. The research shows that education, employment, and training reduces the risk of a prisoner reoffending on release, and those who have received trade and technical training are 8.3 percent less likely to be re-imprisoned within 12 months.


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