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Questions and Answers - February 11


Prime Minister—Statements

1. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by his statement that “personally I’ve been of the view that transparency is a good thing. As Prime Minister I’ve tried to lead that charge…”?

Rt Hon JOHN KEY (Prime Minister): Yes, I stand by that statement, which was made in the context of discussing reform of MPs’ remuneration and travel privileges and transparency around expenses.

Rt Hon Winston Peters: Could he explain to the country and the House how he is leading the charge on transparency in respect of the Trans-Pacific Partnership negotiations when, in his words—

Hon Dr Nick Smith: It’s the same as China.

Rt Hon Winston Peters: —exactly; that’s a communist country, a one-party State, thank you very much—“we do not know what is actually on the table and what is off.”?

Rt Hon JOHN KEY: We are following the same process that has been followed for all other free-trade agreements, including the China free-trade agreement.

Rt Hon Winston Peters: Why is he trying to keep the New Zealand public in ignorance of Trans-Pacific Partnership negotiating terms and details when the European Commission, in a similar deal with the United States, the Transatlantic Trade and Investment Partnership, is releasing both the proposed investment chapter and a layperson’s explanation for public consultation?

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Rt Hon JOHN KEY: For a start-off, all members of the Trans-Pacific Partnership—all 12 countries—have agreed to keep negotiating text confidential. Secondly, our negotiators are negotiating in the best interests of New Zealand. You would not think, actually, that we would go out and there and want to give an advantage to the other countries we are negotiating with.

Hon David Cunliffe: Is the Prime Minister aware of the likely date of the text being tabled in the United States Congress, and can he confirm that that will be before the mid-term elections and well before it has the opportunity for ratification?

Rt Hon JOHN KEY: No one knows that date, because the Trans-Pacific Partnership itself has not been concluded yet.

Rt Hon Winston Peters: Why is the Prime Minister arguing for secrecy in negotiations when it is common practice in the World Trade Organization to release negotiating texts?

Rt Hon JOHN KEY: It is not common practice with the way that free-trade agreements have been negotiated in this country. The member is quite aware, actually, that we have a very thorough parliamentary process. At the point at which a text has been agreed, then it will go through the full process, including going off to the Foreign Affairs, Defence and Trade Committee, for input from the public.

Rt Hon Winston Peters: Does ratification by Parliament represent transparency when by that time the public would have had, and will continue to have, no say in the negotiations; and what is in the negotiations and the discussions—[Interruption] Struck a nerve, obviously. What is in the negotiations and the discussions that is of such—[Interruption] Mr Speaker, I would like to try to get this question out. It is rather serious.

Mr SPEAKER: The member has already got the first question out. He is actually asking a second supplementary question within it, but it would assist the order of the House if the member could complete his question without interjections.

Rt Hon Winston Peters: Thank you, Mr Speaker. Does ratification by Parliament represent transparency when by that time the public would have had, and will continue to have, no say in the negotiations; and what is in the negotiations and the discussions that is of such concern to him and his Government that they presently want to keep it all secret from the New Zealand people?

Rt Hon JOHN KEY: A few things. Firstly, my advice is that the Trans-Pacific Partnership will require legislation, so, ultimately, once it has gone through the select committee and the public have had their chance to have input, and it has gone through all of those various stages, the Government of the day will require a parliamentary mandate, so by definition people would have had a lot of input. The second thing is that the consultation process undertaken by the Trans-Pacific Partnership is amongst the most extensive that a New Zealand Government has undertaken for any trade negotiations. Public comment on the Trans-Pacific Partnership was first sought in 2008, and has been invited since. Negotiators have conducted a proactive consultation process that has included regular meetings with business groups, local councils, the health sector and other representatives, unions and other NGOs, and other individuals and academics. Opposition parties have also been briefed on the negotiations as we go along. I think we all know that Mr Peters is opposed to free trade. This is the man who voted against the China free-trade agreement. Well, good luck, but they happen to be our second-largest trading partner and almost certainly will one day be our largest.

Brendan Horan: Would the Prime Minister think there would be transparency in an entity submitting multiple Official Information Act requests in a made-up name, such as, for example, Bruce Bayliss, and does he think such a practice would be transparent enough for a political party research unit?

Rt Hon JOHN KEY: I have no evidence to support that Mr Bayliss is putting in Official Information Act requests under a pseudonym or false name, but I am aware that Mr Bayliss is associated with, and works for, New Zealand First. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! A point of order has been called.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. There is emerging of late a tendency to get up and ask a supplementary question that has nothing to do with the primary question or any supplementary question or any answer that the Prime Minister might give that would give that member liberty to extend his question. I have got no idea who Mr Bayliss is.

Mr SPEAKER: Order! The essence of the question was around transparency and related to the original primary question.

Prime Minister—Statements

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

Rt Hon JOHN KEY (Prime Minister): Yes.

Hon David Cunliffe: Does he stand by his 2007 statement in relation to trans-Tasman regulatory harmonisation, that “We always have to make sure what we are doing is in the best interests of New Zealand.”; if so, why did he come home empty-handed from Australia in relation to the supermarket boycott of New Zealand products?

Rt Hon JOHN KEY: Far from coming home empty-handed from Australia, we came home with a trans-Tasman visa for the Cricket World Cup; we came home with an invitation for New Zealand

businesses to be part of the G20 and be part of 400 global chief executive officers; we came home unpicking the terrible deal that Helen Clark and Phil Goff and David Cunliffe signed New Zealanders up to, by making sure that student loans actually will be accessible to New Zealanders who are special class visa holders—

Mr SPEAKER: Order! That answer is quite long enough, thank you.

Hon David Cunliffe: Has the Prime Minister sought any advice as to how many Kiwi jobs will be lost as a result of this boycott; if so, what was the number, and, if not, why has he not asked?

Rt Hon JOHN KEY: I do not have that number but I do have the number of people who have lost their job in the Labour Party today. It is one—the Leader of the Opposition’s chief of staff has quit.

Hon David Cunliffe: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I am trying to assist the member who is raising a point of order.

Hon David Cunliffe: The question was a simple and straightforward one: “Has he asked for any advice?”. He has not turned himself to that question.

Mr SPEAKER: Order! There were two parts to the supplementary question. The Prime Minister addressed one part in saying how many—he said “None.”

Hon Annette King: He said he didn’t have the number.

Mr SPEAKER: That is true. He said he didn’t have the number, which answers the question.

Hon David Cunliffe: Does the Prime Minister agree with his soul mate that the only appeal available to New Zealand exporters, who could be facing a loss of up to $700 million per annum, is an appeal to the Australian Competition and Consumer Commission; if so, why?

Rt Hon JOHN KEY: First, and quite fundamentally, I think the Leader of the Opposition is probably inventing numbers from somewhere. They are not from a reliable source. More important—

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

Mr SPEAKER: Order! I apologise to the Prime Minister but we have a point of order.

Hon David Cunliffe: The Prime Minister has called my veracity into question. The number came from the National Business Review, a renowned—

Mr SPEAKER: Order! Order! That is not a point of order. That is a matter of debate within the answer, and the—[Interruption] Order! The member has the opportunity with further supplementary questions, if he wishes to tease out that information. Does the Prime Minister wish to complete his answer?

Rt Hon JOHN KEY: What is clear is that this is a commercial matter, and that in fact the Government does not support a buy Australian-made campaign, any more that it actually supports the supermarkets in New Zealand that actually run buy New Zealand - made campaigns. What is clear is that the Australian Government is actually running a full investigation into competition policy in Australia. There is an opportunity for New Zealand companies to submit to that. But these are actions by a commercial company, so if the member is telling us that he is going to intervene with them, that is a very interesting thing to hear.

Hon David Cunliffe: Does the Prime Minister consider cups of tea and shady deals with extreme minor parties to be gerrymandering the MMP electoral system?

Hon Gerry Brownlee: How does that relate to the Prime Minister?

Mr SPEAKER: Order! The Prime Minister is quite capable of answering it.

Rt Hon JOHN KEY: I think if the member wants to talk about some of those issues, he should go and look in the mirror and also talk to Dr Norman.

Hon David Cunliffe: Does the Prime Minister stand by his statement that “People want greater transparency.”; if so, why will his Government not release the text of the Trans-Pacific Partnership agreement before any final agreement is signed?

Rt Hon JOHN KEY: As I said earlier, firstly, the Government has been involving all of the interested stakeholders. My understanding is that the trade Minister has been talking to both Mr

Goff and Mr Shearer. If they feel they want more information and they are prepared potentially even to answer confidentiality arrangements, I am sure we could go another step forward. We are following—

Hon David Cunliffe: Point of order, Mr Speaker—

Rt Hon JOHN KEY: No, no, sit down, sunshine, I have not finished.

Mr SPEAKER: Order! Order! Both members—[Interruption] Order! I am on my feet. Both members will resume their seats. Is there a point of order?

Hon David Cunliffe: I raise a point of order, Mr Speaker. As the question went to the matter of the text of the Trans-Pacific Partnership agreement, I thought it might assist the Prime Minister to clarify—

Mr SPEAKER: Order! Again—[Interruption] Order! That is not a valid point of order. The question related to transparency, and the Prime Minister was addressing that. Does the Prime Minister wish to add further to his answer?

Rt Hon JOHN KEY: I do, Mr Speaker. The process that is being followed here is the identical process that was followed with the China free-trade agreement. We are more than happy to try to keep parties up to date once texts are complete and we are in a position to be able to do that through a proper process. This is the same process that was followed for China.

Hon David Cunliffe: I raise a point of order, Mr Speaker. Quite clearly the question concerned the Trans-Pacific Partnership agreement. The Prime Minister is obviously new to foreign policy—

Mr SPEAKER: Order! Again, for the third occasion, that is not a valid point of order. What the member is attempting to do is to use the point of order process to debate an answer that has been given. The process would be better accomplished by using further supplementary questions.

Hon David Cunliffe: Given that the Prime Minister routinely refuses to comment on intelligence and security matters, why did he make statements in relation to operational intelligence regarding New Zealanders in Syria?

Rt Hon JOHN KEY: From time to time I do offer answers where I believe it is the right thing to do. I have done that on other occasions in the past. Actually, the interesting thing yesterday was that it was a great example of how the Government Communications Security Bureau actually assists the Security Intelligence Service to protect New Zealanders. Interestingly enough, I remember in this House about 6 months ago the strongest opposition coming from the Labour Party, yet last night David Cunliffe was once again on TV telling New Zealanders he wanted to go further than that. He wanted more information and more laws. Fortunately, Mr Goff straightened him up on the radio this morning.

Hon David Cunliffe: Point of order—[Interruption]

Mr SPEAKER: Order! This is a point of order and it will be heard in silence.

Hon David Cunliffe: I seek leave to table an article on Australian supermarkets locking out New Zealand exports—

Mr SPEAKER: Order! The source—

Hon David Cunliffe: —tabled in the National Business Review—

Mr SPEAKER: Order! I am not prepared even to put the leave. I am not tabling the National Business Review.

Question No. 1 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I seek to table a list of the New Zealand First parliamentary staff showing no Mr Bayliss.

Mr SPEAKER: The easiest way is for the House to determine this. Leave is sought to table a list of New Zealand First staff. Is there any objection to that being tabled? There appears to be no objection. It can be so tabled. Document, by leave, laid on the Table of the House.

Economic Growth—Reports

3. Hon KATE WILKINSON (National—Waimakariri) to the Minister of Finance: How is the stronger New Zealand economy supporting more jobs and higher incomes?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: There are a number of indicators confirming that the stronger economy is translating into more jobs and higher incomes. They range from business confidence and employment intentions running at the highest levels for around 20 years, and the number of job ads on the SEEK website increasing 13 percent to almost 24,000 in January. Just last week Statistics New Zealand issued the labour market data, which confirmed further growth in job numbers and real wages, and a decline in the unemployment rate from 6.2 percent to 6 percent in the December quarter. They are all further signs that the Government’s economic programme, including the Business Growth Agenda to help businesses invest, grow, and employ more people, is working successfully as we recover from the global financial crisis.

Hon Kate Wilkinson: What did the official labour market statistics say last week about the growth in jobs during the period to December 2013?

Hon STEVEN JOYCE: The household labour force survey confirmed that employment increased by 1.1 percent in the December quarter. That means 24,000 more New Zealanders were in jobs in that quarter alone. For the year to December the news was also positive. Between the December quarters of 2012 and 2013 employment increased 3 percent, meaning another 66,000 New Zealanders were in work compared with a year earlier. That is the strongest annual increase since June 2006, again confirming that the Government’s economic programme is heading in the right direction for the benefit of New Zealand families.

Hon Kate Wilkinson: What other indicators in the labour market statistics issued last week provided further evidence that the improving labour market is helping more New Zealanders to get ahead?

Hon STEVEN JOYCE: Apart from the lower unemployment rate and the strong increase in new jobs, another positive indicator is the continuing growth in wages. The quarterly employment survey is the best source of wage movements, and that is why it has been used by successive Governments as the basis for setting, for example, paid parental leave and New Zealand superannuation. Using this measure, average weekly earnings rose by 2.8 percent over the year to December, while inflation was only 1.6 percent. So, on average, wages are continuing to rise faster than inflation. The gains are even more significant when measured on an after-tax basis. The average weekly earnings after tax [Interruption]—they do not want to hear it—have gone up 25 percent since September 2008, compared with inflation of just 10 percent over the same period.

Hon Kate Wilkinson: How has the growth in new jobs over the past 4 years, as reported by Statistics New Zealand, compared with Treasury forecasts issued as part of Budget 2010?

Hon STEVEN JOYCE: In Budget 2010, Treasury forecast that there would be 174,000 more jobs in the economy over the 4½ years to June 2014.

Hon David Parker: That’s not what you promised, though—170,000 extra jobs over 3 years, not 4.

Hon SHANE JONES: I am pleased to report we a tracking pretty close to that forecast, which I remember Opposition parties dismissing at the time as being way too optimistic for New Zealand. Actual employment growth in the 4 years to December 2013 was 139,000 jobs, Mr Parker. To meet that full 4½-year Treasury forecast, another 35,000 jobs need to be created over the next 6 months, which is not unrealistic, given that 52,000 new jobs were created in the 6 months to December. This is further evidence that the Government’s economic programme is working.

Wage Rates—Growth and Comparison with Inflation

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Tertiary Education,

Skills and Employment: By how much did wages and salaries increase between December 2008

and December 2013 according to the Labour Cost Index and how does this compare to inflation according to the Consumer Price Index over the same period?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I will give the member the information he has asked for, but the House also needs to know that the labour cost index he refers to is not a measure of actual wage and salary increases in the workforce. Wage and salary increases in the workforce are captured by the quarterly employment survey and, in particular, the measure of average weekly earnings. That has increased 16.1 percent since December 2008. The labour cost index, on the other hand, is a statistical construct designed to measure inflation in the labour market. It ignores pay increases that are due to increased performance or productivity, for promotion, for taking on extra responsibilities, or for changing jobs. The labour cost index increased 9.3 percent since December 2008, which, not surprisingly, is similar to the other measure we have of inflation, which is the CPI, which increased 10.8 over the same period.

Dr Russel Norman: Can the Minister confirm that the labour cost index went up by 9.3 percent under the National Government over this period, while inflation increased by 10.5 percent over the same period, meaning that people’s pay packets have gotten smaller in real terms under the current Government?

Hon STEVEN JOYCE: No. With the greatest respect to the member, he is being a bit tricky here, because the labour cost index does not measure changes in wages, salaries, and earnings over the period. It mentions the pure inflation in the labour market for somebody who does not get any pay increases from improved productivity or anything like that. The quarterly employment survey is actually the method via which changes in employment, total weekly gross earnings, total weekly paid hours, and average hourly and average weekly earnings are reflected. I think the member does know that because he has asked questions on the quarterly employment survey previously. Today, interestingly, he is asking only about the labour cost index.

Dr Russel Norman: Is the Minister aware of Statistics New Zealand’s User guide for Statistics New Zealand’s wage and income measures, the third edition, which says that “if you are interested in changes in earnings across time, the Labour Cost Index (LCI) is a better measure than the QES.”?

Hon STEVEN JOYCE: I have not got that particular example in front of me, but I can tell the member that on page 15 of the quarterly employment survey, which has just been released last week—helpfully, on the same day as the labour cost index, which may be why the member has confused it—it says: “The unadjusted LCI measures changes in salary and ordinary-time wage rates for a fixed quantity of labour.”—

Grant Robertson: Arrogant man.

Hon STEVEN JOYCE: —no, just correct, Mr Robertson, in this case—“It fixes the relative importance of industries and occupations,” but does not fix the market rates, and so on, in terms of the quarterly employment survey. Again, successive Governments have used the quarterly employment survey for calculating things such as superannuation and paid parental leave because that measures the change in actual earnings of New Zealanders, and if the member was not being tricky, that is what he would use.

Dr Russel Norman: Does the Minister not understand what Statistics New Zealand is saying in the quote from its own documents where it says that the labour cost index is the official measure of the change in earnings over time, not the quarterly employment survey—which is why it puts it in its documents—because the quarterly employment survey will produce misleading results, such as showing an increase in the average wage when lots of low-wage jobs are lost, as has happened under this Government?

Hon STEVEN JOYCE: I disagree with the member on a couple of points here. Firstly, if he has noticed in the previous question, we were able to show the increase in jobs over the period that this Government has been in office—certainly, in recent times and since Budget 2010. But, again, I think the member is, I am sorry, being deliberately disingenuous here, because the labour cost index is about a measure of pure inflation in the labour market for a fixed and equal quantity of labour

that does not change. In reality people’s income goes up because they are more productive, it goes up because they have been given a promotion, it goes up because they have changed jobs. That is captured in the quarterly employment survey, and that is the actual measure of wages for New Zealanders and of how they have changed over time.

Dr Russel Norman: Who is right: Statistics New Zealand, which produces both the labour cost index and the quarterly employment survey, and says, as I quote again, that if you are interested in changes in earnings over time, the labour cost index is a better measure than the quarterly employment survey—is Statistics New Zealand right about the right measure, or is the Minister right, because he seems to know more than Statistics New Zealand?

Hon STEVEN JOYCE: Well, the member and I can exchange these phrases as often as we like. The unadjusted labour cost index, according to Statistics New Zealand, measures changes in salary and ordinary time wage rates for a fixed quantity of labour. It does not fix the quality of labour within occupations. As that changes, that actually changes with the quarterly employment survey. So perhaps to try to resolve this we could make a suggestion. If the member believes that the labour cost index is the correct way that we should calculate the increase in wages of New Zealanders, then perhaps he would like to commit to using that calculation for the calculation of New Zealand superannuation, which would mean that we would all have to reduce New Zealand superannuation to go back to the labour cost index level, and perhaps he would like to commit to that for paid parental leave. I think, regardless of how the Greens spin this, the reality is that when in Government, Labour and the Greens use the quarterly employment survey because that is what measures New Zealanders’ wages.

Tim Macindoe: In light of the previous member’s questions, can the Minister clarify for us what in legislation has been used as the definitive measure of wage and salary growth, and what, in particular, that measure tells us about average weekly earnings?

Hon STEVEN JOYCE: The New Zealand Superannuation and Retirement Income Act passed under the previous Government uses a measure of wage growth to set the floor for New Zealand superannuation payments. That measure is average weekly earnings from a thing known as the quarterly employment survey. Also, the Parental Leave and Employment Protection Act, which was amended by the previous Government, uses a measure of wage growth to increase the payment rate for paid parental leave. That measure is average weekly earnings from the quarterly employment survey. Average weekly earnings have gone up by 2.8 percent in the last year, compared with inflation of 1.6 percent. Once again, if the Greens and their friends are going to be consistent, they should go out and tell superannuitants that they would intend to give them less superannuation from a Labour-Green Government because they are changing the way they measure wage growth in the New Zealand economy.

Dr Russel Norman: Well, then, could the Minister tell the House how Statistics New Zealand has got it wrong when it says in its User guide for Statistics New Zealand’s wage and income measures, third edition—the most recent edition—if you are interested in changes in earnings across time, the labour cost index is a better measure than the quarterly employment survey? Can the Minister explain exactly how Statistics New Zealand has got it wrong and he has got it right?

Hon STEVEN JOYCE: Well, I can only quote Statistics New Zealand to the member, and I suppose we could go on all afternoon if we liked, but the labour cost index, according to Statistics New Zealand, measures, as I say, changes in salary and wage rates for a fixed quantity and quality of labour input. That is a statistical construct that determines inflation in the labour market. What it does not determine is how much people get paid, because, in fact, the quality and quantity of their labour does not stay unchanged over a time period. They get promotions, they change jobs—

Hon David Parker: They work longer hours.

Hon STEVEN JOYCE: —they work more hours—all those things. That adds up to their quarterly employment earnings, which is reflected in the quarterly employment survey. If the

member wants to ask another five supplementary questions, we could save the House’s time if I just table the answers the same way.

Dr Russel Norman: Given that the Minister thinks that he is right and Statistics New Zealand is wrong, does he also believe that he is right and everybody else in New Zealand is wrong when most New Zealanders’ lived experience is that under this Government they have struggled to get ahead as prices have gone up and wages have not kept up with rising prices? That is exactly what the statistics produced by Statistics New Zealand show: the labour cost index is falling behind inflation.

Hon STEVEN JOYCE: I am sorry; the member is simply wrong in this case and he really does need to go and get some advice. The simple reality of the situation is he is wrong on so many levels. Firstly, wages have been going up. Real after-tax wages have been going up faster than inflation under this Government by some margin. Under the previous Government it might have looked like people’s wages were going up, but, as we all know, the inflation was much higher. If the member cannot make a distinction between inflation and wages, then we really do have a problem.

Wage Rates—Minister’s Statements

5. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Does he stand by his statement “I think there’s going to be an expectation, particularly for those people with skills that are in demand, that they will be doing better than zero pay increases”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Yes, in the context that it was made. I would point out that in the year to December 2013—and I hope we do not have to repeat everything from the last question—average weekly earnings rose 2.8 percent while consumer price inflation was only 1.6 percent. [Interruption] Again, for the members opposite, that is 2.8 percent versus 1.6 percent, so, on average, wages are already increasing faster than inflation. That is, of course, according to the quarterly employment survey, which is the best source of wage movements and has been used by successive Governments, including the last Labour Government, as the basis for setting paid parental leave and New Zealand superannuation.

Hon David Parker: What level of pay increase has he or Treasury recommended to the State Services Commissioner for public sector workers such as police, teachers, firefighters, and nurses to receive in the coming year?

Hon STEVEN JOYCE: I do not have that to hand, but I think it is important to expand on the Minister of Finance’s comments because he was saying—

Hon David Parker: I raise a point of order, Mr Speaker. The Minister started by saying he did not know the answer to my supplementary question, and I think that is a sufficient answer to my supplementary question.

Mr SPEAKER: On this occasion, I think we have had quite a lot of figures bandied about, and I accept the point the member is making.

Hon David Parker: What provision has he made in his Budget for the wage increases that he has promised everybody?

Hon STEVEN JOYCE: Of course, the Budget each year contains provisions that are different for different parts of the State sector in terms of wage rounds occurring in that year and then, obviously, in the out-years for subsequent wage rounds. I do not think it would be the wisest thing in the world to suggest putting those numbers out in the public domain right now, because those are all subject to negotiation. But I will say that the Minister in his comments was expecting that the demand for skilled people, in particular, would continue to rise and all employers—public and private employers—would have to be cognisant of that as part of the package of wage rounds.

Hon David Parker: Why is it that under his Government public sector chief executive officers get $50,000 per annum wage increases while most workers get close to nothing?

Hon STEVEN JOYCE: I would really want to know the source of that comment from the member, because we have a number of situations recently where those things have not added up. I

mean, I saw one today where it was suggested that there were 37,000 less 15 to 19-year-olds employed than 5 years ago—

Hon Trevor Mallard: You mean fewer.

Hon STEVEN JOYCE: —fewer, if you like—and, actually, it turns out that they were in education or, in fact, did not exist. That is the quality of analysis that we are getting from the Opposition.

Hon David Parker: Do I take it, then, that the Minister is ignorant of the fact that under his Government a large number of public sector chief executive officers have had increases of $50,000 a year while most workers are getting nothing or close to it?

Hon STEVEN JOYCE: The member needs to actually quantify what he is saying. Yes, different people get pay increases at different times for different reasons. The reality is that that occurs across the public sector at different times. In fact, the entire public sector has shown great restraint through the global financial crisis, and that has helped the whole country balance its books and put us in the strong economic position that we are in today. We would not have been in anything like as strong a position under Labour and the Greens.

Hon David Parker: I raise a point of order, Mr Speaker. In response to an earlier suggestion you made to a point of order to one of my colleagues, I used up a supplementary question to try to elicit from the Minister whether he accepted there had been $50,000 per annum increases, which he denied in an earlier answer. I have had to waste the supplementary question. I have still not got that acknowledgement and I would ask you to ask the Minister to address the question I asked.

Mr SPEAKER: In my opinion, the Minister has addressed the question. The essence of the question was “Do you take it that the Minister is ignorant because of”, and the Minister then went through and gave an answer that addressed the question that had been asked.

Youth Employment—Youth in Employment, Education, or Training

6. MELISSA LEE (National) to the Minister for Social Development: What reports has she received about the number of young people in employment, education or training?

Hon PAULA BENNETT (Minister for Social Development): I am very pleased to report that the latest household labour force survey shows that the number of young people not in employment, education, or training—known as “neets”, of course—continues to fall. The number of “neets” has fallen to 11.3 percent of 18 to 24-year-olds—down from 13.9 percent a year ago. This is the lowest number of young people who are not in any form of education or work since the December 2008 quarter.

Melissa Lee: What support is this Government providing to ensure that young people engage in employment, education, or training?

Hon PAULA BENNETT: This Government has invested heavily in ensuring young people at risk of long-term benefit dependency engage with a Youth Service provider, who can help get them into education or work. Unprecedented in getting results, we are seeing local youth workers working with our youth—getting alongside of them. Currently, there are 38 Youth Service NGO providers who are actively working with more than 9,000 of these “neets”. As a result 63 percent are currently engaged in education or training.

Melissa Lee: Why is it important to provide support to young people to ensure they are in employment, education, or training?

Hon PAULA BENNETT: Young people who are not engaged in work or education are at a high risk of not only going on to a benefit but equally staying on for a very long time. Sixty-two percent of 30 to 39-year-olds currently receiving a benefit first went on welfare as young people. But this Government, through our education policies and through our support via Youth Service, is making a difference, getting alongside of these young people and seeing them get into work and further education.

Schools, Partnership—Value

7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she satisfied that the establishment of Partnership Schools represents value for money to the taxpayer?

Hon HEKIA PARATA (Minister of Education): Yes. They offer choice to parents and students. There is no compulsion to attend. They offer opportunity for raising achievement for five out of five students. We cannot keep doing exactly what we have always done, or we will keep getting what we have always got. All five of the schools offer the New Zealand curriculum and/or Te Marautanga o Aotearoa. Of the 36 teachers employed, 32 are registered and four, for noncurriculum subjects, are not registered. All five schools are not-for-profit. All five are near or above enrolment. In our education system we have just over 830,000 students. These five schools provide for 370 students. In the words of Mrs Sally Ikinofo, the chairperson of The Rise UP Academy and the Labour electorate chair of Māngere, I think that we should give these schools a chance.

Chris Hipkins: Will partnership schools be funded on a broadly similar basis to State schools, or will they be funded more generously on a per student basis?

Hon HEKIA PARATA: I gather that the Opposition is yet again taking its advice from Post Primary Teachers Association (PPTA) blogs. Smaller schools cost us more, whether they are partnership schools, or State schools, or State-integrated schools. We have used decile 3 funding as the general comparison. I will wait to hear the particular numbers from the member, but I would invoke your deputy leader’s advice to compare apples with apples.

Chris Hipkins: I am very happy to help. Why is she satisfied that the taxpayer is getting value for money from partnership schools, given that on a per student basis some are being funded up to $40,000 per student in the first year, about five times the average rate of funding per student for State schools?

Hon HEKIA PARATA: I am sure that the member wants to thank the PPTA for its blog on those numbers. Where it got them from was the original Cabinet paper. I would recommend the member read that paper and see that there is a different range, depending on what the size of the school is and the nature of the achievement level required. If we averaged everything across the State system, we too would find those. So, yes, I am satisfied with the value for money for these young people.

Chris Hipkins: If she is arguing that the smaller size of partnership schools is the rationale for them receiving a higher funding rate, why did she use falling rolls as the reason for closing State schools in Christchurch and in other places around the country?

Hon HEKIA PARATA: That is not the argument that I am making. Again, there are a few facts to get in the way of the argument. In New Zealand, according to the July 2013 roll data, 712 of our 2,500 schools have fewer than 100 students. A further 290 of our schools have fewer than 150 students. So just under half of all schools in New Zealand are small schools. They cost more.

Chris Hipkins: Are partnership schools guaranteed that they will receive all of the funding allocated in their contracts, regardless of the number of students that they actually enrol, meaning that their per student funding could actually be higher than $40,000 per student in the first year; if so, why are they treated differently to State schools, which lose funding on a quarterly basis if their roll drops?


Chris Hipkins: I seek leave to table one of the charter schools’ funding contracts, which makes it clear that they are funded for their minimum roll regardless—

Mr SPEAKER: Order! Leave is sought to table this particular funding contract. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Emissions Trading Scheme—Performance

8. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Is his Government’s emissions trading scheme working, given hundreds of thousands of seedlings are being destroyed across the country due to the collapsed carbon price?

Hon TIM GROSER (Minister for Climate Change Issues): Yes. Forestry is a cyclical business. In the 4-year period from the start of this Government, the sales of tree stocks in this country increased relentlessly from 41 million tree seedlings to 72.5 million tree seedlings in 2012. We are expecting the figures, when they come out for the calendar year 2013, to show a correction on that. So the market has turned, and people who overstocked may have been caught out by it. Let us hope that they made excellent money during the 4 good years preceding it. Markets go up; markets come down.

Dr Kennedy Graham: How can you say the emissions trading scheme is working when Graeme Dodds of Leithfield Nursery in Southland has been forced to destroy 700,000 pine tree seedlings as part of this so-called cyclical industry, losing tens of thousands of dollars in the process, because of a carbon price collapse—going up and down?

Hon TIM GROSER: Well, I am very sorry for the company concerned and I just hope that he gets his projections right in the future and that he does not overstock. The same has happened to many other people stocking many other products—looking at a rising trend and just making the wrong assumption: it is going to go up; it will never come down.

Dr Kennedy Graham: Will he also say sorry to, and is he equally concerned about, Robin Appleton of Appleton’s Nursery in Nelson, who had to kill off 300,000 Douglas fir seedlings, which were grown in anticipation of not an up and down emissions trading scheme but a stable and efficient emissions trading scheme?

Hon TIM GROSER: I would make exactly the same comment about that company too. But there is an assumption underlying this whole range of questions that is fundamentally wrong, and that is that people plant trees only for carbon. People have planted trees in our country for generations before anyone had heard of Kyoto and carbon prices. And log prices, which I think that people should take into account when making decisions with a 27-year horizon in front of them, increased by a phenomenal 20 or 30 percent. I think it went from something like $140 to $180 per cubic metre in December 2011 to around $180 to $206 per cubic metre a year later. So people should look at the two reasons you plant trees, not just carbon prices. I think it is extremely unlikely that in 27 years, carbon prices—which have got nothing to do with the New Zealand emissions trading scheme; they are all influenced by the international price—will be sitting around the current extraordinarily low levels.

Dr Kennedy Graham: Will he move to strengthen New Zealand’s emissions trading scheme to ensure a higher price on carbon, in light of a planned $600 million claim against his Government from the Climate Change Iwi Leadership Group, which actually does plant for carbon, because of value lost on their forests under the current failed scheme?

Hon TIM GROSER: We are not going to intervene to put a fixed price on carbon, which would merely transfer assets and resources from some of the people in those iwi who are farmers, who own businesses, and who pay their electricity bills. You know what the policy is. We are going to stick with our current policy.

New Zealand - Australia Reciprocity—Treatment of New Zealand Exports and Residents

9. Hon PHIL GOFF (Labour—Mt Roskill) to the Prime Minister: Did he ask Prime Minister Tony Abbott to take any action against the supermarket ban on New Zealand products and unfair treatment of New Zealanders living in Australia; if so, what did he ask for?

Rt Hon JOHN KEY (Prime Minister): Yes. I took the opportunity to raise with Prime Minister Abbott the issue of Australia’s two biggest supermarkets procuring products for their home brands from Australian sources only. I told Prime Minister Abbott that although this practice might be

legally consistent with CER, I did not think it was consistent with the spirit of the agreement. We agreed that New Zealand firms that have specific concerns should make submissions to Australia’s competition watchdog, the Australian Competition and Consumer Commission, and those with wider concerns should engage with the Australian competition policy review. I also raised with Prime Minister Abbott the issue of New Zealanders living in Australia. We want to see New Zealanders treated fairly in Australia. We also recognise that it is up to the Australian Government as to how it sets its policies. I will virtually guarantee for the House that that is consistent with what Phil Goff thinks, and when I have an opportunity in a few moments I will read out the very paper he penned on the topic in 2001. I cannot wait. Please fire away with the supplementary questions.

Hon Phil Goff: Hold your breath, Prime Minister. When the Prime Minister—[Interruption] When you are ready. When the Prime Minister has just said that the ban imposed by Australian supermarket monopolies on New Zealand goods is consistent with the letter of CER, how does he reconcile that statement with article 1(c) of the CER agreement, which sets the objective “to eliminate barriers to trade between Australia and New Zealand”, and article 1(d), which says that the objective of CER is “to develop trade between New Zealand and Australia under conditions of fair competition”, and did he actually ask Tony Abbott to honour that agreement?

Rt Hon JOHN KEY: For a start-off, they are actually not, in Australia, banning New Zealand products. What they are choosing to do is buy from Australian suppliers for their home brands, which is exactly what they are doing in New Zealand. I really wish the member was right. If he was right, then of course the Government would be able to resolve that issue.

Hon Phil Goff: When the Prime Minister denies that the action by the supermarket monopolies was to ban New Zealand goods, how does he reconcile that statement with the fact that the supermarkets have stated that they will not even accept bids from New Zealand producers because they are New Zealand producers?

Rt Hon JOHN KEY: What the Australian supermarkets are doing in relation to their home brands is buying from Australian suppliers. That is also consistent with what is happening in New Zealand. I happen to agree with the member that the Australian supermarkets should not do that. As I said yesterday, they should buy from Australasia. I am pretty sure that if the member wants to come and get a briefing, he might find that it is unfortunately—and I say “unfortunately”—unlikely to be a breach of CER.

Hon Phil Goff: In order to promote a resolution of this dispute rather than saying that he cannot do anything, will the Prime Minister use article 22(2) of the Closer Economic Relations agreement, which is designed to deal with the situation where “the achievement of any objective of this Agreement is being or may be frustrated”; if he will not use article 22(2), why not?

Rt Hon JOHN KEY: The Government has actually made it clear that it has looked at the matter, taken advice on the matter, and would progress whatever we could in relation to the matter. I wish the member was right. Unfortunately, the advice is that the member is wrong.

Hon Phil Goff: I raise a point of order, Mr Speaker. As you recall, my question was very specific: will he use article 22(2)? If he does not know what it is, fine, he can say that—

Mr SPEAKER: Order! The Prime Minister has addressed the question that was asked by the member.

Louise Upston: What reports, if any, has he seen regarding the previous Labour Government’s support of the 2001 bilateral agreement?

Grant Robertson: I raise a point of order, Mr Speaker. I do not know what responsibility the Prime Minister has for the actions of the former Labour Government.

Mr SPEAKER: Yes, but the question was not that; the question was “What reports has the Prime Minister received?”. I will listen to the question again.

Louise Upston: What reports, if any, has he seen regarding support for the 2001 bilateral agreement?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The offence with that question is that it has nothing to do with the question Mr Goff asked—question No. 9—or any of his supplementary questions. It is a totally different matter.

Mr SPEAKER: No, I do not agree with the Rt Hon Winston Peters. The question is certainly relevant to the primary question, and I see no reason why it cannot be answered by the Prime Minister.

Rt Hon JOHN KEY: Yes, I have seen a paper written by the Hon Phil Goff when he was the Minister of Foreign Affairs and Trade. Clearly, the leader of the Labour Party—the current leader, because it changes—has not seen it. He said the following things—and let us just go through a few. He acknowledged that Australia had the right to determine for itself what additional benefits it would make available to migrant New Zealanders. He said: “The new arrangements remove a significant and long standing irritant from our most important bilateral relationship. The new arrangement preserves New Zealanders and Australians’ ability to enter, live and work in each other’s country under the Trans Tasman …” relationship.” He said that “It was clear to this government that we needed some sort of circuit breaker. … We looked for a fresh approach that would contain the New Zealand taxpayers’ fiscal obligation—”[Interruption]

Mr SPEAKER: Order! Order! That answer is long enough, but for the benefit of Mr Robertson I will determine that. I appreciate the member’s assistance.

Rt Hon John Key: I seek leave to table The Trans-Tasman Relationship: A New Zealand Perspective, 2001, from Phil Goff, so that Mr Cunliffe can read it.

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


10. SIMON O'CONNOR (National—Tāmaki) to the Minister of Education: What recent announcements has she made on recognising and celebrating the teaching profession?

Hon HEKIA PARATA (Minister of Education): Yesterday I announced a new website called www.inspiredbyU.org.nz, aimed at acknowledging the lifelong impact that teachers have on their students’ lives. Members of the public are able to go online and write a virtual postcard of thanks to—[Interruption]

Mr SPEAKER: Order! I am sorry to interrupt the Minister but I cannot hear the answer that is being given.

Hon HEKIA PARATA: Yesterday I announced a new website called www.inspiredbyU.org.nz, aimed at acknowledging the lifelong impact that teachers have on their students’ lives. Members of the public are able to go online and write a virtual postcard of thanks to inspiring teachers. Following up on my letter to each member of the House yesterday, I reiterate the invitation that they, as well as yourself, Mr Speaker, take the opportunity to stop attacking the profession and start thanking teachers for the critical contribution they make.

Simon O'Connor: What other initiatives are in place to strengthen and value the teaching profession?

Hon HEKIA PARATA: This Government is committed to celebrating excellence in education, raising its status, and recognising the critical contribution that quality education achievement makes to New Zealand, including through the $359 million announced by the Prime Minister, investing in four new roles to create further professional options for teachers; hosting the international summit on the teaching profession here in New Zealand in March; holding festivals of education concurrent with the summit, in Auckland, Wellington, and Christchurch; introducing the Prime Minister’s Education Excellence Awards; and establishing the new professional body the Education Council of

Aotearoa New Zealand. All of those are part of acknowledging, celebrating, and valuing the teaching profession.

Internal Affairs, Minister—Information Security

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Internal Affairs: Further to his answers to supplementary questions to Oral Question No 11 on Thursday 30 January relating to his responsibility for the security of information, does he believe that all his actions as a Minister mean he is an appropriate person to hold the position of Minister of Internal Affairs?

Hon PETER DUNNE (Minister of Internal Affairs): Yes.

Hon Trevor Mallard: Did he, as part of the process of his recent reappointment as a Minister, give the Prime Minister an assurance that he did not leak the draft Kitteridge report or make it available to a Fairfax reporter?

Hon PETER DUNNE: The discussions I had with the Prime Minister are between the Prime Minister and me, but I reiterate the answers that I gave to the House on 30 January. I have had no ministerial responsibility for any issues relating to the Kitteridge report.

Hon Trevor Mallard: Was the reason that he is not prepared to tell the House that he has given the Prime Minister an assurance that he did not make the draft Kitteridge report available to a Fairfax reporter because he in fact made that document available to that reporter?

Mr SPEAKER: I call the Hon Peter Dunne, in as far as there is current ministerial responsibility.

Hon PETER DUNNE: I was appointed to this position on 28 January. In relation to the primary question, I have honoured the responsibilities entrusted to me fully since that date. In relation to other matters, I have no responsibility for them.

Hon Trevor Mallard: Is he in a position to give the House now an assurance that he did not make the draft Kitteridge report available to a Fairfax reporter; if not, why not?

Mr SPEAKER: Again, I will allow the Minister to answer the question, but in as far as he has current ministerial responsibility as Minister of Internal Affairs.

Hon PETER DUNNE: I refer the member to my previous answers on this very subject.

Hon Trevor Mallard: Referring to his current responsibility for security of information, can he give the House an assurance that he is a suitable person to oversee this for New Zealand by now stating that he has never made a confidential report available to a Fairfax reporter?

Mr SPEAKER: Again, I will invite the Minister to answer the question in line with his current ministerial responsibility.

Hon PETER DUNNE: My current responsibilities began on 28 January, and the question that is made is answered in respect of those answers, and I refer the member to previous answers on earlier subjects.

Rt Hon Winston Peters: Having regard to the security and secrecy of information, particularly in his present job, why does he not admit the time, the date, the room, and the circumstances of his leaking of the Kitteridge report?

Mr SPEAKER: Order! That question is not in order at all.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Why not? I put the issue of confidential information, which is critical to the Inland Revenue Department, up front—which is the job he had then and now—and I am asking a straightforward question. Why is it not in order?

Mr SPEAKER: Order! I have ruled it out of order because—

Rt Hon Winston Peters: Yes, I’m asking you why.

Mr SPEAKER: If the member gives me a minute, I will explain it to him. Although he prefaced his question by referring to the Minister’s current employment, he then went back to an issue that occurred prior to Mr Dunne being appointed as Minister of Internal Affairs. On that basis I ruled the question out of order.

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

Mr SPEAKER: Can I just clarify for the benefit of the House, in raising—

Rt Hon Winston Peters: Mr Speaker, you—

Mr SPEAKER: Order! Order!

Rt Hon Winston Peters: What’s your problem now?

Mr SPEAKER: If the member wants to stay in the House to raise a point of order, I expect him to sit down when I rise to my feet. I will hear a fresh point of order from the member but I want to be absolutely clear to the member that if he is attempting to relitigate in any way a decision I have made in ruling that question out of order, I will take that as leading this House to disorder. Does the member wish to raise a fresh point of order?

Rt Hon Winston Peters: Yes. I raise a point of order, Mr Speaker. There would not be one selfrespecting Western democracy where fitness for appointment was not the issue. In countless cases in the UK, Australia, and elsewhere—Canada, the United States, and here in this Parliament, one of only nine that has had unbroken elections for 155 years—you are saying that suitability and fitness for appointment, on a past record, is not a present consideration?

Mr SPEAKER: Order! The member will resume his seat. He is very lucky that I am not asking him to leave the Chamber. The member is now attempting to relitigate a decision I have made.

Hon Trevor Mallard: Would his current position be properly characterised as having absolution without confession, in order to set up another dodgy deal on the part of the Prime Minister to give him the Ōhariu seat?

Mr SPEAKER: Again, I will invite the Minister to answer that question as far as it is in his current ministerial responsibility.

Hon PETER DUNNE: That may be the characterisation the member would choose to apply; it is not actually the fact.

Police Resourcing—Foot Patrols

12. MIKE SABIN (National—Northland) to the Minister of Police: What recent announcements has she made on the number of foot patrols undertaken by Police?

Hon ANNE TOLLEY (Minister of Police): Today—

Rt Hon Winston Peters: Nothing in Kaitāia.

Hon ANNE TOLLEY: Has he finished? Have you finished?

Mr SPEAKER: Order! I have called the Hon Anne Tolley to answer a question.

Hon ANNE TOLLEY: Thank you, Mr Speaker. Today I announced that there has been a 155 percent increase in foot patrols undertaken by the police in the last 2 years. They have increased from 40,918 in 2011 to 104,321 in 2013, while recorded crimes have dropped by 17.4 percent over the last 3 years. Front-line foot patrols help cut crime because officers are out and about and are visible in the community. They walk the beat in known trouble spots, and at the times when crime is most likely to occur. This acts as a strong deterrent to criminals, helps our communities feel safer, and leads to fewer victims.

Mike Sabin: What steps has the Government taken to ensure our front-line police are able to be so visible in the community?

Hon ANNE TOLLEY: Last year, visibility—[Interruption]

Mr SPEAKER: Order!

Hon ANNE TOLLEY: Last year this Government supported the roll-out of mobility technology to all front-line police officers. Smartphones and tablets allow the police to have access to the information that they need while they are out in the community, and reduce the amount of time that they need to spend behind a desk completing paperwork. This technology allows each officer to spend an extra 30 minutes a shift—

Rt Hon Winston Peters: How come the numbers are falling?

Hon ANNE TOLLEY: —30 minutes extra a shift, Mr Peters—out in the community preventing crime, which is about half a million extra hours, and is equivalent to an additional 354 front-line police officers every single year.


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