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Questions and Answers - May 29


Budget 2014—Support for Children and Families

1. MARK MITCHELL (National—Rodney) to the Minister of Finance: What measures did Budget 2014 include to support children and families, as part of the Government’s wider programme to build a more productive and competitive economy?

Hon STEVEN JOYCE (Associate Minister of Finance): on behalf of the Minister of

Finance: The Budget did this in a number of ways. This included a $500 million package over 4 years supporting children and families, which was at the heart of the Budget. It is five parts: $172 million to boost paid parental leave, $42 million to increase the parental tax credit from $150 a week to $220 a week, $90 million to provide free GP visits and free prescriptions for children under 13, an extra $156 million to help early childhood education centres to remain accessible and affordable, and $33 million to help vulnerable children. This comprehensive package is better targeted, better balanced, and fairer than other proposals I have seen for roughly the same cost, including the proposal to extend paid parental leave to 26 weeks. That is because only 40 percent of new parents qualify for paid parental leave.

Mark Mitchell: In what other ways are Budget 2014 and the Government’s wider economic programme helping New Zealand children and families?

Hon STEVEN JOYCE: The Budget and the Government’s programme help children and families by ensuring the economy continues to grow and support higher incomes and more jobs. And we are making considerable progress. New Zealand’s economy grew by 3.1 percent last year, the fifth highest in the *OECD, and Budget forecasts show growth of between 2 percent and 4 percent over each of the next 4 years, with growth peaking at 4 percent in the year to March next year. This economy is supporting more jobs, with 84,000 more jobs created in the last year, and is also supporting higher incomes. *Cost of living increases are low. Inflation was just 1.5 percent in the year to March—well below the average weekly wage increase of 3.2 percent. These things are all helping New Zealand families.

Mark Mitchell: How are New Zealand households and businesses benefiting from the more competitive economy and better management of Government agencies?

Hon STEVEN JOYCE: Here is just one example: the consistently strong performance of the *Accident Compensation Corporation has allowed *ACC levies for households and businesses to fall by close to $1 billion since 2011-12. Budget 2014 indicates ACC is on track to further reduce levies by around $480 million in 2015-16, subject to public consultation. Depending on the outcome of that consultation, the average levy for a private motor vehicle could fall by around $130 a year. Coming after *across-the-board income tax cuts in Budget 2010, two-thirds of which went to the bottom two tax brackets, lower ACC levies are putting extra money in the pockets of hardworking Kiwis.

Mark Mitchell: What reports has he received in reaction to Budget 2014, particularly from commentators commending the Government for clearly setting out the next steps of its successful economic programme?

Hon STEVEN JOYCE: I have received many reports from a wide range of commentators who are positive about the Budget. They include *Business New Zealand, which said: “Business wants an environment where government”—

Grant Robertson: Well, there is a huge shock!

Hon STEVEN JOYCE: —do not worry, there is more to come—“spending is both restrained and appropriately targeted … This Budget helps towards delivering those outcomes.” *Science New Zealand said the Budget “strengthens areas critical to a productive, competitive economy. It builds on New Zealand’s advantages of our people, our environment and our knowledge.” *Forest and Bird welcomed the $25 million commitment over 4 years to combat the spread of *kauri dieback disease. From an unexpected source I received this comment: “Yes, I quite like that policy.” That was one Mr D Cunliffe, supporting the free general practitioners visits and prescriptions for under- 13s.

Hon David Parker: Given that **scenario two in the Budget, based on net migration of 40,000 people this year, which we are already on track for, predicts higher inflation, higher interest rates, higher house prices, more household debt, and lower savings, does he believe that is a better outcome for New Zealand children and families?

Hon STEVEN JOYCE: Fortunately, in terms of the matters that the member raises, New Zealand families have at least some memory. They remember much higher inflation rates, much higher interest rates, all as recently as 2008. But the other interesting thing about that migration statistic is that the number of people coming into the country has hardly changed but the number of people fleeing to Australia has dropped away to nothing under this Government. Actually, people are staying in places like Palmerston North, like Hawke’s Bay, like Invercargill, when under the previous Government’s economic policies they were all racing off to Australia at a hundred miles an hour.

Brendan Horan: Is it possible to bring the commencement date forward for free *doctors visits for children under 13, rather than having parents wait a further 13 months?

Hon STEVEN JOYCE: I appreciate the member’s question. Of course, we always try to bring those things in as early as possible, but the other side of the story is to ensure that New Zealand gets back into surplus. That keeps interest rates much lower than, for example, they were under the previous Government. That means understanding the link between expenditure and interest rates, and that means that we have to be responsible, so we will bring it in as early as we can.

Cost of Living—Productivity Commission Commentary

2. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Does he agree with the Productivity Commission regarding consumer prices that “when judged against average expenditure, the price level in New Zealand appears relatively high”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The report the member is citing, including that particular quote, is based on 2005 data. In fact, I will quote from the same report. It says: “The most recent detailed data available on specific prices are for 2005, which were primarily used in the analysis.” I am very happy to discuss the poor quality of economic management we were experiencing as a country at that time. I think we can all agree that the cost of living rose very significantly in the 2000s, and that is not surprising. That was when we had a Government that put the export sector into recession during a global boom; a Government that was on its way to lifting spending by 50 percent in 5 years, sending interest rates to nearly 11 percent and the current account deficit to around 8 percent; and a Government that left consumer price inflation at more than 5 percent in 2008. So I agree that that was pretty shameful, and I have to thank the member for his question.

Hon David Parker: Given that his answer said that it was about 2005, has the Minister not read the report, or does he not understand the difference between the rate of price growth and the level of prices and that, in fact, the report shows that the relative level of consumer goods has got worse, from 17th worst in the world to, in 2011—not 2005; 2011—11th worst in the world?

Hon STEVEN JOYCE: That is exactly the point. If you read the report, which I have, it shows that through the 2000s prices went up dramatically. We know that. It was because inflation was going up faster than wages throughout that period. Since that time it has been improving, with the *CPI now significantly lower than wage increases, including in the last 12 months and the last quarter. The reality is that if you were not a smoker, the cost of living went up by absolutely nil.

Hon David Parker: Is one of the reasons that New Zealand price levels have got worse relative to other countries’ that the standard supermarket price for 2 litres of milk in Australia is now around $2, yet it is $3.80 in New Zealand?

Hon STEVEN JOYCE: I have free political advice for the member. I just would not run this line of argument, because the record about cost inflation in New Zealand was caused and experienced by the previous Government. Actually, prices relative to wages are improving under this Government. He can go on about that all day if he likes. Under this Government, prices are going up slower than inflation. Under the previous Government, prices were going up faster than people’s wages.

Andrew Williams: Why is the Government doing nothing about rising power prices, leaving many Kiwis, particularly the seniors, to struggle through a cold winter?

Hon STEVEN JOYCE: The member is wrong. The Government has done a lot about the price of electricity, including promoting a much more competitive electricity market. Electricity price rises are much lower, and that is reflected in the overall cost of living increase, which for the last year was 1.5 percent in the year to March for all Kiwi consumers—1.5 percent. Average wages over that period went up 3.2 percent. If we continue on the path we are going and see that for some more years, then New Zealanders will experience a significant increase in their wages relative to prices. In relation to people on superannuation, their incomes are linked to the average wage.

Hon David Parker: In respect of electricity, then, why is it that when 60 percent of our electricity is *hydro power made from public rivers, which is the cheapest electricity to produce in the world, cheaper than nuclear, New Zealanders pay through the nose for it?

Hon STEVEN JOYCE: Again, I do not know why the member goes down this line, because his record on power prices was abysmal. They went up far faster than they ever have in the more competitive market that this Government has created. New Zealanders know that, which is why they are obviously endorsing the economic direction of this Government versus the proposals of the Labour-Green-Dotcom-Internet-Mana Opposition prospect.

Louise Upston: How does the cost of living under this Government compare with* previous Governments, and what is the outlook for wage growth and inflation?

Hon STEVEN JOYCE: In the 9 years to December 2008, the average annual cost of living increase—the average—was 3.1 percent. That compares with an average cost of living increase of 2.1 percent since the Government came into office. That included the increase in *GST, which was compensated for with income tax reductions. In the year to March, annual inflation was 1.5 percent and it was *0 percent in the March quarter for anyone who is not a smoker. As I said, inflation in 2008 peaked at more than 5 percent. If we look ahead, Budget forecasts show the average wage will rise to around $62,300 by 2018, which is an increase of just under 14 percent and well ahead of expected inflation of 9.8 percent over the same period.

Andrew Williams: What plan does the Government have to make the family supermarket bill each week less excessive, given the increasingly high cost of food?

Hon STEVEN JOYCE: I think the member needs to go and have a look at the actual cost inflation in New Zealand at the moment. Nobody is arguing that the costs are not there for households, but in terms of the increase in costs, it has literally gone up by 1.5 percent in the last

year and by nil if you are not a smoker. If you are a smoker, then that has gone up a bit, but if you are not a smoker, it is nil—

Andrew Williams: What about food?

Hon STEVEN JOYCE: Including food, because inflation includes food—that is the way we measure it. It has gone up by absolutely nil in the last quarter.

Hon David Parker: Why does he think it is fair that a loaf of *Vogel’s bread, a New Zealand brand, costs around the equivalent of $3 a loaf in the UK, yet the same loaf here costs around $4.99 or $5?

Hon STEVEN JOYCE: The reality is New Zealand right now has a far healthier economy, with better job growth and better job prospects than the UK. That is one reason for the UK really struggling at this point in time. Our cost of living increases are actually lower than the UK’s right now. That is the reality of it. For New Zealanders, wages are going up faster than inflation. If the member wants to look at the reason why some prices are higher overall, he needs to look no further than the 9 years of the Labour Government, when the inflation of prices was out of control, particularly in 2008.

Hon David Parker: Is the Minister really so out of touch that he does not realise the report shows that prices in New Zealand, relative to income, have got worse relative to the rest of the world, going from, as I said earlier, 17th worst in the world to 11th worst in the world now because New Zealanders are paying too much for the basics?

Hon STEVEN JOYCE: The member needs to be reminded that this report relates to 2005 data. In fact, it says, in terms of comparisons: “The most recent detailed data available on specific prices are for 2005, which were primarily used in the analysis.” We know who the Government was in 2005. We know it did a particularly poor job of managing the New Zealand economy, so I am really not sure why he is bringing this up today.

Louise Upston: What policies has he seen that would increase the cost of living for hardworking New Zealand households?

Hon STEVEN JOYCE: That is a very fair question, because I think that one of the many difficulties for the Opposition is understanding cause and effect. There are a number of policies that would pile costs on households and businesses. For example, a much larger and tougher emissions trading scheme would add around $500 a year to household power and fuel costs. A State-run, monopoly electricity system would push up electricity prices and lead to *blackouts. An expensive capital gains tax on every New Zealand business and farm, but only on a quarter of housing, would also push up prices. Putting everybody in *KiwiSaver and then declaring that you are going to cut their pay by 6 percent on a whim would make it more difficult for people to afford to live. Watering down the *Reserve Bank of New Zealand Act to go soft on inflation would push up the cost of living. A big-spending, big-borrowing Government to run everything from insurance to housing— that too would put up the cost of living.

Hon David Parker: I raise a point of order, Mr Speaker. I think he has left it so late to get to the *punchline that the Speaker will not let him do so.

Mr SPEAKER: That is not a point of order.

Emissions Trading Scheme—Fairness

3. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Is he confident that ordinary New Zealanders are being treated fairly under the emissions trading scheme?

Hon TIM GROSER (Minister for Climate Change Issues): Absolutely, particularly when compared with what would happen to New Zealanders and their jobs, to farmers and our export income, and to businesses and households if that member ever got his hands on climate change policy in a future Labour-Greens coalition.

Dr Russel Norman: What inquiries has he made into the practice of companies passing on carbon costs to consumers under the emissions trading scheme—costs that are much higher than the companies themselves are having to pay?

Hon TIM GROSER: I do not make inquiries; I have discussions with my officials, which are always fruitful, informative, and greatly appreciated.

Dr Russel Norman: I raise a point of order, Mr Speaker. My question was specifically about the passing on of carbon charges. I appreciate that the Minister has conversations with officials—

Mr SPEAKER: Order! The question as I heard it started with “What inquiries has he made … ?”. The Minister said that he did not make inquiries.

Metiria Turei: I raise a point of order, Mr Speaker. Can I just get clarification from you on this ruling—that now the subject of the question is only going to be whether an inquiry was made, as opposed to the actual content of the question, which is about the details of that inquiry. Is that the limit to which Ministers will now have to answer questions—whether they have made inquiries or sought advice?

Mr SPEAKER: In that particular case, the member asked the question as to what inquiries the Minister had made, then added something substantial to it, and the Minister addressed the question. Maybe it was not to the member’s satisfaction; I can accept that it may not be to the member’s satisfaction. It may not be to the satisfaction of the members in the House. That is for the House to judge. My job is to rule that he has addressed that question, and I have done so.

Metiria Turei: I raise a point of order, Mr Speaker. Can I just—

Mr SPEAKER: No—can I just clarify, because I do not want any misunderstanding here. I have ruled on that matter—

Metiria Turei: Yes.

Mr SPEAKER: —and now the member is relitigating that—

Metiria Turei: No, I am seeking clarification.

Mr SPEAKER: I have clarified it for the member.

Metiria Turei: I am seeking additional clarification.

Mr SPEAKER: Then if the member could quickly put that point, I would be grateful.

Metiria Turei: Does that mean, then, that if a member of the Opposition stands and asks a Minister whether they have sought any advice on a particular matter, the Minister need answer only that part of the question that refers to whether or not they have sought any advice on any other matter but not on the subject of the question?

Hon TIM GROSER: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, I do not need any assistance on this. On occasions that may well apply. I will judge individual questions and individual answers, and my job is to determine whether I think they have been addressed. It is not my decision whether they have been addressed to the satisfaction of the member, and I accept that in this case it will not have been addressed to the satisfaction of the member.

Dr Russel Norman: Is the Minister confident that companies have ceased using the emissions trading scheme to overcharge consumers, as the *Emissions Trading Scheme Review Panel found that they were doing—that is, the Government’s own Emissions Trading Scheme Review Panel—in 2011?

Hon TIM GROSER: This Government is not about to launch some inquisition into companies on their pricing strategies. We believe in the market, and we know exactly what the market signals are doing in this case.

Dr Russel Norman: Has the Minister bothered to read his own Government’s *Emissions Trading Scheme Review Panel report from 2011, which found that companies were using the emissions trading scheme* to overcharge consumers by charging them a higher price on carbon than the companies themselves were paying, and the panel came to the conclusion that it “would

like to caution ETS participants that they face the risk of regulatory intervention in the future if such behaviour continues”?

Hon TIM GROSER: Yes, I have read the report.

Dr Russel Norman: Does the Minister intend to follow the recommendations of the committee that there should be regulatory intervention if the behaviour continues of companies using the emissions trading scheme to overcharge consumers, as it found in the Government’s own emissions trading scheme review from 2011?

Hon TIM GROSER: No, we have no intention of doing this, and at the current, regrettably—I would have to say—low international prices, it is a non-issue.

Dr Russel Norman: So, just to be clear, is the Minister saying that even though his own Emissions Trading Scheme Review Panel found that companies were overcharging consumers by charging them a higher price for carbon than the companies themselves were paying, with the companies pocketing the difference, and had called for regulatory intervention to prevent it from happening, the Minister plans to do absolutely nothing?

Hon TIM GROSER: Well, I do not have the report in front of me, but it is not my recollection that it said anything of that sort. At the end of the day, a review is a review. We are the Government; we make the decisions on behalf of what we think are the balanced interests of all New Zealanders.

Dr Russel Norman: Has the Minister sought any update on Treasury’s estimate of the fiscal implications of the changes his Government made to the emissions trading scheme, where Treasury found that the increased cost to the Government would be in the order of $900 million per year by 2030 as a result of the weakening of the emissions trading scheme that his Government introduced?

Hon TIM GROSER: This is really relitigating very old territory. What that figure referred to— and I cannot verify whether the figure is accurate or not—was the increased charges that the Government would have got if it had increased the pace of the emissions trading scheme. Nobody gave any money to anybody. I think that the member needs to live in the current situation.

Moana Mackey: How can he continue to defend his inaction on New Zealand’s collapsed carbon price on the basis that he does not want to impose a higher cost of carbon on “struggling” businesses and households when the benefits are not being passed on, or where the struggling businesses he was referring to are electricity generators and oil companies?

Hon TIM GROSER: I am very comfortable with the Government’s overall approach to containing costs throughout the entire economy, of which this is a very small part.

Budget 2014—Auckland Transport Infrastructure

4. SIMON O’CONNOR (National—Tāmaki) to the Minister of Transport: What announcements did the Government make in Budget 2014 regarding investment in Auckland transport infrastructure?

Hon GERRY BROWNLEE (Minister of Transport): Budget 2014 has seen the Government provide the *New Zealand Transport Agency with $375 million in financial assistance to accelerate $815 million worth of key Auckland transport projects. The package will ensure the completion of nine key motorway projects within three corridors up to a decade earlier than planned, without impacting on the timing of other transport projects around the country. The package has been funded by a combination of National Land Transport Fund* allocations and an interest-free loan from the Crown.

Simon O’Connor: What specific projects are being accelerated?

Hon GERRY BROWNLEE: I was pleased to talk about this at the select committee meeting this morning, where members were most interested to know that it is the northern corridor projects that will widen the Northern Motorway* between Constellation Drive* and Greville Road* and provide a full motorway connection between the Upper Harbour Highway* and the Northern Motorway. The southern corridor projects will widen the southern motorway* between Manukau*

and Papakura*. Those projects will relieve congestion and provide travel time savings along the route, and increase the capacity to provide for the anticipated population growth in southern Auckland. These works will also improve links between Auckland and the Waikato* and Bay of Plenty. State Highway 20A* is a project that will upgrade the route to motorway standard and improve journey times along this route, which is the primary gateway to Auckland from the airport and for surrounding businesses.

Simon O’Connor: Are any further projects being progressed through the Auckland transport package?

Hon GERRY BROWNLEE: The Government has signalled previously that resolving Auckland’s transport problems in southern and eastern Auckland is its next major focus for the Auckland transport network. The Government has provided the New Zealand Transport Agency* with $10 million worth of financial assistance to ensure it will continue the development of the *East-West Link in 2014-15, and $5 million to enable the progression of the Panmure to Pakuranga* phase of the Auckland Manukau Eastern Transport Initiative* in 2014-15.

Phil Twyford: Why did the Government make a condition for starting work on the City Rail Link* before 2020 targets that PricewaterhouseCoopers* says were always unachievable, and, along with the lack of any significant new commitment to public transport in the Budget, does this not just show that the Government’s so-called commitment to the *City Rail Link is a sham, pushed off into the never-never for a future Government to deal with?

Hon GERRY BROWNLEE: Not according to the current polls.

Phil Twyford: I seek leave to table the PricewaterhouseCoopers report entitled Review of Government Patronage Targets for Accelerating the City Rail Link**.

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

Housing, Affordable—Auckland Housing Accord and Special Housing Areas

5. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Housing: How many homes have been built in the Special Housing Areas as a result of the Auckland Housing Accord, and now have people living in them?

Hon Dr NICK SMITH (Minister of Housing): It is difficult to separate out the exact number of new homes resulting from the Auckland Housing Accord*, but the number of building consents issued has risen, when comparing month with month, for the first 6 months of the accord, from 2,535 to 3,417, an increase of 882 homes or 35 percent. In respect of the special housing areas, the legislation was passed on 27 September; the accord was signed on 3 October; the first special housing area, Weymouth, was gazetted on 29 October on land that had been vacant for 10 years; the resource consent was granted in January; and earthworks and infrastructure began in February and are now advanced. This is a cracking pace from zoning—[Interruption]. This is land that sat vacant in the heart of Auckland for more than 10 years.

Phil Twyford: I raise a point of order, Mr Speaker. The question was laid down in advance and it was very specific. I asked the Minister not how many houses had been planned or consented, or how many lines had been drawn on the map; I asked him how many houses had been built in the special housing areas that now have people living in them.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear from the Hon Dr Nick Smith.

Hon Dr NICK SMITH: If the members had not roared, part of the answer I had prepared was to say that we do not keep a specific record of those houses. There are houses in Hobsonville and there are other houses that have been built in special housing areas. The key point is we do not actually keep a record of when the houses are completed and somebody moves in.

Mr SPEAKER: Order! I need no more assistance. I can sympathise with the point of view raised by Phil Twyford, but the Minister right at the start of his answer said it was difficult to sort out. I think members now have to draw their own conclusions from those answers. The way forward—

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

Mr SPEAKER: —I am on my feet, Mr Parker—I would suggest, is to continue with incisive supplementary questions.

Hon David Parker: I raise a point of order, Mr Speaker. I am not even sure whether I know the answer to this point of order, because I am not sure whether it is possible to count to zero.

Mr SPEAKER: The member can always try.

Phil Twyford: Did he admit yesterday that the Government’s target of 39,000 homes is now a considerable stretch, because 1 year after he announced the *Auckland Housing Accord not a single new home has been built in the special housing areas?

Hon Dr NICK SMITH: The twit opposite does not seem to know what is required to build a house.

Mr SPEAKER: Order! I am going to invite the Minister to start his answer again.

Hon Trevor Mallard: Oh, withdraw and apologise!

Mr SPEAKER: If a member takes exception—

Hon Trevor Mallard: You don’t need the member. It’s your job to keep order.

Mr SPEAKER: Order! If Mr Mallard wants to stay for question time, he can stay quiet—

Dr Russel Norman: It’s not question time. There’s no answers.

Mr SPEAKER: Well, if he wants to go, I can assist. I can continue to add to his record. I have invited the Minister to commence his answer again.

Hon Dr NICK SMITH: The process that is required to do a new housing development requires, firstly, the zoning. That took 7 years, on average, under the last Government. We now do it in 7 weeks. You require resource consent. That was done usually very late under the previous Government. It is now done on time. My simple challenge for members opposite is that it takes time to build houses—something the impractical people opposite do not seem to understand.

Phil Twyford: Why did he promise 39,000 homes to the people of Auckland in his announcement last May, when he now talks only about consent numbers and empty sections no one can live on?

Hon Dr NICK SMITH: The Government committed, with the *Auckland Council, to 39,000 new homes. I remind the member that in 2008, 4,000 homes were consented. In the last year we are now up to 7,000. The first-year target is 9,000, and our estimate is that we will achieve more than that—10,500. I have been very up front* in saying that we need to stretch to get the 13,000 target in year 2 and 17,000 in year 3, but we make it absolutely plain that the Government remains committed to those targets.

Tim Macindoe: Has the Minister seen any comparative examples of how the housing accord and special housing areas are speeding up new house construction in Auckland?

Hon Dr NICK SMITH: Yes. At Hobsonville the previous Government announced a new housing development of 3,000 homes in 2002, with a lovely photograph of the then Prime Minister turning the first sod—in 2002. The only problem was that not a second sod was turned by 2008— zip, zero homes. The special housing area at Hobsonville was granted in December and earthworks were consented a week later. One hundred building consents have been issued in that special housing area. I am advised by the *Hobsonville Land Co. that the housing accords and special housing areas on that one special housing area are going to enable at least 200 homes more per year to be delivered.

Phil Twyford: Were the 13 resource consents in his report, granted in the first 4 months in the special housing areas, a typo or has the progress so far actually been that slow, and can he confirm that at that rate it will take 1,000 years to build the 39,000 houses he promised?

Hon Dr NICK SMITH: We committed to 9,000 houses in the first year in an agreement. I would ask the member to talk to his good friend *Len Brown, because at the *Local Government Forum this morning Len Brown made it plain that we would get more than 10,000—that we would exceed those targets—and that shows the progress we have made with measures that members opposite opposed at every step along the way.

Barbara Stewart: Why is the Government pursuing a fast-track housing redevelopment in Auckland that will result in approximately 4,000 people, including many seniors, being displaced from their homes and communities?

Hon Dr NICK SMITH: I assume the member is referring to the area of Tāmaki*, and this Government is progressing new housing developments there. I would note that the Tāmaki redevelopment was announced by the previous Labour Government in 2005, but between 2005 and 2008, zero houses were built. Under this Government, we are making progress in building houses in Tāmaki—several hundred. It is true that a consequence of that intensification, putting more houses in place, is some angst. But the Opposition cannot have it both ways—opposing new housing developments in one breath and complaining that there are not enough in the next.

Phil Twyford: Is the fact that not a single new house has been built in the special housing areas 1 year after he announced his accord not yet more proof that his housing policy has failed; and why does he not just admit defeat and adopt Labour’s policy of building 100,000 affordable homes and taxing speculators? [Interruption]

Mr SPEAKER: Order! I am keen to hear the answer.

Hon Dr NICK SMITH: Opposition members say that they are going to build 10,000 houses per year, but they spent 6 years not building a single one of the 3,000 homes they promised in Hobsonville. That just shows the sort of pipedream* that members opposite spin. I note that the rate of new house builds in Auckland is double of what it was in 2008. It is the highest it has been in years, and it shows the progress we are making.

Brendan Horan: Has the Minister done his mathematics on those 39,000 homes, does he know the current average price for a home in Auckland, and does he realise that that would come to $30 billion worth of building and that the pipedream, perhaps, is actually with the Minister?

Hon Dr NICK SMITH: Yes, it is a very large investment. I would point out that this year’s target is 9,000 new homes. That latest estimate from both the Auckland Council* and the Government is that it will achieve about 10,500 new homes in year 1*. But the member is right to point out the scale of the new investment and the pace with which new house building is progressing in the Queen City*.

Tim Macindoe: How does the time line* for plan changes and resource consents for the previous decade compare with the present one?

Hon Dr NICK SMITH: I am advised that the average time for a plan change to residential zoning in the last decade was 7 years. I am further advised that the average time to achieve the equivalent under the special housing areas is 7 weeks. On resource consents, of which 80 percent are for residential housing, 53 percent were late in 2008—that is, 20,000 late resource consents. I note that the latest resource consent figures show that the number of consents that are now late has dropped below 3 percent, less than 1,200 per year, and I think that shows the progress of this Government. It is getting rid of the red tape* so that Kiwis can have homes.

Barbara Stewart: What steps is the Government taking to ensure that homes built in its special housing areas are affordable for the average Kiwi family?

Hon Dr NICK SMITH: I would point out that the very first special housing area is at Weymouth. I would invite anybody in this House to go to that site, see the earthworks, and see the pace of work to realise, firstly, the pace that we are making on a block of land that has stayed vacant for more than a decade, and, secondly, that 80 percent of the new houses in Weymouth will be in the affordable zone. This morning, in response to this question, I inquired with the Hobsonville

Land Co.*. Over half of its homes are going to be in the affordable range, and that is why members opposite should support both these developments that this Government is advancing.

Privacy Commissioner—New Powers

6. SCOTT SIMPSON (National—Coromandel) to the Minister of Justice: What recent announcements has the Government made for the Office of the Privacy Commissioner?

Hon JUDITH COLLINS (Minister of Justice): Budget 2014 has provided an additional $7 million to the *Privacy Commissioner’s 4-year budget, to ensure adequate resourcing for reviewing and monitoring individual sharing agreements among Government agencies under the *Privacy Amendment Act 2013, and also to respond to the increased demand for services from the Privacy Commissioner. Over the past 4 years the number of inquiries increased by 36 percent and the number of notifications has risen from 16 to 107 per annum. This additional funding will boost the Privacy Commissioner’s ability to protect New Zealanders’ privacy.

Scott Simpson: What steps are being taken to update New Zealand’s privacy laws?

Hon JUDITH COLLINS: Yesterday I announced the Government’s intention to reform the 20- year-old *Privacy Act, to strengthen and update New Zealanders’ rights and powers over their privacy, and to provide the Privacy Commissioner with better tools to deal with the challenges posed by the digital information age. These reforms are the result of an extensive review of the privacy laws by the *Law Commission and of public consultation. The proposals will put strong incentives in place to ensure businesses, Government departments, and other organisations take privacy more seriously.

Scott Simpson: What are some of the proposed changes to the Privacy Act?

Hon JUDITH COLLINS: Key proposals in the reforms include requiring organisations to report data breaches to the Privacy Commissioner and notify affected individuals in serious cases; introducing new offences and increased fines for failing to notify the commissioner of a privacy breach or impersonating someone to obtain their private information, with fines increasing from $2,000 to $10,000; giving the Privacy Commissioner new powers to issue compliance notices; simplifying the legislation so that it is easier to understand; and ensuring better information and guidance to businesses and the public about how to comply with privacy laws. These changes will bring our laws into the 21st century and provide an excellent platform for the protection of privacy in the future.

Social Housing—Initiatives

7. ALFRED NGARO (National) to the Minister of Housing: What steps is the Government taking to grow the community housing sector to achieve the target of 20 percent of social housing by 2018?

Hon Dr NICK SMITH (Minister of Housing): Our first step was establishing the *Social Housing Fund of $141 million, which runs to July 2015. This has enabled over 800 new social housing homes to be built and has trebled the size of the sector. In Budget 2014 we extended this by a further $30 million. The second step was extending the income-related rent subsidy, which now totals over $700 million per year, to the community housing sector. The third step is facilitating the transfer of State houses to community providers. Yesterday we announced the establishment of an independent transactions unit to enable this to occur.

Alfred Ngaro: What are the benefits the Government expects from social housing providers?

Hon Dr NICK SMITH: The first benefit is the *wraparound services that specialist community housing providers are able to deliver. These are mental health services, disability, *Whānau Ora, family support, and budget advice. The second benefit is that the community housing providers are able to strengthen the amount that the Government gets from its housing investment—that is, they have to date produced a house for every $150,000. The third benefit is that the community housing

sector has a far better record of maintaining the quality of its housing stock than the State and council sectors have, which actually have a pretty poor track record.

Tertiary Institutions—Governance of Universities

8. Hon MARYAN STREET (Labour) to the Minister for Tertiary Education, Skills and

Employment: What was the problem that needed to be fixed when he proposed to reduce the size of University Councils in the Education Amendment Bill (No. 2)?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): New Zealand universities have been doing reasonably well for the last few years, but they are operating in an increasingly competitive and challenging international environment. We have therefore been working on a number of initiatives to help maintain and improve their competitiveness and their responsiveness to the needs of students and to improve the quality of the qualifications. Smaller, more agile university councils will help New Zealand universities meet strategic challenges, like adapting more quickly to the needs of a rapidly changing employment market, adapting to new challenges from changing technology in teaching and learning, and strengthening their international linkages much more quickly and effectively.

Hon Maryan Street: What evidence is there that university councils behave in a less *businesslike or efficient manner when their numbers are greater than 12?

Hon STEVEN JOYCE: In my previous answer, I outlined some of the areas where I think universities could respond more strategically and effectively—as I said, a faster adaptation to the needs of a rapidly changing employment market, a strengthening of their linkages internationally, and dealing with the changing technologies of teaching and learning. All of those things are very important. The member may or may not know it, but there has been a 40-year trend to reduce the size of governance bodies, whether it is in business, in *NGOs, in charities, or in any nature of organisation. That may have passed her by, but it has not passed me by.

Hon Maryan Street: What evidence is there from the comparable reduction in size of polytechnic councils that their financial performance has improved?

Hon STEVEN JOYCE: I am glad the member raises that because, actually, although it is a different change and, in fact, the polytechnic councils have dropped to a smaller size of eight people, what has resulted from that is a very significant improvement in educational performance for students, and also a very significant improvement in financial performance for the polytechnics. Also, a general endorsement by the polytechnic councils has given a significant and positive direction to the strategic management of the polytechnic sector. So I am glad the member raises it, because it is some of the evidence that supports this change.

Hon Maryan Street: I seek leave to table a graph from the Auckland University submission on this bill, which shows that the financial performance of polytechnics has actually declined since comparable changes—

Mr SPEAKER: Order! This is a submission that I understand is on the website and freely available. Is it a submission to a select committee that has been released? Is it a select committee submission?

Hon Maryan Street: It is to the select committee.

Mr SPEAKER: Yes—then it is publicly available.

Hon Maryan Street: Which constituent parts of existing university councils should, in his view, be excluded by the reduction in council membership—staff, students, alumni, Māori, Pasifika, business representatives, or other community interests?

Hon STEVEN JOYCE: My view is that that is a matter the universities can decide on. These are very large organisations with $7.4 billion worth of assets and 173,000 students being taught each year. I think we can trust them to decide what the *make-up of the councils could be under their constitutions.

Hon Maryan Street: Was the Vice-Chancellor of the University of Auckland, *Stuart McCutcheon, wrong when he said of the bill: “The State molested is what we see in this bill. A greater influence of the Minister, a lessening of the influence of other legal members of the institution, and something that will be to the detriment of our universities ...”; if he is wrong, why?

Hon STEVEN JOYCE: I think, with respect to Stuart, the use of the word “molestation” in relation to university councils was way over the top. We are talking of an adjustment in university governance; we are not talking molestation of universities by the State. That sort of hyperbole does him no justice whatsoever. The reality is that these are very moderate changes that will help boost the ability of our universities to respond strategically to a more competitive international environment.

Primary Growth Partnership—Reports

IAN McKELVIE (National—Rangitīkei): My question is to the Minister—[Interruption]

Mr SPEAKER: Order! The conversation can cease. I will allow Ian McKelvie to ask his question.

9. IAN McKELVIE (National—Rangitīkei) to the Minister for Primary Industries: What reports has he received on the economic impacts of the Primary Growth Partnership?

Hon NATHAN GUY (Minister for Primary Industries): Yesterday an independent report by the *New Zealand Institute of Economic Research was released, looking at the economic impacts of the *Primary Growth Partnership scheme. It estimates that these projects funded jointly by industry and the Government could add up to $11.1 billion per year to New Zealand’s *GDP by 2025. This will be a major step forward for our goal of doubling primary sector exports by 2025, and it shows the importance of investing in research and development in our most successful industries. This will mean more jobs and exports and a major boost to regional economies, as well as having environmental and safety benefits.

Ian McKelvie: What are some of the wider benefits that Primary Growth Partnership projects will deliver?

Hon NATHAN GUY: The 18 programmes announced cover a broad range of industries, including red meat, dairy, forestry, and fishing, right through to the honey, wine, and avocado industries. Some of these projects will deliver environmental benefits, such as the *Precision Seafood Harvesting project. This allows whole fish to be caught live while avoiding smaller and unwanted fish. *Ballance Agri-Nutrients is investigating ways to reduce the amount of nitrates and phosphorous leaching into waterways. And, of course, the *steeplands harvester machine will have long-term benefits for health and safety by having fewer forestry workers holding a chainsaw on dangerous slopes.

Ian McKelvie: Why is the Government supporting research and development in the primary industries?

Hon NATHAN GUY: That is a very good question. It is because the primary industries are the backbone of the New Zealand economy. They generate around $36 billion a year and make up around 70 percent of our merchandise exports. Science and innovation are key drivers of economic growth and international competitiveness. Boosting productivity in New Zealand’s primary industries will mean more exports, more jobs, and, importantly, an improved standard of living for all New Zealanders.


10. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Justice: Does she agree with Suzanne Snively from Transparency International that there is “an awful lot of complacency” about corruption in New Zealand?

Hon JUDITH COLLINS (Minister of Justice): New Zealand has been named by *Transparency International as being one of the least corrupt countries in the world for 8 years in a

row. I agree with the reported comments. I also agree with the view that corruption requires dishonest intent or fraudulent conduct, similar to that of a trusted employee who steals from their employer.

Grant Robertson: Does she think that this complacency is made worse by a Government Minister on a taxpayer-funded visit to China manipulating her programme to include the two directors of her husband’s company, which happens to be a major donor to the National Party, into three events on that trip and there not being any real sanction for that behaviour from the Prime Minister?

Hon JUDITH COLLINS: I do not agree with that question, and the answer is no.

Grant Robertson: How does a Government contribute to reducing complacency about corruption when it has a Minister who advocates for friends using ministerial letterhead, a Minister who seeks to intervene with the police on behalf of a donor to the National Party, a Minister who orchestrated taxpayer-funded visits to her husband’s company, and is propped up by someone who has been described by Crown Law as having manipulated and engineered donations to avoid declaring them?

Hon JUDITH COLLINS: That last reference is to a matter that is before the court, and that member should know that that is quite out of order.

Hon Gerry Brownlee: Come on, Rocky, have another go.

Grant Robertson: Try this one, Gerry. Noting her own ministry’s fact sheet on bribery and corruption, which lists abuse of one’s position of power as a form of corruption, is she concerned that two Government Ministers bullied the Māori Party into not changing its vote on the paid parental leave bill last night, despite—

Mr SPEAKER: Order! I will hear from Gerry Brownlee before I rule, but those sorts of allegations bring this whole House into disrepute.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Mr Te Ururoa Flavell has very generously put out a statement making clear the circumstances that led to the confusion last night. I think for Mr Robertson to make those allegations here is completely out of order. It is somewhat typical, but completely out of order.

Mr SPEAKER: And I am ruling the question out of order.

Grant Robertson: How is it consistent with a Government that says it wants to reduce corruption and increase transparency when its Ministers are prepared to tell a Māori Party MP they have to vote against a bill—

Mr SPEAKER: Order! I ruled the earlier question out of order; I am doing the same on that one.

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

Mr SPEAKER: Order! In case I need to remind the House, this is a point of order. It will be heard in silence.

Grant Robertson: I would ask why it is that I am unable to ask a question that is legitimately to the Minister of Justice about the question of corruption and bribery—and I quoted from a Ministry of Justice fact sheet, which describes that as abuse of one’s position of power—and I am not allowed to ask questions about Ministers who bullied somebody—

Mr SPEAKER: Order! The member will resume his seat. The reason it was ruled out of order was the imputation that was contained in both questions. That is the end of the matter.

Emissions Trading Scheme—Unit Trading

Dr KENNEDY GRAHAM (Green): My question is to the—[Interruption]

Mr SPEAKER: Order! Allow Dr Kennedy Graham to ask his question.

Dr KENNEDY GRAHAM (Green): My question is to the *Minister for Climate Change Issues. Has he asked for any advice on the potential profit made by companies—[Interruption]

Mr SPEAKER: Order! I would be reluctant to ask a member to leave the House at this stage of proceedings, but I have asked the House to give this member a fair crack at asking his question. If

these interjections continue, then members will be leaving the Chamber. I invite the member to restart his question.

11. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Has he asked for any advice on the potential profit made by companies, which were given free New Zealand units under industrial allocations in the emissions trading scheme, submitting cheaper offshore units instead to meet their liabilities; if so, what was it?

Hon TIM GROSER (Minister for Climate Change Issues): No, because unlike non-industrial participants of the emissions trading scheme, the industrial participants in the scheme do not have the luxury of opting in and opting out and opting in again to the scheme.

Dr Kennedy Graham: Is he aware that *Methanex, which, for example, received an allocation of 300,000 New Zealand Units* in 2012, could have submitted cheaper international units instead of those New Zealand Units, thereby profiting at the taxpayer’s expense to the tune of $1 million?

Hon TIM GROSER: This goes to the heart of the issue. The scheme is designed to allow participants in the scheme to minimise the cost of meeting their obligations. It is entirely possible that Methanex may have found a way to minimise its costs. From the end of May onwards the situation will change, when all participants will have to use New Zealand Units.

Dr Kennedy Graham: When he said yesterday in answer to a question that he was happy for companies “to maximise their fiscal position” under the emissions trading scheme, was he talking about the possibility of *New Zealand Steel making $3 million because his Government refuses to stop the flow of cheap credits into New Zealand?

Hon TIM GROSER: This is essentially relitigating exactly the same point. The reality is that we expect companies to behave like rational economic actors. If the way they can meet their obligations involves using certain types of units that meet the standards of environmental integrity that we have set, that is exactly what we would expect to happen.

Dr Kennedy Graham: Does he think New Zealand families will be equally as happy as he is that these big companies are profiting from their pollution by playing the market?

Hon TIM GROSER: These companies are minimising their costs of meeting their obligations. They are still obligations they have to meet. New Zealand will be better served by people who pursue low-cost abatement strategies.

Moana Mackey: Does he appreciate that New Zealand met its international climate change obligations in the first commitment period of Kyoto only because of forestry; if so, why is he unfairly targeting the post-1989 foresters whilst allowing everyone else to continue to engage in arbitrage, with access to these cheap units?

Hon TIM GROSER: We are not unfairly targeting forestry; we were removing a privilege that only post-1989 Kyoto foresters had. They were making money at the taxpayer’s expense. I think it is time the member started to think of the taxpayers she is meant to represent.

Moana Mackey: In that case, why did he not simply stop post-1989 foresters from being able to deregister and reregister in a single reporting period, which would have avoided capturing forest owners who entered into the emissions trading scheme in good faith but now want to exit because the economics are not there and who have no intention of reregistering to game the system?

Hon TIM GROSER: First of all, if post-1989 Kyoto foresters want to stay in the scheme, they can, until the end of the true-up period, or, rather more precisely, until the end of May 2015, continue to use cheaper international units if they wish to, along with other participants. What we have stopped is a *money-go-round that allowed them to make money at taxpayers’ expense.

Budget 2014—Exclusive Economic Zone

12. JACQUI DEAN (National—Waitaki) to the Minister for the Environment: What recent announcements has she made about funding to support implementation of the EEZ legislation?

Hon AMY ADAMS (Minister for the Environment): In Budget 2014 we announced that the Government is investing an additional $3.2 million to support the implementation of the exclusive

economic zone legislation. This funding is to support the *Environmental Protection Authority continuing to establish this new and specialist regulatory function and to ensure that adequate funding is immediately available to support monitoring and enforcement functions.

Jacqui Dean: How will the funding help to support public involvement in oil and gas activities in the exclusive economic zone?

Hon AMY ADAMS: In addition to monitoring, the funding will also help the Environmental Protection Authority to raise awareness of the exclusive economic zone legislation’s requirements, so that industry participants, iwi, councils, and local communities fully understand the new environmental regime. Up until now the public has never had the right to have a say on activities taking place in the exclusive economic zone. Now, before an oil company can make a single dollar of profit, it has to go in front of the people of New Zealand and make sure the community can be heard in a full, robust process.


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