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Questions and Answers - December 2

QUESTIONS TO MINISTERS


Household Savings and Debt—Reports 1. IAN McKELVIE (National - Rangitīkei) to the Minister of Finance: What reports has he received showing New Zealand households are using rising incomes to save more and pay down debt faster?

Hon BILL ENGLISH (Minister of Finance): The household economic survey for the year ended June 2014 shows that New Zealand households are paying down mortgages faster, with a 14.8 percent increase in mortgage principal repayments in the 2 years to June. These faster principal repayments explain most of the increase in weekly mortgage costs. New Zealand households have been paying down debt since early 2009, and debt servicing costs as a share of household income are now 38 percent below the peak in September 2008, reflecting a sharp fall in interest rates. As I said last week, national accounts data shows that New Zealand household savings rates have now been positive for 5 consecutive years. This is the first time this has happened since 1994.

Ian McKelvie: How much have average incomes and wages increased for New Zealand households over the past 2 years, and what is driving this?

Hon BILL ENGLISH: According to the survey, in the last 2 years to June 2014 there was an average overall increase of 9.1 percent in average incomes and wages for households. This is driven by a combination of more people in the labour force, more hours worked, and wage increases. Wages and salaries were 7 percent higher over those 2 years, driven in part by a higher minimum wage and increases in New Zealand superannuation. This compares with inflation of 2.3 percent in the 2 years to June—that is, wages and salaries are 7 percent higher and inflation is 2.3 percent in the 2 years to June.

Grant Robertson: Given the Minister’s detailed knowledge of the survey, can he say whether it shows that housing costs are rising faster than incomes?

Hon BILL ENGLISH: I think it does show that, which is why the Government is taking an assertive approach to ensuring more land supply in our metropolitan markets, and is also reforming our State housing sector to provide more social and affordable housing. Housing costs have been rising faster than income for about 20 years. This has been one of the principal drivers of inequality in New Zealand, and this Government is setting out to change that.

Ian McKelvie: How do increases in incomes and wages for New Zealand families and households compare with the cost of housing? (uncorrected transcript—subject to correction and further editing)

Hon BILL ENGLISH: Statistics New Zealand reports that total housing costs increased from $256 per week to $284 per week in the 2 years to June, or 11 percent. By comparison, average annual household incomes increased by $141 per week before tax. Higher household costs were driven in part by higher council rates, interest rates rising off 50-year lows, and higher average weekly rental payments, which were up $17 to $290 per week. The report notes that more than one in three households that rent spends over 30 percent of its income on housing costs. This is part of a long-run trend in which people on lower incomes are seeing housing costs consume an increasing proportion of their incomes. That is why, starting 3 years ago, the Government set about to change our planning system, our housing supply, the regulation of our housing markets, and State housing—because we must turn around this 30-year trend.

Ian McKelvie: What steps is the Government taking to support further income and wage growth and limit increases in the cost of living?

Hon BILL ENGLISH: The Government is following the example of New Zealand households by committing to responsible management of its expenditure, maintaining a path to surplus, and paying down debt. This helps to keep interest rates lower for longer, to take pressure off the exchange rate, and to support business investment and job growth. Our goal is to maintain moderate growth through this economic cycle, and we are on track to achieve this with projected economic growth of 2 to 3 percent over the next 4 years. In the last year there were 72,000 more jobs, and an average wage growth of 2.3 percent, which was ahead of inflation at 1 percent.

Grant Robertson: Is it correct that the household economic survey shows that the average household incomes of the bottom 20 percent grew by 2.9 percent in the past year and that that of the top 20 percent grew by 14.7 percent in the past year, and does this not demonstrate that inequality is widening in New Zealand under his watch?

Hon BILL ENGLISH: No, it does not.

Hon Phil Goff: No? Yeah, right!

Hon BILL ENGLISH: Well, I invite the member to look at the Child Poverty Monitor that was published yesterday or today, which shows a number of measures of income distribution, all of which have slightly improved in the last couple of years. It is simply not correct to say that income inequality is getting worse; in fact, it is getting mildly better.

Prime Minister—Communications with Press Gallery 2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: How many of the 46 journalists currently holding full Press Gallery accreditation had he advised of his new cellphone number by the end of October, after his number was changed following the Whaledump document release?

Rt Hon JOHN KEY (Prime Minister): I sent my new phone number to the media numbers that were programmed into my phone that typically contact me by text. That group includes many press gallery contacts as well as media contacts outside the gallery, and I am unable to tell the member exactly how many were notified by the end of October.

Dr Russel Norman: Is the reason he said that he had given the number to “every member of the media” because he was trying to justify the fact that he had given it to Cameron Slater?

Rt Hon JOHN KEY: No.

Mr SPEAKER: Sorry, I did not even catch that.

Rt Hon JOHN KEY: No.

Dr Russel Norman: Did he text Cameron Slater his new cellphone number, or did he advise him of it in some other way?

Rt Hon JOHN KEY: I did the same thing with Mr Slater as I did with every other person. I sent them a text. (uncorrected transcript—subject to correction and further editing)

Dr Russel Norman: So is the Prime Minister saying—just to be clear—that the way Mr Slater got the Prime Minister’s new cellphone number was that the Prime Minister, off his own bat, texted Mr Slater his new cellphone number?

Rt Hon JOHN KEY: Yes, I sent a text message to all of the people. As I have said, I updated people, and the reason I did that, of course, was that I had to change my phone number because an illegal hacker had decided to put my phone number on the internet. That is the illegal hacker that the member seems to support.

Dr Russel Norman: Why did he ensure that Cameron Slater had his phone number but did not give it to senior political reporters such as the political editor at Radio Live?

Rt Hon JOHN KEY: Well, I gave it to the people whom I have had text conversations with in the past from the gallery. That is not all of the gallery but it is a fair number. I gave it to other people who are in the social media. I can say I did not give it to Kim Dotcom, as, I am sure, that member probably has Mr Dotcom in his mobile phone from the time he went up there for lunch. That was the time when his high horse he parked up there got Ebola.

Dr Russel Norman: Is the reason he responded to texts from Cameron Slater over the last few months but did not respond to texts from press gallery journalists because Cameron Slater is a friend or because he fears Cameron Slater?

Rt Hon JOHN KEY: In answer to the last part of the question, I, for the most part, actually do answer the text messages I get from press gallery journalists. Sometimes they are reporting about what a muppet that member makes of himself when he asks me questions.

Chris Hipkins: I raise a point of order, Mr Speaker. Is it now acceptable for members to use names of other members in the way that was just done in that answer? Because that exact word has been ruled out of order by Speakers in the past.

Mr SPEAKER: I am not ruling the word out of order; I am certainly saying that it is not helpful to the order of the House for the answer to be toned in that way by the Prime Minister. But I took particular note of the question, which suggested that he may have been acting in fear, and that determined my judgment as to whether the answer was giving some political playback to the way the question was asked in the first place.

Dr Russel Norman: Considering that Mr Slater has verbally abused two dead boys, and accused the victim of an alleged sexual attack of making it up, how disgusting would Cameron Slater have to be before the Prime Minister severed all contact with him?

Rt Hon JOHN KEY: I have made it quite clear in the past that I do not condone all of the statements, blogs, or actions taken by Mr Slater. But if the member wants to believe that the people who make outlandish or aggressive statements are limited to the right, then maybe he might want to check out “Bomber” Bradbury’s comments made on the left.

Dr Russel Norman: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I just need some assistance from—[Interruption] Order! I need some assistance from members to my left. This is a point of order.

Dr Russel Norman: The question was: will the Prime Minister sever all contact with Cameron Slater? I would like an answer to that question.

Mr SPEAKER: I invite the member to go back carefully and look at the Hansard when it is printed. That was not the question that the member asked.

Prime Minister—Communications with Blogger and Report on SIS Release of Information 3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by any of his statements last week about the Gwyn report and about his relationship with Cameron Slater?

Rt Hon JOHN KEY (Prime Minister): Yes. (uncorrected transcript—subject to correction and further editing)

Andrew Little: Does he stand by his statement that he “did not mislead people” when he said that Cameron Slater “… sent me a text one time and I can’t remember when it was”, given they had exchanged texts the evening before?

Rt Hon JOHN KEY: Yes.

Andrew Little: Why has he maintained a political relationship with Cameron Slater since the release of Dirty Politics?

Rt Hon JOHN KEY: For the most part I think I have made the point that I have not. I have not had a proactive relationship with him. [Interruption]

Mr SPEAKER: Order! The Leader of the Opposition wants to ask a further supplementary question.

Andrew Little: In light of Bill English’s statement that Dirty Politics “isn’t the style of politics I participate in”, why does he think Mr English is distancing himself from the Prime Minister’s style of politics?

Rt Hon JOHN KEY: I think Mr English is quite correct. We do not undertake that on this side of the House, but if I could just take a moment to catalogue the long list from the left. Shall we start with the H-Fee, or shall we go to some of the other actions that we have seen, like Phil Goff leaking reports to try to get a better spin. Or should we go through to the person from the Labour Party—

Mr SPEAKER: Order! I do not think that answer is actually going to help the order of the House.

Andrew Little: Why does he delete records of his text conversations with Cameron Slater? Is it standard practice to delete records of his smear machine, as revealed in both the Gwyn and Chisholm reports?

Rt Hon JOHN KEY: I do, on an ongoing basis, delete all of my text messages. I do that for a very good reason because, amongst everything else, they would clog up my phone, but for security reasons, it is in case I lost my phone.

Andrew Little: In light of his statements this morning that he has nothing to fear from Cameron Slater releasing their communications, will he now request that Mr Slater release those records?

Rt Hon JOHN KEY: No. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Now I have got trouble with noise from my right-hand side, as Mr Little attempts to ask his supplementary question.

Andrew Little: Why, a week on from the inspector-general’s report, has it taken this long for the Prime Minister to admit his true political relationship with Cameron Slater; and why will he not just front up and tell New Zealanders straight what he has been up to in his office?

Rt Hon JOHN KEY: I have been clear. As I said last week, it is not a proactive relationship. The member obviously has real issues with it, so here is a little question for him: has he made it quite clear to some members of his caucus? Has he made it quite clear to his acting chief of staff? Has he made it quite clear to all members of the Labour Party that they should have no contact with Mr Slater? And can he answer this question: when was the last time that they did? [Interruption]

Mr SPEAKER: Order! [Interruption] Only if I call the honourable member to do so.

Prime Minister—Statements 4. Rt Hon WINSTON PETERS (Leader - NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Rt Hon Winston Peters: Is it his position that Mr Goff should not have, as the Prime Minister has stated, leaked the Gwyn report? [Interruption]

Mr SPEAKER: Order! Could we ask the Rt Hon Winston Peters to repeat the question?

Rt Hon Winston Peters: Is it his position that Mr Goff should not have, as the Prime Minister has stated, leaked the Gwyn report? (uncorrected transcript—subject to correction and further editing)

Rt Hon JOHN KEY: Yes, that would be my view, because that was the confidentiality agreement that surrounded it.

Rt Hon Winston Peters: Is it his position that this alleged leak is a matter for police investigation; if so, why?

Rt Hon JOHN KEY: No, it is a matter for the inspector-general.

Rt Hon Winston Peters: If that is the case, why, then, was he prepared as Prime Minister to again take on a Minister who had been stood down, namely Peter Dunne, who leaked four times from the Intelligence and Security Committee?

Rt Hon JOHN KEY: That is not proven. The member is making it up, as he often does. [Interruption]

Mr SPEAKER: Order! We are breaking for Christmas next week, not this week.

Rt Hon Winston Peters: If that is a fact, then is it not also true that he has one set of standards for him and his colleagues and an entirely different and higher one for everybody else?

Rt Hon JOHN KEY: No, I have the same set of standards. What is quite clear is that Mr Goff leaked the report. In fact, he did not own up to that on day one. He forgot that, but he eventually remembered it a day later. He did that, as the inspector-general herself has said, because he wanted to get a favourable spin or coverage—those were the words. Unfair coverage was put on this side of the House. See, it is an interesting scenario, is it not? It is an interesting scenario when you go out and leak a report before it is due out to try to get favourable coverage because you know it will not stack up. Unfortunately, it backfired.

Economic Growth—Role of Skilled Workers 5. MELISSA LEE (National) to the Minister for Tertiary Education, Skills and Employment: What reports has he received on the importance of skilled workers in ensuring the New Zealand economy continues to grow?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I have received a number of reports. New Zealand’s unemployment rate is steadily declining and is now the lowest it has been since before the global financial crisis—in fact, the South Island unemployment rate is now just 3.4 percent. Although this is positive news for the New Zealand economy, it is starting to lead to emerging skills gaps. To help fill these gaps, we are training more people, and recently we have held our first two job fairs in Australia to attract expat Kiwis and skilled Aussies to New Zealand. Around 3,000 people have attended those. I have also seen international travel and migration statistics for October, which show positive net arrivals from Australia for the first time since December 1993. What is clear is that more people are voting with their feet and returning home to work in a growing economy.

Melissa Lee: What is the Government doing to encourage new job creation, and how does that contrast with other proposals he has seen advocated?

Hon STEVEN JOYCE: This is a Government that is very focused on creating and growing more jobs and more work for New Zealanders, and 159,000 new jobs have been created since Budget 2011 through a comprehensive package that includes 90-day trials, the starting out wage, investment in key infrastructure projects, and making sensible changes to the Resource Management Act to speed up consenting. That contrasts with other proposals I have seen that would destroy jobs: abolishing 90-day trials and the starting out wage, big increases to compulsory KiwiSaver rates, five new taxes, and an expensive emissions trading scheme. Not surprisingly, those positions were all advocated by the Opposition parties.

Melissa Lee: What other recommendations has he received on how to create jobs?

Hon STEVEN JOYCE: The most recent suggestion I have seen is for the establishment of a discussion group of politicians to investigate important and pressing issues such as: “What is work? Who does work? How is work changing? What will work be?”. These are undoubtedly important academic questions! Of course, in the meantime businesses and employees are getting on and (uncorrected transcript—subject to correction and further editing) adapting to a changing and growing economy. Nevertheless, I understand that the discussion group has been successful. It is creating a job for one person, or at least something to keep him busy. This person, of course, is lifetime politician, student politician, student, noted workaholic, and leadership aspirant Grant Robertson.

State Housing—Suitability of Housing Stock 6. PHIL TWYFORD (Labour—Te Atatū) to the Minister responsible for HNZC: Does he agree with his statement on state houses: “one-third of these houses are in the wrong place or are the wrong size”?

Hon BILL ENGLISH (Minister responsible for HNZC): Yes. As recently as just last month Housing New Zealand issued a press release that said: “around one third of our housing stock is in the wrong place, wrong configuration or is mismatched with future demand.”

Phil Twyford: Did he sign off the Housing New Zealand annual report 2014 that says, and I quote, that 96 percent of State houses are in the right places to meet demand and 89 percent have the right number of bedrooms; if not, why is he deliberately trying to mislead the public when he knows the real figures do not support his State house sell-off?

Hon BILL ENGLISH: In response to the member raising that point, I went to find out exactly what was involved. It turned out that Housing New Zealand counted those people who had asked for transfers and subtracted them from 100 percent. So 96 percent of Housing New Zealand clients did not ask for a transfer, and it was from that that Housing New Zealand derived the statement that everything about its 65,000 houses is right. Housing New Zealand has since retracted that statement because it was wrong.

Phil Twyford: I raise a point of order, Mr Speaker. I asked the Minister whether he signed off the Housing New Zealand—

Mr SPEAKER: Order! The member asked more than one question in his question. If he wants to make progress, he might have another opportunity with a supplementary question.

Jami-Lee Ross: What steps is Housing New Zealand taking to reduce the mismatch of housing stock so that the needs of more vulnerable people and families can be met?

Hon BILL ENGLISH: Housing New Zealand has quite a major task because the houses it owns are misaligned with demand. For instance, the fastest-growing demand is for one and two-bedroom houses. To meet the demand, about 25 percent of Housing New Zealand’s stock should be one and two bedrooms; actually, only 9 percent are one and two bedrooms. However, it has twice as many three-bedroom houses as it needs. So we have people who live on their own currently in three-bedroom houses, sometimes on quite large sections, and it is not appropriate. Housing New Zealand has an ongoing programme of sales, reinvestment, and redevelopment. In the 5 years to 2013-14, it spent around $1 billion on maintenance, purchased or built 1,780 properties, and disposed of 3,179 properties, including some affected by the Canterbury earthquakes. I expect that this programme of sales, reinvestment, and redevelopment will need to accelerate, because with our $18 billion worth of houses we still cannot meet very serious housing need today that should be able to be accommodated. So we are working with the Minister for Social Housing and with Housing New Zealand to speed up the rate of change.

Phil Twyford: Can he explain to the public how selling off one-third of State houses to community housing providers will somehow magically ensure that they become in the right place and of the right size?

Hon BILL ENGLISH: Of course, that is not the policy. The policy involves changes that have been through Parliament to set up the Ministry of Social Development as the purchaser of social housing, which ultimately, for instance, will enable providers and tenants to choose the appropriate house for their characteristics in a much more refined way than happens at the moment. The fact is that Housing New Zealand has a lot of houses that are currently unsuitable to meet demand and it will sell some and will redevelop others, such as the development on the North Shore, where it is (uncorrected transcript—subject to correction and further editing) converting 11 current State houses into 70 new units. That is all being done by a developer. The Government will keep 20 of those as social houses and the rest will be sold to the market.

Phil Twyford: Is the fact that, as Housing New Zealand says, 96 percent of State houses are in the right places to meet demand and 89 percent have the right number of bedrooms the real reason that the Government has scaled back and now shut down its much, much-hyped Right Size project, which promised to build thousands of new modular bedrooms and larger houses for State house tenants?

Hon BILL ENGLISH: The member’s assertions are wrong, because 96 percent of Housing New Zealand houses are not in the right place and of the right size; in fact, a third of them are the wrong size, in the wrong place, and in poor condition. Secondly, with the Right Size project, my understanding is that it is partially completed, but due to a combination of costs and planning requirements it is finding that the original scope of the project may not be able to be executed, and it is being revised.

Phil Twyford: I raise a point of order, Mr Speaker. I seek leave to table a written parliamentary question that is not yet public, which explains how the Government has cut back and shut down the Right Size project.

Mr SPEAKER: Order! The matter has been described. On the basis that it has not been published, I will put the leave. Leave is sought to table this answer to a written parliamentary question. Is there any objection to that being tabled? There is. It will not be tabled.

Housing—Supply 7. ALFRED NGARO (National) to the Minister for Building and Housing: What does the latest building consents data and National Construction Pipeline report show about the increased level of residential activity over the past year, particularly in Auckland and Christchurch?

Hon Dr NICK SMITH (Minister for Building and Housing): Residential building is booming, with over 24,000 consents issued in the last year, growth in Auckland of 31 percent, and in Christchurch of 89 percent. We have exceeded the Auckland Housing Accord target of 9,000 homes, with over 11,000, and the number of apartments built in the last year in Auckland is 1,974, a 150 percent growth over the previous year. In Christchurch we are now building houses at the rate of over 4,000 houses per year, which is more than three times the historic average. The National Construction Pipeline report is projecting $50 billion of residential housing over the next 3 years, which is the largest investment in housing in New Zealand’s history.

Alfred Ngaro: What progress has the Government made in Christchurch in addressing the major building consenting problems that led to the city council losing its accreditation?

Hon Dr NICK SMITH: The Government’s intervention in Christchurch building consenting has been successful, with changes in leadership, recruitment of new building consenting staff, and investment in new information systems. The latest report I have received from my ministry is that re-accreditation of Christchurch City Council is only weeks away. I am encouraged that over 4,000 building consents have been successfully issued in the last year, which is more than three times the historic rate. This is a huge boost for Christchurch’s housing recovery.

Alfred Ngaro: How are the Government’s housing reforms helping achieve an increase in supply and what further steps is the Government planning?

Hon Dr NICK SMITH: The process of converting land to housing takes six steps. The first is getting the land rezoned. The special housing areas policy has enabled us to do 80 of those, covering an area of over 4,000 hectares. The next step is the resource consents for subdivision: 41 of those have been approved for 477 new homes in those special housing areas and there are 63 further applications in process for another 3,600. Of course, that special housing legislation expires in 2016 and that is why the Government’s Resource Management Act reforms will be a crucial part. Of course, the Government is also introducing the KiwiSaverHomestart loans scheme. That will enable tens of thousands of New Zealanders to get a greater amount of support from Government (uncorrected transcript—subject to correction and further editing) for putting together a deposit for a home and, of course, we are doubling those grants for new homes.

Phil Twyford: Will he finally accept that even after he has gazetted 80 special housing areas and thousands of new sections and subdivisions, only five houses have been built in 12 months; that Auckland land bankers are not intimidated by all his press statements and photo ops and prefer to sit and watch their land values go through the roof; and is he ready to accept now that the only option left is to adopt Labour’sKiwiBuild policy and actually build affordable houses for people to live in?

Mr SPEAKER: I call the Hon Nick Smith—any of those three supplementary questions.

Hon Dr NICK SMITH: I am delighted the member has asked me about Labour’s KiwiBuild’s policy. That was resoundingly rejected by the voters of New Zealand at the election and I am not surprised why, because while Labour had promised all the way through for 3 years that it was going to build 10,000 houses per year, he actually admitted in the last week that it would do just 600 in the first year. I also note that since Labour announced the KiwiBuild policy the reforms that this Government has announced have enabled us to grow from 12,000 houses being built per year to 24,000 houses being built by the private sector. I think we would all agree that is a much better policy.

Agricultural Land Use—OVERSEER Nutrient Management Tool 8. RICHARD PROSSER (NZ First) to the Minister for Primary Industries: Does he stand by all his statements in relation to the Nutrient Management Tool, OVERSEER?

Hon NATHAN GUY (Minister for Primary Industries): Yes.

Richard Prosser: Since the Minister stated last week that the OVERSEER experience of New Zealand’s largest fertiliser cooperative, Ravensdown, is anecdotal, is that also how he would describe the concerns of hundreds of dryland farmers in the Hurunui-Waiau zone committee, who met in September regarding stringent nutrient management limits that have been determined using OVERSEER?

Hon NATHAN GUY: No, what I will say is that the member needs to be aware of the chief scientific officer, Ants Roberts, who works at Ravensdown, when he said that some compromises and assumptions are needed to be made in running any model like OVERSEER on complex farm systems.

Richard Prosser: Even accepting a recent apology, does the Minister condone Environment Canterbury commissioner David Bedford for using expletives towards farmers after they questioned nutrient limits based on OVERSEER, or are reports of such abuse also anecdotal?

Hon NATHAN GUY: Well, I do not have any ministerial responsibility for those comments. What I will say is that OVERSEER has been around for 20 years. It is evolving. It is improving all the time. It is an important nutrient management tool, and we have got regional councils involved working with the Ministry for Primary Industries to ensure that we are focused on the national guidelines and how OVERSEER is managing nutrients going forward.

Richard Prosser: Given that respected soil scientist Dr Doug Edmeades has summarised that type A errors in OVERSEER could be in the range of minus 40 percent to plus 60 percent and that type B errors could be in the plus or minus 30 percent range, will the Minister assure farmers that he will ensure Budget funding to fully and properly calibrate OVERSEER?

Hon NATHAN GUY: There is about $1.6 million invested in OVERSEER at the moment. The three owners are involved—that is, the Fertiliser Association of New Zealand, the Ministry for Primary Industries, and AgResearch—in making contributions in kind. They are currently looking at the funding model going forward, and there are a variety of funding options available as demand picks up.

Richard Prosser: I seek leave to table two documents. The first is the 2013 evidence of Dr Doug Edmeades at the hearing of submissions on the proposed Canterbury land and water regional forum. (uncorrected transcript—subject to correction and further editing)

Mr SPEAKER: And the second document?

Richard Prosser: The other is the 2013 Foundation for Arable Research report entitled A peer review of OVERSEER in relation to modelling nutrient flows and arable crops. [Interruption]

Mr SPEAKER: Order! It is for the House to decide. On the basis they are not easy for members to obtain, I will put the leave and members can decide. Leave is sought to table those two documents. Is there any objection? There is none. They can be tabled.

Corrections, Minister—Statements 9. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections: Does he stand by all his statements from Question Time on Wednesday, 26 November?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Yes.

Kelvin Davis: Does he stand by his statement that Phillip Smith’s obtaining of a passport was legitimate?

Hon Peseta SAM LOTU-IIGA: Yes. My understanding of the Passports Act is that prisoners do not automatically lose the right to be issued with a passport. As I have already said in this House, that decision is a matter for the Minister of Internal Affairs.

Kelvin Davis: Why, then, does he believe the passport was issued legitimately when Minister Dunne has said it would not have been approved, and section 4 of the Passports Act provides that passports should not be issued to people under a sentence that requires them to remain in New Zealand?

Hon Peseta SAM LOTU-IIGA: With respect to the first part of that question, you will have to ask Peter Dunne that.

Kelvin Davis: When the police said that Mr Smith had help in obtaining his passport, was the help they were referring to from the Department of Corrections in that it apparently legitimately helped him obtain a passport?

Hon Peseta SAM LOTU-IIGA: I do not agree with what the member has just said in terms of what the police have said. [Interruption]

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

Kelvin Davis: When the police said Smith had help in obtaining his passport, was the help they were referring to from the Department of Corrections in that he could apparently legitimately obtain a passport?

Hon Peseta SAM LOTU-IIGA: No. The Department of Corrections did not help him obtain a passport.

Kelvin Davis: Will his utter confusion about the legitimacy of Smith’s passport be one of matters looked into in the review of the failures of interdepartmental communication?

Mr SPEAKER: Very marginal, but I will allow the Minister to answer.

Hon Peseta SAM LOTU-IIGA: As I have said in this House already, the Government inquiry will deal with matters between agencies.

Economic Inequality—Commentary 10. JAN LOGIE (Green) to the Minister for Social Development: Does she agree with paediatrician Professor Innes Asher, who is calling on the Government to “lift incomes for those in paid work and those supported by the income support benefits”?

Hon ANNE TOLLEY (Minister for Social Development): Yes, and although the number of children living in hardship has dropped, this Government is very focused on lifting the incomes of all New Zealanders. That is why our priorities are on growing the economy and getting people off welfare. According to the Statistics New Zealand household economic survey, household incomes have risen 9 percent, and we also have 1,600 people going off welfare and into work every week. For low-income families we are spending, for example, $2.5 billion a year on Working for Families, (uncorrected transcript—subject to correction and further editing) $4.4 billion on benefits, and $1.9 billion a year on housing assistance. We have maintained that support throughout the recession and the Canterbury earthquakes, when finances were extremely tight and other countries were introducing austerity measures. Plus we are funding programmes like breakfasts in all schools that want it, social workers in all low-decile schools, and extra support for budgeting services. Yes, there are New Zealanders doing it tough, and the Government continues by making sure that the billions we already spend each year on supporting families are being spent in the most effective way.

Jan Logie: Is the Minister concerned that even with all of that beneficence, these children are still living in poverty because the basic benefit levels are set too low?

Hon ANNE TOLLEY: I do not think there is a member in this House who is not concerned and who does not want to see every New Zealand child live a full and successful life. But the premise that that member puts into her question is incorrect.

Jan Logie: Does she accept it is not possible or even appropriate for all parents to be in paid work—for example, parents going through chemotherapy, parents caring for severely disabled children, or parents traumatised by violent relationships?

Hon ANNE TOLLEY: Yes, that is correct, and our benefit system supports exactly those people throughout those troubles.

Jan Logie: Why will she not set aside ideology and lift the incomes of the parents who cannot work, so that no New Zealand child has to live in poverty, which is what her current policy settings are subjecting them to?

Hon ANNE TOLLEY: I wish it was that easy, actually. The issues around poverty are complex and numerous, and take a great deal of effort over a long period of time. And in the very best of times, under the previous Labour Government, those children living in poverty hardly moved at all. So to expect us, after recovering from an economic recession, to work miracles in a short period of time—this Government is determined to work to ensure that all New Zealand children can enjoy a full life.

Carmel Sepuloni: Will she consider lifting the abatement rate from $100 to $150 as a way in which to lift incomes for those who are in paid work and supported by income support benefits; if not, why not?

Hon ANNE TOLLEY: This Government is looking at a range of measures to address some of the issues that have been raised in the Child Poverty Monitor released today, and in the work that this Government has been doing. But you also have to be careful that you maintain the advantage for people who are working, and that is why this Government is focused so much on getting people back into work—1,600 people a week leaving the benefit to get back into work has to be better for their families in the long term.

Lending Practices—Initiatives 11. KANWALJIT SINGH BAKSHI (National) to the Minister of Commerce and Consumer Affairs: What recent announcements has the Government made regarding responsible lending?

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): Recently I released a draft of the Responsible Lending Code for consultation. The code will give lenders guidance on how to implement the new responsible lending obligations set out in the Credit Contracts and Consumer Finance Amendment Act. It will promote the best practices that lenders should follow in order to comply with the binding lender responsibility principles.

Kanwaljit Singh Bakshi: How will the Responsible Lending Code help consumers when borrowing money?

Hon PAUL GOLDSMITH: The code seeks to provide consumers with better access to information and better protection from the predatory practices of loan sharks and unscrupulous pay-day lenders. At the same time, we are conscious of the need to provide sufficient flexibility to avoid imposing unnecessary compliance costs on those lenders who already have good, responsible (uncorrected transcript—subject to correction and further editing) systems in place. We will be listening carefully to feedback from all interested groups before issuing a final version of the Responsible Lending Code in March 2015.

Child Poverty—Measurement 12. JACINDA ARDERN (Labour) to the Minister for Social Development: By what percentage have child poverty levels changed since the Government took office, based on the constant value, below 60 percent of median incomes, and after housing cost measures included in the Ministry of Social Development’s report on household incomes?

Hon ANNE TOLLEY (Minister for Social Development): The rate on that one measure specified went from 22 percent in the 2008-09 survey to 24 percent in the 2010-11 survey and back to 22 percent in the 2012-13 survey, which shows that we are recovering from the recession. There is a range of measures in the Child Poverty Monitor released today, and the Ministry of Social Development regularly looks at a range of measures, but the issues around poverty are complex, and research shows that a number of measures needs to be used. This Government is focused on practical help rather than arguing over individual measurement. Things are improving, but there is still a long way to go, and, as I say, the issues can be complex and often intergenerational.

Jacinda Ardern: Based on her interview with Radio New Zealand this morning, where she stated: “What you describe as poverty is not what I might describe as poverty.”, how does she describe poverty and how many children are living in it?

Hon ANNE TOLLEY: Well, that is absolutely correct. Poverty is a scale and it is very important, and the research shows that it is very important to understand what aspect of poverty you are talking about. So what that member might describe as poverty may be quite different from what another measure is describing as poverty. That is exactly what the research shows.

Jacinda Ardern: I raise a point of order, Mr Speaker. The member really only reiterated my question. My question was: how would the Minister describe poverty, therefore, and how many children are living in it? She can choose to answer one or the other, but one would be nice.

Mr SPEAKER: She certainly answered one. The question was not as the member has just said it was; it was a lot more full than that. It asked how the Minister would describe poverty, and the Minister went on to describe it as a scale and that there were various aspects for measuring it. [Interruption] Order! If the member wants to question whether the answer is adequate, she should show the manners to listen to my justifying that the Minister has addressed the question. If she wants to make further progress, make it using concise supplementary questions.

Jacinda Ardern: What target will she set to reduce child poverty?

Hon ANNE TOLLEY: This Government has already set results targets, and reports regularly on progress. We are finding that that clarity and accountability are well received and are what matter to New Zealanders. I remind the member that the Salvation Army said in 2008: “Our measures of progress at this time next year should not just be those of how much our economy has grown … more relevant measures could be those of how few people are locked up in prison, how few violent crimes have been committed and how much better children in poorer schools are achieving.” Those are the sorts of targets this Government has set and is reporting on regularly.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question was very straightforward and explicit. It was: what target will she set to reduce child poverty?

Mr SPEAKER: And, again, I accept that the member may have had difficulty listening to the answer because I did as well—there was a lot of noise coming from members around her—but there was discussion in the answer about targets and measures. One of them that I did pick up on was the measurement of incarceration rates. That is the Minister’s answer. [Interruption] Order! If the member is going to continue to raise every time an answer that she considers to be an unsatisfactory addressing of the question, I will attempt to explain to the member why I think it is satisfactory. But we will make no progress at all if the member is going to continue to yell at me when I am standing on my feet. Does the member have a further supplementary question? (uncorrected transcript—subject to correction and further editing)

Jacinda Ardern: Can the Minister explain how targets to reduce incarceration rates have anything to do with improving the well-being of a child living in poverty?

Hon ANNE TOLLEY: I would love to. There are about 23,000 children at any one time living in New Zealand who have a parent in prison. If the member does not think that that affects long term the economic, social, and emotional well-being of children, then that member has a very different concept of poverty from mine.

ENDS

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