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Questions & Answers - 10 August 2016



Economic Programme—Progress

1. MARK MITCHELL (National—Rodney) to the Minister of Finance: What progress is the Government making in building a more competitive and productive economy?

Hon BILL ENGLISH (Minister of Finance): Good progress. The Government has four priorities: responsibly managing the Government's finances, building a more productive economy, delivering Better Public Services, and rebuilding Christchurch. We are making progress on all of these. Two hundred thousand more people are in work now than 3 years ago, and a further 170,000 jobs are expected by 2020. The average wage is forecast to rise to $63,000 a year, and we are on track for moderate growth of 2 to 3 percent over the next 4 years.

Mark Mitchell: Given the outlook for continuing growth, what steps is the Government taking to lock in these gains through investment in infrastructure, education, and better social outcomes?

Hon BILL ENGLISH: As set out in Budget 2016, we are focusing on increasing investment in infrastructure and getting better results for public spending, for instance: a $700 million investment in science, skills, and regional development; a $2.1 billion package for public infrastructure, including the complete rebuild of the Inland Revenue Department's tax systems; $650 million for social investment to support vulnerable New Zealanders; and in Budget 2016 there was a $2.2 billion health package. It is the results that this spending will achieve, however, that will be beneficial to New Zealand households.

Mark Mitchell: What are some of the consequences of lower interest rates for households and the economy?

Hon BILL ENGLISH: The track for New Zealand interest rates reflects what is happening with interest rates around the world, and that is that they are reaching all-time lows and, in some countries, negative interest rates for the first time in living memory. That in part is what is driving up asset prices in stock markets, exchange rates, and land and house prices. However, lower interest rates reduce the cost of borrowing, and that means that households have lifted their debt levels, because they can service larger debt at about the same proportion of interest payments in their income.

Mr SPEAKER: I just need to inform Mr Seymour that with enthusiasm he used his complete allocation of questions yesterday. Supplementary question—Grant Robertson.

Grant Robertson: Happy news, Mr Speaker. [Interruption]

Mr SPEAKER: Order! If the member wishes to seek leave he is entitled to do so.

Grant Robertson: What progress is the Government making towards its target of exports as a percentage of GDP rising from 30 to 40 percent, and if he does not have the exact figure, can he indicate whether it is progress or regress?

Hon BILL ENGLISH: The Government is making good progress towards its 2025 target. Of course, as that member will be aware, the impact of the Christchurch earthquake and the fact that thousands of New Zealanders are staying home instead of leaving mean that there has been significant commitment of capital and labour resource to domestic growth. As we continue on the back of this success to get the houses built and Christchurch finished, those resources will be available to divert to the export sector.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Although we cannot always be certain of the quality of the question, the Government would be prepared to give one of its supplementary questions to Mr Seymour so that he might be able to ask his question.

Mr SPEAKER: On that basis I will certainly accept a supplementary question from Mr Seymour, but in the future the arrangement needs to be a little more formal, otherwise it is very difficult for me to keep an accurate score here.

David Seymour: Has the Government's fiscal discipline been strong enough to enable tax cuts next year in election year?

Hon BILL ENGLISH: That is yet to be seen. What we do know is that fiscal discipline in itself is not sufficient to ensure that New Zealanders get the best results from their public services. We need to actually focus on delivering effective services to people who really need them. What we have found is that the more we do that, the less need there is in the longer run for Government services, and that means more opportunities for lower taxes.

Hon Peter Dunne: I raise a point of order, Mr Speaker. I have been reflecting upon the exchange that has just taken place because my colleague to the left wanted to ask a supplementary question. Although I accept the principle that has been established for a long time of primary questions being allocated on a proportionate basis around the House, I do wonder whether it is time for you to give fresh consideration to the allocation of supplementary questions. My colleague to my left is extremely enthusiastic. I am not sure that he should be punished for his enthusiasm, and I wonder whether it is time to take a more flexible approach to the granting of supplementary questions based on a member's interests, rather than the size of the party they represent. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I will hear from Chris Hipkins.

Chris Hipkins: Ultimately, the Business Committee makes an indicative allocation of supplementary questions but the discretion, of course, always rests with the Speaker in making a final decision on how supplementary questions should be allocated. Speakers have traditionally allocated supplementary questions on the basis of proportionality in the House, which is what the indicative allocation of supplementary questions is based upon. If members were to suggest that supplementary questions be allocated based on quality, I would suggest that we get a lot more supplementary questions over on this side of the House than on that side of the House.

Mr SPEAKER: No, I do not—I will hear from Ron Mark. [Interruption] Order!

Ron Mark: Speaking to the point of order, I rise to lend some support to the views of the very experienced Hon Peter Dunne, who stands as one of the longest-serving Ministers in New Zealand's Parliament. I think that—if I could just add something to maybe take into account what Chris Hipkins from Labour has said—if you could come up with a formula that lends credence to the level of interest a particular party has in a particular issue, plus balance it by its numbers in the House, we would, I think, wholeheartedly consider that.

Mr SPEAKER: I thank all members for their contributions. The Hon Peter Dunne has asked me to give consideration to the matter. I will do so, but I do remind members that the allocation of questions, both primary and supplementary, is discussed at length at the start of each Parliament and has, by tradition, for many years now, been allocated on a proportional basis. I note that members to my right often do not use their full allocation; members to my left certainly do. The arrangements by which some of the smaller parties do not get perhaps what they see as a fair share is often made then by informal arrangements between a major party and a coalition party. What I do need is for that arrangement to be relatively formal, so that I can keep score. But in regard to Mr Dunne's issue, I will give it further consideration. I may raise it as an item for discussion at the Business Committee next week.

David Seymour: I raise a point of order, Mr Speaker. I just ask you to confer with the officials. I think I actually do have two supplementary questions remaining this week, quite apart from anything else—and thank you for the freebie. Thank you.

Mr SPEAKER: I will check that out again, but not according to the records that are being presented to me. The member is entitled to two questions; there are an additional three that have been granted by the National Party to Mr Seymour. That makes a total of five and, as I have pointed out, with great enthusiasm he asked five supplementary questions yesterday.

Grant Robertson: Does he agree with the Minister for Economic Development that growth in per capita GDP last year was "about half a percent"; if so, is Hamish Rutherford not correct that New Zealand's economic growth is "driven almost exclusively by rising population"?

Hon BILL ENGLISH: I consult with a range of economists and statisticians, and Hamish Rutherford, who, I understand, fits neither of those descriptions—but he is a journalist. No, he is not correct, but I do notice that the Opposition and, to some extent, commentators always say that whatever is causing growth at the moment is not valid growth, and that if you took it out growth would be zero. Well, that is true—if you take away everything that is growing, there is no growth. But, in fact, for the 21-year-old Māori and Polynesian males who have just got apprenticeships in Auckland, and will get more because we are announcing the Tāmaki regeneration project, they think it is real growth.

Mark Mitchell: What international reports has he received on the performance of the New Zealand economy?

Hon BILL ENGLISH: There was a recent article in the Australian Financial Review that said, in one of the rare occasions that it reports on New Zealand, that the New Zealand Government has "achieved an increasingly rare feat in any advanced economy. That includes returning a budget to surplus while managing better growth along with substantive social, economic and … taxation reform." That is not a bad verdict from the Aussies.

• Housing, Auckland—Affordability

2. ANDREW LITTLE (Leader—Labour) to the Prime Minister: Does he stand by his statement that he doesn't accept the average Auckland house, costing $992,000, is out of reach for most families?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement in the House yesterday, which was: "If you look at the year to 31 March 2016 in Auckland there were 31,963 sales. Sales in the under $600,000 category of … homes were over 30 percent of that—9,638 sales. For … houses under $650,000 there were 11,842—37 percent of sales." My point was that there is a significant number of Auckland houses selling for well under the reported average price. In addition, on the back of the Government's housing plan, we are on track to build 85,000 new houses across New Zealand in this term of Parliament alone.

Andrew Little: Does he agree with bumbling Nick Smith that houses are getting more affordable despite—[Interruption]

Mr SPEAKER: Order! Can I just ask the member to start the question again. I may have missed something that he added in the question.

Andrew Little: I am obliged to Mr Speaker. Does he agree with the Minister for Building and Housing, Nick Smith, that houses are getting more affordable, despite prices rising by half a million dollars under his Government?

Rt Hon JOHN KEY: I think the point that the Minister was making was that there are a number of different factors, and one of them includes very low interest rates and high levels of economic growth. I think it is probably worth injecting just a few facts into this debate. If one looks at the 2009 to 2016 level, national house prices across the country in that period of time grew 43 percent. Interestingly enough, as a comparator, between 2000 and 2008 national house prices grew by 102 percent. If one looks at Auckland over the period 2009 to 2016, house prices grew 82 percent. But, interestingly enough, if one looks at Auckland house prices between the period of 2000 to 2008, they grew 87 percent. So it is pretty simple. When they go up by a smaller amount under a National-led Government it is a crisis, but when they go up faster under Labour it is not.

Andrew Little: In light of that answer, and moving to the present, if housing is getting more affordable, why is homeownership falling and why are record numbers now living in cars and garages?

Rt Hon JOHN KEY: There are many reasons why homeownership rates have been declining over the last 30 years, but I go back to my point. Opposition members seem to care about this issue today but did not care about it when they were in Government. [Interruption]

Mr SPEAKER: On both sides now the interjections are just too loud and interruptive to the questioning.

Andrew Little: Does he seriously think most families have a $200,000 deposit and can afford the $1,000 a week mortgage needed for the average Auckland house?

Rt Hon JOHN KEY: There will be a great range, of course, of different financial circumstances of New Zealanders. But as I said yesterday, interestingly enough, in the under $600,000 category—30 percent of all sales took place at that level, and at the new $650,000 category, where people can get access to the KiwiSaver HomeStart programme in Auckland, 37 percent of sales took place. Interestingly enough, just to take, for instance, Hamilton, 75 percent of all sales that took place over the last 12 months were under $500,000. In Tauranga, for houses under $500,000, it was 54 percent. It is quite wrong to say there are no sales that take place at more affordable levels, and a lot of New Zealanders are very realistic and they do match their income and their deposits with the houses that are there.

Andrew Little: When Auckland's population grew by 43,000 last year but, according to Bill English, only 500 affordable houses were built, how can he possibly deny there is a shortage of affordable housing?

Rt Hon JOHN KEY: The Government is working on the issue of making sure that there are more affordable houses. But I actually do stand proudly by the fact that there are Kiwis returning from overseas. There are New Zealanders not going because they see opportunities, rising wages, a stronger economy here in New Zealand. The Labour Party thinks success is when everybody leaves and you have got to go to the departure lounge to see your grandkids. Well, if that is success, you have got a pretty warped view of what a good New Zealand is like. [Interruption]

Mr SPEAKER: Order! [Interjection] Order!

Andrew Little: Can he just tell me straight when homeownership rates will start to rise again in New Zealand and restore the Kiwi Dream of homeownership once more?

Rt Hon JOHN KEY: I cannot tell the member when that side of the trends will change, but what I can say is that under a National-led Government there is a very comprehensive plan of ensuring that there is both increasing supply and support. Interestingly enough, we saw the Real Estate Institute of New Zealand data that came out today and indicated Auckland is the slowest-increasing region in the country for house prices. I say to the Nick Leggett hater: why does he not just understand the data?

Andrew Little: In light of the fact that 75 percent of New Zealanders do not believe him when he says that he has got the housing crisis under control, when will he finally step up and take responsibility?

Rt Hon JOHN KEY: I go back to the interesting facts, which are that there are more houses being constructed than ever before. There is a housing boom taking place in New Zealand. There are more people working in the construction sector than we have ever seen before. Under a National-led Government national house prices have gone up at under half the rate that they did under the previous Labour Government. It is very easy in Opposition to make these claims, but, in Government, Labour was a complete and utter failure.

• Construction Industry—Jobs

3. KANWALJIT SINGH BAKSHI (National) to the Minister for Tertiary Education, Skills and Employment: What recent reports has he received on job growth in the construction industries?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Recently the Minister for Building and Housing and I released the National Construction Occupations projections report, which shows that the number of people working in construction-related occupations is expected to hit a high of 539,500 in the next 5 years, up nearly 10 percent—or 49,000—from last year. Occupations expected to experience the largest growth in the next 5 years are electricians, 14 percent; plumbers, 13 percent; and civil engineers, 11 percent. The majority of this building activity will be in residential construction, which is already at record levels across the country and is expected to grow a further 20 percent in the next 2 years. The report was released alongside the National Construction Pipeline Report from Building Research Association of New Zealand and Pacifecon, which predicts that the total value of building and construction work by 2021 will top $200 billion. New Zealand is in the middle of its biggest ever building boom, and the workforce to support this boom is continuing to grow.

Kanwaljit Singh Bakshi: What reports has he received on recent job growth in the construction industry?

Hon STEVEN JOYCE: The industry is growing rapidly and was the largest contributor to annual employment growth last year, with 27,500 more people employed. In fact, there are 40,000 more people employed in construction today than 2 years ago. The nationwide construction sector workforce is the largest it has ever been, with 232,000 people working directly in the industry, while a much larger group of 490,000 work in construction-related occupations. The Auckland construction workforce has grown by more than 24,000 in just the last 2 years, to a total of 80,000 people currently.

Kanwaljit Singh Bakshi: How is the Government supporting the demand for tradies, including in the construction industry?

Hon STEVEN JOYCE: With construction growth at record levels and forecast to keep growing, the Government is actively supporting the industry to train more skilled workers to meet the demand for new housing and construction. Last year there were almost 38,000 people training in construction-related fields, which is an increase of nearly 20 percent over 4 years. For the first time ever, the number of apprentices being trained by the Building and Construction Industry Training Organisation has topped 10,000. To further support training, Budget 2016 included a further $14 million for more apprentices, along with $9.6 million for Māori and Pasifika trades training. We are also supporting initiatives like Ara at Auckland Airport, which is bringing people off benefits and into meaningful employment and training on that worksite.

• Prime Minister—Statements

4. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Does he continue to stand by all his statements; if so, in what fashion?

Rt Hon JOHN KEY (Prime Minister): Yes; and I did not realise question time had become Project Runway, but now that the member has asked today, I am wearing a New Zealand - designed suit. It is a New Zealand shirt made and designed here, but it is 100 percent Egyptian cotton. It is an Italian tie, and—I have got to be honest—I bought the shoes in Paris. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I do not mind some interjection, but when it is continuous I am going to have to deal with it.

Ron Mark: When he said "any increase in police would not be made because of [Mr] Peters' demands" following six extra police being sent to Kaitāia on a fixed 12-month term, how does he explain this being doubled to 12 in the past 24 hours? Is it coincidence or politically fashionable?

Rt Hon JOHN KEY: The police make their own decisions in the operational sense of where they send police officers, but all I can say is that we do not respond to Mr Peters. What we do do is honour our commitments. When we came into office in 2008 there were 8,211 police officers. As of today the latest annual report showed there are 8,899, an increase of 688 police officers.

Ron Mark: If Minister Collins met with him 2 months ago, as she said this morning, to discuss her concerns over police resources, why have you, Prime Minister, waited until yesterday to announce increased police numbers, or did Winston Peters just jog your mind?

Rt Hon JOHN KEY: When the Government makes an announcement about the increase in the number of police officers, it will do that as a formal announcement with details and specifics around that. I simply made the point when I was asked the question about police numbers that the numbers had gone up under a National-led Government and that I was confident that over time they would continue to increase.

Ron Mark: Prime Minister, are you listening to the concerns of your Ministers, such as the Minister of Police, Minister Collins, or is she simply not briefing you correctly?

Rt Hon JOHN KEY: The member has clearly never been in a briefing with Judith Collins if he does not think that she would be briefing me correctly, forcefully, and with all of the attention, care, and love that she has for the New Zealand Police Force. Police budgets in annual terms have gone up over $400 million in the time that we have been in office. We have increased both the technology and number of police officers, and I am confident we will continue to invest in the police force. One thing I will say: on this side of the House, in good times and in bad, we actually support and back the police officers of New Zealand. That is not always the case on the other side.

Ron Mark: Who does he agree with: his former Minister of Police and Deputy Prime Minister, who said crime is decreasing; New Zealand First, which said crime is actually increasing; his current Minister of Police, who is now saying police are under-resourced; or is he actually listening to his poll-driven focus groups?

Rt Hon JOHN KEY: I agree with the Deputy Prime Minister that crime rates are going down, because that is a statement of fact. I agree with the Minister of Police when she says that we are investing in, and will continue to invest in, and support, police officers. I do not agree with Mr Peters when he says the crime rate is going up, because he is palpably wrong.

Ron Mark: Then, Prime Minister, why have you allowed our police per capita ratio in New Zealand to plummet from 1:488, when New Zealand First was in coalition Government, to where it is now at 1:526? Why have you allowed that to drop?

Rt Hon JOHN KEY: It is true that the ratio has increased slightly, and the Government will be looking at those issues, but I think it is a little simplistic to say it is solely around those ratios, because of the increases in technology. We have invested an enormous amount in that area and have got the equivalent of, from memory, about 324 additional police officers. I think it is logical, actually, to ask our police force to use the best technology, provide the capability, and therefore allow them to redeploy themselves and do more on the street. It is not solely just a matter of using old technology and more people on the street. I think that is a reasonably smart thing and that that police would back that.

• Teachers—Low-decile Schools

5. CHRIS BISHOP (National) to the Minister of Education: What recent announcements has she made that will get more teachers into low-decile schools?

Hon HEKIA PARATA (Minister of Education): I was pleased to announce today the extension and expansion of a groundbreaking teacher training programme to help strengthen and grow the teacher workforce. The Teach First NZ pilot has been very effective in attracting high-achieving graduates into teaching. That is why we are extending the programme for a further 2 years to train 40 new secondary school teachers and expanding it by another 10 places focused on science, technology, and maths in 2017. This means there will be up to 30 places in 2017 and 50 new trainees overall by 2018. Teach First NZ is a field-based initial teacher education programme developed by the University of Auckland and the Teach First NZ Trust. The programme has a robust selection process that selects high-calibre participants—just the type of teachers we want in our schools. It also has a high completion and retention rate, so we are backing it to recruit more quality graduates.

Chris Bishop: How will this announcement help more young people succeed?

Hon HEKIA PARATA: We are committed to recruiting the best and brightest into teaching, particularly in high-demand subjects like science, technology, and maths. The extra places and the expansion to allow Teach First NZ to cover technology graduates will help attract more new teachers for these subjects. The Ministry of Education has just released the third of four evaluation reports on the pilot from the New Zealand Council for Educational Research. The report confirms that Teach First NZ is effective and is being efficiently implemented. The strength of the relationship between Teach First NZ and the University of Auckland is an important factor in the success of the programme—

Ron Mark: No one's listening.

Hon HEKIA PARATA: —and the success of our kids. Mr Mark, you may not be listening, but the sector is.

• Schools, Funding—Review

6. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she still expect her Government will live up to the Prime Minister's statement regarding the review of the education funding system that the Government "wouldn't really be progressing the issue unless they could get the other stakeholders on board—the unions and others"; if so, will she now rule out implementing global budgets?

Hon HEKIA PARATA (Minister of Education): I can tell you that the Prime Minister and I are in complete agreement that we would like to get all stakeholders on board—parents, teachers, as well as unions—and that we need a system that delivers the right funding to the right child at the right time to ensure their educational success. If the member had chosen to provide the Prime Minister's full quote in context, it would have been clear to the House that he was referring to advice I had provided to him that we should work with all stakeholders. In regard to the proposed global budgets—one of several proposals—we are still in an advisory group process, including unions, that then must be taken to Cabinet, and, therefore, I cannot rule anything in or out at this stage of the consultation.

Chris Hipkins: In light of her claim "it isn't bulk funding", what is the difference between her proposed global budgets and bulk funding?

Hon HEKIA PARATA: The criticism of bulk funding from 20 years ago was that it incentivised the employment of younger, less experienced—and, therefore, cheaper—salaried teachers. I might add at this point that we are finding it difficult to get young graduates appointed to permanent positions in schools, but—coming back to the member's question—that is the only criticism of it. In the global budget we have provided for an average notional salary so that schools will be indifferent as to what level of expertise—

Sue Moroney: No, they won't.

Hon HEKIA PARATA: —they employ into their schools. Yes, I am sorry, did you need me to go over that for you, Sue—

Mr SPEAKER: Order! The answer is finished.

Chris Hipkins: Are the teachers wrong when they say proposed global budgets would mean parents on school boards of trustees "would have to make trade offs between the number of teachers they employ and the other non-teaching costs of running a school."; if so, why?

Hon HEKIA PARATA: The member is actually referring to unions rather than teachers. The unions have said—[Interruption] The unions held a press conference yesterday and said that this was what was proposed. The fact of the matter is that there are already flexibilities available in every school. In our self-managing system, the boards and principals make decisions about where they deploy resources. So what we are trying to do is continue the theme of parents having greater choice, schools having greater flexibility, and real kids in real time getting great results through those decisions.

Chris Hipkins: Under the proposed global budgets could schools opt to employ fewer teachers in exchange for more non-teaching funding if the Government froze their operating funding—as it did in this year's Budget?

Hon HEKIA PARATA: These are all just proposals at this stage, and under our system schools make different decisions all the time. The proposal around a global budget is to give them flexibilities. The proposal is also operating in the context where we have far more data than we have ever had before—which is highlighting what the actual achievement challenges are, school by school. Therefore, the choices each school will make will be different according to the educational challenges they have.

Chris Hipkins: I raise a point of order, Mr Speaker. The question was quite specific about whether schools would or would not be able to do something under the proposal that she has put forward, and she has not actually given an answer to that question.

Mr SPEAKER: She has. If the member listened, the Minister then said that because they are just proposals she cannot answer that. That is an answer that addresses the question. It may not be one that the member likes.

Chris Hipkins: If schools employ fewer teachers, with the same number of students, will class sizes at those schools have to increase; if not, how would they not increase?

Hon HEKIA PARATA: The member is posing a hypothetical about what schools might do when they have very different challenges between them, and they exercise flexibilities now. This approach gives them that greater licence to do so because the achievement challenges are different in different schools—just as, under the current situation, schools make different decisions about how they deploy their teacher-aides, about whether they team teach or individually teach, about whether they have shared classrooms or separate unit cells, or whether they use different curriculum resources. These are all the prerogative of the professionals.

Chris Hipkins: In making those decisions, how could a school reduce the number of teachers it employs without either increasing class sizes or reducing the number of subjects available?

Hon HEKIA PARATA: Again, I am not going to be speaking to a hypothetical on behalf of 2,500 schools that are making different decisions every day. This is a proposal. It is a very open and inclusive process with an advisory group that includes 17 representatives from across the sector. I am waiting to hear back from them with their advice on these particular issues.

• Housing Market—Affordability

7. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Tū ai a ia i runga i te mana o tana tauākī, e pā ana ki te mākete whiwhinga whare, "My advice is to believe in the system because it will work for young people"?

[Does he stand by his statement about the housing market "My advice is to believe in the system because it will work for young people"?]

Rt Hon JOHN KEY (Prime Minister): Yes. However, the system would definitely not work for young homeowners if house prices crashed by half, as advocated by that member. That Green-Labour policy would be a war on the poor.

Metiria Turei: How exactly is the system working for the young Aucklanders trying to save a deposit while the average house price rises $570 a day and their rent rises twice as fast as their wages?

Rt Hon JOHN KEY: I think there are a number of factors when you are a young person. One, certainly, is access to quality education, which is improving under this Government. I think the second thing is ensuring that there are job opportunities for New Zealanders who, ultimately, do invest in their education. We know that unemployment rates are falling and opportunities are rising in a place like Auckland—indeed all around the country. Secondly, if we look at a young couple who wants to buy a house or a young individual who wants to buy a house, whether it is in Auckland or anywhere around New Zealand, the Government has KiwiSaver HomeStart, which has recently just had both the income thresholds and the asset price thresholds increased. That does allow New Zealanders to access those. If you look at somewhere like Hamilton, for instance, I think that just under 79 percent of the sales that took place were in the $550,000 category, where KiwiSaver HomeStart would work for those youngsters. So I think, overall, you would say it is working for people.

Metiria Turei: How can he argue that his policy is working, HomeStart included, when in 2001, 46 percent of people aged between 20 and 40 owned their own home, and in 2013, after his policies were in place, that dropped to only 35 percent of people aged between 20 and 40 years old?

Rt Hon JOHN KEY: I am always suspect about Green Party numbers, but as I say, and I am pleased that the member did raise the issue of 2001, as I pointed out today to my good and close friends in the Labour Party, in that period between 2000 and 2008—so the 2001 period the member is talking about—there was a staggering national increase of 102 percent in house prices, and in Auckland an 87 percent increase in house prices. That probably was a crisis compared with the 43 percent and 82 percent increase respectively under a National-led Government.

Denis O'Rourke: What advice would the Prime Minister give to the many grandparents and parents who own their own homes when asked by their grandchildren or children why it is that they cannot realistically expect to become homeowners themselves, especially if they live in Auckland?

Rt Hon JOHN KEY: The first thing I would say to those grandparents is: is it not lovely that under a National-led Government they can give their grandkids a hug in New Zealand, where they are now living, as opposed to overseas, when New Zealand First was last in Government?

Metiria Turei: Is the Prime Minister genuinely—[Interruption] Is the Prime Minister seriously telling New Zealand families that it is perfectly fine to give their grandchildren a hug and then send them back out to their cars to sleep because homelessness has become such a serious issue in this country? Is that what he is saying to New Zealanders now?

Rt Hon JOHN KEY: No. But what I am saying is that what you have seen in the last period of time in New Zealand is a significant number of New Zealanders returning and a significant number of New Zealanders choosing not to go. Personally, I think that is a vote of confidence by those New Zealanders, in our country and in our future. What the Labour, Green, and New Zealand First parties seem to be saying is that New Zealand was so much better when people were deserting the country, and I just do not agree with that proposition.

Metiria Turei: Does the Prime Minister agree with the World Bank, the United Nations, and Demographia that the price to income ratio of three times the median household income is the standard measure for an affordable home?

Rt Hon JOHN KEY: I do not think that in international cities there would be the case anywhere that, I think, the member could quote. So I think what is realistic, though, when looking at affordability for homes, is: do people have a job to support the mortgage; are interest rates at an affordable rate for them; is the prospect if they lose their job or want further overtime likely to be there; is there, in some cases, assistance from the Government, as there is under the National-led Government through KiwiSaver HomeStart; and, most importantly, what is the pipeline of development of housing in the case of New Zealand? Under this Government, it is extremely significant. That is why we are seeing a record number of houses being built.

Metiria Turei: Is that the excuse for unaffordable housing that he would give to the principal of an average-size primary school, who would have to spend about eight times their income to buy a median-priced house in Auckland; I mean, is the housing market working for that family?

Rt Hon JOHN KEY: Well, the member talks about an average principal of a New Zealand primary school, I think she quoted. If they live in Hamilton, 71 percent of all sales that took place were under $500,000. But if they lived in Auckland, 30 percent of sales that took place were under $600,000, and 37 percent under $650,000. My colleague before was just looking on TradeMe and the number of properties in Auckland that are under $500,000. There are many properties listed there. Not every property that is bought and sold is done so at the median rate. That is the reality of the property market. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! If Mrs King and the Prime Minister wish to have a discussion, I would suggest they do it in the lobbies after question time.

Metiria Turei: So is it his advice—[Interruption]

Mr SPEAKER: Order! Prime Minister, there is a question to you.

Metiria Turei: Is it the Prime Minister's advice, then, to a senior station officer in the Fire Service in Auckland who earns a maximum of $77,000 a year that they should just abandon the city they work in and go and live somewhere else—is that his advice now?

Rt Hon JOHN KEY: No, but in many cases, and the member has quoted one—$77,000—in all probability, these are relationships where there are two members of the household working. So, again, let us just argue that the other partner is earning $50,000 or $60,000 a year—they have got an income of about $140,000 a year. I accept that there are people who earn more than that, and I accept that there are people who earn less. With $140,000 a year on very low interest rates, they will be able to afford a property in Auckland. It may not be the property that the member is talking about, but there will be properties they can afford at those levels.

• Trade—Relationship with China

8. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Trade: On what date was he or his office first informed of the "possible trade retaliation" that triggered engagement at "various levels of Government" with China and when were the Prime Minister, his office, and the Department of Prime Minister and Cabinet first informed?

Hon TODD McCLAY (Minister of Trade): As I have already said publicly, I first learnt of concerns and allegations in late May. The Department of Prime Minister and Cabinet (DPMC) was copied in to some reports subsequently that related to this issue. On 15 July the Prime Minister's office was made aware of issues to be raised in a media story that weekend, and the Prime Minister was briefed on a possible specific company concern or threat on 18 July in Jakarta. The Prime Minister was further informed on 25 July that there had been earlier discussions and limited correspondence.

Grant Robertson: I raise a point of order, Mr Speaker. I appreciate the detail of the answer that the Minister gave. I did just wonder whether you can reflect on a question on notice—several hours' notice—that the Minister gave us only in "late May". He did not give us a date. He was able to give dates for all of the other parts of the question, for which we are grateful, but he did not answer the first part on the date that he was first informed.

Mr SPEAKER: That is reasonable. If the Minister has the actual date that he was first aware of the issue, that would be helpful. He certainly gave dates for the DPMC, the Prime Minister's office, and the Prime Minister quite specifically. If we could have that, it would be helpful.

Hon TODD McCLAY: On or around 25 May.

Dr David Clark: Is he saying the Prime Minister is wrong when he said he first knew about possible reprisals on 21 July?

Hon TODD McCLAY: No. As I have already said publicly, I should have provided the Prime Minister with a fuller account of the issues, and I have offered an apology to him for that. In terms of any potential threat to our trade, let me assure the House that this issue has been taken very seriously. Every time there was a suggestion of a rumour or a threat to our trade, I have sought and received assurances from the Chinese Government that any concerns around retaliatory action were unfounded.

Dr David Clark: What prompted the discussions at various levels of Government in May?

Hon TODD McCLAY: In broad terms, the engagement relates to both Governments explaining their positions, clarifying legislation and other requirements around trade remedy issues, or New Zealand's official seeking of assurances in the event of suggestions or rumours of possible trade retaliation being brought to our attention. However, there are limits to what detail I can provide, given the legislative constraints around the reporting of competition complaints that are not yet under investigation.

Dr David Clark: Why did he say that the contact from Zespri to the New Zealand Embassy in China on 8 July was the first time a concern was raised about possible trade retaliation, when in fact discussions had been taking place since May?

Hon TODD McCLAY: In relation to a company-specific concern, my statement was as understood and was correct. However, I repeat again that, as a result of legislation, there are things that we are not able to speak about when it comes to competition issues.

Dr David Clark: Why did he say on the weekend of 17 July that he knew nothing about possible trade retaliation concerns, when he was briefed on concerns when in China in the previous week for a meeting with Minister Gao?

Hon TODD McCLAY: In respect of that, I accept I should have—I saw the fuller briefing and provided additional information to the Prime Minister, and I have apologised to him for that.

• Immigration New Zealand—Vision 2015

9. MELISSA LEE (National) to the Minister of Immigration: What recent announcements has the Government made in relation to the Vision 2015 programme?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Last week the Government welcomed two reports that show the learnings of Immigration New Zealand's (INZ) successful Vision 2015 programme. The programme was launched in 2012 and formally closed in June this year. It involved a $136 million technology-enabled business transformation of people, process, and place, which has enabled Immigration New Zealand to deliver a more customer-focused, consistent, and cost-effective service. The success of the programme has ensured that INZ is recognised as a trusted partner capable of providing outstanding immigration services, and ensures that we facilitate the effective movement of the increasing number of people coming over New Zealand's borders.

Melissa Lee: What were the main initiatives undertaken through the Vision 2015 programme, and how have these initiatives improved INZ's operations?

Hon MICHAEL WOODHOUSE: Immigration New Zealand was constrained by a high-cost operating model, a bricks and mortar - based system, and limited ability to respond to customer and market demands. Vision 2015 has transformed and streamlined services for customers, with the deployment of Immigration Online, which allows applications for student, work, and visitor visas to be made online. E-medicals can be made online, and the sorts of biometric checks for identity and risk are also now being done in this system. The risk-based approach to managing applications means communicating with hundreds of trusted partners, including high-end tourism operators, education providers, and key industry sectors, to facilitate value and low-risk visa processing.

• Schools, Funding—Review

10. CATHERINE DELAHUNTY (Green) to the Minister of Education: Will she guarantee that her education funding review will not lead to larger class sizes?

Hon HEKIA PARATA (Minister of Education): Class sizes are determined by principals; therefore, the member's question is best directed to them. I know that principals make decisions that are in the best interests of their school community, and the education funding review is aimed at providing them with the best tools and flexibility possible to allow and support them to do so.

Catherine Delahunty: Do larger class sizes result in better educational outcomes for children?

Hon HEKIA PARATA: The evidence is very clear that it is the quality of teaching and leadership in a school that makes the most difference to the quality of learning that children have.

Catherine Delahunty: When parents in 2012 soundly rejected increased class sizes, what has changed since then that would justify a funding proposal that facilitates that?

Hon HEKIA PARATA: I reject the member's proposition that the proposals that we are discussing will facilitate that.

Catherine Delahunty: Which advice would she give a principal with urgent, conflicting demands on their budget because of her proposed funding model: to increase class sizes, restrict curriculum choices, not have computers, or cash up a few teachers, as this option allows?

Hon HEKIA PARATA: Unlike the member, I hold principals in high regard. I trust them to use their professional judgment about what is necessary. They do that based on the data and experience of their actual children, and they do it informed by the guidance of the board, made up largely of the parents of children at their school.

• Road Safety—Alcohol Interlocks

11. JACQUI DEAN (National—Waitaki) to the Associate Minister of Transport: What steps is the Government taking to increase the take-up of alcohol interlocks?

Hon CRAIG FOSS (Associate Minister of Transport): Our road toll is much, much too high. To help to address this, the Government has decided that alcohol interlock sentences will become mandatory for serious repeat offenders with two or more drink-driving convictions within 5 years, and first-time offenders who are more than three times over the legal limit. Around two-thirds of all fatal crashes are caused by a combination of alcohol, drugs, and/or excessive speed. Interlocks physically prevent an offender from drink-driving, ensuring their own safety, and, of course, the safety of other passengers and other New Zealanders on the road. Mandatory interlock sentences are a targeted and effective way to help spare families, friends, loved ones, and communities the pain and suffering that inevitably follow each and every serious crash.

Jacqui Dean: What reports has the Minister seen on the Government's announcement to make alcohol interlock sentences mandatory?

Hon CRAIG FOSS: I have seen many reports from organisations that support the Government's announcement yesterday. The Automobile Association says: "The Government's intention to make alcohol interlocks mandatory for many drink-drivers is a much-needed advancement to keep innocent people safe on the roads." Sober Check says that it has seen firsthand the good that alcohol interlocks do—and they really do effect and improve driver behaviour change. The road safety charity Brake is pleased with the "hardline approach" this Government is taking to drink-driving. Mandatory interlocks for repeat, serious drink-driving offenders will make our roads safer for all New Zealanders.

• Police—Resourcing and Crime Resolution Rate

12. STUART NASH (Labour—Napier) to the Minister of Police: Is there any link between the increase in crime and the decline in police numbers in the past year?

Hon JUDITH COLLINS (Minister of Police): To my fellow right-winger, the premise of the member's question is flawed. Police are funded for 8,907 sworn staff each year, and that has not changed.

Stuart Nash: Can she confirm that her Government has failed on John Key's 2008 promise to maintain a police to population ratio of 1:500, and it has, in fact, worsened?

Hon JUDITH COLLINS: Not really, when you consider that we have got the equivalent of 350 police officers from the electronic assistance mobility programme that we funded for police, as well as the fact that police now have Tasers, firearms in lock boxes in their cars, stab-resistant body armour, new ballistic body armour, enhanced pepper spray, automatic number plate recognition, boots for all the staff, and sponge rounds for the armed offenders squad—none of which, of course, was funded by the previous Labour Government.

Stuart Nash: If she has been, in her words, "working on a policy for more police for quite some time", why does the police 4-year strategy show no plans to increase police numbers until at least 2020?

Hon JUDITH COLLINS: As I could have said to Mr Leggett the other day at the police college in Porirua, police 4-year plans are police 4-year plans; they are not necessarily the Government's 4-year plans.

Stuart Nash: Did the Minister sign off on that police 4-year plan?

Hon JUDITH COLLINS: Most likely at the time, but, of course, things have moved on.

Stuart Nash: Why has she said for months that funding and resources are sufficient, and dismissed everyone, including the Police Association, which challenged this, when clearly this is not the case?

Hon JUDITH COLLINS: I think I have made it very clear that, at the moment, it is all right. But the trouble is that we are looking to the future and we are looking to the fact—

Grant Robertson: This Minister is always looking to the future.

Hon JUDITH COLLINS: —that so many New Zealanders now come back from overseas and the population is rising because of it. We are no longer losing 40,000 Kiwis every year, as we did under a previous Government.

Stuart Nash: What has made the Minister change her mind on police numbers between May, when she signed off on the police's 4-year plan, and today?

Hon JUDITH COLLINS: Looking to the future.

Darroch Ball: Is she aware that raw front-line police data shows that in 2008, police attended 240,000 confirmed offences compared with 2015, when they attended 280,000 confirmed offences, and how is that, in her—and Bill English's, and now the Prime Minister's—own words, a reduction in crime?

Hon JUDITH COLLINS: For that member's benefit, the crime rate is looked at on a per capita basis. The population has increased by about 400,000 New Zealanders, because people like living under a John Key - led Government.

Darroch Ball: Is she aware that those numbers of confirmed offences were provided to me by her office through answers to written questions, just 1 week after she told this House that she stood by her advice that the crime numbers were down?

Hon JUDITH COLLINS: I am very pleased that my office is giving the member assistance, and I am sure that next time it will tell him that the crime statistics are actually worked on a per capita basis, not just on the bald figures.


Healthy Homes Guarantee Bill (No 2)—Purpose

1. PHIL TWYFORD (Labour—Te Atatū) to the Member in charge of the Healthy Homes Guarantee Bill (No 2): Why did he draft the Healthy Homes Guarantee Bill (No 2)?

ANDREW LITTLE (Member in charge of the Healthy Homes Guarantee Bill (No 2)): Because, in 2016, no child in New Zealand should be living in a hovel, and it is time that New Zealand accepted a standard that no child should be getting sick or die because they cannot live in a warm, safe, dry home. This bill sets standards to ensure that every rental property is livable and will keep kids out of hospital.

Phil Twyford: How does this bill differ from the current law?

ANDREW LITTLE: The current law, propagated by the present Government, applies a standard for insulation that is only at the 1978 standard and requires the installation of smoke alarms. My bill requires there to be a source of heating, requires weathertightness, requires the house to be able to be ventilated, and has a minimum standard on drainage. The Children's Commissioner described the Government's current law as shameful and said that it will do little for children living in cold, damp, mouldy homes. My bill will be a whole heap better.

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