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Questions and Answers - 18 October 2016



Economy—Opportunities for New Zealanders

1. TODD BARCLAY (National—Clutha-Southland) to the Minister of Finance: How is the Government's management of the economy creating opportunities for New Zealanders?

Hon BILL ENGLISH (Minister of Finance): The ongoing growth of the economy is giving businesses the confidence to invest. ANZ's most recent survey of job advertisements shows that on a seasonally adjusted basis, job advertisements increased by 0.3 percent in September, the eighth consecutive month in which job-ad numbers have increased. On a yearly basis, the number of jobs advertised in September was 13.5 percent higher than a year ago—more opportunities for New Zealanders and their families.

Todd Barclay: What does the ANZ survey tell us about regional economies?

Hon BILL ENGLISH: It shows that job growth was fairly robust in Auckland and Wellington, where ads are up 14.8 percent and 13.8 percent on a year ago. But there is a strong lift in employment intentions in the regions, including Waikato, which is up 27 percent on a year ago; Hawke's Bay, which is up 17.6 percent; Manawatū, which is up 17 percent; and Otago, which is up 19 percent on a year ago. Clearly, the regions are generating a lot more job opportunities.

Grant Robertson: Does he recall saying on 11 May 2011 that prisons were a moral and fiscal failure, and that the Wiri Prison would be the last prison his Government built? In light of his last answer, is his plan for regional economic growth just building more prisons—is that as good as it gets?

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Hon BILL ENGLISH: I do recall saying that, and the statement I made about not building any more prisons turned out to be not correct. The Government now—well, actually, the Government does not have much choice. The courts are sentencing criminals every week, and we have got to have somewhere to lock them up.

Todd Barclay: What other reports has he seen that demonstrate that New Zealanders are confident in the direction of the economy?

Hon BILL ENGLISH: As I said, job advertising in the regions is up very strongly on last year. There is also improved consumer confidence. Consumer confidence rose in September for the fifth month in a row and is now at its highest level since late 2014. According to the survey, 35 percent of New Zealanders believe they are better off now than they were a year ago, and 25 percent think they are worse off; 44 percent expect to be better off in a year's time, compared with 13 percent who expect to be worse off.

David Seymour: What effects does the Minister believe tax rates have on work, saving, and investment activity?

Hon BILL ENGLISH: I think it is fairly well established that if tax rates are too high they discourage work, saving, and investment. However, because of tax reforms undertaken by this Parliament, New Zealand now has one of the lowest labour tax wedges in the developed world. That is, for an extra hour of work, New Zealanders on average pay less tax than almost anyone else in the developed world.

Todd Barclay: What other reports has he received on the state of the economy?

Hon BILL ENGLISH: I have seen in the last day or two a report asserting that most New Zealanders have seen their wages "barely rise in recent years." That report not only is wrong but overlooks the relationship between inflation and wages. For instance, between 1999 and 2008 after-tax wages increased by 35 percent, but inflation was 29 percent in that period. Since 2008 the after-tax wage has increased by a little bit less—that is, 31 percent on average—but inflation has been only 12 percent. So real wages have increased much more quickly in the last 7 or 8 years than in the decade before that.

David Seymour: In light of his earlier answer, could the Minister elaborate on how the 51st Parliament has reduced the tax wedge faced by workers?

Hon BILL ENGLISH: I am referring, maybe, to the 50th Parliament—that is, the tax reforms done in 2010, where income tax rates were reduced. That now shows up, actually, in the average source deduction tax as a proportion of GDP, which has dropped by 3 or 4 percentage points. That achieves what we set out to achieve, which is less tax on work, saving, and investment, and more tax on consumption and property.

David Seymour: Does the Minister have any plans to reduce taxes in the 51st Parliament?

Hon BILL ENGLISH: I would not want to get into a debate with the member about which Parliament we are in or what might be the next one, but, as indicated, the Government is interested in further lowering taxes should economic and fiscal conditions allow. But that is in the context where, as we have seen in the last week or so, there is a cacophony of demands for how the Government could spend its surpluses. The great thing is that we are one of the very few developed countries that have those choices, because we are one of the very few that have rising surpluses.

Rt Hon Winston Peters: Could the Minister of Finance explain to the whole country why it is that the National Government gives the ACT Party a right to ask questions that box him round the ears so that it can look like—in the case of the ACT Party—a real party?

Mr SPEAKER: There is no—[Interruption] Order! There is no ministerial responsibility in that question.

Housing—Dwelling Consents

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that "we are seeing a record number of houses being built", given 2016 isn't even in the top 5 years for number of dwelling consents issued?

Rt Hon JOHN KEY (Prime Minister): Yes, and, as I said in answer to an almost identical question from Mr Little last month, according to the latest building activity survey from Statistics New Zealand, the amount of residential building work in the 3 months to July was the highest since the series began back in the 1980s. That is up 6 percent on the previous record levels, set in March this year. That is an increase of 50 percent since 2013 and over 90 percent since the start of 2012. As I said previously, building consents have been running at the highest level for over 11 years, and we are looking to increase them further.

Andrew Little: Can he confirm that the Ministry of Business, Innovation and Employment's June state of the markets report says on page 5 that there is a building shortfall of 8,000 houses a year in Auckland?

Rt Hon JOHN KEY: No, I cannot confirm that. But what I can confirm is that if we look at the special housing areas established by the Government since October 2013, over 1,300 homes have been completed, 2,200 building consents have been issued, 2,458 new sections have been created, and 7,170 new sections have been granted resource consent—

Mr SPEAKER: Order! Bring the conclusion to an end.

Rt Hon JOHN KEY: The Government is making good progress.

Andrew Little: Can he confirm that the report also says on page 5 that there was no shortfall in houses in Auckland when he came to office, but now there is a cumulative shortfall of 34,000 houses?

Rt Hon JOHN KEY: No. I cannot confirm that. But it is hardly surprising that the demand for housing has gone up, because when I became Prime Minister of this country 35,000 New Zealanders a year deserted for Australia—because they were sick of Helen Clark's Government—and now they are coming home to New Zealand. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I need substantially less interjection than that which is occurring.

Andrew Little: When the Ministry of Business, Innovation and Employment said months ago that not enough houses are being built in Auckland and the shortfall is going to continue to grow for years to come, why did he not tell the public?

Rt Hon JOHN KEY: The Government has, through its comprehensive plan, been demonstrating to New Zealanders that it is very serious about increasing supply and, in fact, that the increase in supply that we are seeing is having a dramatic effect. One only needs to go round Auckland for about 5 minutes and have a look at the enormous amount of construction that is under way. That is why we know there are literally thousands and thousands more people working in construction—tens of thousands, actually—in Auckland than there were a few years ago.

Andrew Little: If Auckland needs 34,000 more houses today, and he has managed just 18 affordable houses in the special housing areas in 3 years, how long will it take to fix the housing shortfall?

Rt Hon JOHN KEY: The member is talking nonsense when he wants to try and trot out his little number of 18, and it dents what very little credibility he has got. As the Minister for Building and Housing has pointed out, over 500 houses meet the criteria that he defines, and that is why the member has no credibility, because he just keeps making things up—

Mr SPEAKER: Order! That sort of final comment will only lead to disorder. [Interruption] Order! Now the interjections are coming from both front benches. I will ask people once more to desist. If I need to start mentioning them by name, I can do that as well.

Andrew Little: Why did he claim a $1 billion infrastructure fund would be the answer to the housing crisis, when Treasury had told him it is not likely to result in additional housing in the short term?

Rt Hon JOHN KEY: I did not. What I did claim was that the $1 billion could be used by councils in the five areas. That will make a difference. That was as a result of ongoing discussions we have had with a number of councils over a long period of time where they talked to us about their inability to take more debt on their balance sheet. The Opposition members cannot have it both ways. On the one hand they want to tell us that we are taking it too slowly to get them what they want—and when we move rapidly they tell us we are going too fast. Maybe we have just got a Goldilocks situation: about right.

Andrew Little: Can we just get a straight answer to this: when he has only managed 18 affordable houses in 3 years, does he really think he is doing enough to fix the housing crisis?

Rt Hon JOHN KEY: It does not matter how many times the member comes to the House with a made-up number that he cannot back up. It does not make it right. It is just like when he keeps telling everyone that he has the support of his caucus. That does not mean it is right either.

Roading, Auckland—Western Ring Route Motorway

3. Dr PARMJEET PARMAR (National) to the Minister of Transport: What recent progress has been made on construction of the Government's western ring route motorway in Auckland? [Interruption]

Mr SPEAKER: Order! Iain Lees-Galloway, could I have substantially less interjection from you, sir.

Hon SIMON BRIDGES (Minister of Transport): Last week the Prime Minister and I officially opened the new St Lukes to Great North Road interchange on Auckland's State Highway 16. The Government has invested $85 million to widen the highway from three lanes to four lanes in each direction, with upgrades to on and off ramps in the St Lukes Road overbridge. The improved section of highway and interchange will improve congestion on Auckland's Northern Motorway and is one of seven projects that make up the Government's $2.4 billion western ring route project.

Dr Parmjeet Parmar: What progress has the Government made on its commitment to deliver the East-West Link roading project?

Hon SIMON BRIDGES: Very pleasing progress, in fact. Recently, the Prime Minister and I marked the start of work on the East-West Link roading project, which is one of the Government's top transport priorities in Auckland and a project of national significance. The first stage of the project, in Onehunga, is now under way, and involves widening the Southwestern Motorway to four lanes in each direction between Neilson Street and Queenstown Road in Onehunga. Dedicated bus lanes will also be added to State Highway 20 at Walmsley Road to improve travel times for those heading to and from the airport. Work is also progressing on the broader East West Connections project, with the consent applications for the $1.85 billion project due to be lodged before the end of the year.

Dr Parmjeet Parmar: What other priority roading projects is the Government delivering in Auckland to support the city's growth?

Hon SIMON BRIDGES: The Government is committed to Auckland and to keeping it moving. In the 3 years to 2018 over $4.2 billion will be invested in transport in and around Auckland. This will see the western ring route completed, including the opening of the $1.4 billion Waterview Connection next year. There is the ongoing construction of the $1.3 billion Auckland-Manakau Eastern Transport Initiative project, $268 million worth of upgrades to parts of the Southern Motorway, and upgrades to the Northern Motorway, including an extension of the Northern Busway. All of these projects underscore the Government's very strong commitment to our biggest city.

Prime Minister—Statements

Rt Hon WINSTON PETERS (Leader—NZ First): This question—[Interruption]—and I am pleased to see you too. Ha, ha!

4. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so, how?

Rt Hon JOHN KEY (Prime Minister): Yes; and with a sartorial elegance that I know the member privately admires.

Rt Hon Winston Peters: I do not want to be churlish here, but—[Interruption]. I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! As I needed to remind the House last Thursday, points of order will be heard in silence. I look forward to the point of order.

Rt Hon Winston Peters: With respect, that is so frivolous and also, as you can see, utterly wrong, that he should be asked to apologise.

Mr SPEAKER: Order! No, the Prime Minister has no responsibility for the question that was put down by the Rt Hon Winston Peters.

Rt Hon Winston Peters: When he said "let's take a minute to look at the enormity of this problem. … the second worst housing affordability problem in the world. … this problem has got worse in recent years.", what did he do about it?

Rt Hon JOHN KEY: A considerable amount. That is what the comprehensive housing plan is about. It is ultimately about dealing with the issues that were created through the metropolitan urban limit in Auckland. It is the release of special housing lands. It is the reform of the Resource Management Act (RMA). It is first-home buyers' grants for New Zealanders. It is a much stronger economy to create jobs. It is the release of land. There is just a range of things that the Government has done to address that issue.

David Seymour: What initiatives did the Government of New Zealand take to—

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

Mr SPEAKER: Order! I have a point of order. I hope it is a genuine point of order.

Rt Hon Winston Peters: It is a genuine point of order.

Mr SPEAKER: Then I will hear it.

Rt Hon Winston Peters: I have observed that it is usually the case that the primary questioner gets the first two questions, and then it passes to the side. [Interruption]

Mr SPEAKER: Order! No, I don't need any assistance. The primary question was asked. The first supplementary question went to the member, the Rt Hon Winston Peters. I then go across to this side if there is a supplementary question. David Seymour.

David Seymour: It helps if the primary question has some substance. What initiatives did the New Zealand Government take between 2005 and 2008 to increase housing supply?

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

Mr SPEAKER: No. [Interruption] Order! There is no prime ministerial responsibility in that question—[Interruption] Order! Ron Mark, there is no need to behave like that. If the member wants to stay—[Interruption] Order! I am excited by the potential question No. 11. I want him to stay for that question, but I do need his assistance to behave himself in the meantime.

Rt Hon Winston Peters: When he said "we need Government leadership that is prepared to focus on the fundamental issues", did he mean promoting the RMA changes loaded with race-based preference?

Rt Hon JOHN KEY: No, and if the member is feeling guilty about the fact that he was part of a Government that did nothing when it came to housing, he should just get up and say sorry.

Rt Hon Winston Peters: When the Prime Minister announced his four-point plan for improving home affordability—(1) ensuring people are in a better financial position to afford a house; (2) freeing up land supply; (3) dealing with compliance and building cost issues; and (4) allowing State house tenants to buy the houses they live in—what happened, Prime Minister, to the first three points?

Rt Hon JOHN KEY: A great deal has happened when it comes to improving the supply of housing in Auckland and across New Zealand. That is why, in the year to August, nationwide residential building consents have increased by 14 percent to 29,622—the highest total since March 2005. I remind the member that he was part of a Government that saw nationwide house prices double—

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

Rt Hon JOHN KEY: Oh, the member does not like it when we point out what actually happened—

Mr SPEAKER: Order! [Interruption] Order! Order! The member will resume his seat. If he wants to raise a point of order, he is certainly welcome to do so. I certainly hope that this time it will be a genuine point of order.

Rt Hon Winston Peters: It is a genuine point of order. It is to do with the fact that he went right off the question that he had been asked and started to get personal and nasty again, which is most unbecoming.

Rt Hon JOHN KEY: Speaking to the point of order—

Mr SPEAKER: No. I thank the Prime Minister for his help but I do not need it. The question itself was a very long question; I could well have ruled it out on the basis that it was not succinct enough. I gave the member the benefit of the doubt and left the question there. It gave quite a wide ambit to the Prime Minister as he chose to answer it.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I may stand corrected, and the member might want to make this clear, but I am pretty sure that he is quoting from statements I made back in 2008 when I was not Prime Minister, in which case, by definition, that does bring the points that I am making about the previous Government well and truly into play, because that is what the question is about.

Mr SPEAKER: I thank the Prime Minister, but that, again, is actually a debating point rather than a point of order. Question No. 5, the—[Interruption] Order!

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am just going to offer to respond to Winston Peters' question about what the point of order was. The point of order simply was that he raised the past; the Prime Minister responded.

Mr SPEAKER: Order! [Interruption] Settle down. We have moved past that point of view, Mr Brownlee. Neither were very good points of order. They are matters for debate, and there will be a general debate tomorrow.

District Health Boards—Funding

5. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Did district health boards receive enough funding in 2016/17 to meet all demographic, wage, and inflationary cost pressures; if not, what is the amount of the shortfall?

Hon Dr JONATHAN COLEMAN (Minister of Health): Demographic pressures for 2016-17 are fully funded, but, of course, we will not know until the end of the financial year whether inflation has been fully funded, but given the latest inflation figures it is as good as covered. Since 2001, district health boards (DHBs) have been asked to make savings every year. For 2016-17 DHBs are expected to save a tiny 0.7 of 1 percent of their total massive $12.2 billion budget.

Hon Annette King: How much funding has been allowed in the DHBs' budgets in 2016-17 to pay for improved working conditions for junior doctors and cover for senior doctors during the 2-day strike?

Hon Dr JONATHAN COLEMAN: Well, of course, that is all subject to ongoing negotiations, as the member well knows, and it is expected that DHBs will use funding within their very generous baselines to cover all pressures in the manner I have just described.

Hon Annette King: Does he stand by his statement that "It is unacceptable if our junior doctors are working in unsafe conditions,"; if so, does he believe junior doctors are working in unsafe conditions—justifying their demand for a safer roster.

Mr SPEAKER: Two supplementary questions. The Minister can answer one.

Hon Dr JONATHAN COLEMAN: Well, of course, we are not going to do wage negotiations in Parliament, but I stand by all my statements.

Hon Annette King: If he believes a junior doctor's job is "tough", why has he been at such pains to rubbish their survey by saying there is "no objective evidence" of a problem when junior doctors reported making mistakes and falling asleep driving home from work, exhausted after long hours?

Hon Dr JONATHAN COLEMAN: Well, look, I think we have got a very hard-working junior doctor workforce and I know the member would love to drag me into the centre of negotiations, but I think the common-sense approach would be, actually, just to let this strike play out and get both parties back to the negotiating table so we can continue to provide the very excellent health services that New Zealanders have the benefit of accessing.

Hon Annette King: Does he think the Prime Minister made an unfair comparison between the long hours junior doctors work, dealing with life and death decisions, and the comparison he made with the long hours that investment bankers work, shuffling money around?

Hon Dr JONATHAN COLEMAN: No, the member is misrepresenting what the Prime Minister said. He said that all young people in professions work long and hard hours in those first few years after graduation.

Hon Annette King: How can he claim all costs have been covered by the Government funding, when the health system has reached the stage where we have some DHBs that could not cover the nurses' pay increase and are now trying to claw back penal rates from junior doctors who work unsociable hours? Is what he is saying not just spin and waffle?

Hon Dr JONATHAN COLEMAN: No, that is completely incorrect. If you look back at the record over the previous 7 years, and what is going to happen again this year, it is that funding has actually been well ahead of the estimated pressures. So funding has kept up with all pressures, but, of course, we will not know until the end of the year what the inflation rate has been. It is very similar to the automatic savings that Labour demanded of DHBs, of 0.5 percent of their total budget each year. This is pretty much in the same ballpark.

Child Sex Offenders—Reoffending Prevention

6. JONO NAYLOR (National) to the Minister for Social Development: What recent announcements has she made regarding efforts to prevent reoffending by known child sex offenders?

Hon ANNE TOLLEY (Minister for Social Development): Last week I announced that New Zealand's first child sex offender register came into effect. Since Friday, when offenders convicted of a qualifying offence come out of prison, they have to provide authorities with a range of personal information and then tell police of any change in their circumstances, or plans to travel. The register will allow authorities to be more proactive in identifying risk and working to prevent reoffending and harm to children.

Jono Naylor: What is the reasoning behind the need for the child sex offender register?

Hon ANNE TOLLEY: Before the register came into effect, there was very limited information available to the authorities on where these people were living once they were released from prison and what was going on in their lives that may trigger reoffending. These offenders will no longer be able to disappear back into communities after completing their sentence, and authorities will now have a much better idea about where they are living and what their personal circumstances are. This will allow them to assess what effect a change in the person's circumstances has on their risk of offending and whether any preventative action needs to take place.

Jono Naylor: Who will have access to the register?

Hon ANNE TOLLEY: Only authorised police and Corrections staff involved in monitoring child sex offenders have direct access to the register. Information will be able to be shared between police, Corrections, the Ministry of Social Development, Housing New Zealand, the Department of Internal Affairs, and Customs, and between the Commissioner of Police and overseas law enforcement agencies, plus police will be able to release some information to a third party such as a parent or caregiver if they assess there is a need to do so to protect the safety of a child or children. This register is part of this Government's commitment to prevent harm to children and is another example of our focus on this very important issue.

Finance, Minister—New Zealand Superannuation Fund

7. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Why did he break his commitment with respect to the New Zealand Superannuation Fund, "when surpluses return we will resume contributions", and will he make restarting contributions to the New Zealand Superannuation Fund a higher priority than tax cuts?

Hon BILL ENGLISH (Minister of Finance): I disagree. There has not been any broken commitment regarding the Superannuation Fund. We have said for some time that when the Government returns to a sufficient budget surplus and can contribute genuine savings rather than borrowing, National will resume contributions to the New Zealand Superannuation Fund. The straightforward issue is that even when the Government shows surpluses under the operating balance before gains and losses measure, it does not always have cash surpluses until those accounting surpluses get reasonably big.

Grant Robertson: In light of that answer, does he recall Sunday, 31 May 2009, when he said to Guyon Espiner that "the Government would restore contributions to the super fund when surpluses return."? Is that not a breaking of a commitment?

Hon BILL ENGLISH: I remember that Sunday in 2009 in vivid detail, in fact, and constantly go back to it. The Government has outlined its position many, many times since 2009, and when there are sufficient surpluses and when we have debt down to the levels we think are prudent, which is 20 percent of GDP by 2020, then we will resume contributions, which we would like to do. I am pleased to report to the member that because we took none of the Labour Party's advice, we currently have the choice of making some contributions.

Grant Robertson: Is the New Zealand Superannuation Fund correct when it says that, as at 30 June this year, the fund is—

Hon Steven Joyce: Back on the burning issues!

Grant Robertson: Do you want to answer, Steven?

Mr SPEAKER: Order! No. [Interruption] Order! The interjections coming from Mr Joyce are certainly not helpful. They must cease. Would the member like to start his question again?

Grant Robertson: I would. Thank you, Mr Speaker. Is the New Zealand Superannuation Fund correct when it says that, as at 30 June this year, the fund is $20 billion less than what it would have been had contributions been continued?

Hon BILL ENGLISH: No. That is a hypothetical calculation. In any case, the legislation does not give the Superannuation Fund the job of deciding when contributions are made; it gives this Parliament the job—and rightly so. Given that it is a long-term fund, it is the return over 20, 30, or 50 years that matters, not the return over the first 10 or 15. It is just a hypothetical calculation.

Grant Robertson: All right then. Is Treasury correct that the Superannuation Fund will be $36 billion short of what is required by 2030, and does he not think that making up for this should be a greater priority for surpluses than tax cuts?

Hon BILL ENGLISH: As we have indicated, contributions to the Superannuation Fund are among the choices that the Government has, as well as the size and scope of those contributions. But Treasury cannot possibly know what a shortfall might be in 2030, because it does not know what decisions Governments will make under the legislation between now and then, and it does not know about any of the other fiscal risks that might occur between now and then.

Grant Robertson: Why is he being so irresponsible and reckless to put tax cuts ahead of providing a secure retirement for future generations, when older New Zealanders are waiting longer and paying for operations, and children are trying to do their homework by torch-light in a van because of the housing crisis? Are those things not more important than tax cuts?

Mr SPEAKER: A series of supplementary questions—the Hon Bill English can answer any.

Hon BILL ENGLISH: Right now those things are more important than ineffective Government spending that does not change lives in the way that we would hope it does. This Government has developed a wide-ranging tool kit to enable it to focus on the high-priority communities that need effective Government spending. In fact, what we do with the $70 billion we already spend is much more important than what happens with the next $2 billion or $3 billion.


8. BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Corrections: What is the Government doing to ensure our prisons have the capacity they need?

Hon JUDITH COLLINS (Minister of Corrections): Excellent question. Well, today I announced plans to increase prison capacity on existing prison sites by around 1,800 beds, at a construction cost of around $1 billion. Despite significant progress in reducing crime, the number of prisoners has increased faster than projected. The Government is responding with new investment. We are committed to ensuring value for money for taxpayers. All the proposed beds are on prison land where a lot of the infrastructure is already in place.

Barbara Kuriger: How will the Prison Capacity Programme further ensure those in prison get the treatment and rehabilitation they need to reduce reoffending?

Hon JUDITH COLLINS: The Prison Capacity Programme is not just about bricks and mortar but is also aimed at the drivers of crime: drug and alcohol abuse, and domestic violence. Along with ensuring public safety, reducing reoffending is Corrections' ultimate goal. Corrections actively works with offenders to provide rehabilitation, education, and employment training that make a positive and demonstrable difference in assisting prisoners to turn around their lives. The programme will increase delivery of the department's most successful rehabilitative and reintegrative programmes, including drug treatment units to address drug- and alcohol-related issues; special treatment units to address violent and sexual offending; reintegration programmes, including Out of Gate and guided release; and education training programmes such as core literacy and numeracy, and industry training.

Finance, Minister—Crown Financial Institutions

9. JAMES SHAW (Co-Leader—Green) to the Minister of Finance: Would he act to further regulate Crown Financial Institutions if they were found to still be directly or indirectly investing in companies involved in the manufacture of cluster bombs, nuclear weapons, land mines, tobacco, or whaling?

Mr SPEAKER: Before I call the Minister, my office has been advised that this answer may be longer than normal in an attempt to fully inform the member.

Hon BILL ENGLISH (Minister of Finance): No. And I would just like to explain briefly for the member how the independent investment activities at Crown Financial Institutions (CFIs) are already subject to a range of requirements for ethical investment. Each CFI runs an exclusion list that prevents direct investment in the companies on those exclusion lists. All of the activities that the member asked about are excluded by these lists. CFIs may also invest in what are called collective investment vehicles (CIVs). Most recent figures show that CIV investments are a small proportion—around 3 percent of ACC in New Zealand Superannuation, and 13 percent of Government Superannuation Fund portfolios, which total just short of $70 billion. If a CFI learns that a collective investment vehicle has invested in a company on its exclusion list—that is, investing in the activities that the member referred to—the CFI will engage with the fund manager to try to influence their behaviour or consider divestment. Finally, all CFIs are signatories to the United Nations Principles for Responsible Investment, and have adopted the UN Global Compact. These require signatories to establish a responsible investment framework, which is subject to the following statutes and resolutions: the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987, the Cluster Munitions Prohibition Act 2009, the Anti-Personnel Mines Prohibition Act 1998, and two UN Security Council resolutions regarding nuclear weapons.

JAMES SHAW: So, given all of that, is he saying that it is acceptable for the Government to indirectly invest in, and profit from, companies that manufacture cluster bombs that blow the legs off children?

Hon BILL ENGLISH: We would expect that the fund that became aware of an investment in one of the excluded activities would then take the action required to comply with its own rules—that is, either to influence, in this case, the collective investment vehicle that may be investing at one or two arm's lengths from such activities, or to divest.

James Shaw: Is he aware that the Government Superannuation Fund Authority continues to invest in three tobacco companies even though the authority itself has found these companies unethical, and is it not time to make the law clearer?

Hon BILL ENGLISH: I think the law is pretty clear, and the Superannuation Fund should comply both with the law and with the ethical investment framework, which I am advised is one of the most developed among sovereign funds in the world.

James Shaw: I raise a point of order, Mr Speaker. Just for clarity, I was referring to the Government Superannuation Fund Authority, not the Superannuation Fund.

Mr SPEAKER: My difficulty is that the member actually asked two questions. He then also asked whether it is not time to make the law clearer, and the Minister immediately addressed that. So he has answered one of the legs, and that is enough to satisfy.

James Shaw: Does he agree with the ACC investment fund's position statement, stating that it thinks indirect investments in cluster bombs manufacturers are perfectly legal?

Hon BILL ENGLISH: Again, we would expect it to comply both with the statute that creates a framework for its investment decisions and with any undertakings that it has made, as I said, as signatories to the United Nations Principles for Responsible Investment. I think the member would probably give credit to these organisations that as and when issues are raised regarding investment in companies that are on the exclusion list, from what I have seen, in each case the funds have acted appropriately.

James Shaw: I seek leave to table the ACC investment fund's position statement on investment in cluster bombs, obtained under the Official Information Act.

Mr SPEAKER: Is it freely available on the ACC website?

James Shaw: No. We could not find it on the website.

Mr SPEAKER: On that basis I will put the leave. Leave is sought to table that particular position statement. Is there any objection? There is none. It can be tabled.

Document, by leave, laid on the Table of the House.

James Shaw: Is it not a double standard for the Government funds to continue to invest indirectly in cluster bomb makers—for example, when KiwiSaver providers immediately dropped their indirect investments?

Hon BILL ENGLISH: I would not use that term—in the first place, I am not exactly sure whether what the member says happened has actually happened. Secondly, in respect of the Crown financial institutions, we would expect them, as I said, to act consistently with the statute, and in fact with general expectations around the United Nations principles, and so on. If it is the case that ACC is not complying with those, then that would be a matter of governance, which I am sure would be raised with it.

James Shaw: Is it ever OK to fund cluster bombs?

Hon BILL ENGLISH: No, but I do not think that is the issue here. The issue here is how these financial institutions deal with the situation where much of the levy payers' funding that they have is invested indirectly, often at two or three arm's lengths, from the New Zealand decision maker—that is, invested in collective vehicles, which are then investing in further collective vehicles. We would expect them to have the systems that enable them to be able to track their investments and respond consistently with the framework, in a way that I think the member and the Government would probably agree on.

James Shaw: Given that when the New Zealand Herald broke the story a few weeks ago about KiwiSaver investments, indirect investments, in these kinds of companies, how come it was that they were able to move within a matter of a few days and yet the Government funds do not seem to have been able to find that information?

Hon BILL ENGLISH: I cannot answer that question directly. I think it is safe to say that KiwiSaver funds managers made statements within a few days. Just whether they have been able to divest, I think, is another matter that you would have to check up with them. But we would expect Crown financial institutions to act in a way that is consistent with their own ethical investment practices and with the statutes that govern them.

Illegal Drugs—Prevention

10. STUART NASH (Labour—Napier) to the Minister of Police: Is the Government winning its so-called "war on P", given the drug is now cheaper, more pure, and more readily available than ever, according to the Police Association?

Hon JUDITH COLLINS (Minister of Police): Victory will not be declared until there is no more methamphetamine being bought and sold in New Zealand. Although there is always more that can be done, the Government has made excellent progress on tackling the problem. So far, we are seizing more methamphetamine than ever. The Police have seized almost a tonne this year so far—

Hon David Parker: That's not true. There's more, it's purer, and more available.

Hon JUDITH COLLINS: Mr Parker might think that that is something to laugh at, but I do not. We are taking the proceeds of crime from criminals. Over $390 million of cash and assets have been seized since December 2009, and we are using that money on drug-related initiatives. Just yesterday the Prime Minister announced that almost $15 million seized from criminals will be invested in anti-drug initiatives, to reduce both supply and demand, with extra funding for the Police, Customs, Health, and Corrections.

Stuart Nash: If this is such an important area, why has the number of police officers dedicated to drug crime been cut in the last 3 years, according to her own figures?

Hon JUDITH COLLINS: Obviously, that member does not realise that every member of the New Zealand Police is dedicated to dealing with this area. Nobody in the Police would actually walk by and allow this drug to continue being sold.

Stuart Nash: Does she support the Prime Minister's support for gangs acting as vigilante groups to fight P, or does she support the Police, which has said: "We reinforce that people should not take matters into their own hands."?

Hon JUDITH COLLINS: I see no difference between the Prime Minister's very wise words and those of the New Zealand Police.

Jami-Lee Ross: Has the Minister received any reports of organisations advocating greater law enforcement activity in relation to drugs, while also opposing the need to accommodate more offenders in prison?

Mr SPEAKER: I will just be listening very carefully to the answer to the question.

Hon JUDITH COLLINS: Strangely enough, I have. That would be the New Zealand Labour Party, under Mr Andrew Little.

Mr SPEAKER: Order! No. That is a question that is designed to do nothing but attack the Opposition.

Stuart Nash: Rather than leaving law enforcement to the gangs, will she back Labour's plan for 1,000 extra police?

Hon JUDITH COLLINS: Rather than ever back the Labour Party on law and order, I think we would—obviously, it is nice to know that some gang members are turning their lives around and suddenly deciding that methamphetamine is a bad thing, and that is a good thing. When they start taking family violence as seriously, then I will be a bit more impressed.

Stuart Nash: When P gets cheaper, more pure, and easier to get than ever, when communities have to turn to gangs for help because there are not enough police, when P is driving the surge in violent crime all over the country, why can she not admit that National has failed to live up to its promise to New Zealanders and adopt Labour's plan for extra police?

Hon JUDITH COLLINS: That member has obviously got a very short memory, because I remember that when Labour was last in Government it said that P was not an issue.

Prime Minister—Statements

11. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so, how?

Rt Hon JOHN KEY (Prime Minister): Yes; and as Prime Minister.

Ron Mark: How can he say that his Government is "not losing the war on P" when, after 8 years of his leadership, there is now so much of it available on the street that the price has plummeted to half of what it was when he came to office?

Rt Hon JOHN KEY: First, I am not sure that that is actually the statement that I made, but, second, I think it is worth reflecting on what is happening. That is that the Government has had a fairly comprehensive plan that has seen, actually, significantly more resources for both Police and Customs, and more money put into rehabilitation beds. That has seen—on the estimates of the most significant survey in this area, actually—the usage of P reduced by about half. What is true, though, is the enormous price differential between what the product actually sells for in New Zealand and what you can buy it for in markets like Mexico or China, meaning there is a huge incentive for people to bring it into New Zealand.

Ron Mark: Does he agree with the current president of the Police Association, who said in reference to the P problem that "we took our foot off the throat", and the outgoing president, who said "funding to police organised crime units [has] been reduced, making it more difficult to fight the p problem.", and is it not him and his Cabinet who are ultimately responsible for that?

Rt Hon JOHN KEY: No, I do not agree at all, and the facts do not back that up.

Ron Mark: How pathetic is it that your Government on one day announces that it is going to spend $28 million exterminating possums and rats, and then on another day announces that it is going to spend a piffling $15 million to eradicate P dealers?

Rt Hon JOHN KEY: I think it would be a stretch of the legislation to use the proceeds of crime to exterminate rats, and, therefore, we are using the legislation and the powers within the legislation to use those resources. Far from being behind the ball, actually, the Government has been quite forward-leaning in this area, but one has to accept that around the world the use of P has actually increased for the hardened end. The overall usage rates in New Zealand have declined, on the survey work.

Ron Mark: Then does he stand by his and his officials' views that "the number of people using P is declining", and would he accept that one would have to be on P to believe that?

Rt Hon JOHN KEY: The member is entitled to hold that view if he wants to, but the biggest survey in this area—which is an anonymous survey that people fill in and also takes into account the number of people who present themselves at hospitals and the like—indicates that the broader usage of P is going down. What is absolutely true, I think, is that the hardened end of users is going up, and what has been the case is that we have become much better at identifying that now. People do test homes, for instance, for the use of P and the like. The reality is that New Zealand—I think, actually, above Australia—has one of the highest rates, if not the highest rate, in the OECD, and that there are enormous price differentials, which encourage the gangs to try to bring it into New Zealand. We need to combat that, and that is what we are doing.

Waste Management—Plastic Bags

12. DENISE ROCHE (Green) to the Minister for the Environment: Will he support a charge paid by customers on single-use plastic bags in order to reduce waste and provide revenue for waste-minimisation programmes and education; if not, why not?

Hon NICKY WAGNER (Minister of Customs) on behalf of the Minister for the Environment: Plastic bags make up a very small proportion of New Zealand's waste stream, about a quarter of 1 percent—a quarter of 1 percent—so the Government currently does not support a compulsory charge. That would also be double-dipping, because we already charge a levy on every tonne of waste that goes to landfill, and that charge raises $30 million a year for waste initiatives, including $15 million for local initiatives including education and research.

Denise Roche: Why will he not support a charge when overseas examples have shown how well they work—for example, in the UK where there has been an 85 percent reduction in plastic bag use and £13 million generated for environmental charities in just the first 6 months?

Hon NICKY WAGNER: Waste minimisation is focused on managing waste harm and waste volume. Plastic shopping bags only become a significant environmental problem if they are not disposed of correctly, but New Zealanders are generally very responsible about that and we have good waste management and recycling facilities. Furthermore, single-use plastic bags are only a quarter of 1 percent.

David Seymour: Does the Minister believe it a good use of New Zealanders' funds to take $150 million—at 15c on a billion plastic bags—to potentially reduce plastic waste output by a quarter of 1 percent?


Denise Roche: Should this Government not be more ambitious than settling for a recycling scheme that does not actually reduce the 1.6 billion plastic bags that we use every year, when scientists are predicting that there will be more plastic than fish in the sea by 2050 unless drastic action is taken?

Hon NICKY WAGNER: Plastic bags only become a problem if they are not disposed of correctly, and there are effective waste management systems and recycling facilities. But international research tells us that 80 percent of the plastic in our marine environment comes from a total of 20 countries, and New Zealand is not one of those countries. I believe there is a bigger concern of plastic microbeads, because it is not possible for households to separate these and they end up in the waterways and the oceans, so the Ministry for the Environment is working with its officials and with Australians to address this issue.

Denise Roche: Is the Minister saying we should just give up trying to protect our oceans?

Hon NICKY WAGNER: Of course not.

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