Parliament: Questions and Answers - June 26
QUESTIONS TO MINISTERS
Question No. 1—Prime Minister
1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government's statements, policies, and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Yes.
Hon Simon Bridges: Is she satisfied with annual GDP per capita growth at 0.7 percent in the last 12 months when it averaged 1.6 percent during the five years before she took office?
Rt Hon JACINDA ARDERN: Again, as I pointed out yesterday, over the term of the last Government's term in office they averaged at 0.9 percent, and that's obviously the quarterly growth that we've experienced. I also think it's worth pointing out, again, as I said yesterday, that the 10-year, long-term average is 1 percent, but is actually over the next 4 years forecast to be 1.2 percent. But, overall, even despite those figures, I acknowledged yesterday in the House, and continue to do so, that there are improvements to be made particularly in the area of productivity.
Hon Simon Bridges: Does she accept that growth per person was stronger in the five years before she took office than under her Government; if not, is she not aware that growth per person has halved under her Government?
Rt Hon JACINDA ARDERN: Indeed I have the figures in front of me. When it comes to the quarterly change in GDP per capita, we've consistently had rates of 0.1, 0.2. There are numbers that the member opposite will well know, given it generated under his office 0.9 percent on average, that have never been numbers particularly to crow about. Work needs to be done. Again, I'd also like to point out that the member mentioned yesterday New Zealand's ranking in GDP per capita relative to the OECD in 2018—that we were seventh worst. I think it is worth pointing out that New Zealand was rated third worst GDP per capita in the OECD when he was in Government in 2017.
Hon Simon Bridges: Is she concerned, given the services sector represents 70 percent of the New Zealand economy but it grew only 0.2 percent last quarter, which is a decline when you take out the population growth?
Rt Hon JACINDA ARDERN: Of course, if we take the current account deficit generally, then we see, actually, a quite different picture. If he only wants to focus in on what's happening around net flows with services, tourist spending fell, yes, but at the same time we saw exports perform particularly well. It is about both what's happening with our service sector but also our exports. Overall, relative to other OECD nations, we are performing relatively strongly.
Hon Simon Bridges: What's the current account deficit got to do with the State services sector—70 percent of our economy that only grew 0.2 percent last quarter, a decline when you account for population growth?
Rt Hon JACINDA ARDERN: Because taking into account when we look at the weekly economic update that comes through from Treasury, they have made, in particular, references to services' balance deterioration being related to the tourists' spending having fallen.
Hon Simon Bridges: Why is our GDP growth slowing when the terms of trade and exports are rising?
Rt Hon JACINDA ARDERN: Again, as I have said in this House before, if the member wants to fixate solely on, for instance, the prices that our exporters are receiving, then that is perfectly his prerogative to do so. But, of course, it is also about the investment decisions that are being made, and, as every economist is pointing out and as the Reserve Bank themselves are pointing out, the international environment does have an impact on confidence and investment decisions. That is what's causing other economies to slow, but, again, alongside those other economies, we are performing well.
Hon Simon Bridges: What does she say, then, to Westpac economists this week, who stated, "New Zealand's economic growth has slowed in the last year, which we put down largely to domestic factors."?
Rt Hon JACINDA ARDERN: Even the Minister of Finance himself and, in fact, most members in this House bar him, I believe, have reflected on the fact that there is a slow-down. But what I continue to be frustrated by is the fact that the member seems to think the experience is unique to New Zealand, when we see that even, of course, the projections that are coming out of the IMF, and the acknowledgment by the OECD, are that we are in the middle of a global slow-down.
Hon Simon Bridges: Does she think one of the reasons the services sector went backwards last quarter on a per capita basis was because of the decline in consumer confidence, and does she think that her Government's higher petrol taxes are partly responsible for that weakening consumer confidence?
Rt Hon JACINDA ARDERN: I've actually been interested in the trajectory of consumer confidence, and the Westpac McDermott Miller consumer confidence survey actually showed some really interesting numbers recently in the June quarter, demonstrating that, actually, confidence in the under-30-year-old age group reached a five-year high. I'd say that particularly may potentially be a reflection of what's happening in the housing market—a softening in Auckland—and, of course, wages and wage growth are looking to outstrip now what we've seen in housing cost increases. So I think the member would do well to keep a fuller picture of what we're seeing in some of those consumer confidence numbers.
Hon Simon Bridges: Is she aware that the Westpac regional economic confidence survey last week showed that eight of New Zealand's 11 regions had a deterioration in economic confidence last quarter, and why does she think that is?
Rt Hon JACINDA ARDERN: I imagine because they read the news in the same way we do and see the issues around potential oil price increases coming out of Iran, China's economy softening, and issues in the UK affecting trade as well. We do not operate in isolation. We are an exporting, trading nation that of course looks to attract investment in New Zealand, and, of course, when we have a global slow-down, it affects us.
Hon Ron Mark: It's pretty simple, Simon.
Hon Simon Bridges: Is she—
SPEAKER: Order! Order! No, the member will resume his seat. That's not an appropriate interjection. The Deputy Prime Minister will withdraw and apologise.
Hon Members: No, it wasn't—
SPEAKER: Oh sorry, was it Ron Mark?
Hon Ron Mark: I withdraw and apologise.
SPEAKER: That was a good imitation.
Hon Simon Bridges: Is the Prime Minister's position that it's uncertainty in Iran that's led to eight of New Zealand's 11 regions showing deteriorating economic confidence?
Rt Hon JACINDA ARDERN: That is not what I said.
• Question No. 2 - Finance —
2. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?
Hon GRANT ROBERTSON (Minister of Finance): Yesterday, the OECD released their 2019 survey for New Zealand. I'm sure that the House will be pleased to know that it said that economic growth in New Zealand is solid, and it commended the Government for its sound economic management. Equally pleasing is that the survey's recommendations support the policy direction this Government is taking, including in the Wellbeing Budget. The 2019 survey looked at New Zealand through a wellbeing frame, with the OECD finding that "current wellbeing in New Zealand is generally high, [with our performance] very good for employment and unemployment,…health, social support, air quality, and life satisfaction."
Tamati Coffey: Did the report highlight any risks to the New Zealand economy?
Hon GRANT ROBERTSON: Yes, it did. The OECD said that the greatest risks facing the economy were a sharp economic contraction in China, and also natural disasters. That's why the Government is managing the books responsibly, so that we can face global economic headwinds and make sure we are in a strong position to deal with any event such as a natural disaster. The OECD said the greatest domestic risk was a housing market contraction, not because it expects one but because of the high levels of indebtedness that have been built up in our housing market over previous decades. That's why this Government has a comprehensive housing plan that includes reform of our urban planning systems, building affordable houses, changes to the rules around foreign buyers, and the extension of the brightline test.
Tamati Coffey: What other reports has he seen on the New Zealand economy?
Hon GRANT ROBERTSON: Well, today the International Monetary Fund released its concluding statement following its article IV mission. While they noted a slower rate of economic expansion, they did say that the near-term growth outlook is expected to improve on the back of Government investment and accommodative monetary policy. They went on to say that Budget 2019 strikes an appropriate balance between supporting policy priorities and maintaining prudent debt levels. They noted that New Zealand's sound fiscal framework had been further strengthened by this Government's approach. While these international organisations may have some different policy prescriptions from the Government, they agree that the fundamentals of the economy are strong and that the Government's priorities are focused in the right areas.
Rt Hon Winston Peters: Can I ask the Minister of Finance as to whether he will share that information on the OECD and the IMF with the Leader of the Opposition and yet another finance spokesperson?
Hon GRANT ROBERTSON: I certainly intend to do that. I've been sharing it with the House today, and I shall make sure it's done in very short sentences.
• Question No.3 - Finance
3. Hon PAUL GOLDSMITH (National) to the Minister of Finance: Does he agree with the Reserve Bank that there has been a "sharp decline in GDP growth" while he has been in office?
Hon GRANT ROBERTSON (Minister of Finance): I take the opportunity to welcome the member to the portfolio. As I have previously acknowledged in this House, the rate of GDP growth in New Zealand has slowed. But I also note that Statistics New Zealand, who produce the GDP data, said, in last week's release, "Annual growth in GDP has been slowing since the December 2016 quarter."
Hon Paul Goldsmith: What effect does an economy that is losing momentum have on the day-to-day lives of Kiwis?
Hon GRANT ROBERTSON: We all know that we need sustainable economic growth in New Zealand in order to support all of the things that we want for our country. The New Zealand economy continues to grow—as the OECD said—at sustainable and solid levels. We also continue to grow at a faster rate than most of the countries that we compare ourselves to. So, yes, sustainable economic growth is important. What's also important is caring about who shares in that growth.
Hon Paul Goldsmith: Does he accept analysis from the OECD that healthcare "is strongly dependent on the economy, and the GDP correlates with lower child mortality, higher life expectancy, higher literacy rates, and greater life satisfaction."?
Hon GRANT ROBERTSON: The member may not have heard my answer to his last supplementary question. We need sustainable economic growth. That means building that growth on lifting levels of productivity, actually investing in innovation in our regions and in infrastructure—all of the things that the last Government failed to do. So while it's all very well to be able to quote the OECD, it's this Government that actually has a plan to address the issues that they've raised.
Hon Paul Goldsmith: Did he note the comments today from the IMF saying, on the risks to the downside, "On the domestic side, the fiscal stimulus could be less expansionary if policy implementation were to be more gradual than expected", and does that, in quotes, mean "if the Government stuffs up the implementation", like it has with KiwiBuild?
Hon GRANT ROBERTSON: I would invite the member to read all of the IMF's statement. I know just getting past the first few lines might be a struggle, but I'll help him out here. The financial year 2019-20 Budget "strikes an appropriate balance between supporting policy priorities and maintaining prudent debt levels." "New Zealand's sound fiscal framework has been strengthened further." I could go on, but what the IMF is saying is that this Government has got the balance of its priorities right.
Hon Paul Goldsmith: Is he willing to contemplate a return to Budget deficits in 2020 or 2021 if the slowdown continues and his Government continues significantly increasing spending?
Hon GRANT ROBERTSON: That is a hypothetical, and I have huge confidence in the businesses and the workers of New Zealand that are supported by a Government that's investing in skills, in research and development, in infrastructure. We will be able to see a sustainably growing economy over that period. The member shouldn't take on a pessimistic tone.
Hon Paul Goldsmith: Well, regarding that pessimistic tone, isn't the real threat to the economy coming not from anything I say but what he and his Government is doing with policy after policy driving down growth and a lack of delivery on infrastructure and housing?
Hon GRANT ROBERTSON: It is a little bit rich from a Government that failed to invest in infrastructure year after year to stand up in this House and say that this Government's not doing enough in that area. I think the parents of children who are being taught in assembly halls because that Government failed to invest in schools will find that a bit rich. I think the people who are in hospitals where the lifts don't work and the heating doesn't work because that Government failed to invest in the health infrastructure know that it is this side of the House that has their best interests at heart.
Hon Simon Bridges: What role does he believe uncertainty in Iran has on eight of 11 regions in New Zealand suffering dramatically declining economic confidence this last quarter?
Hon GRANT ROBERTSON: I would've thought the member, who's come to the aid of his new spokesperson there, would know that businesses in our regions are incredibly connected to the world, and what they're concerned about is making sure, as they turn into an export business, that there is a stable global economy. They know that New Zealand is an exporting nation that has to care about what happens in the rest of the world. But I understand that the member who asked that question's more focused on internal matters.
Hon Simon Bridges: So, to be clear, is he seriously saying it is uncertainty in Iran that is causing eight of 11 regions in New Zealand to suffer sharply declining economic uncertainty?
Hon GRANT ROBERTSON: I'm sure the member is aware that Iran is one example of global uncertainty. The Prime Minister, when she spoke before, gave a number of examples. She mentioned Brexit; she mentioned the trade war between China and the US. That member well knows that New Zealand, as a small nation, has to make sure that it's aware of what happens in the rest of the world. We know that the greatest threat to that member is sitting very close to him.
Rt Hon Winston Peters: If the issue of business confidence is what's important here, how come the New Zealand sharemarket is at new record levels?
Hon GRANT ROBERTSON: Indeed, there are many examples in the New Zealand economy of where businesses and companies are doing well, where people want to invest in innovation, where the Government is alongside them making sure that we're adjusting to the climate change challenge and making sure that we're transforming the economy. It's the difference between a Government that's firmly focused on building an economy that's appropriate for the 21st century and an Opposition that's pessimistically looking in the rear-view mirror.
• Question No. 4—Housing and Urban Development
4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: How many of the 10,356 KiwiBuild houses contracted and committed to build are in either the Mount Roskill, Māngere, Northcote, or Porirua developments or at the old Wakatipu High School site in Queenstown?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): I'm advised that there are 3,879 KiwiBuild homes currently forecast across those five sites. This figure will change as build dates are confirmed and contracts finalised.
Hon Judith Collins: Does he stand by his answers to written questions that there was no specific date for when houses at Mount Roskill, Māngere, Northcote, and Porirua were committed to by this Government?
Hon PHIL TWYFORD: The answer was correct based on the advice I received. There were no specific dates, but there were time frames within which those houses are committed.
Hon Judith Collins: How can houses be contracted and committed to be built if there is no date on which the agreement was made?
Hon PHIL TWYFORD: If I could just seek clarification in the member's question—the member is saying that there was no date on which the contract or the commitment was made?
Hon Judith Collins: Shall I address that?
SPEAKER: Yes, say it again.
Hon Judith Collins: Yes. Yes, that's what it says in written questions. How can houses be contracted and committed to be built if there is no date on which the agreement was made, as disclosed in written questions answered today?
Hon PHIL TWYFORD: The houses that are contracted and committed include homes that are committed in the large-scale developments within a certain time frame and homes that are based on finalised contracts. It's based on completed and approved—
Hon Gerry Brownlee: It's just being made up.
Hon PHIL TWYFORD: —business cases.
Brett Hudson: The Minister needs to be reset.
SPEAKER: Order! The member will stand, withdraw, and apologise.
Brett Hudson: I withdraw and apologise.
SPEAKER: No, I thought it was Mr Brownlee who made the—or was it Mr Hudson? All right. I'm missing them today!
Hon Judith Collins: Which of the—
Hon Gerry Brownlee: I've been named!
SPEAKER: Order! Order! Yesterday, you took the blame for Amy. Well, I apologise to you, and I'm sure Ms Adams will shout you something later.
Hon Judith Collins: Which of the HLC developments—Mount Roskill, Māngere, Northcote, and Porirua—were not already planned before KiwiBuild came into existence and included in his various briefings as incoming Minister?
Hon PHIL TWYFORD: Of those developments that the member has listed, only the one in Northcote was started by the previous National Government, and in that development there was no guaranteed commitment to build a certain number of affordable homes. In all of the others, the business cases were completed and approved after the last election.
Hon Judith Collins: I raise a point of order, Mr Speaker. My question was: which of those four developments were not already planned before the Government came into existence and also included in his briefings as incoming Minister?
SPEAKER: I'll get the Minister to repeat his reply or to answer the question again. I'm sorry; he might have got it in there, but I was momentarily distracted.
Hon PHIL TWYFORD: Well, I guess it depends what the member means when she says "planned". There was a press release by the former Government that announced the intention to build some developments in those places, but there were no approved business cases for any other developments, other than the Northcote one, and no commitment to a guaranteed number of new affordable homes.
Hon Judith Collins: Is his ministry being truthful when it says that KiwiBuild has contracted and committed to build 10,356 houses, when there are no dated contracts for those?
Hon PHIL TWYFORD: Yes, the ministry is being absolutely truthful. There are 10,356 KiwiBuild houses either contracted through the Buying off the Plans scheme or committed in confirmed business cases over the next 10 years in a number of large-scale urban development projects.
Hon Judith Collins: Can he guarantee that following the KiwiBuild reset, the homes to be built at Mount Roskill will be marketed as KiwiBuild?
Hon PHIL TWYFORD: Well, as myself and the Prime Minister have been saying, all of the policy decisions involved in the reset will be announced when the reset is announced.
• Question No. 5 - State Services
5. GINNY ANDERSEN (Labour) to the Minister of State Services: What reports has he seen on New Zealanders' trust and confidence in public services?
Hon CHRIS HIPKINS (Minister of State Services): Good news, Mr Speaker. On Monday, the State Services Commission published the 2018 Kiwis Count survey, which shows that trust in public services is at an all-time high. The Kiwis Count survey provides a voice for New Zealanders who use public services and gives us a clearer picture of what the Public Service is doing well, and it also gives us an indication of where we can focus our activities to do better. Achieving a record service satisfaction high with the public on 43 commonly used public services—such as applying for New Zealand superannuation, for example—speaks to a culture change that the coalition Government has been putting into place, ensuring that people's wellbeing is at the centre of what we do.
Hon Phil Twyford: What does the survey show about the public's satisfaction with Housing New Zealand?
Hon CHRIS HIPKINS: More good news. It shows that a significant improvement in the public's satisfaction with Housing New Zealand has occurred, the largest increase since 2012. Of those who applied for, or are living in, a Housing New Zealand house or a community housing provider, their satisfaction increased by 13 percent between 2017 and 2018. Of those who applied for or received a housing subsidy or accommodation supplement, their satisfaction increased by 11 percent between 2017 and 2018.
Hon Peeni Henare: What does the survey show regarding public satisfaction with applying for a community services card?
Hon CHRIS HIPKINS: It shows a record level of satisfaction from the public when they were asked about applying for or using a community services card—again, the largest increase in 2018 since 2012.
Hon Peeni Henare: What does the survey show about the public's perception of Work and Income support?
Hon CHRIS HIPKINS: More good news. It shows a significant change in the public's satisfaction with Work and Income, with the largest increase since 2012. In those applying for or receiving a sole parent or jobseeker support payment: 6 percent up between 2017 and 2018.
Hon Willie Jackson: What does the survey show about the public's satisfaction with using services for employment or retraining opportunities?
Hon CHRIS HIPKINS: More good news. The survey shows the largest increase since 2012 in people's perceptions of using public services for employment and retraining opportunities, with an 8 percent increase since 2017.
SPEAKER: Right, I was going to say, the next one can just be "ditto".
• Question No.6 - Health
6. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Does he agree the projected final district health board combined deficits for the 2018/19 financial year will be $389.5 million, as forecast by the Ministry of Health from the March 2019 figures; if not, what does he expect the deficit will be?
Hon Dr DAVID CLARK (Minister of Health): That forecast was made based on the best available information at the time. I do, however, expect the combined deficit to be larger than that, in large part because of one-off costs related to legacy issues inherited by this Government. This includes historic Holidays Act pay issues that should have been resolved years ago, as I think the member knows, and writing down the value of assets related to the National Oracle Solution, which has cost more than $100 million over seven years, been much delayed, and failed to deliver the anticipated benefits. Work on these longstanding issues is ongoing, and it would not be appropriate to speculate about their final financial cost and the impact on district health board (DHB) deficits.
Hon Michael Woodhouse: Are reports that the actual DHB combined deficits are now projected to be $460 million in the 2018-19 year accurate?
Hon Dr DAVID CLARK: I have not heard that particular projection. What I will say about the figure that was covered in his primary question is that that Budget reflects the best available forecasts at the time.
Hon Michael Woodhouse: When he said that his Government is "investing in our health system, which was neglected for nine long years", did he expect that his Government's investment in health would result in DHB deficits going down or up?
Hon Dr DAVID CLARK: I make no apologies for overseeing record investment in new mental health services. I make no apologies for investing in our ageing hospital facilities and funding DHBs more sustainably. The member might want to reflect on the legacy of under-investment, workforce issues, and deferred capital investment that his party left behind.
SPEAKER: Order! Order! The member will now answer the question.
Hon Dr DAVID CLARK: Can the member please repeat the question?
Hon Michael Woodhouse: When he said that his Government was "investing in our health system, which was neglected for nine long years", did he expect that his Government's investment would result in DHB deficits going down or up?
Hon Dr DAVID CLARK: I understand from those years of under-investment that it will indeed take more than one or two Budgets to ensure sustainability in our health sector. By DHB the results do vary because some DHBs require more investment to get on to a sustainable footing. They have been running off their balance sheets. Deficits have been going up since 2013 because of the shameful under-funding of that Government. It is too soon to say what that will mean as an overall picture. DHB by DHB it will vary because of that under-investment and the effect and long-term impact it's had on their balance sheets and on the sustainability of their services. That Government under-funded those services for nine long years, and there are consequences of that.
Hon Michael Woodhouse: When he said, through his Associate Minister on June 13, "it's entirely possible there'll be small surpluses, balanced budgets, or small deficits, all according to circumstances.", which of those three scenarios will be most heavily represented in the final figures?
Hon Dr DAVID CLARK: I think the legacy of under-funding means that probably more DHBs will be in deficit than posting surpluses at this stage. It is possible this Government wants to see sustainable health services that provide the services that New Zealanders would expect and deserve. We're not running them into the ground like that Government did.
Hon Michael Woodhouse: Is he set to oversee the biggest combined DHB deficits in New Zealand history?
Hon Dr DAVID CLARK: I go back to my original answer for the member, just to clarify what is driving the increases right now. These are historic issues—the historic Holidays Act pay issues that I believe that member himself sought to resolve but failed to resolve and got taken off him by Steven Joyce because he could not resolve it. Subsequently—that's if memory serves me correctly—certainly, the previous Government did not solve that issue. On top of that, the National Oracle Solution—a computer system which has failed to deliver the promised benefits. Tens of millions of dollars, I suspect, will have to be written off because of the failed oversight of that member. Yes, that will mean that we will have deficits that we wouldn't want to see. That member and his Government under-invested in health for nine long years, and we will be investing ourselves for quite a period to set that right.
• Question No.7—Education
7. MARK PATTERSON (NZ First) to the Associate Minister of Education: What recent announcements has she made regarding early intervention learning support?
Hon TRACEY MARTIN (Associate Minister of Education): On Monday, I went to Toru Fetu Kindergarten in Porirua to announce another increase in early intervention funding from Budget 2019. This extra $24.8 million over the next four years will provide early intervention to preschool children who have communication, behaviour, development, and disability needs. This is additional to the $21.5 million over four years provided as part of Budget 2018. It will be used to recruit additional specialists to work with children across all regions in the country.
Mark Patterson: Will this new funding reduce waiting lists?
Hon TRACEY MARTIN: No, not on its own. The last five years have seen demand increase by 21 percent for behavioural services, 15 percent for the communication services, and 15 percent for the early intervention services. We also saw a stagnation or slight decline in the specialist workforce over that same period. Rebuilding the specialist workforce and changing the way support is delivered is also required. The roll-out of the learning support delivery model and changes in practice, bringing the services to the children rather than referring the children out and waiting, is showing that we can address demand pressures. [Interruption]
SPEAKER: Order! Order! The pair of you, just settle.
Mark Patterson: How will this new investment help grow the learning support specialist workforce?
Hon TRACEY MARTIN: An additional 19 front-line specialists will be recruited to work with children across all regions in the country. This adds to the additional 120 recruited between December 2017 and March 2018, but there will also be an increase of 35 early intervention study awards worth $20,000 each and 28 speech language therapist scholarships worth $5,000 each over the next four years.
• Question No.8—Education
8. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Does he stand by his involvement in collective bargaining and the offer made to primary principals?
Hon CHRIS HIPKINS (Minister of Education): Absolutely, and I do want to acknowledge and welcome the vote taken by primary school teachers, who have resoundingly voted in favour of their settlement. Primary school teachers and principals told us that to retain and attract people into the profession, to stabilise the workforce, they needed to restore pay parity for the teachers that was lost in recent years. We listened to them on that and we acted, and around 30,000 primary teachers will now benefit from significant pay increases, with maximum base salary increases rising to $90,000 by July 2021. I am disappointed that primary principals have rejected the substantial offer that was made to them, but the Ministry of Education remains available to meet with the New Zealand Educational Institute to discuss how the offer for primary principals could be repackaged to better meet their needs.
Hon Nikki Kaye: Does he take some responsibility for the rejected settlement by 1,900 primary principals, given he took the unusual step of directly negotiating with the unions?
Hon Grant Robertson: I'm pretty sure you called for that.
Hon CHRIS HIPKINS: I'm pretty sure the member called for that, but I also do take responsibility—
Hon Simon Bridges: Now he's giving you answers as well.
SPEAKER: Order! He's not.
Hon CHRIS HIPKINS: I do take responsibility for the settlement of the primary school collective agreement, and I do take responsibility for the fact that we have yet to reach a settlement with the primary school principals. As the Minister of Education, of course that is my job to take responsibility for those things. I would, however, note that the deal that the primary school principals rejected was recommended to them and endorsed by their union.
Hon Nikki Kaye: Given his comments around pay parity for teachers, does he commit to pay parity for principals?
Hon CHRIS HIPKINS: I have no problem with the concept of pay parity. I do note that was not something that was claimed by primary school principals when these negotiations started, and the offer that they have rejected was recommended to them by their union.
Rt Hon Winston Peters: Is this the second time that pay parity has been given to the teachers in question in this country, and what happened in between times?
Hon CHRIS HIPKINS: Yes, for primary school teachers this restores the pay parity that they were first given in the early 2000s after a long campaign, and—
SPEAKER: No. Late 1990s, I think.
Hon CHRIS HIPKINS: Sorry—the late 1990s. It restores the pay parity that was lost, and it was most notably lost nearly four years ago now under the last agreement reached under the National Government.
Hon Nikki Kaye: Is he absolutely ruling out an increase to the envelope for primary teachers and principals, and why should educators believe him when the last time he said there was no more money he magicked up $271 million?
Hon CHRIS HIPKINS: We don't need to increase the envelope for the primary school teachers, because that settlement has now been reached and it is has been ratified and endorsed by their members. We won't be putting more money into the primary principals' agreement. We agreed to fund pay parity after extensive talks with the unions, both primary and secondary, on the basis that any extra money we were putting in was for a full and final settlement.
Hon Nikki Kaye: Does he agree with Ross Intermediate School principal, Wayne Jenkins, who said, "There's little been presented to address the issues and concerns that face New Zealand principals every day. As an experienced principal in a large school, I feel let down by the offer." and did he let down the primary principals of New Zealand?
Hon CHRIS HIPKINS: I think that the principal concerned—his own union would disagree with him, because the union recommended and endorsed the offer when they presented it to their members.
• Question No. 9—Economic Development
9. MARJA LUBECK (Labour) to the Minister for Economic Development: What is the Government doing to boost innovation and support higher incomes and more jobs?
Hon DAVID PARKER (Minister for Economic Development): The coalition Government has a comprehensive plan to boost innovation. As part of the Wellbeing Budget we announced the venture capital fund to accelerate the development of high-growth New Zealand start-ups as they expand. The announcement of this fund has received overwhelming approval from all sectors of society as it will develop New Zealand's points of comparative advantage, supporting higher incomes and growing jobs. I note this is something that the OECD has been urging New Zealand Governments to do for some time and this active Government's getting on and doing it.
Marja Lubeck: What has the OECD said about New Zealand's capital markets and innovation?
Hon DAVID PARKER: In successive reports, the OECD has noted New Zealand's low productivity is caused in part by over-investment in the speculative sector rather than investment in the productive sector. The OECD has noted that Governments should support venture capital markets as these generate knowledge benefits across the economy. In 2013, the OECD specifically urged New Zealand to provide more support for the expansion of early-stage firms to help address our productivity problem. Follow-up reports from the OECD noted, perhaps with dismay, that no action had been taken. After years of inaction, this Government's done it.
Marja Lubeck: What announcements will the Government be making about innovation in the near future?
Hon DAVID PARKER: As the OECD has said, New Zealand has for too long had a productivity problem. We believe that technology and innovation are important parts of the solution and, as part of the Government's economic plan, next week we'll be launching our industry strategy, From the Knowledge Wave to the Digital Age. This will be a call to arms for New Zealanders to work together to grow our points of comparative advantage so that we grow the jobs of the future as we lift exports, productivity, and the incomes of New Zealanders.
Hon Todd McClay: How can he claim his Government's policies are working, when economic growth has more than halved, job creation is in decline, and Stats New Zealand has just today said life satisfaction has become worse over the last two years?
Hon DAVID PARKER: I think it's clear that the New Zealand economy is recalibrating away from an excessive reliance upon speculative investment. House price inflation, on average, in New Zealand has tailed off. We are seeing increased investment in the export sector. It's reflecting in the increasing sophisticated mix of our exports and by the booming increase in the number of technology exports earned by the TIN200.
• Question No.10—Transport
CHRIS BISHOP (National—Hutt South): When will construction begin on the City Centre to Māngere light rail project, and how much is the project expected to cost?
SPEAKER: Does the member want to have another crack?
10. CHRIS BISHOP (National—Hutt South) to the Minister of Transport: When will construction begin on the City Centre to Māngere light rail, and how much is the project expected to cost?
Hon PHIL TWYFORD (Minister of Transport): Firstly, congratulations to the member on his promotion to transport spokesperson. Light rail is able to carry 11,000 commuters per hour. That's the equivalent of four lanes of motorway through one of the most built up parts of the city, connecting commuters to some of the biggest concentrations of jobs in the country. As I said yesterday in the House, the most recent cost estimate I've seen is around $4 billion. However, it is important to note that the business case and the final design will provide more certainty on the final cost and when construction will begin.
Chris Bishop: Does he stand by his statement "One of my first actions as Minister will be to have officials advise on how quickly we can start and how soon we can get it built. I would expect Queen Street to Mount Roskill within four years as a minimum.", and, nearly two years into his term as transport Minister, how's that going for him?
Hon PHIL TWYFORD: Well, as the member knows, this is a major, at-scale infrastructure construction project that would run the equivalent of four lanes of motorway right through the middle of one of the most built up, intensely populated parts of our city. We are committed to taking the time to get it right, and we will be making announcements in due course.
Chris Bishop: Is it correct, as his colleague the Hon Shane Jones has said, that the cost of the city centre to Māngere light rail project could be $7.6 billion?
Hon PHIL TWYFORD: Well, I almost always agree with my colleague the Hon Shane Jones, but, in this case, the answer is no.
Chris Bishop: Does he have any idea as to why the Hon Shane Jones would have said yesterday the cost of the city centre to Māngere light rail project could be $7.6 billion?
Hon PHIL TWYFORD: It's way above my pay grade to guess what's going on in the mind of my colleague.
SPEAKER: I think that's a no.
Chris Bishop: Apparently. Will the Government proceed with the city centre to Māngere light rail project if the business case is negative?
Hon PHIL TWYFORD: Well, a business case is not generally described as being positive or negative; a business case is what it is. A business case often includes a benefit-cost ratio, but those are two quite different things.
• Question No.11—Police
11. BRETT HUDSON (National) to the Minister of Police: Does he stand by all his statements, policies, and actions in relation to the Government's firearms buy-back scheme?
Hon STUART NASH (Minister of Police): Yes, in the context in which they were given.
Brett Hudson: How can the price list for the firearms buy-back scheme be fair and reasonable compensation when the experts who designed it had only five hours to do so?
Hon STUART NASH: Well, that is absolutely untrue. As I have already stated publicly several times, KPMG consulted widely on behalf of police. KPMG consulted farmers, hunters, dealers, valuers, auctioneers, collectors, and gun clubs. So I would say to that member there were many, many five-hour meetings.
Brett Hudson: I raise a point of order, Mr Speaker. My question was specifically to the experts, which were referenced by the Minister yesterday, not to a wider group.
SPEAKER: Well, you can't get a yes/no. If the member is not satisfied with the answer, he can keep asking supplementaries.
Brett Hudson: Supplementary—
SPEAKER: Order! If the member thinks it is inaccurate, then he'll bring it up with the Minister, and the Minister will correct it. If he thinks it's deliberately inaccurate, he will write me a letter, but I cannot get for him the answer that he wants.
Brett Hudson: I appreciate that, Mr Speaker. That's why I'm moving on with another supplementary as you suggested.
SPEAKER: I'm pleased you're moving on. I was getting some appeals from people in front of you.
Brett Hudson: How is it fair that there are not separate prices for E category and A category firearms, as recommended by the experts in the KPMG report?
Hon STUART NASH: We have not separated out E category and A category. What we want to do is take out any illegal firearm that we made illegal through legislation.
Brett Hudson: Why does he think that the firearms buy-back will work when thousands of people are already saying that they won't hand their firearms back, because they feel ripped off by the Minister's proposals?
Hon STUART NASH: There are two things I'd say to that. First of all, thousands of people are not saying they feel ripped off. Our feedback is that 80 percent of all phone calls are positive; only about 5 percent are negative. Secondly, we are not "ripping people off" at all. Thirdly, if people do not comply with the law, they face up to five years in jail, and I trust that the good, hard-working people of New Zealand are law abiding and will obey the law.
• Question No.12—Employment
12. WILLOW-JEAN PRIME (Labour) to the Minister of Employment: What reports, if any, has he seen on He Poutama Rangatahi?
Hon WILLIE JACKSON (Minister of Employment): I've seen figures that show that there's nearly $21 million in funding committed so far over the next four years to target just over 3,750 rangatahi. Currently, we have 1,700 young people participating on He Poutama Rangatahi programmes around the regions.
Willow-Jean Prime: Has the Minister seen any specific outcomes for He Poutama Rangatahi programmes?
Hon WILLIE JACKSON: I've been really pleased with what I'm seeing out in the regions. Some of our young people have significant barriers to employment, and I'm pleased to share with the House that these programmes are making a real difference in the lives of rangatahi. For example, in the Northland College pine project, all 16 participants completed their training, obtaining the level 2 certificate in New Zealand forestry qualification. Twelve of these rangatahi are still in full-time employment, and three have been promoted to crew boss.
Willow-Jean Prime: What is the impact He Poutama Rangatahi is having in our communities?
Hon WILLIE JACKSON: I want to share with the House the success that a programme like the Development Hub with its Initiate Programme has had in the Hawke's Bay community—a community-based social enterprise that matches training for local rangatahi wāhine with skills and job shortages in the area. Thirty-six women started the programme, and 33 completed it. Currently, 27 have remained in continuous education or employment since then. That's 27 whānau that are seeing positive impacts in their lives, and He Poutama Rangatahi has played a significant part in that and in our communities.