Uncorrected transcript - subject to correction and further editing)
Questions 1-12 7 November, 2002

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Public-private Partnerships--Prime Minister's Meeting

1. Hon. BILL ENGLISH (Leader of the Opposition) to the Prime Minister: What were the items on the agenda provided by the then Chairman of Television New Zealand, Dr Armstrong, for her dinner at Vinnies with him, the former Prime Minister of Australia, Paul Keating and Kristy McDonald QC?

Rt Hon. HELEN CLARK (Prime Minister): There was no agreed agenda. I accepted the invitation to dine with Mr Keating. The discussion was stimulating, both on foreign policy issues and on his views of how public-private partnerships had worked in Australia.

Hon. Bill English: Is the Prime Minister aware that the cost of the dinner at Vinnies was paid on Dr Armstrong's Television New Zealand credit card, that TVNZ also picked up the cost of his flight and his accommodation in Auckland following the dinner; and does she consider that appropriate expenditure of public moneys?

Rt Hon. HELEN CLARK: Obviously not appropriate expenditure. I trust that all inappropriate expenditure will be reclaimed from him.

Rt Hon. Winston Peters: Is this not just a clear case of the Government using taxpayers' funds via TVNZ, and their proximity to Mr Armstrong, to promote their policies and fly kites in the community to see what kind of acceptance there is--a pattern of behaviour that they began in 1984?

Rt Hon. HELEN CLARK: No, and the matter has been dealt with.

Hon. Bill English: Can she explain which TVNZ interest was served by her dinner with her longstanding friend and political associate Paul Keating, for whom she says she has the greatest respect, and where she ``enjoyed the discussion on foreign policy and on his experience of public-private partnerships. End of story.'' What TVNZ interests were served by that meeting?

Rt Hon. HELEN CLARK: None, which is why the money is being reclaimed.

Rt Hon. Winston Peters: Why would she be consulting on the issue of public-private partnerships with Paul Keating, when the Federal Government of Australia has not been involved in one, but the State Governments have been? Could not she find someone more appropriate from those State Governments to consult with, or did she have some alternative purpose as well?

Rt Hon. HELEN CLARK: My understanding is that Mr Keating does, indeed, have some knowledge, and I am sure it would comfort the member to know that Mr Keating is very sceptical about a lot of the partnerships in Australia.

Labour Market--Position
2. LUAMANUVAO WINNIE LABAN (NZ Labour--Mana) to the Minister of Social Services and Employment: What recent reports has he received on the state of the Labour market?

Hon. STEVE MAHAREY (Minister of Social Services and Employment): This morning I have received Statistics New Zealand's release on the household labour force survey for the September 2002 quarter. It shows the following: continuing strong growth in the labour force--in large part due to a steep decline in the number of New Zealanders leaving the country permanently or long term; the labour force participation rate remains at historically high levels of 66.6 percent; there is continued employment growth, but at a slower rate than in recent quarters, an increase in the number of full-time employed of 3,000 in the quarter, an increase in the number of mostly full time employed of 50,000 in the past year, and of 115,000 since the start of 2000; and there has been a slight increase in the number of unemployed and in the unemployment rate.

Luamanuvao Winnie Laban: What reports has he seen on the impact of the Government's industry training initiatives on the state of the labour market?

Hon. STEVE MAHAREY: I have a report in today's Dominion Post that New Zealand boat builders--after losing a lot of business over recent years because they did not have trained people to help fill orders--are set to exceed $1 billion in sales by the year 2004 on the back of the Modern Apprenticeships scheme. I quote the Boating Industries Association Executive Director, Peter Busfield, who says: ``Now we are addressing skill shortages throughout the boat industry training organisation. The apprenticeship scheme is working exceptionally well. In 1992 there were only 31 boat-building apprentices, now there are now 485 with 60 expected to graduate this year.'' This is but one example of this Government resolving the skill shortages problem.

Hon. Roger Sowry: Is the Minister embarrassed that he set up a patsy question today, before the official figures were released, that show that there was, in fact, a rise in unemployment, and that he originally attempted to use the registered unemployment figures, which for the past 3 years he has criticised ACT for doing, and if he is not embarrassed, what is that egg doing on his chin?

Hon. STEVE MAHAREY: I always front the issues in this House, no matter what those members say. Can I point out that today's figures are a reflection of the fact that so many New Zealanders do not want to leave this country because the labour market is expanding beyond _______.

Dr Muriel Newman: Does the Minister regret issuing his Maharey Notes publication headlined ``Unemployed drop in every region'' this morning, minutes before the official statistics showed the reverse, and regret setting up this patsy question; if so, are reports correct that he is ringing Statistics New Zealand officials and blaming them for ``ruining his exemplary career'', and stating ``I have led a life of blameless excellence until they came along.''?

Hon. STEVE MAHAREY: Working backwards in answering that question, no, I have been in a seminar all morning so I could not be ringing anybody, least of all Statistics New Zealand. No I am not embarrassed; the Maharey memo that the member refers to is based upon the registered unemployment figures she so often likes to quote, and they are going down region by region.

Sue Bradford: Is there any work being done within Government on improving its ability to provide accurate and adequate data on true unemployment rates, and on the real employment rates among the casual workforce?

Hon. STEVE MAHAREY: The true unemployment rate, if we can call it that, of course is the household labour force survey. But I have invited the select committee, and if it would like to move beyond the household labour force survey, the census measure, the quarterly employment survey, and every other measure that may have anything to do with unemployment, then we are happy to facilitate that kind of work.

Mr SPEAKER: I call question No. 3.

Hon. Roger Sowry: I raise a point of order, Mr Speaker. In the past--in fact, already this week--I have had to remind you of the need to operate fairly across the House. We have seen today during the first two questions that you failed to give the Labour Government a supplementary question to either question one or two.

Mr SPEAKER: That is not a point of order. The member knows that if nobody takes a call, nobody else gets one. The member knows that is a specious point of order.

Dr Muriel Newman: I seek leave to table the Maharey Notes publication headlined ``Registered unemployed drop in every region''.

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

Hon. Dr Michael Cullen: I raise a point of order, Mr Speaker. If the Deputy Leader of the National Party would like to correct his previous statement, there was in fact a supplementary question to question 2, taken by my colleague Luamanuvao Winnie Laban.

Mr SPEAKER: Yes, I am sorry. I should have drawn that to the attention of the House, because I have it listed down here.

Immigration--Fraud
3. Rt Hon. WINSTON PETERS (Leader--NZ First) to the Minister of Immigration: Further to oral question No 8 yesterday, and subsequent supplementary questions, is it her view that she cannot act in the Muhammad Saidi case until she has evidence; if so, what further evidence does she need?

Hon. LIANNE DALZIEL (Minister of Immigration): I am not able to give details of the individual's case. However, generally speaking, an immigration permit may be revoked when it was obtained by fraud, forgery, false or misleading representation, or concealment of relevant information.

Rt Hon. Winston Peters: In thanking the Minister for an abbreviated version of the Act, I ask which of these facts did she fail to act on: that he left his country of origin with a false passport, that he destroyed that passport on the aeroplane, that his father and brother are known to have links with fundamentalist groups, that there are Indonesian newspaper publications of drug trafficking in both Indonesia and Thailand in respect of this person, that the Refugee Status Appeals Authority declined his application for residence, that he was taken to court and accused of rape and harassment, that his appeal was dismissed, that the New Zealand Immigration Service was asked by the Refugee Status Appeals Authority to conduct an investigation to verify the information he had given, that he is married to a woman with--

Mr SPEAKER: I would like the member please to come to the point.

Rt Hon. WINSTON PETERS: Yes, very quickly--that he gave a false name and lied about an international driver's licence that he did not have when he was picked up on a traffic case, that he claimed not to understand English--

Mr SPEAKER: I have already allowed a question that was much longer than usual. I let the member go on a little bit. He must now come to the very last phrase.

Rt Hon. WINSTON PETERS: Yes. I raise a point of order, Mr Speaker.

Mr SPEAKER: A point of order?

Rt Hon. WINSTON PETERS: I have 10 facts that the Prime Minister and this other Minister, the Minister of Immigration, over a period of years have been advised about. The Minister might laugh about it, but each fact would be sufficient to have this man removed from this country, and I am trying to outline them.

Mr SPEAKER: That is not the way to ask a question. The question has to be shorter than what the member has asked. He must abbreviate the facts. He will have the opportunity of another supplementary, when he can develop some of those points, but he must come to the point.

Rt Hon. WINSTON PETERS: I raise a point of order, Mr Speaker.

Mr SPEAKER: I am not having any argument about that.

Rt Hon. WINSTON PETERS: I am not contesting--

Mr SPEAKER: I have had enough. I have asked the member. His question is far too long. I judge that the question is now sufficient to require an answer. I ask the Minister to answer it, and in the meantime--

Rt Hon. WINSTON PETERS: I raise a point of order, Mr Speaker. I tabled all the documentation that supports these allegations. This Minister has now had 24 hours, with the rest of us--but it is 2 years in the case of the Prime Minister--to answer the question I am asking. The first thing she said today was--

Mr SPEAKER: Please by seated!

Rt Hon. WINSTON PETERS: No, I am not going to finish; I am going to--

Mr SPEAKER: Be seated, or the member leaves the Chamber.

Rt Hon. WINSTON PETERS: --put my case. I am entitled to put my case.

Mr SPEAKER: The member will now leave the Chamber.

Rt. Hon. Winston Peters withdrew from the Chamber.

Mr SPEAKER: Order! or there will be other people going too. I have ruled that a question must be concisely asked. The member himself went on and on. I allowed him to do so. I then said that was sufficient and the member continued to go on. There is no reason for that particular course being followed.

Peter Brown: I raise a point of order, Mr Speaker. I do not want to challenge your ruling, but I do point out regarding the points of order you exchanged with my colleague the Rt Hon. Winston Peters that if you had let him finish his question, the time would have been much shorter and we would have added to the point. The Minister had asked Mr Peters for the proof.

Mr SPEAKER: I say to the member that he will know I gave the member a very, very long time to ask the question. If he cares to consult Hansard, he will find it is probably about the longest question since the House resumed this week. Now, at that point, the member still had not finished and proceeded to continue on with further parts of the question. That was where he was breaking the rules.

Gerry Brownlee: I raise a point of order, Mr Speaker. It seems now that Mr Peters was asked to leave the Chamber during a point of order. He was on his feet, taking a point of order, when you asked him to leave the Chamber. That raises the question: was his point of order too long, and is it now a requirement that people taking points of order do so within a time frame that you find acceptable? It seems to me that Mr Peters was perhaps transgressing by taking too long over a question but I would point out that the Minister of Immigration, in her answer, had asked him to provide evidence, which does put a member in a difficult position. So the real question now is that Mr Peters having been ejected from the Chamber halfway through a point of order, is a member not now able to conclude a point of order?

Mr SPEAKER: I refer members to Speaker's ruling 16/4: ``There is no obligation on a presiding officer to let a point of order run on as long as members want it to run on. If the Speaker or chairperson feels that the point has been made, he or she is entitled to say so and to rule on it.'' The member was not asked to leave the Chamber because he was speaking to a point of order. The member was asked to leave the Chamber because he completely disobeyed my instructions.

Hon. Richard Prebble: I raise a point of order, Mr Speaker. I rise to support what you have done. The whole House saw what happened, and I think we have a duty to support the Speaker, but when a member is ordered to leave the House that does not entitle the member to insult the Speaker. You might decide that it is a breach of privilege matter when a member who has been instructed by you, very clearly, defies your ruling and then when he leaves the Chamber says that the Speaker is engaged in a cover-up. Maybe you did not hear that but he said repeatedly that you were engaged in a cover-up, and that is clearly not so. You were not stopping him from asking a question. You just said he must keep within the Standing Orders with regard to questions. It is outrageous for you to be accused by a senior member of a cover-up. Before the member is allowed to return to the Chamber he should be required to withdraw and apologise to the House for this insult, which is an insult to the whole House when he makes an accusation of that sort against the Speaker.

Mr SPEAKER: I will deal with that when the member returns to the Chamber. I thank Mr Prebble for his point of order. The member will most certainly not be allowed to get away with that or he will be named, and that is the next step I can take.

Dail Jones: I raise a point of order, Mr Speaker. Surely the question was put and the Minister should be answering it.

Mr SPEAKER: Yes, that is a fair comment. I think the member is right and I will ask the Minister to answer the parts of the question that deal with the issue.

Hon. LIANNE DALZIEL: I did genuinely try to take notes of all the different points that Mr Peters was raising. I know that the first point raised was that Muhammad Saidi had arrived on a false passport and that this was one of the issues that I ought to have taken into account. He arrived in October 1997 and applied for refugee status. He was not declined refugee status until 1998, so therefore under the convention the Government of the day was obliged to hear the claim.

Nanaia Mahuta: Are there ongoing investigations with regard to this case, and, if so, what are the risks associated with raising it publicly?

Hon. LIANNE DALZIEL: Yes, there are ongoing investigations, and the risk associated with my commenting on them is the risk of judicial review or appeal if anything I say is construed as predetermination or bias if I am called upon to make a revocation decision.

Peter Brown: I raise a point of order, Mr Speaker. I draw your attention to the fact that, if I heard the Minister correctly, in the initial answer to the Rt Hon. Winston Peters she quoted the Privacy Act, which put him in a very difficult position of having to divulge the information he has at length.

Mr SPEAKER: I am sorry; I do not understand how that in any way develops the issue. That is a debating point. The member can take a supplementary question.

Gerry Brownlee: Notwithstanding the Minister's report to the House today that she is somewhat constrained in being able to answer this question because of potential legal ramifications that may come of it, does she intend at any point to report to the House changes that need to be made to the way in which we deal with immigrants like this, so that members of Parliament can use this House to expose them in our communities?

Hon. LIANNE DALZIEL: The member raises a very good point. One of the law changes that has already occurred was actually at the behest of a National Government in 1999, and it would have in fact prevented this person from applying for any other permit to remain in New Zealand after having held a work permit for the purpose of a refugee status application.

Ron Mark: Why, then, is it that, given the circumstances and the clear evidence that was put to her a long time ago, she has not moved her department to investigate these matters earlier; and is there not therefore some truth to the view that some people have that her opposition to those very laws--that very Act that was passed in 1999, which she strenuously opposed in this House--is really at the heart of the matter, and that she does not want to enforce what everyone else in New Zealand wants her to enforce?

Hon. LIANNE DALZIEL: Unfortunately, the second part of that question is not accurate. We did not oppose all the amendments that occurred in 1999.

Ron Mark: Read your speech!

Hon. LIANNE DALZIEL: There were several amendments in 1999, and we did not oppose them all. Section 129U was not an element that we opposed. I should make the point to the member that the individual concerned was declined refugee status. In fact, the Refugee Status Appeals Authority--and I have to mention this because it was tabled in the House yesterday--made it very clear that it did not regard the applicant as credible. So the claims that were made with respect to that are not an issue in the ongoing investigations. I have made it very clear to this House that there are ongoing investigations with respect to this matter.

Early Childhood Education--Community Support
4. HELEN DUNCAN (NZ Labour) to the Minister of Education: What support is available to assist communities to establish early childhood education centres?

Hon. TREVOR MALLARD (Minister of Education): Assistance is available now through the Government's design and build scheme, contracted nationwide through Signature Homes Ltd. The scheme provides for a choice from a range of building design options that has been developed in conjunction with the sector to ensure their suitability for a range of purposes. It fills a gap in the early childhood sector, and will give good designs at a much lower up-front cost. It will therefore be able to be developed much more speedily. The scheme is voluntary, and the providers can choose to use either whole or in part the service provided by Signature. Over the next 2 or 3 years, we expect that about 80 new centres will be established using the scheme.

Helen Duncan: How does this initiative fit with the Government's goals for early childhood education?

Hon. TREVOR MALLARD: Very well. It is one of a number of initiatives to increase participation in quality early childhood education. It goes along with the equity funding, discussed earlier in the week, the discretionary funding available to establish or upgrade community-based facilities, and network planning and support to make sure that the gaps in provision are covered. It fits with the research that shows that increased participation in quality early childhood education will have the greatest effect possible on raising educational achievement in New Zealand.

Phil Heatley: Is the Minister happy that the recently announced equity funding for selected early childhood education centres amounts to only about $500 a month per centre, and does he believe that that is enough to encourage new centres in areas of genuine need; if so, why?

Hon. TREVOR MALLARD: If the member puts it together with the discretionary grants that design and build schemes, I think he will find that equity funding will make a difference in the viability of centres in isolated areas and in low-income areas. I note that I am yet to receive a note of thanks from National Party MPs for the support for isolated centres that were closing under their Government.

Hon. Brian Donnelly: If the Government is as committed to expanding quality early childhood services as he claims, why have early childhood grants for the establishment of new centres--which are mentioned on page 381 of the Budget document--and for the increase of capacity in existing centres, been cut by a whopping 36 percent, from $13.8 million in last year's Budget to $8.8 million in this year's Budget?

Hon. TREVOR MALLARD: If the member looks at last year's Budget, he will see that the amount was considerably less than that, but, as part of the supplementary estimates process, it was added to when we found some extra money and extra demands. That is something that will be given consideration this year, as was the case last year and the year before.

Metiria Turei: Does the Minister agree with concerns that specific support for community centres such as the build scheme, equity funding, and other funding measures would be in breach of New Zealand's General Agreement on Trade in Services; if so, does he agree that the inclusion of education in the General Agreement on Trade in Services will seriously undermine the ongoing provision of publicly funded early childhood education?

Hon. TREVOR MALLARD: No. There is no chance of that happening.

Judy Turner: Could the Minister give an assurance that, once established, early childhood education centres will receive adequate funding on an ongoing basis?

Hon. TREVOR MALLARD: That is certainly my intention. This Government has put a lot of extra funding into that, because we believe that quality early childhood education is the key to making the difference in education on an ongoing basis, especially for low income groups.

Public-private Partnerships--Meeting Expenses
5. Hon. BILL ENGLISH (Leader of the Opposition) to the Prime Minister: Following newspaper reports that Dr Armstrong paid for the dinner at Vinnies with his Television New Zealand credit card, what inquiries, if any, has she requested officials to undertake to ensure that public monies are spent in accordance with the ``new standards'' she spoke of before the 1999 election, when she said ``The Labour Government will set new standards--both in terms of behaviour and performance--so that we govern for the people and are accountable to them.''?

Rt Hon. HELEN CLARK (Prime Minister): This matter is being pursued by the board of Television New Zealand, which is accountable to shareholding Ministers. Under this Government, the board requires any inappropriate expenditure to be reimbursed.

Hon. Bill English: Is the Prime Minister concerned that on Tuesday a Television New Zealand spokesman said that the cost of the dinner at Vinnies was not put on Dr Armstrong's Television New Zealand credit card, yet today a spokesman from Television New Zealand has said that Dr Armstrong did use his Television New Zealand credit card, and what action will she take to make sure that State-owned enterprises such as Television New Zealand provide all the truthful information in response to legitimate questions about the expenditure of public money?

Rt Hon. HELEN CLARK: The Government expects such officials to provide truthful information. That individual is accountable to his chief executive, who is accountable to the board, which is accountable to the Minister.

Hon. Richard Prebble: Given that in her reply to question No. 2 yesterday, the Prime Minister said that she is willing to pay her share of the cost of the dinner at Vinnies, and given the fact that Mrs Shipley paid the total cost of her dinner with Kevin Roberts, can the Prime Minister now give the House an assurance that she has met the cost of her dinner at Vinnies, and how much was it?

Rt Hon. HELEN CLARK: The Minister's office has been advised by TVNZ that Dr Armstrong has repaid in full the cost of the dinner. If he wishes to send me an invoice I will cheerfully pay it.

Hon. Peter Dunne: In the light of the whole set of circumstances that surround Dr Armstrong's departure and his behaviour prior to that, has any consideration been given to changing the rules under which the directors and chairs of State-owned enterprises operate when it comes to matters that are outside their direct areas of responsibility in terms of expenditure in those delegations?

Rt Hon. HELEN CLARK: The member has made a useful point, and the Minister for State Owned Enterprises might well remind State-owned enterprises, their chairs, and boards to be very careful to distinguish between what is legitimate business for the board on which they are appointed and what is not.

Hon. Bill English: Has the Prime Minister seen reports that Dr Armstrong also hired Kristy McDonald QC without seeking TVNZ board approval, and will she seek assurances from TVNZ that it will not continue to pay the fees for Kristy McDonald's involvement in Dr Armstrong's group of insiders?

Rt Hon. HELEN CLARK: The shareholding Ministers expect the board to have proper procedures for approving expenditure. If that is not the case, then the board is accountable to Ministers for cleaning that up.

Telecom--Kiwi Share Obligations
6. PAUL ADAMS (United Future) to the Minister of Communications: Under its Kiwi Share obligation, is Telecom obliged to install new telephone connections for rural customers at rates equivalent to those that were in place in December 2001 when the updated agreement was signed with the Government?

Hon. TREVOR MALLARD (Acting Minister of Communications): The Minister is currently seeking a legal opinion on whether the new connection requirements meet Telecom's obligations under the Kiwi share. He hopes to receive this opinion next week. The Minister has already contacted people at Telecom to inform them that I want to meet with them to discuss the issue. The Minister for Economic Development, the Minister for Rural Affairs, and the Associate Minister for Rural Affairs have been asked to attend as well.

Paul Adams: Does the Government still stand by its often-stated commitment to regional development, which includes improving and updating telecommunication coverage to rural areas; if so, what plans does it have for migrating any adverse effects the latest price hike may have in this regard?

Hon. TREVOR MALLARD: Does the member mean ``mitigating'' or ``migrating''? There are differences when it comes to Telecom services?

Paul Adams: I mean ``mitigating''.

Hon. TREVOR MALLARD: This Government takes very seriously it commitment to rural areas. My colleague the Minister of Education, for example, along with the Minister for Economic Development, has announced this year a Budget commitment of tens of millions of dollars to get broadband into those areas. Already, the evidence from the Southland contracts is that one does not need a copper approach to all of this. If Telecom is not a little bit careful, there is a danger of it being left out in the cold in this area.

John Carter: Why did the Government not deal with this issue specifically when it renegotiated the Kiwi share last year, or is this just more proof that the Government is ignoring the concerns of rural New Zealand?

Hon. TREVOR MALLARD: I would like to reiterate, on behalf of the Minister, his initial comment, and that is that he is getting legal advice on this matter. I should say, though, that his colleague the Minster who is acting for him now, and acted for him in the first 6 months, had a considerable amount to do with this issue around the inquiry time, and at that time I think we established that if a price got to a certain point where it was effectively a refusal to supply--so if the charge was so high it would be seen as that--that would be seen as a reduction in availability and therefore a breach.

R Doug Woolerton: What steps is the Government taking in attempting to lower costs to our primary producers?

Hon. TREVOR MALLARD: I think the main activity on the part of the Government is the investment of tens of millions of dollars in order to get broadband there. Obviously, if there is broadband available by way of wireless or satellite approach, much, much wider than a normal Telecom wire, that will obviate the Telecom problem.

Ian Ewen-Street: Does the Minister consider that Telecom has an obligation, as a telecommunications service obligation, to upgrade those consumers who are still on party lines, at no cost to them; if not, why not?

Hon. TREVOR MALLARD: That is not a matter that this acting Minister has considered.

Shipping--Freight Rates
7. PETER BROWN (Deputy Leader--NZ First) to the Minister of Transport: Is he concerned that seven foreign-owned shipping companies operating on the trans-Tasman run are allegedly all increasing freight rates by way of collusion; if so, what is he prepared to do about it?

Hon. JUDITH TIZARD (Acting Minister of Transport): I am aware of a media report to this effect. International shipping to and from New Zealand is an open market. Increases and decreases in freight rates occur from time to time, depending upon a variety of seasonal and market factors.

Peter Brown: Is the Minister telling the House that she is not aware that east-bound freight rates were increased in October and west-bound freight rates are about to be increased, all collectively, in December, and she does not believe there is collusion and thinks that is in the best interests of this country, noting that the Australian trade is very, very important to this country?

Hon. JUDITH TIZARD: I am aware of the increase in the freight rates, but the only report I have seen of an allegation of collusion was in a newspaper article last week.

Lynne Pillay: How have international freight rates changed in recent years?

Hon. JUDITH TIZARD: International freight rates are variable, depending on seasonal and market factors. However, rates reduced by about 18 percent between June 1991 and June 2000.

Hon. Roger Sowry: Since the Minister has admitted in the House today that she is aware of the freight rates moving in a collective way, has she asked for a report from officials on this; if not, why not?

Hon. JUDITH TIZARD: The Ministry of Transport keeps an eye on these issues in a regular way and reports regularly to the Minister. If the Minister has any reason to believe that there is collusion, he has the power under the Shipping Act to investigate suspected practices that could have the effect of limiting, preventing, or reducing competition. If he was concerned, he would do that.

Hon. Roger Sowry: I raise a point of order, Mr Speaker. It was a pretty simple question. It was ``Has the Minister asked for a report on this matter?''. We got a long, legal answer about what the department can and cannot do. We know that. What we want to know is whether the Minister has asked for anything.

Hon. JUDITH TIZARD: I do not have that information.

Peter Brown: Will she take on board the suggestion of the Hon. Roger Sowry to ask for a report, and if the report supports the initial assertion that there is collusion, will she fast track the recommendations that her shipping review came to, to develop the New Zealand shipping industry; will she or will she not?

Hon. JUDITH TIZARD: The Minister of Transport, the Hon. Paul Swain, is, right now, at the Australasian Transport Ministers' meetings, and I am sure it is one of the issues that will be addressed. I am sure that the Minister will continue to monitor this issue and will continue to take any action that is possible and necessary.

Jeanette Fitzsimons: Does the Minister agree that price rises like this are a very likely outcome from a situation where foreign-owned shipping companies were allowed to enter what had been a local market, were able to loss-lead and undercut, to the point where now only they are left in that market, and therefore they can now raise prices?

Hon. JUDITH TIZARD: The question seems to confuse the primary question, which is about international freight rates, with the rates that are being charged in the coastal shipping service. With regard to the coastal shipping service, I have had complaints from a New Zealand shipping company that international companies that are now coming around the coast are charging marginal prices, rather than actual total prices, and undercutting New Zealand providers, in that sense. So the complaint from New Zealand shipping companies is that coastal rates are too cheap. I think there are always a number of issues around the international rates and the coastal rates that are affected by overseas shipping companies. They always have been.

Peter Brown: I raise a point of order, Mr Speaker. This sits heavily with me. The primary question referred to ships on the trans-Tasman run, not international ships. Jeanette Fitzsimons' question was perfectly appropriate and deserves a much more considered answer than that.

Mr SPEAKER: That is a matter of opinion, and not for me to judge.

Mental Health Services--Funding
8. Dr LYNDA SCOTT (NZ National--Kaikoura) to the Minister of Health: When she assured the Health Committee on 25 September 2002 that mental health funding is one part of health funding that could not be used for other purposes, was she aware of the audit by the Ministry of Health into the alleged misspending of money targeted for mental health?

Hon. DAMIEN O'CONNOR (Associate Minister of Health), on behalf of the Minister of Health: Ring-fenced mental health money cannot be used for other purposes.

Opposition Members: But they are.

Hon. DAMIEN O'CONNOR: Just listen. This message has been conveyed to district health boards on a number of occasions. The statement made to the Health Committee was entirely consistent with that given to the boards. The Ministry of Health conducts an ongoing programme of reviews to ensure that district health boards comply with current policies.

Dr Lynda Scott: Why did the Minister not inform the Health Committee that on 22 August she had written to the six district health boards under investigation on this issue, and will she take responsibility for the misunderstanding that has occurred between herself and district health boards over the ring-fencing of mental health money?

Hon. DAMIEN O'CONNOR: I do not believe there is an misunderstanding. The decision to review the current situation was taken between the Mental Health Commission and the Ministry of Health. It was done as part of the ongoing review of this policy. The ministry was alerted to the possibility of some money not being spent in the areas that it should, in terms of the district annual plan process. This matter will be monitored by that ring-fenced protection project team, into the future.

Dave Hereora: Why did the Government introduce ring-fenced funding?

Hon. DAMIEN O'CONNOR: The Mental Health Commission advised the Government that there were ongoing sector concerns about the diversion of mental health funding. A review of that in 1998-99 found that there were large variations and inconsistencies in mental health expenditure. That is why this Government has moved to ring-fence the funding to ensure that mental health money is spent for the benefit of the people who need it.

Heather Roy: Will the Minister give this House an absolute assurance that she did not discuss concerns over the misuse of mental health funding with any of the Associate Ministers of Health prior to her assurances of 25 September to the Health Committee?

Hon. DAMIEN O'CONNOR: I cannot speak on behalf of the other Associate Ministers. She did not speak with me on that issue.

Hon. Richard Prebble: I raise a point of order, Mr Speaker. I think the member has, again, got confused about his role. He is supposed to be answering as the Minister of Health. He has now given us a personal explanation, which was helpful, but it was not the answer that he was supposed to give.

Mr SPEAKER: The member is correct. The Associate Minister is actually at this moment acting as the Minister.

Hon. DAMIEN O'CONNOR: I did not speak with the Associate Minister of Health Mr Damien O'Connor on this particular issue.

Sue Bradford: When does the Minister expect mental health funding to reach the levels identified in the mental health blueprint?

Hon. DAMIEN O'CONNOR: I cannot say for sure when we will meet the targets we have set, which are very high, but I can assure that member that since 1997 when $524 million was spent, we have now reached the projected level of spending in the area of mental health for the next year, which will be between $845 and $860 million. That money will be ring-fenced to be spent on the people who need it.

Judy Turner: What percentage of ring-fenced mental health funding is tagged for recruiting much-needed specialist staff?

Hon. DAMIEN O'CONNOR: I do not have that information in front of me, but if the member wishes to put that down as a written question I will ensure that the answer goes to her.

Dr Lynda Scott: When district health boards received the funding for mental health services, whose responsibility was it to inform them of their obligations; and is this not an example of why district health boards acting as funders and providers of services is returning to the bad old days of the 1980s, when boards thought that mental health services did not matter, and treated them like a Cinderella service?

Hon. DAMIEN O'CONNOR: The bad old days were the 1990s, I can assure the country. I have evidence here that the Minister has communicated with the district health boards on a number of occasions--on 11 April, 13 June, 26 June, and 22 August--pointing out that the expectations on them are that they should spend the money allocated for mental health on mental health services.

Industry New Zealand--Grants
9. RODNEY HIDE (ACT NZ) to the Minister for Industry and Regional Development: Is he satisfied that Industry New Zealand is applying grants to business in a manner consistent with Government policy; if so, on what basis is he satisfied?

Hon. PETE HODGSON (Associate Minister for Industry and Regional Development), on behalf of the Minister for Industry and Regional Development: Yes. The Government has a goal to take the New Zealand economy back to the top half of the OECD. Currently our growth rate is the highest in the OECD. Government policy outlines criteria for each grants programme, against which grants should be given, and Industry New Zealand has developed approval processes that ensure criteria are met before grants are approved.

Rodney Hide: How does he square his answer with his statement at the international conference on problem gambling on 26 July, just last year, that New Zealand was ``saturated with pokie-machines'', and declared his policy bit to be to cap the number of pokie-machines, with the fact that a so-called ``jobs machine'' has just granted $100,000 of taxpayers' money for the purposes of ``business growth'' to Gaming Machine Distributors Ltd, whose business it is to distribute pokie machines throughout the South Island?

Hon. PETE HODGSON: Unsurprisingly, I do not have the facts of every grant made by Industry New Zealand at my fingertips, though I would have, had the primary question indicated the area the member wished to raise. Should the member wish to put down a further question, I would be most happy to answer it.

Hon. Matt Robson: Are grants allocated on the criteria of each grant, regardless of who applies?

Hon. PETE HODGSON: Yes, grants are allocated to proposals, depending on the merit of the application. One excellent example was a grant obtained by Donna Awatere Huata of the ACT party. In May of this year she obtained $5,000 worth of regional sponsorship from Industry New Zealand for Kakahu, a ground-breaking fashion show and programme, to assist innovative young Maori designers on the East Coast. The winning designer from this fashion show has gone on to join the World Class New Zealanders programme.

Peter Brown: I note the first supplementary question from Mr Hide and the Minister's answers, and ask whether the Minister shares the view that most New Zealanders would be appalled by Industry New Zealand distributing money to the gambling industry, and does it mean that Industry New Zealand will distribute funds to virtually anybody; and, if Tim Barnett's bill comes through, can we expect it to distribute money to people who want to set up brothels around the country?

Hon. PETE HODGSON: I have nothing more to add, expect to say that if the member wishes me to respond to a specific grant that is made by Industry New Zealand, given that there are so many of them, because there are so many excellent business ideas in this country, and he had indicated to me at the beginning of question time that he wished to ask me what I thought of something, I would be happy to help him.

David Parker: Are there examples of grants going to ACT party members or associates?

Hon. PETE HODGSON: Yes, there are. Wi Huata was the prime mover behind an application of funding for three economic summits for Ngati Kahungunu, which Maori entrepreneurs were sponsored to attend by Industry New Zealand. A total of $20,000 was provided as an extension of the Business New Zealand grants for 60 attendees. Industry New Zealand was convinced that this application met the criteria for support and was an excellent series of summits.

Hon. Tony Ryall: Since the Minister was appraised of some other grants, can he advise the House why the taxpayers funded the Warehouse $75,000 from Industry New Zealand--where everyone gets a bargain?

Hon. PETE HODGSON: The Warehouse is not a direct beneficiary of the $75,000 grant, but the criteria allow representatives of a network of companies to apply for funding on their behalf. The Warehouse acted as a representative of a network of companies, all of which met the business growth grant criteria. Interestingly, the Warehouse put its funds into the proposal to have environmental mark certification. So far from being a recipient, the Warehouse was in fact a donor.

Gordon Copeland: Does the Minister think that it is right for taxpayers' funds to be used for the distribution of poker-machines; if not--assuming Mr Hide's claims are found to be correct--will he discipline those involved in making such a stupid grant?

Hon. PETE HODGSON: I will check out the assumption first.

Rodney Hide: Does the Minister now not realise that the difficulty with his hands-on Government is that it is very clear to this House that the left hand does not know what the right hand is doing?

Hon. PETE HODGSON: Right through the 1990s this country behaved as if we could do without industry development policy. We were the only country in the Western World to do so. Now that we have finally managed to fill that vast policy gap that existed only in New Zealand, the so-called ``friends-of-business party'' can find nothing better to do but criticise it.

Rodney Hide: I seek leave to table a series of papers. [Interruption]

Mr SPEAKER: Somebody else wanting to leave the Chamber, too.

Rodney Hide: It is Mr Cunliffe.

Mr SPEAKER: I do not require people to point names. Just carry on with seeking leave.

Rodney Hide: First, to help the House is the actual answer to a parliamentary question that shows that Gaming Machine Distributors Ltd did get $100,000.

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

Rodney Hide: Second is a speech by the Hon. Jim Anderton on 26 July 2001 where he complains about the impact that pokie-machines are having.

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

Rodney Hide: Third is the printed copy of the web page of a great company called Gaming Machines Distributors Ltd.

Mr SPEAKER: Leave is sought to table that. Is there any objection? There is.

Rodney Hide: Do I leave the web page in?

Mr SPEAKER: There was an objection to the third one, there was none for the first two. I do not control what the House does. Any member can object.

Prisons--Ngawha
10. NANDOR TANCZOS (Green) to the Minister of Corrections: As construction cost estimates for a new prison at Ngawha have risen from $40-$80 million in 1999 to $105 million in November 2002, what level of cost increase or cost uncertainty would cause the Government to abandon plans for a prison on this site?

Hon. MARK GOSCHE (Minister of Corrections): I understand that the figure of $40 million was never a projected cost. The costs of this project have been subject to ongoing reviews by Treasury and the Audit Office. I understand that proposed costs are comparable to building prisons in similar overseas jurisdictions.

Nandor Tanczos: How much money has the Government committed to building on this site, to date, and is that amount less than the projected cost overruns to date on this site?

Hon. MARK GOSCHE: I think the commitment is around $20 million at the moment. The tenders are out for the construction costs. We will know then what the overall costs should be.

Hon. Tony Ryall: Will the Minister explain to the House that the latest cost estimates mean that each bed in the Ngawha prison is costing the taxpayers $300,000 each--almost twice the cost of the average New Zealand family home.

Hon. MARK GOSCHE: Perhaps I could point out to the member that the beds actually have walls around them, the walls have fences around them, and that those prisons are staffed.

Ron Mark: What assurance can the Minister give the people of Northland that when Ngawha prison is completed it will be better run than the Christchurch prison that has in the past 3 years distinguished itself through the bizarre and illegal antics of its now infamous goon squad by allowing a young inmate to visit a drug dealer for a day, and subsequently die of a drug overdose in the cell; and now to cap that by allowing a dangerous sexual predator on preventive detention to escape?

Mr SPEAKER: That is very wide of the original question, but the Minister may comment.

Hon. MARK GOSCHE: Obviously, the Department of Corrections is always looking to improve its performance. It is looking to build prisons that are suitable for modern-day rehabilitation. Many prisons in New Zealand are over 100 years old and are just not built for rehabilitation. We might get better performance out of our prison system if we were prepared to invest in it. The Opposition does not seem prepared to invest in the prison system, even though it claims to be in favour of law and order.

Martin Gallagher: Why is the Northland regional correction facility needed?

Hon. MARK GOSCHE: Opposition members may rage around the country demanding tougher prison sentences and more law and order, and they may laugh about building prisons in areas where they are needed. Inmates from the Northland region--as Mr Carter, who represents the area knows, along with a number of MPs--can be in prisons as far away as the Hawke's Bay, and some can be in prisons even further away than that. The Northland region corrections facility will enable Northland inmates to serve their sentences locally, and maintain family and whanau links that are proven to aid successful rehabilitation.

Ron Mark: Why?

Hon. MARK GOSCHE: When prisoners are thrown out on to the streets after serving their sentences, that disconnection from a community does tend to lead to more crime.

Dr Muriel Newman: In the light of the Auditor-General's response to concerns I raised over the excessive cost of the prison due to the unsuitability of the site, that the responsibility rests solely with the Minister and ``The accountability for those decisions is a matter for Parliament and the electorate.'', since the previous Minister, Matt Robson, was punished by the electorate at the election, is it not in the interests of democracy that under this Parliament the prison is relocated to a more suitable Northland site?

Hon. MARK GOSCHE: I invite that member to read the court decisions. Obviously, she has not, because she continues to make claims that were disproved and not believed by the court. If there were no prisons built by this Government, where would ACT launch its election policy next time?

Marc Alexander: How much would taxpayers have to pay for non-structural costs on the prison at Ngawha as a result of challenges to planning consents, such as legal fees from the Environment Court and High Court process, how much went into design-delay fees, and in hindsight, were they reasonable and within initial budgetary projections?

Hon. MARK GOSCHE: I do not have those exact figures. I would be happy to supply them to the member. Needless to say, the department has been required to consult community and Maori. That can lead to considerable expense, as can continual court cases that cannot be planned for exactly, because one does not know how many people will appeal.

Jim Peters: As the Department of Corrections consent application for the prison at Ngawha required an assessment of alternatives, including cost, has the Minister sought from his department clarification about the integrity of the application, or is this another example of ``The Labour Government will set new standards both in terms of behaviour and performance.''?

Hon. MARK GOSCHE: I could not hear all the question. However, I tell the member that I have looked through all the procedures by the department as they have been audited by a number of Government departments, including Te Puni Kokiri, Treasury, and the Audit Office, to make sure that all the procedures have been followed properly. I am satisfied that they have been followed properly.

Nandor Tanczos: Did the Government take a whole of Government approach to that proposed prison and investigate by how much the projected number of inmates from Northland would be reduced if the $105 million of projected construction costs, plus the $10 million per year running costs, were spent on job creation in Te Tai Tokerau?

Hon. MARK GOSCHE: Of course, this Government takes into account the cost to imprison people. Cabinet discussed the need to build four new prisons in New Zealand. That is something no member in this House should relish, and something that the public of New Zealand should expect if they want tougher sentencing laws. We are investing a great deal more in the social infrastructure that will reduce imprisonment overall.

Dr Muriel Newman: I seek leave to table two documents. The first is a document from Treasury that states it would be difficult to find a more unsuitable site. The second is an Environment Court ruling that states it is very likely that a better site could have been found that would be less expensive.

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

John Carter: I raise a point of order, Mr Speaker. In the light of the rather flippant answer given by the Minister to my colleague Tony Ryall's question, I wonder whether you might consider giving my colleague an opportunity to ask another question.

Mr SPEAKER: Leave would have to be sought for that. Leave is sought. Is there any objection? There is objection.

Scampi--Quota Allocation
11. PHIL HEATLEY (NZ National--Whangarei) to the Minister of Fisheries: Does he accept that recent High Court and Court of Appeal judgments, the State Services Commissioner and the Serious Fraud Office have all raised issues of fairness or poor management relating to scampi allocation, and will he undertake to further delay gazetting of scampi into the Quota Management System until these issues are resolved?

Hon. PETE HODGSON (Minister of Fisheries): Yes, the courts, the State Services Commissioner, and the Serious Fraud Office have raised, or at least, referred in passing to, issues of fairness, or poor management, relating to scampi allocation. As I told the member, in response to a similar question on Tuesday, I will decide in the next week or two whether to gazette my decision in principle to bring scampi into the quota management system, and, if so, on what date. Before doing so, I want to see the final terms of reference for the select committee's inquiry, and to have had the time to consider the legal and other advice available to me.

Phil Heatley: If the High Court says it is unfair, the Court of Appeal says it is unfair, the Serious Fraud Office says there is unfairness, the Primary Production Committee is intending to conduct an inquiry, and the State Services Commission says it is unfair, and if it is not enough that all those groups say that the decision on allocation is unfair, why is the Minister continuing to hold back on gazetting his decision on scampi allocation?

Hon. PETE HODGSON: I am not sure whether I got the question the right way round, but certainly all of those people have said that it is unfair. None of them, interestingly, have said what is fair. The decision--

Hon. David Carter: It's not a Serious Fraud Office job.

Hon. PETE HODGSON: It certainly is not a Serious Fraud Office job, nor is it the Court of Appeal's job. I am not saying it was; I am saying--

Hon. Bill English: Is it their fault?

Hon. PETE HODGSON: No, it is not their fault. I am saying that they have not said what is fair. I think the member asked, given that, why I did not delay my decision. Am I right? I will decide in the next week or two whether to gazette my ``in principle'' decision--

Hon. Bill English: Just say now.

Hon. PETE HODGSON: The reason I am not doing it now I gave in my primary answer.

Clayton Cosgrove: Has the Court of Appeal delivered any judgments that support his ministry's policy concerning the quota management system?

Hon. PETE HODGSON: Yes, it did recently. In the case of Kelian and others, the Court of Appeal considered challenges to the introduction of a number of species--I think 10 of them--to the quota management system on the same basis as that proposed for scampi. The Court of Appeal upheld the process of introducing species into the quota management system, with allocation based on the years specified in the Fisheries Act.

Gerrard Eckhoff: Does the Minister agree with the High Court comment that the allocation of rights be fair and transparent, and does the Minister describe his department's role in scampi allocation as being transparent; if so, why?

Hon. PETE HODGSON: I do not think I have come across a process that is more transparent. On the issue of fairness, the Court of Appeal has spoken about procedural fairness, and substantive fairness, and the difference between the two. It acknowledges that the fisheries process has been procedurally fair, but argues that it has not been substantially fair.

Phil Heatley: What specific aspects of the terms of reference of the select committee inquiry troubles the Minister so much that his decision has to be delayed for a couple of weeks?

Hon. PETE HODGSON: I am not troubled by the select committee's prospective inquiry, but, right now, it does not have one.

Sustainable Management Fund--
Guardians of Fiordland's Fisheries and Marine Environment

12. DAVID CUNLIFFE (NZ Labour--New Lynn) to the Minister for the Environment: What has been the outcome of money provided out of the Sustainable Management Fund to the Guardians of Fiordland's Fisheries and Marine Environment by the Ministry for the Environment?

Hon. PETE HODGSON (Acting Minister for the Environment): The Guardians of Fiordland's Fisheries and Marine Environment have developed a draft sustainable management strategy for Fiordland's fisheries and the associated marine environment. The strategy contains recommendations about voluntary and statutory solutions to environmental issues, and agreements from both stakeholders and statutory agencies to implement the recommendations. The strategy, I might say, is an excellent example of local people with differing interests coming together over several years to develop a solution to local environmental challenges.

David Cunliffe: What is the Sustainable Management Fund, and what other outcomes has the fund contributed to?

Hon. PETE HODGSON: The Sustainable Management Fund helps to achieve the Government's environmental objectives and priorities by funding projects that provide outcomes with national benefit. The Sustainable Management Fund has contributed to a wide range of positive results, including the development of a framework for the sustainable management of Lake Taupo's resources, and a skill development package to assist local authorities to understand their roles under the Resource Management Act and to improve their decision-making.

Hon. Dr Nick Smith: Why has Labour, after having been so critical of National's record of marine reserves--13 new reserves were gazetted during the 1990s--not created one single reserve in 3 years; and all it has to show for 3 years--

Hon. Chris Carter: You only did one.

Hon. Dr Nick Smith: It is actually 4 years for the Minister; the Minister cannot count--is the publishing of a discussion document for Fiordland?

Hon. PETE HODGSON: Far from it! This Government has decided to revise legislation in respect of marine reserves, because the legislation is, this year, 31 years old and in need of revision. Moreover, the sustainable plan put out by the Guardians of Fiordland's Fisheries and Marine Environment contains a significant number of marine reserves in what is a unique world marine environment.

Hon. Ken Shirley: How many grants have been made from the Sustainable Management Fund since its inception by this Government; and is the Minister satisfied that in all instances the grant moneys were used in an appropriate manner to deliver a national benefit?

Hon. PETE HODGSON: I regret I cannot answer that member's question, except to say that the fund was not instituted by this Government but by a previous Government, or probably by the Government before that. Of the grants that I know about I am more than satisfied with the appropriateness of the spending.

Jeanette Fitzsimons: Would the Minister agree that a good deal of the success of this Fiordland project has been due to the four Government agencies involved being helped by skilful facilitation to allow community and interest groups to take a lead role in developing the draft plan; if so, how will the Minister encourage more use of this approach in other environmental and ecosystem management efforts?

Hon. PETE HODGSON: I think it is appropriate for me to acknowledge the work of the Ministry of Fisheries, the Department of Conservation, the Ministry for the Environment--that ministry in a way being the lead agency, for money purposes--and also the Southland Regional Council, and to say that all officers of those four agencies have been enormously helpful. But, in the same breath, I must say that this project has been something that had a local origin, and is the result of local leadership. It would not be appropriate for me to overlook that either.

Question No. 3 to Minister
Hon. Lianne Dalziel: Due to comments made about voting records, I seek leave to table the voting record on Part 6 of the Immigration Amendment Bill, which shows that the Supplementary Order Paper was supported by Labour and opposed by New Zealand First.

Mr SPEAKER: Is there any objection to that? There is objection.

Question No. 10 to Minister
Dr Muriel Newman: I seek leave to table a press release from a former Minister of Corrections to show that the construction of the new Northland prison would cost $40 million.

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

(Uncorrected transcript - subject to correction and further editing)

End of Questions for Oral Answer.

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