Questions for Oral Answer

Questions to Ministers

Working for Families Package—Implementation, Reports

1. LESLEY SOPER (Labour), on behalf of LIANNE DALZIEL (Labour—Christchurch East), to the Minister for Social Development and Employment: What reports, if any, has he received on the implementation of the Working for Families initiatives?

Hon STEVE MAHAREY (Minister for Social Development and Employment): Latest figures, to the end of June 2005, show that 199,500 families received family assistance. Those families were getting $30 more a week on average from the Inland Revenue Department than in June 2004, 65 percent more working families are receiving accommodation assistance, and 43 percent more children are receiving childcare assistance. Next year we will be expanding family support eligibility again and introducing a new, $60-a-week in-work payment.

Lesley Soper: What reports has he seen about the implementation of the rest of the Working for Families package?

Hon STEVE MAHAREY: I have seen at least five reports on Working for Families. The first report said it was third-rate, the second report said it would be scaled back, the third report said the in-work payment would stay, the fourth report said the whole package would be kept in its entirety, and the fifth report said there would be major changes but they would be announced after the election. All of those reports came from Dr Donald Brash and the National Party, who cannot seem to make up their mind on one single issue.

John Key: When the Minister said that the uptake of Working for Families by working families had been disappointing because they were “nervous”, what part of the Working for Families programme were they nervous about?

Hon STEVE MAHAREY: I am afraid the member misquotes me. What I was referring to was the self-employed group of people—[Interruption] Just for Mr Key again, because he cannot stop yelling: I was referring to the group of self-employed New Zealanders who, because of their experiences in the past, have waited for the end of the year before they collect their money. We are encouraging them to take advantage of this fantastic package that the National Party endorses, does not endorse, will change some of, will not change any of, cannot make up its mind about, but will make up its mind about once it gets into Government.

Gerrard Eckhoff: Why was $15 million of taxpayers’ money spent on presenting this Labour Party election bribe, when the Minister’s own officials confirmed that 75 percent of the recipients would receive assistance automatically?

Hon STEVE MAHAREY: Fifteen million dollars has not been spent. That is the entire budget through to 2007.

Judy Turner: Has he yet considered enabling working families to receive their entitlements by alternative means—in the same way that they can currently elect to receive them as an end-of-year lump sum—such as an adjustment to the take-home pay of parents, to be paid through their employer, or by enabling their entitlements to be capitalised to raise the deposit for a first home; if not, why not?

Hon STEVE MAHAREY: As always, they are fantastic ideas from United Future, but right now we are rolling out the Working for Families package, and it is going extremely well.

Lesley Soper: What reports has he seen about working families needing to queue at their local Work and Income to receive assistance through Working for Families?

Hon STEVE MAHAREY: I have seen an inaccurate report about New Zealanders having to queue to get access to Working for Families, when, of course, it is delivered almost completely through the Inland Revenue Department. I have, however, seen a similar report from the same person suggesting that New Zealanders should queue outside post offices if they wish to get a job on a daily basis. I am sure that member, Dr Donald Brash, is merely anticipating his own future.

Taxation—Top Tax Rate

2. RODNEY HIDE (Leader—ACT) to the Minister of Finance: What percentage of the workforce are paying the 39 percent tax rate, and how does this compare with his statement on 22 December 1999 that the 39 percent tax rate will “affect only about 5 percent of the workforce”?

Hon Dr MICHAEL CULLEN (Minister of Finance): The information at the time I made that statement related to the 1998 tax year, when the proportion of taxpayers earning more than $60,000 was 5.3 percent. The current percentage is 8.7 percent. Had we intended to index the threshold for the 39c in the dollar rate at the time, the policy would have said so, because this Government does what it says it will do.

Rodney Hide: Does the Minister accept that he is referring to all taxpayers, not to the workforce, and that if one looks at the workforce one sees, by his own admission, that 22 percent of the workforce are paying the top rate of tax, and is that not just another example that this Government cannot be trusted to keep its word, because it has always been more than 5 percent of the workforce—and, indeed, 5 percent of taxpayers—who have had to pay the top rate of tax?

Hon Dr MICHAEL CULLEN: I understand the member’s fascination with a 5 percent threshold—I do, indeed. And I accept that I made an error in that press statement referring to the workforce. That king hit by the member will not lift him from 1 percent to 5 percent overnight.

Rodney Hide: I raise a point of order, Madam Speaker. Those were very interesting comments by the Minister, but I ask you: at what point did he address the question? Not once did he attempt—

Hon David Cunliffe: He did.

Rodney Hide: Well, David Cunliffe may want to help me with this point of order, but the reality is that the Minister is required to address the question. Not once did he address the question in that answer.

Hon Dr MICHAEL CULLEN: Speaking to the point of order, Madam Speaker, I point out that the member asked me whether I incorrectly referred to the workforce in the press statement, and I said yes. That is the best king hit he has had on me in 5½ years.

John Key: Why do working New Zealanders, including those paying the top rate, have to wait 3 years for Labour’s tax cuts, which cost only $360 million per year, when there was clearly enough money in the kitty to give that amount and more to those with student loans today—or does Labour not care about workers any more?

Hon Dr MICHAEL CULLEN: The first point is that this was a 3-year policy, and actually announced as such. The second point is that, on present reckoning, the threshold change will probably arrive before National announces its tax policy.

Kenneth Wang: Why is it that the Minister can afford a $300 million a year pledge to his favourite student-vote group but cannot afford to cut the 39c in the dollar rate at all, especially given that there are now 320,000 people, or 11 percent of taxpayers, paying the 39c in the dollar rate—or is it just that there is an ideological opposition in the Labour caucus to lowering people’s taxes, but full support for election bribes?

Hon Dr MICHAEL CULLEN: I do note that the party promising $5.7 billion of tax cuts is at approximately 1 percent in the polls, and that the Labour Party is at approximately 40 times that number in the latest opinion polls. On the point the member makes, he does need to understand that the two have to be added together if we do them both. We cannot count the same $300 million twice.

Hon Richard Prebble: In my valedictory question can I help the Minister, by asking him whether he has ever considered that he could actually lower the 39c in the dollar tax rate to 33c in the dollar for about $680 million, and that he could easily find that money by just cutting out support for hip-hop tours, the sending of port-a-loos to Venice, and Twilight Golf, and by cutting down social welfare fraud and abuse; if not, why not?

Hon Dr MICHAEL CULLEN: We have already cut out the support for the hip-hop tour, and at $27,000 it adds up to roughly a 1c a year tax cut once for all taxpayers.

Student Loans—Uptake from April 2006

3. Hon BILL ENGLISH (National—Clutha-Southland) to the Minister of Education: Does the estimated cost of “a maximum of around $300 million” for the policy proposal to abolish all interest charges on student loans for all students and New Zealand - based graduates from 1 April 2006 include the cost of an increased number of students taking up student loans; if so, what is the expected increase in student loan uptake?

Hon TREVOR MALLARD (Minister of Education): The maximum is $302 million in 2008-09. The cost is based on 70 percent of full-time and 13 percent of part-time students paying their fees through a student loan, and up to 50 percent of full-time students drawing down living costs. The costing is also based on up to 60 percent of full-time and 18 percent of part-time students drawing down course-related costs.

Hon Bill English: Can the Minister confirm that after “no interest while studying” was introduced, the average loan balance rose by $2,700 to $14,500 and the proportion of students who took up student loans rose by 20 percent; and why does he imagine that an average 18 or 19-year-old will not take the opportunity to borrow more money and hold it for longer when there is no interest on the loan?

Hon TREVOR MALLARD: I apologise in advance for this answer being slightly longer, but it is an important point. The first point is that in 1999 there were 296,000 equivalent full-time students. By 2003 there were 428,000 equivalent full-time students. The prediction in June 1999, under the previous Government, was that in 2005 total student loan debt would be $7,279 million. The current estimate of student loans is $7,203 million. That shows that notwithstanding the change that has been made, we are under what the track was for student loans when we came into Government; notwithstanding the fact that there has been a massive increase in the numbers and the fact that interest has been received whilst students are studying. Turning to the question of uptake that the member asked about, in 2000, before interest-free loans, the uptake rate was 55 percent. In 2004, following that, and following some behavioural change, the uptake rate was 55 percent.

Lynne Pillay: What feedback has he received on the proposal to scrap interest on student loans?

Hon TREVOR MALLARD: I think it is fair to say that Kiwis love it. I have had feedback from nurses, doctors, teachers, parents, grandparents, students, uncles, aunties, and through Marian Hobbs’ daughter, and everyone loves it. People are so keen to see how this works that over 300,000 people have checked out the website. However, I give one warning. If people have less than a year left of study there is a technical error on the website that is giving inaccurate results. For the people who had a loan under the Tory policy and who would have taken 30 years to pay their loan back, the figures are quite accurate, but for those who have a few weeks to go, it needs a bit of fine-tuning.

Hon Brian Donnelly: Is it not true that over 30 percent of full-time students take out no student loan whatsoever, and is it not a foregone conclusion that Labour’s interest-free policy will guarantee that that percentage drops rapidly to zero?

Hon TREVOR MALLARD: Yes and no.

Deborah Coddington: Why will the Minister not tell the country what both Treasury and the Tertiary Education Commission told his Government in 2000—that the real cost of writing off interest on student loans at net present value is not $300 million, but $4.5 billion, or is he worried that Kiwis will not love that one?

Hon TREVOR MALLARD: The Tertiary Education Commission did not exist in 2000.

Nandor Tanczos: What is the estimated cost of the other half of that policy initiative, which is to ensure that 50 percent of full-time students become eligible for a student allowance in the next term of Government?

Hon TREVOR MALLARD: I do not have those figures with me, but I do want to point out to the member that it is not a lot extra, because already built into the baselines for the last financial year, and for this financial year in fact, were estimates that would have a much higher uptake of student allowances. Of course, the booming economy has meant that that has not been the case.

Bernie Ogilvy: What confidence does the Minister have in the estimated maximum cost of the $300 million for zero-interest charges on student loans when the response of Associate Minister of Finance to my written question asking how much it would cost to make a much smaller cut to the interest rate of 3.7 percent was that: “The fiscal cost to the Government is difficult to estimate with any degree of accuracy as there are likely to be large changes in the number of borrowers and in the size of the average loan as a result of such a policy change.”?

Hon TREVOR MALLARD: I agree with the Associate Minister of Finance—[Interruption]; the other one, I hope—that it is difficult to calculate.

Hon Bill English: Can the Minister confirm that a student who is currently fully supported by his or her parents and is eligible for a student loan but does not have one will be able to take up his or her interest-free student loan for living costs and put the $150 per week directly into an interest-earning bank account and therefore be better off; and why should taxpayers pay for that?

Hon TREVOR MALLARD: Some things have changed in the last few years, one of which is that interest came off student loans quite a few years ago. They could have been doing that for a number of years, and it has not—

Hon Dr Nick Smith: Rubbish!

Hon TREVOR MALLARD: The member says “Rubbish”. It has not happened to the extent that it would make behavioural change, and the member is just wrong.

Nandor Tanczos: Can the Minister confirm that his answer to my previous supplementary question—that the increase in eligibility would not cost very much—means that the Government does not intend that many more students will be eligible for a full allowance, just that a whole bunch more will get $5 a week?

Hon TREVOR MALLARD: Not at all.

Rodney Hide: Referring to the Minister’s answer to the primary question, which estimated the costs, could he tell the House what percentage of eligible students who can take out a loan he is assuming will not take out a loan at the full amount?

Hon TREVOR MALLARD: Quite a wide variety, depending on the component of the loan.

Hon Bill English: Can the Minister confirm that it is now the Labour Party’s position that in charging no interest on student loans, students are likely to borrow less and pay it off quicker, or does he accept the common sense of everybody else—that if the loans are completely interest free, students will borrow more, more of them will borrow, and they will have much less incentive to pay it back?

Hon TREVOR MALLARD: I think my best estimate of the situation is that they may borrow slightly more and they will pay it off much more quickly.

Electricity—Pricing

4. PETER BROWN (Deputy Leader—NZ First) to the Minister of Energy: What has been the percentage increase for fixed and variable electricity prices since 1999, and what solutions does he have, if any, to reduce the price of electricity to consumers?

Hon TREVOR MALLARD (Minister of Education), on behalf of the Minister of Energy: Variable charges for consumers have increased by between 46 percent and 66 percent. Fixed charges have increased by 25 percent for those on options other than the low-tariff options, and fixed charges have decreased by 50 percent for consumers on the low fixed-charge tariff options.

Peter Brown: Is he aware just how detrimental these increasing power prices are for people on fixed incomes—in particular, the elderly who are now going to bed wrapped in blankets, failing to put their heaters on, having short showers, limiting their cooking, and living in fear and dread of receiving their next power bill?

Hon Dr Michael Cullen: Most of us go to bed with blankets.

Hon TREVOR MALLARD: I note Dr Cullen’s comments, and I think that most of us do go to bed with blankets. The changes this Government has made to superannuation are very important, but we are now seeing the effect of the rundown of the Mâui gasfield under the previous National Government and its active discouragement of people who were exploring for replacement gas. That practice has changed under this Government.

Mark Peck: What steps has the Government taken to lower the cost of electricity for low-volume users such as pensioners?

Hon TREVOR MALLARD: Our Government is committed to keeping electricity affordable. All power networks have been required to offer a fixed daily-charge option. Lower power users are now saving up to $96 a year on their electricity bills, thanks to the very good work of Pete Hodgson.

Hon Ken Shirley: What is the projected increase in consumer electricity prices resulting from the Labour Government’s carbon tax on gas and coal, and how can he seriously claim to be trying to reduce the price of electricity charges to the consumer?

Hon TREVOR MALLARD: I do not have those figures with me, but, of course, the figures will depend a lot, going into the future, on the success of the renewable energy industry and also the savings that can be made through more efficient homes and more efficient businesses.

Mike Ward: What has been the change in fixed charges for gas over the same period, and when will the Government act to introduce low fixed-charges for gas, so more Auckland households find it economic to connect to the gaspipes that run past their doors?

Hon TREVOR MALLARD: Some of the actions I have taken in the last 24 hours will be helpful with regard to the cost of gas. The member will see policy announcements soon.

Peter Brown: In light of the Minister’s earlier answer to my supplementary question, does he take seriously the fact that some of the elderly in this country live in fear and dread of their power bill and see it as ever-increasing, because it has increased hugely over recent times; if so, will he tell us exactly what he is going to do to help the elderly with their power bills?

Hon TREVOR MALLARD: This Government has done quite a lot about power pricing. We have facilitated a lot of wind power, we have worked in the solar area to knock off the peaks in demand, and we have subsidised gas exploration by providing tax breaks for those exploring for gas and by paying for seismic surveys. Those are really important factors in making sure that electricity prices do not continue to go up at the rate they have as a result of the Bradford reforms.

Peter Brown: Does the Minister accept that if there were more players in the industry, generating more electricity, there would be downward pressure on prices?

Hon TREVOR MALLARD: If the market were working well, that would be the case.

Education Expenditure—Proposed Changes

5. MOANA MACKEY (Labour) to the Minister of Education: What reports, if any, has he received on proposed changes to education expenditure?

Hon TREVOR MALLARD (Minister of Education): I have seen a report suggesting that education expenditure should be ring-fenced at 2005-06 levels. That would effectively result in a cut of $1.38 billion from forecast expenditure—funding that is already budgeted for extra teachers, teacher pay increases, school operation grant increases, early childhood education funding increases, and the list goes on. That crazy proposal came from Don Brash.

Moana Mackey: What impact would those funding cuts have on the tertiary education sector?

Hon TREVOR MALLARD: The university sector would lose the $40 million that has been budgeted to increase the Performance-based Research Fund, and the entire tertiary sector would lose the $73 million that has been budgeted to increase tuition subsidies. Extra funding for industry training and Modern Apprentices would be cut. Is it any wonder that National cannot get its tax cuts right if it cannot even understand that?

Hon Bill English: Why does the Minister think he has any credibility on education spending, when he has overseen the worst blowouts on the lowest-quality learning, and left a total shambles in the bureaucracy in the time that he has been Minister of Education; and why does he not apologise, instead of exaggerating the numbers?

Hon TREVOR MALLARD: I am proud to be the Minister—

Simon Power: I raise a point of order, Madam Speaker. During the course of Mr English’s supplementary question, a Minister sitting—I believe, although I stand to be corrected—on the front bench interjected. Since you have been Speaker you have set a rule that members are able to ask their questions in silence, and I ask you to rule accordingly.

Madam SPEAKER: Yes, I have mentioned that to members before. I have on several occasions in this session let members from all sides of the House breach that. You are all now on final warning, again. Would the Minister please answer the question.

Hon Bill English: My colleague was telling me that because of the interjection he did not hear the question. I seek leave to ask it again.

Madam SPEAKER: Yes, you may ask it again.

Hon Bill English: Why does this Minister think he has any credibility at all on education spending, when, under his responsibility for the last 6 years, he has overseen the biggest blowouts on the lowest-quality learning this country has ever seen, and he has left the bureaucracy in a total shambles, as confirmed by a report written by the Secretary to the Treasury, the chief executive of the Department of the Prime Minister and Cabinet, and his own State Services Commissioner; why does he not apologise?

Hon TREVOR MALLARD: This Minister is proud of the results from the Programme for International Student Assessment, which have our kids in the top group of the OECD. Our kids are in the top group in literacy, numeracy, science, and problem-solving. Opposition members do not like our kids being successful, and they do not like our teachers being good, but none of their whingeing will take away from the facts.

Budget 2005—Education, Minister’s Statement

6. JOHN KEY (National—Helensville) to the Minister of Finance: Does he agree with the statement of the Minister of Education that there is “room for $1.9 billion additional spending” in the Budget; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): Yes.

John Key: Can the Minister confirm that the cost of the student loan policy announced on Monday will come out of the $1.9 billion of new Budget spending earmarked for the out-years; if not, where will the cost be funded from?

Hon Dr MICHAEL CULLEN: Yes, but the member must be careful—the $1.9 billion is $1.9 billion plus $1.9 billion plus $1.9 billion. Three hundred is roughly flat line.

John Key: Will all new pledge card initiatives that have a fiscal impact be funded from the $1.9 billion of new Budget spend; if not, where will they be funded from?

Hon Dr MICHAEL CULLEN: That is the intention, as opposed to promising tax cuts of a total of $1 billion—having already promised more than $1 billion—with the main course yet to come.

Peter Brown: Noting the Minister’s positive answer to John Key’s initial question, why does the Minister not spend some of this $1.9 billion on roading, where he knows there is a shortfall, where he knows there would be huge economic gains, and which he would get back, plus bonus, in very short order; why does he not do that?

Hon Dr MICHAEL CULLEN: In the Budget we announced $8.4 billion additional spending on roading. Since then, we have added a further $500 million. Since then, we have added further spending on Wellington. The Minister will announce spending in the Bay of Plenty next week. There is a Waikato package to come next. There is $23 billion to be spent on land transport for the next 10 years. There is in Auckland, at the moment, 10 times as much by value roading under way as there was in 1999.

Gordon Copeland: Does he agree with the Minister of Education that a significant proportion of the $1.9 billion per annum is already spoken for in terms of salary increases for teachers, nurses, and other State servants; if so, what is the difference between the figure that is spoken for and the amount that is in the slush fund that has now been used to announce this policy of no interest on student loans?

Hon Dr MICHAEL CULLEN: The $1.9 billion allocation—which, I draw to Mr Key’s attention, was in the Budget documentation on page 71—is not a slush fund. I think it was actually the Rt Hon Bill Birch who first put a Budget allocation for out-years into the Budget, after some encouragement from me as Opposition spokesperson on finance. It is quite true that a significant growth in expenditure is required merely to keep services constant. Thus, if a party promises merely to increase health spending by, say, $1, which is more spending than in the previous year, services will go backwards. That, of course, is precisely what the National Party is saying about the track of health and education spending.

John Key: Did the Minister’s office provide the costings for the student loan policy announced on Monday, or was it Mr Mallard’s office; and if there are cost overruns over and above the $300 million per year, will those be funded out of the $1.9 billion of out-year spending?

Hon Dr MICHAEL CULLEN: I think it was a joint effort between our offices on that matter. In terms of those cost overruns for the future, I thank the member for his confidence in the re-election of a Labour-led Government.

Rodney Hide: On what date were the costings done on the student loan policy that was just announced; can the Minister confirm that when Mr Birch set aside new initiatives for spending the amount was $600 million compounding each year, not the Labour Party’s $1,900 million compounding each year; and if one adds that up it is $5.7 billion, as set out in the Budget, in 2009, which, combined with the surplus of $5.3 billion, actually leaves $11 billion above current forecast spending?

Hon Dr MICHAEL CULLEN: I think that explains why that party is at 1 percent in the polls, on that particular matter—

Hon Dr Nick Smith: Just answer the question.

Hon Dr MICHAEL CULLEN: I ask that member to keep apologising to Basil Morrison for his behaviour on Monday night at the local government conference. Work started on those matters earlier this year. Final costings were done in the last few weeks.

Working for Families Package—Childcare Assistance for Non-working Families

7. JUDY TURNER (Deputy Leader—United Future) to the Minister for Social Development and Employment: What assistance is there for families who do not qualify under the Working for Families package but wish to have one parent stay at home to care for children, such as the Garside family featured on Television One’s Sunday programme recently?

Hon STEVE MAHAREY (Minister for Social Development and Employment): The Working for Families package targets tax relief to the 61 percent of families with children who are most in need. Families earning between $25,000 and $45,000 a year will get around $100 per week from that package. For other families, the best Government strategy, frankly, is a growing economy and investment in those things that will raise productivity levels, so that wages can rise, rather than tinkering with complications to the taxation system, which would give us no long-term profit. Families earning $60,000 or more with young children may, however, be eligible for an expanded childcare subsidy, and will qualify for 20 hours of free early childhood education from 2007.

Judy Turner: Does the Minister agree that the introduction of income splitting, as proposed by United Future, would give a family such as the Garsides, who missed out on the Working for Families assistance, an extra $98 a week, and allow them to achieve their dream of having one parent at home while their children are young; if so, does he support the introduction of that family-friendly policy; if not, why not?

Hon STEVE MAHAREY: The Garside family, who I understand are on a main income of about $65,000, with a part-time income coming from the second earner, may well look at the income-splitting idea. But from the Government’s point of view, we have no plans to move on that policy. We do not believe that income-splitting benefits those families that most need financial assistance; income splitting is more beneficial to those who are on higher incomes, rather than those whom we are targeting. I note also that the price of United Future’s income-splitting package is the cancellation of the rest of the Working for Families package—no in-work payment, and no $10 increase per child for all eligible families. If that is not now United Future’s position, I welcome that.

H V Ross Robertson: Given the Minister’s response to the House, can he inform it of what reports he has seen about assistance for families who wish to have one parent stay at home to care for their children?

Hon STEVE MAHAREY: I have seen a report that: “This issue is very, very complex.”, that: “It cannot be addressed without the resources of the State behind you.”, and that: “Frankly, in Opposition no party, certainly not National, has the capacity to deal with it adequately.” A person told Radio Rhema that, and he was Dr Donald Brash, who is clearly intent on stealing home in this election, rather than openly telling his voters his plans about his policies.

Judy Turner: Has the Minister seen the Littlies Lobby survey results released yesterday, which indicate that the No. 1 concern of parents with under-fives is spending more quality time with them, and that parents want policies which affirm “support and recognition for a parent to stay at home with children”; if so, how does he reconcile that desire for parenting to be valued with the Government’s clear agenda to get more mums into work?

Hon STEVE MAHAREY: The Government’s clear agenda is to give men and women choice about staying at home or going into the workplace, which means providing proper support through things like childcare to ensure that that choice is real and meaningful for both partners.

Judy Turner: Does the Minister agree with the comment from Diane Garside on the Sunday programme that she wants the choice to stay at home to care for her toddlers “no matter what income her family is at”; or does he still stand by his comments on National Radio last year that such a choice is simply a luxury?

Hon STEVE MAHAREY: I note that the Garside family, who have a $65,000 main income plus a second, part-time income, do want to make that kind of choice. As I said before, it is the Government’s intention to try to put in place policies that provide both men and women with a choice as to whether they will go back into the workplace or stay home with their children. As I said last night at a seminar here, which was attended by a number of members of Parliament, the key to that, of course, is to lift wages. That is what this Government has also embarked on doing, rather than giving silly, waste-of-time tax cuts.

Student Loans—Uptake from April 2006

8. Hon BRIAN DONNELLY (NZ First) to the Minister of Education: How much did student debt increase in the 3 years after the policy to remove interest on loans while studying commenced, and how much is it estimated that student debt will increase as a result of the policy announced on Tuesday to remove interest on student loans for graduates living in New Zealand, in the 3 years after its implementation?

Hon TREVOR MALLARD (Minister of Education): On the first part of the question, in 2001 the total amount borrowed was $909 million, a 56 percent uptake rate. In 2004 it was $983 million, a 55 percent uptake rate. If the member is talking about out-years, in, say, the 2007-08 year, under existing policy settings the close of year student loan balance would be $8,422 million. Under this policy—because, of course, the interest does not keep being added on—the closing balance would be $7,979 million.

Hon Brian Donnelly: Does the policy announced on Tuesday mean that taxpayers will be paying the interest on the residue of lump-sum loans taken out by students in the period prior to the New Zealand First - National coalition Government in order to buy motorcars and stereos?

Hon TREVOR MALLARD: That will be the case, but I think it would be pretty hard to differentiate around the quality of borrowing 10 years previously.

Dr Ashraf Choudhary: What is the estimated impact of the no-interest policy on the amount of time it takes to pay back a student loan?

Hon TREVOR MALLARD: I will give a couple of examples. Someone with a debt of around $15,000, which is pretty average, and a salary of around $35,000, which, again, is pretty average, will pay back the loan 3 years sooner and save $7,000 in interest. Someone who has a bigger debt—say, $35,000, which is not unusual—and earns a salary of around $45,000 will pay back the loan 7 years sooner and save over $30,000 in interest. It is no wonder Kiwis love this policy.

Hon Bill English: If getting rid of interest on loans is such a good idea, why does the Labour Government not pass a law that abolishes all interest on loans, on the basis that it believes that it would make no difference to what people borrow or when they repay their loans, and that lots of Kiwis would love that for their mortgage?

Hon TREVOR MALLARD: Given the member’s background, I am surprised he is taking such an Islamic approach to life.

Hon Brian Donnelly: For ex-students who moved in and out of New Zealand—for example, within 1 year for short periods, like 3 months in Australia, 4 months back here, then off to England, etc.—will the time they were out of the country be factored into calculations of interest owed, and how many bureaucrats will be required to keep track of these calculations?

Hon TREVOR MALLARD: The changes will involve a closer link between the migration authorities and the Inland Revenue Department. People will be allowed to be out of the country for 2 months, except if they are out doing postgraduate studies, in which case the nil interest will apply. There will be some set-up costs, obviously, but I expect that the process will be pretty much automated.

Hon Brian Donnelly: Does the Minister agree that Parliament is the only body that has a constitutional right to levy taxes, and that the public has the right to know what those taxes are for; if so, why was this $300 million per year policy not announced in the Budgets so that it could be debated by Parliament?

Hon TREVOR MALLARD: Because it is a Labour Party policy, and it will be debated in the right place: on the hustings. But I must say that other than a couple of whinges from the other side of the House—[Interruption]—and one down there, I have not heard of anyone who opposes the policy.

Weathertight Homes Resolution Service—Staff Functions

9. Hon Dr NICK SMITH (National—Nelson) to the Minister for Building Issues: Does he stand by his statement on Tuesday about the Weathertight Homes Resolution Service having Sound of Music, cowboys and Indians, and Pacific Island theme parties: “I have approached this matter with a certain degree of jest, because it sounds so absurd.”; if so, why did the Weathertight Homes Resolution Service say yesterday that allegations it had wasted taxpayers’ money are untrue?

Hon CHRIS CARTER (Minister for Building Issues): Yes, because it did sound absurd. But, of course, much that has been claimed in this House about those events by that member has been exaggerated or incorrect.

Hon Dr Nick Smith: Now that the department has confirmed it has had five of those parties—and I have identified only four—over the last 14 months at taxpayers’ expense and, notably, that it flew nine staff to Auckland especially for a Pacific Island awareness day with Auckland staff, which involved kava drinking and Pacific Island dancing and cost $6,670, why did the Minister’s officials say yesterday that the department had not wasted any public money, and does that not indicate a rotten culture of extravagance in an agency that is actually meant to be fixing rotten homes?

Hon CHRIS CARTER: The five events the member has referred to, which were discussed yesterday in this House in my absence, ranged in value from $632 to $2,563, and to $6,000 for two training days on Pacific Island culture. The other functions were a Christmas function and an office-moving function. As I said on Tuesday, those are trivial matters. Their importance has been greatly inflated by that member, but they do, nevertheless, indicate a culture that has gone on in that department but that has now ceased.

Russell Fairbrother: What changes have taken place within the Weathertight Homes Resolution Service since the social functions and staff training courses occurred?

Hon CHRIS CARTER: The service has now been incorporated into the Department of Building and Housing. That took place 28 days ago. The new manager has set out the standards of financial and performance accountabilities expected of public servants. My department has been looking at ways of improving the service it provides to homeowners affected by failures in the building system created by the last National Government. I will be discussing those likely changes when I meet with affected homeowners in Auckland tomorrow.

Hon Dr Nick Smith: Does the Minister agree with the comment Dr Cullen made yesterday that I should apologise for saying staff had flown between Auckland and Wellington at taxpayers’ expense for a theme party, when in fact the kava drinking and hula dancing that the nine staff flew to Auckland for was not a party but a Pacific Island awareness activity, or does he think this Government owes an apology to leaky homeowners for having staff hula dancing and kava drinking while they lived with the misery of their rotting homes?

Hon CHRIS CARTER: I have a transcript here of an interview that that member gave this morning on the radio, where he said there was an all-day kava drinking and hula dance party at one of the flashest hotels in Auckland “for just 17 people, costing $6,600”. That was a Pacific Island training day, which involved a cultural group from a local high school coming in at the end of the training session to give a performance. Those were not hula girls. There was a kava ceremony at the end of a day’s training for the staff. That member, as usual, has totally distorted the whole event by exaggeration and embellishment.

Hon Dr Nick Smith: I seek leave to table a media release from the Minister’s Department of Building and Housing, which states that all the points that I raised on Tuesday were correct: that the Pacific Island awareness day cost $6,679, that it involved 17 staff at a cost of $392 per staff number, and that it involved a formal kava ceremony and a local cultural group—and, furthermore, the participants have confirmed they spent some time doing hula dancing with the girls from the school.

Leave granted.

Hon Dr Nick Smith: What does it say about the politically correct culture in the public service under this Government that an agency charged with fixing leaky homes, which is thousands of cases behind in its workload, sees fit to have a Pacific Island awareness day, and how many other Government agencies that we have not yet found are engaging in that sort of politically correct nonsense?

Hon CHRIS CARTER: What it does say about this Government is that we set up a service to fix a problem that the previous National Government, which that member belonged to, created.

Primary Health Organisations—Reports on Future Changes

10. DARREN HUGHES (Labour—Otaki) to the Minister of Health: What reports, if any, has she received on future changes to primary health organisations?

Hon DAMIEN O'CONNOR (Acting Minister of Health): On Monday I read a report in the New Zealand Herald that talked about rationalising so-called inefficient primary health organisations in small communities whether they served rural areas or specific groups in cities and regions. Rationalisation, in my view, is just another name for cut-backs. Small communities would be deprived of the ability to determine the health services they need. This is what the National Party proposes to do to pay for its tax cuts. That is the party that says it supports choice.

Darren Hughes: Can the Minister explain how primary health organisations are performing this valuable role in our smaller communities?

Hon DAMIEN O'CONNOR: As it happens, yes, I can give many examples of smaller primary health organisations relating to specific community needs in a way that larger organisations would find more difficult. Examples include the Lake Taupô primary health organisation’s home insulation project in Mangakino, the Mornington primary health organisation’s door-to-door transport service in Dunedin, Ngâti Porou Hauora’s diabetes programme on the East Coast that promotes practical activities, and the Canterbury Community primary health organisation’s project to improve the oral health of teenagers. National calls such primary health organisations inefficient, but I say they understand their communities in a way that National never will.

Heather Roy: What is the Minister of Health’s response to the independent report, Review of Primary Health Organisation Management Services, commissioned by her own ministry, which states: “PHO management is deficient in performance monitoring and reporting requirements, business planning, research and analysis, community liaison, development of protocols, quality management, and referred services.”, and how is she intending to address this damning criticism of primary health organisations, especially smaller organisations?

Hon DAMIEN O'CONNOR: I am aware of that problem. There were some small primary health organisations that received insufficient funding to adequately carry out those management services. This Government has increased the funding so that they can indeed address the problems raised in the report.

Judy Turner: Does the Minister agree that scrapping primary health organisations would mean burdening New Zealanders with yet another restructuring of our health system, and wastage of significant investment in primary health, two things that they do not want; but would he consider that, if we are to continue with primary health organisations, they do need to undergo significant streamlining and coordination to ensure that the resources are not squandered?

Hon DAMIEN O'CONNOR: Yes, I do agree that the last thing health practitioners in the primary area need is radical change. We are seeing some outstanding results from the good work that primary health organisations are doing up and down the country. We acknowledge that there will have to be ongoing improvement in some areas, but there are numerous examples that show, and many general practitioners up and down this country who now think, that primary health organisations are one of the best things this Government has done in the whole area of health care.

Traffic Infringement Notices—Policy

11. Hon TONY RYALL (National—Bay Of Plenty) to the Minister of Police: How many hours will the police dedicate to speed control this financial year compared with last financial year, and how many traffic offence notices and infringement offence notices are expected to be issued this financial year compared with the past financial year?

Hon GEORGE HAWKINS (Minister of Police): I am advised that the hours dedicated to speed control for the 2005-06 year will be approximately the same as those for the last financial year. The police are not expected to issue any number of offence notices, and any that they do issue will be to people who are breaking the law. The latest information I have is that the number of tickets issued during the January-March quarter showed a decrease of 8 percent against the quarterly average, and that the number of speed camera offences has dropped over the last year. The police and I hope the reduction continues.

Hon Tony Ryall: Why has the Government cut the number of hours that police will spend targeting drink-drivers this year?

Hon GEORGE HAWKINS: Because the police each year look at what the need is, and where the drop-off is, and make sure they are policing our roads better. I can tell the member that the number of fatal accidents over the last few years is a lot better than it was in the previous 50 years. Fewer people per 10,000 people have been killed on the road. [Interruption] The member opposite may say that is rubbish, but he would not know because he does not do his homework.

Martin Gallagher: In the light of the Minister’s previous answer, can he detail what reports he has seen on the result of the Government’s road safety strategy designed to save life?

Hon GEORGE HAWKINS: The Land Transport New Zealand website indicates that road fatalities per 10,000 of population in the last few years are the lowest for more than 50 years. I am further advised that 74,922—

Gerry Brownlee: What about warrants on the cars?

Hon GEORGE HAWKINS: I will repeat this, seeing that Mr Brownlee is getting excited. I am further advised that 74,922 fewer speed camera tickets were issued last year. The message is getting through.

Peter Brown: Is our road toll fatality record inferior or superior to that of nations such as the UK, Holland, and Sweden; if it is inferior—as I suspect it is—will the Minister tell us why?

Hon GEORGE HAWKINS: I will get that information for the member, but what I can say is that our having the best figures for the last 50 years is something we can be proud of. The average, mean speed on our roads is dropping dramatically.

Hon Tony Ryall: Given that the Government’s own latest available data shows an increase in the proportion of crashes and casualties where drink-driving is a contributing factor, why would Labour cut the effort against drink-driving, or has revenue gathering become even more of a priority for the Government?

Hon GEORGE HAWKINS: It is not about revenue earning. That member must realise that $216 million goes into road safety, and only $100 million is collected in fines.

Peter Brown: What is the Minister’s view of a dedicated traffic policing force, separate from the police force, my noting that when in Opposition he voted against National’s amalgamation of the two forces—what is his view now?

Hon GEORGE HAWKINS: When John Banks brought it in I thought that it was not a good idea. John Banks now thinks the same; so do I.

Peter Brown: I raise a point of order, Madam Speaker. We are just trying to work out what that answer meant. I wonder whether it is convenient for the Minister to talk to John Banks, then he can tell us what he really thinks.

Madam SPEAKER: I will say that the Minister addressed the question but he may have not have done it satisfactorily for the member.

Hon Tony Ryall: Why will the Government not use the extra hours funded for the police to issue even more speeding tickets this year, to target drink-drivers?

Hon GEORGE HAWKINS: The police always target drink-driving. They have done that all the time. The member did not listen earlier. The number of speeding tickets is going down, and the member does not like it. In a recent DigiPoll survey published in the New Zealand Herald, about 70 percent of people thought we were getting it right.

Hon Tony Ryall: I seek leave to table two documents. One is table 16 from the safety administration programme, which shows that the Government is cutting the police effort on drink-driving and putting it into additional speeding tickets.

Leave granted.

Hon Tony Ryall: Secondly, I seek leave to table a document from Land Transport New Zealand that shows that the number of deaths per 100,000 people has increased, and that the road toll is perilously close to that of previous years.

Leave granted.

Genetically Modified Food—Contamination Test

12. IAN EWEN-STREET (Green) to the Minister of Agriculture: When did the Government obtain a copy of the positive GM contamination test announced yesterday and what does it say?

Hon JIM SUTTON (Minister of Agriculture): The Ministry of Agriculture and Forestry was alerted to the positive test result on Monday. However, that screening test is only a basic one, and further testing is required in order to get information about the GM presence. Hopefully, that testing will be available within a couple of weeks.

Ian Ewen-Street: When did the Ministry of Agriculture and Forestry first hear about the contamination, and why did it take so long for the test certificate to be provided to the Government?

Hon JIM SUTTON: The industry participants have provided the Ministry of Agriculture and Forestry with assurances that the grain is voluntarily embargoed. The industry has amply demonstrated its integrity in that regard. The ministry issued biosecurity directions on Wednesday to secure the grain after necessary legal procedures.

David Parker: Do we have systems in place to deal with this situation?

Hon JIM SUTTON: We certainly do. I have confidence in the work of our officials. After all, we have dealt with adventitious GM presence in maize previously on several occasions.

Hon Brian Donnelly: Does the Minister stand by his statement made on television last night that New Zealanders opposed to GE do not mind eating a little bit of GE food?

Hon JIM SUTTON: That comment was made in a somewhat different context. I must say that the law of the land allows for zero tolerance of unauthorised GM material, and that law is the one we are enforcing.

Ian Ewen-Street: Is the Government now willing to act on the unanimous recommendation of the select committee inquiry into “corngate” that legislation be passed to require testing laboratories to immediately make available any test certificate when requested to do so by the Government?

Hon JIM SUTTON: The Government sees no need for such a requirement. The industry has demonstrated its complete responsibility and we do not think it is right that we should treat it as if it were a public enemy.

Ian Ewen-Street: Is the Government willing to admit yet that there will continue to be regular contamination events unless we have a liability regime that holds the GE patent holder, or the importer of the seed, liable for all costs caused by the contamination; if not, why not?

Hon JIM SUTTON: As I said, the Government does not see any merit in treating the people involved in a situation like this as public enemies when they have demonstrated good faith and their responsibility. We will continue to try to tighten up the controls to prevent any unauthorised GM material entering New Zealand, but members must realise that we are operating on the very fringe of detectability at the lower end. So it is that one can never rule out another such incident.

Ian Ewen-Street: Does the Minister agree with the comments of Hugh Ritchie of Federated Farmers that our overseas markets for maize rely on our GE-free status, and that ongoing contamination scares would be damaging to our reputation; if not, why not?

Hon JIM SUTTON: New Zealand is not a significant exporter of maize, but nevertheless, we have a very high-integrity system for authorising, or certifying, the content of what we export. We will continue to the best of our scientific ability to make sure that that remains of high reputation.

Ian Ewen-Street: Can the Minister name one GE food product that can be grown in New Zealand for which there is any demand in any of our major export markets; if so, what is that food, and what is the demand?

Hon JIM SUTTON: To the best of my knowledge there are no GM foods produced in New Zealand, or no foods produced from GM plants grown in New Zealand. Almost all the GM technology employed commercially around the world so far—all 80 million hectares or so of GM crops—are types of crops that are not commonly grown in New Zealand at all.

( Uncorrected transcript—subject to correction and further editing. For corrected transcripts, please visit: http://www.clerk.parliament.govt.nz/hansard )

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