Questions And Answers - Tuesday, 2 May 2006

Questions to Ministers

Oil Prices—Strategy

1. JEANETTE FITZSIMONS (Co-Leader—Green) to the Prime Minister: What instructions, if any, has she given her Ministers and her department to develop a strategy for New Zealand’s primary industry, transport, tourism, and trading relationships to adapt to the reality of more expensive and less available oil, in light of her statement of 18 April that the reason for high oil prices is “because we’re probably not too far short of peak production, if we’re not already there”?

Rt Hon HELEN CLARK (Prime Minister): Ministers and officials are working on how to increase the use of bio-fuels, as well as researching improvements in vehicle fleet efficiency. As well, a New Zealand energy strategy is being developed, and the National Energy Efficiency and Conservation Strategy is being reviewed, and I thank the member for the work she is doing in respect of that. The actual date for peak oil production is a matter of debate but there is no doubt that it will occur.

Jeanette Fitzsimons: Is she confident that the national energy strategy will take sufficient account of her statement, with which I agree, that oil is not going to get cheaper over the long term, given Treasury’s projection in the December Economic and Fiscal Update that prices will drop to $54 a barrel, from $75 now, after this year and the 2003 projections still on the Ministry of Economic Development’s website that forecast a drop in oil prices to $25 a barrel by 2020 and constant prices thereafter?

Rt Hon HELEN CLARK: I think there will be fluctuations around the price, but I have little doubt that the long-term trend will be for the price to go higher. That is because of the huge demand for oil now as a finite resource from the emerging mega-economies of China and India and also the fact that the world’s oil supplies tend to be drawn from rather unstable parts of the world. All those factors are leading great economies like that of the United States to start to think actively about how to move to a post-oil economy.

Jeanette Fitzsimons: Does she agree that if cities are to remain viable, investment must shift from new motorways into better public transport, especially electric rail in Auckland and trolley buses in Wellington, and what does her statement about peak oil imply for the economics of a new Transmission Gully motorway at a time when the affordability of private motoring is declining?

Rt Hon HELEN CLARK: I absolutely agree with the member about the importance of investment in public transport. The investment that has gone in over the last 6½ years is many times what was there before then, and that is the right thing to do. I think for the modern day and age, people want the independence the private vehicle offers, but for the future I think we will see the private vehicle increasingly be powered by sources other than oil.

Jeanette Fitzsimons: Has she received any reports that suggest that our current high use of transport fuels, which is growing by nearly 4 percent a year, could be sustained by bio-fuels alone, and what impact would that have on land available for agriculture in New Zealand?

Rt Hon HELEN CLARK: No, I have not seen reports on that, but I understand from colleagues that the Government is likely to be setting a target around bio-fuels in June. I look forward to that, because I think that will be part of our energy future.

Jeanette Fitzsimons: Will the Government consider establishing a process involving both the Government and the private sector to study the work done in Sweden, which plans to cut its reliance on petroleum by 2020, and to plan a similar transition here?

Rt Hon HELEN CLARK: I am open to such suggestions. I am well aware of the impetus that Sweden is giving to how to develop a post-oil economy, and it is good to see those kinds of initiatives from offshore now being reported in our own press, and quite fully. I think we do need new initiatives, and I am certainly open to discussing initiatives like that.

Television New Zealand—Former Chairman

2. Dr DON BRASH (Leader of the Opposition) to the Prime Minister: What expectations, if any, has she conveyed to her Ministers regarding the accountability of Crown company directors to select committees, and what is her response to revelations that the former chairman of Television New Zealand Ltd referred to select committee members as “bastards”, describing them as the “enemy”, and urged the withholding of politically damaging information from the committee?

Rt Hon HELEN CLARK (Prime Minister): The Government expects all State-owned enterprises, Crown entities, agencies, and departments to respect the public accountability processes, and that is why I have described the emails as inappropriate.

Dr Don Brash: Does the Prime Minister accept that anyone who describes select committee members as “bastards” and the “enemy” is unfit to serve on the board of a Crown entity; if so, why does Mr Boyce continue to sit on the board of New Zealand Trade and Enterprise?

Rt Hon HELEN CLARK: The answer to the first part of the question is no. Mr Boyce, of course, was responding after several years of being chair of Television New Zealand, during which time not a single constructive thing about the corporation was said by the National Party Opposition.

Dr Don Brash: Does the Prime Minister accept the fundamental proposition that Crown companies like TVNZ have an absolute obligation to account to this Parliament and its select committees; if so, why has her Government retained as a member of a Government-appointed board a man as contemptuous of this Parliament as Mr Boyce?

Rt Hon HELEN CLARK: Mr Boyce has indeed clarified today that he is not contemptuous of the parliamentary process but, rather, of Mr McCully.

Dr Don Brash: Does the Prime Minister believe that it is acceptable for directors appointed by her Government to seek to suppress politically damaging information regarding Dame Ann Hercus because, to use Mr Boyce’s phrase, it “would be a disaster for everyone” for the truth to emerge, and can she tell the House just what was the disastrous information that Mr Boyce was so keen to suppress?

Rt Hon HELEN CLARK: No, frankly, I cannot.

Dr Don Brash: Was the Prime Minister aware that Television New Zealand director Dame Ann Hercus, a former Labour Cabinet Minister, who kept her office and her Minister’s office closely informed about issues in the TVNZ board, was involved in something that Mr Boyce described as “a disaster for everyone”; if so, does she accept that both Parliament and the select committee have a right to know just what Dame Ann Hercus was up to?

Rt Hon HELEN CLARK: In my experience select committees generally have a way of getting to the truth of the issue, but I have to say that Dame Ann Hercus did not keep me appraised of what happened on that board.

Dr Don Brash: Does the Prime Minister know about what Mr Boyce described to Mr Fraser as “the mid year stuff between yourself and Ann”, the release of which would be “a disaster for everyone”; if so, why will she not tell the House about it?

Rt Hon HELEN CLARK: No; the mind can only boggle at what might have been revealed.

Rodney Hide: Why should anyone in New Zealand—[Interruption]

Madam SPEAKER: Questions will be heard in silence, as is the convention.

Rodney Hide: Why would anyone in New Zealand be surprised that a Government-appointed chairperson would seek to dodge parliamentary accountability and withhold sensitive information from the public, when that is exactly what the Government has been doing, from the Prime Minister down, ever since it was elected to office?

Rt Hon HELEN CLARK: I know that the member has been taking dancing lessons, but dancing on the point of that particular pin will only prick his balloon.

RODNEY HIDE: I raise a point of order, Madam Speaker. That was not even witty. The point is that the Prime Minister has to address the question, and I ask you to reflect on how, in any way, she attempted to address that question. It actually goes to prove the point of my question.

Madam SPEAKER: Well, in which case, then, the Prime Minister addressed the question.

Rodney Hide: I raise a point of order, Madam Speaker. What you have just said is that Helen Clark as Prime Minister does try to duck accountability in Parliament and does try to withhold information. That is what you have confirmed. What annoys me is that you do not uphold the Standing Orders of this Parliament and require the Prime Minister to address the question.

Madam SPEAKER: The Prime Minister addressed the question.

School Student—Serious Offence

3. MOANA MACKEY (Labour) to the Minister of Education: What reports, if any, has he received on the possibility of a student attending school after being charged with a serious offence?

Hon STEVE MAHAREY (Minister of Education): I have seen and heard a media statement made by Mr Bill English saying a school will be forced to take back a student who is on bail, following serious charges being laid against that student. That report was completely wrong. The report and the member’s subsequent comments have put the school and its families in a very difficult position. As a result, the board of trustees has had to deal with a large number of media inquiries to defend its reputation. If Mr English had taken the simple step of contacting my office, he could have found out the facts for himself.

Moana Mackey: What action has he and his ministry taken in these circumstances?

Hon STEVE MAHAREY: I was kept up to date throughout the weekend with developments. The Ministry of Education worked with the police and the school over the weekend. The ministry helped the school prepare to deal with the media attention brought about by Mr English’s comments. The ministry’s Group Special Education people assisted the school on Monday with its students and community, in the aftermath of Mr English’s irresponsible comments. I issued a clarifying statement on Monday morning to clear up the misinformation from Mr English. This instance serves to remind all of us in the House how careful we must be to check our facts, before commenting publicly on difficult situations and therefore making distressing situations more fraught.

Hon Tau Henare: When the Minister became aware of the situation, why did he not say publicly that the student, who is on bail for murder, would not be allowed back into a mainstream classroom?

Hon STEVE MAHAREY: If the member cares to check the Herald on Sunday he will realise that my office was contacted, and I commented. But, of course, I am limited in what I can say, because, unlike Mr English, I did not intend to break the law. [Interruption] Let me be clear: if I had done what that member asked for, I would have broken the law in the same way that Mr English tentatively has done.

Moana Mackey: What was the source of the confusion around this matter?

Hon STEVE MAHAREY: The confusion is a direct result of the statements made by Mr English. I heard Mr English say on National Radio, firstly, that the board of trustees was taking it seriously enough to have an emergency meeting; secondly, that the board clearly thought it must deal with the issue; and, thirdly, that this board of trustees knew that it had to deal with it. When asked whether he had spoken to the board, so he knew that, he said: “Ah, no, I haven’t.” He further said that Steve Maharey should make the college accept the student, even though there were those charges. When he was asked whether he had spoken to me about my actions, he said: “Ah, no, I haven’t.” That is where the confusion came from.

Elective Surgery—Ability to Meet Need

4. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Is he concerned about the Government’s ability to meet New Zealanders’ need for elective surgery; if not, why not?

Hon PETE HODGSON (Minister of Health): Yes, I am. Despite a 24 percent increase in hip replacements, a 52 percent increase in knee replacements, and a 75 percent increase in angioplasties since the change of Government, there are always improvements to make. This Government will pursue those improvements with vigour.

Hon Tony Ryall: What responsibility will he take for the fact that 13,000 more people are now waiting for an appointment to see a specialist than when Labour was first elected, and that is despite clear evidence that district health boards up and down the country are culling patients who are waiting to see a specialist for the first time, such as in Hawke’s Bay and elsewhere around the nation?

Hon PETE HODGSON: That seems to be at variance with the member’s point of view around about Thursday of last week, when he said there was a drop in the number of people waiting to see a specialist and therefore something must be wrong because people cannot get on to the specialist’s waiting list. Now he is saying that there has been an increase and therefore the health system is failing for that reason. The member has to get his lines straight.

Hon Tony Ryall: Could he explain his comments yesterday that patients culled from a waiting list and sent back to a general practitioner are, in fact, better off?

Hon PETE HODGSON: I made no such comment. What I did say—

Hon Tony Ryall: Yes, you did.

Hon Dr Nick Smith: We heard you.

Hon PETE HODGSON: Well then, let me quote the speech that the member has misquoted. I did say that it is better for a person to be sent back to a general practitioner than to be left on a waiting list and receive no attention, no review, no follow-up, and no reassessment. That is why the National Government got rid of the old waiting list system and introduced the booking system.

Hon Tony Ryall: Why should New Zealanders believe him when he says that patients are better off by being sent back to their general practitioner, when the respected chairman of the Royal Australasian College of Surgeons says there is a crisis and the numbers are getting worse, the Association of Salaried Medical Specialists says the Government has no effective strategy to deal with waiting lists, and the lobby group Health Cuts Hurt says the Minister is offering nothing to reassure the thousands of patients who are languishing on his waiting lists?

Hon PETE HODGSON: I am delighted that the National Party, as the other main party in this House, joins Labour in wanting to have a better-still health system. However, I find it bewildering that only 8 months ago we went to the polls in this country, fighting over whether we should have an $11 billion tax cut courtesy of the National Party, which thankfully lost the election, because an $11 billion tax cut over 3 years would make health cuts deep and ugly.

Hon Tony Ryall: What does it mean that the land information portfolio has now been taken off the Minister, and is that not a sign that even the Prime Minister can see that Pete Hodgson is doing to the health system what he did to Kyoto?

Hon PETE HODGSON: What that reflects is the fact that within this Cabinet there are many, many multiskilled members and we can manage any number of portfolios without a great deal of difficulty.

Dr Jonathan Coleman: Would the Minister accept that the symptoms of “crisis syndrome” that he described yesterday include lashing out at doctors who dare to question Labour policy, frenzied attacks on Opposition spokespeople, criticism of the media, and loss of personal control during question time, and that the best cure is to remove himself from his unbearable portfolio responsibility; and would he further agree that being criticised by him on matters of health-care policy is a bit like being called a halfwit by the village idiot?

Hon PETE HODGSON: I think the member has just described the Leader of the Opposition. I also think that so long as the facts can be put in the way of a good story I will remain happily active in my role.

Mâori Seats—Reports

5. DAVE HEREORA (Labour) to the Minister of Justice: What recent reports, if any, has he received on the future of the Mâori seats?

Hon MARK BURTON (Minister of Justice): I have received a report that outlines the objectives of the Mâori electoral option process. Those objectives are that Mâori have the opportunity to choose whether they are enrolled on the general roll or the Mâori roll and that Mâori are encouraged to participate in the democratic process.

Dave Hereora: What other recent reports has he seen on the future of the Mâori seats?

Hon MARK BURTON: I have seen three reports. The first report notes a plan to abolish the Mâori seats, the second report states that the seats will be part of the political landscape for some time to come, and the third, principled, report states that the Mâori seats will be abolished—well, that is unless the party in question needs the support of the Mâori Party. The first report is from the leader of the National Party, and the second and third reports are from his deputy.

Gerry Brownlee: Can the Minister confirm that the 1867 legislation that set up the Mâori seats intended that they should last for only 5 years, and can he tell us what justification there is for race-based seats in this country some 135 years after they were supposed to go out of existence?

Hon MARK BURTON: I can say to the member that it has always been the view of this party that the end of the Mâori seats, if it should ever come, should come as a result of Mâori deciding that they are no longer required. Another member of this House said that the policy has always been that the Mâori seats will go when the Mâori people choose for them to go—that was said by the National Party’s Tony Ryall between 1992 and 2001 on the subject of the Mâori seats. I agree with him.

Taxation—Overseas Shares

6. JOHN KEY (National—Helensville) to the Minister of Finance: What will be the formula for New Zealand residents calculating their tax liability if they hold shares outside of New Zealand or Australia after 1 April 2007?

Hon Dr MICHAEL CULLEN (Minister of Finance): That would depend on the nature of the resident, the nature of the company invested in, and the total cost of the investment held.

John Key: Does the Minister support the New Zealand Superannuation Fund’s diversified approach to asset allocation, where the vast bulk of equities are owned offshore; in which case, why is he proposing a capital gains tax on ordinary Kiwis that will penalise them for everything he says he supports the New Zealand Superannuation Fund undertaking?

Hon Dr MICHAEL CULLEN: All managed funds have investments offshore, primarily because the New Zealand sharemarket is relatively small. But the member, of course, continues to make a fundamental misstatement. At present, a 100 percent capital gains tax applies to investment in all countries outside of eight “grey list” countries. That will be significantly reduced under the new regime, and that will encourage diversification. The member is arguing that we should continue to advantage investment into Germany compared with India.

John Key: I am glad the Minister answered in that way, because does he understand that currently the capital gains tax - exempt, “grey list” countries comprise 80 percent of the world’s market capitalisation of listed stocks—80 percent of the world’s capitalisation is in those companies—which leaves only 20 percent on his blacklist, yet, after his latest “envy tax”, that 80 percent will now shrink to a mere 2 percent; armed with this knowledge, does he still think it is such a great idea to introduce the new rules, which replace a bias against 20 percent with a bias against 98 percent?

Hon Dr MICHAEL CULLEN: No, the advantage is in relation to New Zealand and Australia only, because they are treated as a single economic market—and that member will go up to Auckland on Friday and pretend to support that, but in this House, of course, he will oppose it. The reality at the moment is that the “grey list” regime was developed on the theory that those countries could be relied upon to tax at source. In practice, that is not happening in many instances.

Hon Peter Dunne: What reports, if any, has the Minister seen of positive industry reaction to the proposals that were recently announced?

Hon Dr MICHAEL CULLEN: I have received a number of such reports, and, particularly, from those who know something about these issues. Ernst and Young describes the change as a “triumph for tax neutrality”. The NZX Chief Executive, Mark Weldon, said that the change would be positive for New Zealand capital markets. Carmel Fisher, of Fisher Funds Management, stated that the tax changes are great news for investors and for New Zealand capital markets. Jo Doolan, in the Independent, wrote: “It is evident the Government … moved a long way in trying to make the rules more user-friendly.” The only people opposing this are a British-based company, Guinness Peat Group, its paid agents, and the National Party.

Peter Brown: If the legislation is enacted along the lines reported, will a person be able to avoid any capital gains tax liable on American shares by selling those shares and transferring the money to Australia?

Hon Dr MICHAEL CULLEN: Yes, because, of course, the value of those shares has not been repatriated to New Zealand. I might add that, given that the American context is of specific importance for countries involved in what might broadly be called new-technology venture capital areas, talks are well advanced on ensuring that those kinds of companies will not be adversely affected by the changes.

Dr the Hon Lockwood Smith: Will this new capital gains tax apply to new migrants and returning New Zealanders who qualify for a 4-year tax exemption on foreign income; if not, once the exemption expires, will capital gains be calculated on an increase in value from 1 April 2007 or from when the exemption expires?

Hon Dr MICHAEL CULLEN: My understanding is that that would apply from the date of the expiry of the exemption, but I will check on that and get back to the member. The member, however, does help with a very important point to clear up a misunderstanding. The new regime applies prospectively only from 1 April next year; the gains are not backdated from the time of purchase of shares. There has been a good deal of misunderstanding of that point within the public arena.

Shane Jones: By how much will taxation on investments be reduced under the proposal announced on 11 April 2006?

Hon Dr MICHAEL CULLEN: Contrary to the impression some people are trying to create, the proposals will cut tax on investments by a net $110 million a year by reducing tax advantages for investors using managed funds—primarily those on lower incomes—

John Key: Absolute nonsense—$25 million if you’re lucky!

Hon Dr MICHAEL CULLEN: —which is why the “Young Pretender” is squeaking away over there; he is not interested in those particular people—and abolishing the tax on capital gains on New Zealand and Australian shares held via a managed fund, which at present are subject to a capital gains tax.

John Key: Can the Minister confirm that New Zealand investors’ liability under his new capital gains tax is not capped by his formula of 85 percent of 5 percent—the formula he wants everyone to believe—but that, rather, the formula applies to the total capital gains, once the assets have been sold and repatriated to New Zealand?

Hon Dr MICHAEL CULLEN: Effectively, what there is here is a rolling imputation credit along the way, and, on repatriation, that will occur. But, of course, what the member completely fails to point out, yet again, is that all investments in countries outside the “grey list” at the moment are subject to 100 percent capital gains tax. There is not a new capital gains tax; it is a rationalisation of the existing regime.

John Key: How much additional revenue will the Crown receive as a result of his cracking down on the salary sacrifice rules, and when this is added to the additional revenue from the abolition of all but Australia as the “grey list” countries, is it not a fact that, rather than cutting tax by the figure of $110 million that he was trumpeting before, in an earlier answer on this question, this policy is pretty much revenue neutral, like every Michael Cullen tax adjustment, and just like his business tax review will be when he slaps on his shiny new little payroll tax?

Hon Dr MICHAEL CULLEN: From 1 April there were very significant business tax cuts, which cost some hundreds of millions of dollars a year, and which were not in the least revenue neutral, but the member, of course, as usual, wants to avoid those particular things—a member who, in an interview on Saturday morning, could not even answer whether he believed in God.

Working for Families Package—Support

7. GEORGINA BEYER (Labour) to the Minister for Social Development and Employment: What reports, if any, has he received on support for the Working for Families package?

Hon DAVID BENSON-POPE (Minister for Social Development and Employment): I have seen a number of reports that endorse the Government’s policy of targeting tax credits where they are needed—to hard-working Kiwi families with children. One example was in a speech given on Sunday, which was an endorsement of “allowing for family size in the tax structure”, and “easing the financial pressure on families generally.” That speech was given by Don Brash, so in the words of the Dominion Post, it is “back to the drawing board” for National on tax policy.

Georgina Beyer: What other reports has the Minister seen?

Hon DAVID BENSON-POPE: I have seen a number of letters to the Prime Minister in response to the package. One of them states: “In our household the extra $132 that is received each week has eased the financial pressure substantially. Now I shop knowing there is room in the budget to buy a reasonable amount of groceries that will see us through the full week. The extra money means that I can put some money towards paying off old debt. It means I can enrol my son in swimming lessons and sports activities. Working for Families is, for my family, huge.”

Craig Foss: How can the Working for Families package, which sends a message to Kiwis of “This is as good as it gets, and don’t even bother trying to improve yourself because the Labour Government will tax you at 90 percent.”, do anything at all to lift the living standards for New Zealanders to the levels enjoyed by the thousands of New Zealanders currently living in Australia?

Hon DAVID BENSON-POPE: Well, I would have thought that a package that has already benefited 194,000 families in terms of family assistance, 286,500 recipients of accommodation supplements, and 31,600 recipients of childcare assistance is actually making some very substantial gains for those families.

Hon Dr Michael Cullen: Can the Minister confirm that Australia uses a targeted tax credit mechanism, which is also bled out with high effective marginal tax rates, and, like many countries, does not have a universal tax allowance for children?

Hon DAVID BENSON-POPE: Yes, I can confirm that the system the Working for Families package is based on is very similar to that in the UK and Australia.

Housing New Zealand—Chairman

8. PHIL HEATLEY (National—Whangarei) to the Minister of Housing: Does he have confidence in the Housing New Zealand chairman, given that he broke the “no surprises” agreement by failing to tell him for 6 months about the allegations of accounting irregularities made by a former contractor; if so, why?

Hon CHRIS CARTER (Minister of Housing): Yes. The chair acted appropriately and promptly, once all the circumstances of the allegations were drawn to his attention.

Phil Heatley: Why does he have confidence in the chairman when the Prime Minister herself said that the chairman should have advised him earlier, and when all parties agreed that the gagging clause was “an error of judgment” and “not remotely appropriate”?

Hon CHRIS CARTER: The chairperson of Housing New Zealand and myself both condemned the gagging clause as soon as we found out about it. We did not find out about it until the news media broke the story.

Steve Chadwick: What steps did the Minister take when he was made aware of the full circumstances of the allegations?

Hon CHRIS CARTER: I called in the board chairman for a full explanation and made it clear that the allegations needed to be investigated in a transparent and comprehensive way. I am pleased to see that the Office of the Controller and Auditor-General is now engaged in that investigation.

Phil Heatley: Why did the chairman not agree to an inquiry until now, given that he knew of the contractor’s allegations 6 months ago and knew of the gagging clause as early as March; why did the chairman not take this issue seriously before the public and media outcry?

Hon CHRIS CARTER: As I indicated in my initial answer, as soon as the chairman was aware of the full scope, or potential scope, of the allegations he acted promptly, as I did.

Phil Heatley: Why did the chairman have Gerald Coles stood down on the basis of the gagging-clause letter that directly implicated him, but did not stand down the chief executive when that very same letter directly implicates her?

Hon CHRIS CARTER: These are matters being investigated by the Auditor-General. I do not consider it appropriate to comment until after that investigation is completed and made public.

Phil Heatley: I raise a point of order, Madam Speaker. My question was about the standing down of Gerald Coles, which occurred well before the Auditor-General’s inquiry was agreed on, and even before the Auditor-General was asked to have an inquiry. I find it intriguing that the Labour member Steve Chadwick can ask about events before the inquiry was announced and get a full answer—and you will find that in the reply to supplementary question No. 3—but an Opposition member like myself cannot get a full answer from the Minister on events before the inquiry was called, and that he hides behind the fact that the inquiry was called. I would like an answer to my question, just like the Labour member got an answer to her question.

Madam SPEAKER: The Minister addressed the question.

Phil Heatley: As the Minister has condemned the gagging clause in the House today, can he confirm that as a matter of principle, if inquiries show that the chief executive knew of this gagging-clause arrangement, he will expect the directors of Housing New Zealand to require her resignation?

Hon CHRIS CARTER: In all my public comments on this issue, and as I have said again in the House today, I find such a gagging order totally unacceptable.

Phil Heatley: As he has condemned the gagging order, can he confirm, as a matter of principle, that if the chairman of the board knew of this gagging-clause arrangement he would expect his resignation?

Hon CHRIS CARTER: I repeat my last answer that such a gagging clause is totally unacceptable. We will see what the investigation turns up.

Phil Heatley: I seek leave to table the gagging-clause letter that caused Gerald Coles to be stood down because he is identified in it, but did not cause the chief executive to be stood down, even though she was identified in it.

Leave granted.

Housing Statistics—Social Report 2005

9. TARIANA TURIA (Co-Leader—Mâori Party) to the Minister of Housing: What progress, if any, has been made in reducing the people living in crowded housing statistics, noting that the Social Report 2005 stated 10 percent of the New Zealand population were living in crowded housing?

Hon CHRIS CARTER (Minister of Housing): When Labour took office the number of State houses in New Zealand had declined by approximately 13,000 under the previous National administration, despite mounting demand, poverty, and increased rates of overcrowding. Since January 2000 the Government has added almost 6,000 State houses to the housing network and has introduced income-related rents, all of which assist in alleviating the levels of overcrowding.

Tariana Turia: Would the Minister consider that the substandard housing and overcrowding crisis identified in the Northland, East Cape, and Bay of Plenty areas in the early years of the current Labour Government has been addressed; if not, why not?

Hon CHRIS CARTER: Progress has been made in the areas that the member has just mentioned—indeed, she herself was responsible from 10 December 1999 to 30 April 2004 for implementing the Government’s policies in that area. We have made progress, but increasing land values and the scarcity of skilled labour in the area have restricted the achievements we would like to have made. But over 1,600 houses have been improved in those rural areas.

Dr Ashraf Choudhary: Does the health of tenants in State houses improve once they move from the Housing New Zealand Corporation waiting list to State houses?

Hon CHRIS CARTER: Yes. The Housing, Crowding and Health study just published by the University of Otago shows that the health of tenants in State houses improves significantly once they move from the waiting list to a State house. The study found that acute hospital attendances were 10 percent lower in Housing New Zealand Corporation tenants compared with those on the waiting list for such a house. That is why this Government has placed such an emphasis on providing more housing.

Phil Heatley: Will the Minister undertake to change Labour’s fundamentally flawed policies that allow people with $70,000, $80,000, and $90,000 after-tax incomes to remain in State houses, and that allow State house tenants to have three, four, or five boarders in their spare rooms, in order to start addressing the human and health costs of the blowout in the Housing New Zealand Corporation waiting list?

Hon CHRIS CARTER: Under the previous National Government—[Interruption]

Madam SPEAKER: I ask the Minister to continue so that we can hear the answer.

Hon CHRIS CARTER:—wealthy tenants were encouraged to move into State houses, because they were the only ones who could afford market rents. Under this Government, 98 percent of new tenants are paying income-related rents—these are people with high housing needs.

Phil Heatley: I raise a point of order, Madam Speaker. I asked the Minister whether he would change Labour’s policies, which he has responsibility for—and for which he has had responsibility for nearly 7 years now—that have allowed thousands and thousands of people to languish on the waiting list while people in State houses are earning $70,000, $80,000, or $90,000 after-tax and are renting out their rooms to boarders. I asked the Minister whether he will change that flawed policy; I did not ask him about what National did nearly 7 years ago.

Hon Dr Michael Cullen: The Minister made it perfectly clear that he was not going to because, under the existing policies, 98 percent of those now entering State housing are people on low incomes. Under the previous National Government’s policy, one had to have $70,000, $80,000, or $90,000 even to be able to afford to get into a State house.

Madam SPEAKER: Both members have had an opportunity to address the point of order. The Minister was in the process of addressing the question. I think we should hear the Minister’s full answer to the question.

Gerry Brownlee: I raise a point of order, Madam Speaker. With all due respect, the Minister did start the question with a very provocative statement, which you noted because of the noise level in the House. I thought you had previously instructed Ministers to give answers in a concise way so that we do not have that sort of disruption in the House. After all, those Ministers are supposed to be responsible for their portfolios and for what is happening now.

Hon Dr Michael Cullen: I watched very carefully what happened in that case. The outburst of noise erupted as members on the National Party benches woke up when the Minister said “under the previous National Government”. If the words “under the previous National Government” are regarding as being provocative, then I am not quite sure what words we are allowed to use in this House.

Madam SPEAKER: Certainly, I agree with the member that it would be appreciated by everyone if both questions and answers were delivered concisely. However, I ask the Minister to complete his addressing of the question that was asked.

Hon CHRIS CARTER: We are encouraging Murray McCully’s tenants to move on. We are actively seeking to place more of the people on the waiting list into State houses. [Interruption]

Madam SPEAKER: Would the Minister please address the question without making provocative comments.

Gerry Brownlee: Point of order.

Madam SPEAKER: Mr Brownlee, I am addressing an issue. I would like the Minister to please answer the question without making those provocative comments. He should just stick to answering that question.

Hon CHRIS CARTER: We have invested almost $2 billion since 1999 in housing. We have built almost 6,000 new houses. We are actively promoting a programme that leads to decent housing for all New Zealanders.

Hone Harawira: Why has there been no response to the case of Mrs Ataheihei of Takou Bay, who approached Housing New Zealand Corporation 10 months ago regarding the overcrowding in her home, where 14 people were confirmed by the housing support coordinator for the Ministry of Social Development to be living there, and where the issues identified were privacy, health, emotional stress, hygiene, and sanitation; does the Minister consider a 10-month delay to be an appropriate time frame to address such serious issues?

Hon CHRIS CARTER: I would really welcome the opportunity to talk to the member about that particular case, and I ask him to see me at the end of question time.

Rt Hon Winston Peters: Is it not a fact that the reason why the Housing New Zealand Corporation can do nothing in Takou Bay is that it has no residential properties for rent there?

Hon CHRIS CARTER: That may well be the case.

Madam SPEAKER: Supplementary question, Tariana Turia. [Interruption] Tariana Turia has been called. She is entitled to ask her question in silence.

Tariana Turia: What response will the Minister give to Miss Dawn Heihei of Takou Bay, whom the Kaitâia Family Start worker referred to Housing New Zealand Corporation for urgent rental accommodation, particularly when the corporation’s offices in Whangarei and Kaikohe have been advised that one of the corporation’s properties in Takou Bay is being used as a holiday home for one family?

Hon CHRIS CARTER: I would be very happy to talk to the member about this case to see if we can find a solution.

Waikato River—Government Negotiations with Tainui

10. GERRY BROWNLEE (Deputy Leader—National) to the Minister in charge of Treaty of Waitangi Negotiations: What negotiations, if any, are currently taking place between the Government and Tainui over the Waikato River?

Hon MARK BURTON (Minister in charge of Treaty of Waitangi Negotiations): In May 2005 the Crown recognised the mandate of the Waikato Raupatu Trustee Co. Ltd to negotiate the Waikato River claims of Waikato-Tainui. Negotiations are taking place.

Gerry Brownlee: Are those negotiations likely to cause Waikato River users additional costs, where costs are applied, if those negotiations are successfully concluded for Tainui?

Hon MARK BURTON: As agreed in the terms of negotiation between the Crown and Waikato-Tainui, the negotiations over the river are, as with any such negotiations, confidential to the parties unless otherwise agreed between them. It would not, therefore, be appropriate for me to discuss or disclose any of the detail of those negotiations at this time.

Gerry Brownlee: What protections for existing Waikato water and river users are the Government seeking in those negotiations?

Hon MARK BURTON: As I indicated, although it is inappropriate for me to comment on the specifics of any negotiation that is in progress—as the member knows, that would be a breach of good faith—I can say to the member that it is a general principle that the rights of users be protected in any such negotiation.

Gerry Brownlee: Is it possible that as a result of those negotiations, Waikato River users and/or users of water will have to negotiate with Tainui over the existing or future use of the river or its water?

Hon MARK BURTON: The member is asking me to speculate on a hypothetical question. That is absolutely pointless.

Gerry Brownlee: I raise a point of order, Madam Speaker. I did not ask him to speculate, at all. The Minister knows he is in those negotiations. He knows he has received reports. He will not give them to us, because he is saying that the Act does not apply to them. This is a parliamentary issue. It is about a very iconic waterway in this country. I asked him, simply, what the Government’s position would be in the negotiations. To just be told he cannot tell me that because to do so would be a breach of good faith raises the question of with whom it would be a breach of good faith.

Hon MARK BURTON: As the member knows well, the process by which negotiations take place is that good-faith negotiations require a confidentiality of process. This Parliament, of course, will have the opportunity, at the time that a deed of settlement bill comes to it, to consider that bill in detail. The bill would go to a select committee, and the House in its entirety would get to consider it after the select committee. It is therefore simply not credible for the member to suggest that the House is excluded. It is simply a matter of addressing matters in their appropriate order, in good faith—a concept I do not think the member understands well.

Madam SPEAKER: I do not think we needed that last comment.

Hon MARK BURTON: I withdraw and apologise for the last comment.

Madam SPEAKER: Thank you.

Rt Hon Winston Peters: I ask the Minister whether it is a fact that the negotiations are taking place because the Waikato River was not included in the Tainui settlement effected and signed off by the previous National Government, seven members of which are present over there on the Opposition benches?

Hon MARK BURTON: It is the case that in 1995 the river was specifically excluded, in order that it would be addressed later on. That is what this Government is doing.

Gerry Brownlee: Will the Minister confirm that the legislation that may give effect to the negotiations will not see the light of day until he and this Government know that they have the numbers to pass it; and in that event, will he give an undertaking that prior to it coming to the public’s attention, there will be discussions with Waikato water users over the future of their rights to access water from the river?

Hon MARK BURTON: I can assure the member that the bill will not see the light of day until the negotiations are complete. That is the normal order of these things.

Gerry Brownlee: It wasn’t the question.

Hon MARK BURTON: I previously addressed the question in a general sense, by saying that all such negotiations take account of existing users’ rights and needs.

Medicines Strategy—Terms of Reference

11. JUDY TURNER (Deputy Leader—United Future) to the Associate Minister of Health: What are the next steps following the announcement of the terms of reference for the national medicines strategy?

Hon PETER DUNNE (Leader—United Future): The aim of the national medicines strategy is to identify where improvements can be made within the existing system and the broad policy settings to ensure the best health and disability outcomes from medicines over the coming years. The Ministry of Health has begun work on a draft strategy document that will analyse the current system in New Zealand, look at our current policy settings, and describe international trends. It is also engaging with the sector on this work. I expect a new consultation document will be submitted to Cabinet by the end of the year. Consultation will take place early next year and I expect final advice of the outcome by the end of next year.

Judy Turner: Is this strategy confined to a review of Pharmac?

Hon PETER DUNNE: I am glad the member raises that question, because I need to make a point very clearly that this strategy is not simply a review of Pharmac. The strategy will focus on quality, access, and rational use of medicines. That being said, access to medicines is clearly an issue of interest to many stakeholders, but this is not about the way Pharmac operates, this is about the overall environment within which those decisions are made, and I look forward to the public response.

Judy Turner: What has been the response to the announcement so far?

Hon PETER DUNNE: So far the response has been very positive from a variety of different groups. The non-governmental organisation Access to Medicines Coalition described this as being a significant move in the right direction. The research medicines industry has strongly welcomed the approach, and I have had a number of responses from individuals— medical practitioners, and others—all saying that this is a very timely initiative that they want to participate in.

Taito Phillip Field—Conflicts of Interest Report

12. Dr the Hon LOCKWOOD SMITH (National—Rodney) to the Prime Minister: What has been the total cost to date of the inquiry by Noel Ingram QC into alleged conflicts of interest involving Taito Phillip Field?

Rt Hon HELEN CLARK (Prime Minister): The information on costs will be released when the inquiry is complete and all costs are known. I do not consider progress reports on costs appropriate as they could be deemed to be placing pressure on the inquiry. The inquiry should take as long as necessary.

Dr the Hon Lockwood Smith: Does the Prime Minister stand by her statement of 14 September last year that: “I think the only thing he is probably guilty of is trying to be helpful to someone.”?

Rt Hon HELEN CLARK: I am waiting for the report, to see what it advocates.

Dr the Hon Lockwood Smith: If there is no substance to the allegations against the honourable Taito Phillip Field, why has a report that she herself initially estimated would take 9 working days to complete now taken over 7 months?

Rt Hon HELEN CLARK: As I have consistently said, the report must take as long as required to be full and frank.

Dr the Hon Lockwood Smith: Has the Prime Minister seen a draft of the report; if so, was the report in the Trans Tasman of 27 April, that the honourable Taito Phillip Field was playing “hardball with the Labour Party over the examinations of his dealings with the immigrant community” accurate; if not, why has the release of the report taken so long?

Rt Hon HELEN CLARK: I know of nothing to substantiate the quote the member has referred to, nor have I read a draft report.

Dr the Hon Lockwood Smith: Did the honourable Taito Phillip Field’s former electorate agents Maria Coady, and Siniva Papalii give evidence to the inquiry; if not, why have such key people not provided evidence to it?

Rt Hon HELEN CLARK: I have no idea. I am waiting for the report.

ENDS

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