Questions for oral answer
17 July 2007

1. Superannuation—Income and Asset Testing

1. Hon MARK GOSCHE (Labour—Maungakiekie) to the Minister of Finance: Has he received any recent reports advocating income and asset testing of New Zealand superannuation?

Hon Dr MICHAEL CULLEN (Minister of Finance) : Yes, I have seen two that appeared to advocate such a move. One is from *Michael Littlewood; the other is from the Hon Bill English. Both argued that the current provision for New Zealand retirement income is too generous. I can confirm that unlike National, this Labour-led Government has no plans whatsoever to income or *asset test New Zealand superannuation.

Hon Mark Gosche: Has the Minister received any reports on why the income and asset testing* of New Zealand superannuation might be considered?

Hon Dr MICHAEL CULLEN: Yes. I have seen the comment that supporting savings will not win “the hearts and minds of 20-year-olds”, which is a clear attempt to drive a wedge between young people and the elderly. Unlike Mr English, who made that comment and who sat around a Cabinet table that did cut superannuation, and indeed had previously cut it twice in order to fund tax cuts, this Government has no plans to play that kind of divide and rule* politics.

R Doug Woolerton: Is the Minister aware that when New Zealand First left the coalition with National in 1998, one of the first moves that that party made was to withdraw New Zealand First’s bill to remove asset testing for seniors?

Hon Dr MICHAEL CULLEN: Yes, indeed, I can confirm—and I think I should place it on the record very clearly—that the reduction in New Zealand superannuation that occurred in 1998-99, coming into force apparently on 1 April 2000 if it had not been reversed, took place after New Zealand First left the coalition Government.

2. Health, Minister—Confidence

2. JOHN KEY (Leader of the Opposition) to the Prime Minister: Does she have confidence in the Minister of Health; if so, why?

Hon Dr MICHAEL CULLEN (Acting Prime Minister) : Yes, because he is hard-working and conscientious Minister.

John Key: Is the Prime Minister satisfied with the departmental inquiry set up by Pete Hodgson into serious allegations of conflict of interest by a board member at Hawke’s Bay District Health Board*, and what confidence does she have that the inquiry will reach any conclusions, given that the last inquiry set up by her Government was headed by *Noel Ingram QC and concerned former Minister Taito Phillip Field?

Hon Dr MICHAEL CULLEN: The Government has confidence in the form of the inquiry. The inquiry should be left to arrive at its conclusions. Unlike members opposite, we are not jumping to those conclusions.

John Key: Is not this inquiry set up by Pete Hodgson just a sham as, after all, it is headed by a Government-appointed district health board member, it will not report its findings directly to the Minister, and, contrary to the answer the Acting Prime Minister just gave, Pete Hodgson has actually prejudged the outcome, saying: “I must say, I don’t expect to find anything.”?

Hon Dr MICHAEL CULLEN: It is up to the inquiry, which is very broadly based. I am sure the *Hawke’s Bay District Health Board will welcome such a broadly based inquiry, which will enable it to look at a range of matters.

John Key: Has the Prime Minister asked her former Minister of Health Annette King why she appointed **Peter Hausmann to the Hawke’s Bay District Health Board, and why she fast-tracked the process despite the enormous conflicts of interest that she was aware of, and what was her explanation for appointing him?

Hon Dr MICHAEL CULLEN: I have no information in front of me as to whether the Prime Minister did discuss that matter with Annette King, either at the time or subsequently. Mr Hausmann*, of course, is now the subject, in part, of this inquiry into conflicts of interest. That is what the inquiry is about.

John Key: Is the Prime Minister concerned at the treatment of the whistleblower* who subsequently lost her job after raising concerns at the *Hawke’s Bay District Health Board?

Hon Dr MICHAEL CULLEN: All these matters can be considered by the inquiry. We shall await the inquiry on those matters.

John Key: If there is nothing to this whole saga, why did the acting CEO* tell the whistleblower: “This is very, very serious. It’s at ministerial level. We need to de-escalate the situation.”, and why does the Prime Minister miraculously think that when the restructuring took place in the Hawke’s Bay District Health Board, the only person to lose her job was the whistleblower?

Hon Dr MICHAEL CULLEN: Any communication of that sort between the acting CEO and any person is obviously part of the inquiry. I am not going to prejudge that inquiry.

John Key: If the Prime Minister was taking this whole matter seriously, why would she not have asked Annette King why she fast tracked the process, and why she appointed someone when there was a clear conflict of interest, or does the Prime Minister not care about that, just in the same way the Prime Minister does not care about the whistleblower who has lost her job for doing her job?

Hon Dr MICHAEL CULLEN: I did not say that the Prime Minister did not talk to Mrs King. I said I have no information as to whether that conversation occurred.

Judy Turner: Is the Prime Minister aware of whether the proposed New Zealand regulator for complementary medicines will operate on a full cost-recovery basis; if so, is she concerned that this will drive smaller producers out of existence, given that those currently exporting to Australia and meeting the Australian regulations are likely to be exempt from the New Zealand regulations, leaving the burden of cost to the smaller producers?

Hon Dr MICHAEL CULLEN: One thing is clear. If New Zealand has to set up its own entirely separate regulatory authority for alternative medicines, it will probably cost alternative medicines providers more, and it will not give alternative medicines providers access into the Australian market. If they wish to have that access, they will have to go through Australian regulatory procedures as well. This is a remarkable achievement of combined stupidity, led by Mr Tony Ryall.

Hon Pete Hodgson: Can the Prime Minister confirm that Mr Hausmann’s appointment to the Hawke’s Bay District Health Board in June 2005 met all statutory rules and guidelines in their entirety, that Mr Hausmann’s conflict of interest was openly declared from the outset, and that nothing unusual exists about Mr Hausmann’s appointment to the Hawke’s Bay District Health Board?

Hon Dr MICHAEL CULLEN: That is the advice I have had. Indeed, my understanding is that Mr Hausmann absented himself from the board in relation to the community services contract.

3. Dollar—Rise in Value

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: What is the Government planning to do to combat the continuing rise of the Kiwi dollar, which is hurting exporters and companies competing with imports, especially in the wake of it reaching a post-float high of just over US79c overnight?

Hon Dr MICHAEL CULLEN (Minister of Finance) : The Government is acutely aware of the pain the high dollar is causing to much of the exporting sector. Although there are no short-term fixes, we are committed to removing the imbalances facing the economy by increasing savings and continuing to run a tight fiscal policy to support monetary policy.

Rt Hon Winston Peters: Is he concerned that in fewer than 6 years our dollar has almost doubled in value, from US40c to now close to US80c, and does he think that broadening the primary functions of the *Reserve Bank, as stipulated in the *Reserve Bank of New Zealand Act, to include other critical macroeconomic factors such as the rate of growth, export growth, the value of the dollar, and employment as well as price stability would help to steady our economy?

Hon Dr MICHAEL CULLEN: The position is slightly larger than the member indicates. In fact, the New Zealand dollar hit a bottom of just under US38c, and is now at more than double that level. However, of course, at US38c it was also grossly undervalued at that time. I can say that where I would differ from the member, probably, is that although I fully welcome any inquiry into these matters looking at options, as long as the *Governor of the Reserve Bank has essentially one arrow, it is hard to hit many targets.

Charles Chauvel: What recent reports has the Minister seen on the importance of maintaining fiscal discipline for the New Zealand economy?

Hon Dr MICHAEL CULLEN: Just yesterday I received a report from *Standard and Poor’s confirming our current credit rating, which praised the Government’s “strong fiscal position and conservative macroeconomic management” and warned against any outbreak of fiscal profligacy, because it is only that strong fiscal position that is offsetting a credit downgrade in the current account position we are in at the moment.

John Key: Why, in March of this year, did the Minister of Finance tell his Cabinet colleagues that if they spent more than they had set aside “they risked an interest rate response from the Reserve Bank” and “the exchange rate staying higher for longer”, only for them to then go on and spend an additional $600 million more than they had allocated; and is it about now that the Minister will get up and apologise to the homeowners and exporters of New Zealand for that?

Hon Dr MICHAEL CULLEN: I think it is a bit rich for the member to pre-empt his colleague’s question No. 8, which is on precisely the same point, but then he does tend to bounce from one cloud to another, as Mr English said in the *North and South magazine.

Hon Member: You can’t say that.

Hon Dr MICHAEL CULLEN: He did. But in fact, if the member cares to look at the numbers—and I will deal with this more clearly in the answer to Mr English’s question—he will see that that increase in expenditure was offset by increased revenue. So the fiscal position out-turn* was the same.

Rt Hon Winston Peters: When the Minister referred to the *Governor of the Reserve Bank having only one arrow, was he telling the House that the two policy targets agreements* of 1996 and 1999 have been totally ignored by the Reserve Bank governor, and that that in itself is a reason to now dramatically amend the Reserve Bank of New Zealand Act* so that the governor acts in the interests of New Zealand’s economy and exporters rather than in the interests of foreign currency dealers?

Hon Dr MICHAEL CULLEN: Nearly all central banks around the world have one primary instrument, which is some form of manipulation of the core interest rate. In using that instrument, they have to determine what their objective is. The objective of seeking price stability, which orthodox theory tells us is the most important objective, will often run counter to an objective around foreign exchange management. The one central bank I am aware of whose primary target is related to the exchange rate is the Singaporean central bank. That has behind it some hundreds of billions of dollars of effective power for intervention.

Jeanette Fitzsimons: If the dollar does fall to nearer to US60c, where it needs to be for the survival of our exporters, and if that is taken in combination with the 50 percent increase in crude oil prices since January, what effect will the resulting fuel prices have on the Government’s biggest new road-building spree in New Zealand’s history and what effect will it have on the ability of motorists and freight companies to use all those new roads?

Hon Dr MICHAEL CULLEN: I think that the member has finally joined the ranks of economists: for every silver lining, she finds a cloud. It is absolutely true that if the exchange rate adjusts in order to help the position of exporters, then that will obviously place upwards pressure on the cost of petrol and other imported goods. Unfortunately, in economics one cannot have it all ways at once.

Rt Hon Winston Peters: Is it a fact now that the Government’s view of the Reserve Bank of New Zealand Act and its workings and its problematical shift in respect of the currency is the very same as the National Party’s, so that in short we have the two old parties in this Parliament refusing to act for an export-dependent nation but rather acting for the paper-shufflers of Queen Street and abroad in international financial circles?

Hon Dr MICHAEL CULLEN: I think that the member underestimates himself. He has been around long enough to know there are three old parties at least within this Parliament, not simply two. But there has been a degree of bipartisan consensus around the Reserve Bank of New Zealand Act since it was passed in *1989. I should point out that under section *12 of the Act, the Government does have the power to issue an *Order in Council to suspend the current policy targets agreement and to suspend the primary objective element of the Act.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. I acknowledge what the Minister of Finance said, and I tell him that he is invited to our 14thbirthday tomorrow.

Madam SPEAKER: I thank the member for that intervention.

4. Therapeutic Products and Medicines Bill—Order Paper

4. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of State Services: Why has she left the Therapeutic Products and Medicines Bill on the Order Paper despite admitting yesterday that the Government does not have the numbers in Parliament to pass it?

Hon ANNETTE KING (Minister of State Services) : The bill will remain on the Order Paper because the opportunity to arrive at a sensible and workable compromise still exists, but not in the time frame available to meet the Australian Government’s need to introduce and pass the mirror legislation to our own before its forthcoming election.

Hon Bill English: How has that Minister managed to mess up this major policy, when as long ago as 2004 National started telling the Government that it would support the bill if the Government dealt with the concerns originally set out in the minority report on the select committee hearings on the original treaty—a report tabled in this House 3 years ago?

Hon ANNETTE KING: In relation to dealing with the issues raised in the National Party minority report, I tell the member that I replied in detail to Dr Brash, when he was leader, on all the actions taken in that minority report. But I say to this House that I think that Mr English has a bad case of amnesia—or, otherwise, a *cover-up with bluff and bluster—because I happen to know that Mr English, as Minister of Health, was one of those who agreed, in fact, to take urgency over setting up a joint regulator. And I have many other documents to show that the National Party, from August 1997, wanted a joint regulator to be set up, misleading the people of Australia and the Australian Government about what it really wanted to do. I think that Mr English had better go back and look into his documents to see what he was saying then.

Darren Hughes: Has the Minister seen criticism of her that she failed to consult with the National Party; if she did, what consultation took place with the National Opposition regarding this proposal and how does that compare with any consultation a New Zealand Government in the 1990s had regarding the establishment of the *Australia New Zealand Food Authority?

Hon ANNETTE KING: I met with many and varied National health spokespersons on at least 6 occasions. There were also discussions with the changing leadership of the National Party and many further briefings by officials throughout the development of the proposal. In comparison, when National was in Government it did not bother to consult over the establishment of the Australia New Zealand Food Authority, which set the standards for our food safety, and which was a considerably weaker arrangement than the one we managed to negotiate for therapeutic products. I will leave it to the public to determine which party—[Interruption]

Madam SPEAKER: We will have the rest of the answer in silence.

Hon ANNETTE KING: I will leave it to the public to determine which party is the arrogant one.

Sue Kedgley: Does the Minister agree that following the parking of the bill, the priority now is to consult with the dietary supplements industry and all parties in this House on a cost-effective New Zealand - based regulatory system, which can assure New Zealand consumers that dietary supplements are safe and true-to-label without imposing crippling costs on industry or undermining our sovereignty?

Hon ANNETTE KING: What happens from now is very much in the hands of the Minister of Health. But I think it is important that the Minister of Health also listens to a large majority of complementary health product manufacturers in New Zealand, who were not listened to because of the voice of a minority. I happen to agree with *Dr Pippa McKay, who said today that it is a shame that some people demand that food be regulated for safety reasons but somehow naively expect that labels on complementary medicines from an unknown source should be believed. She said that this is Third World – politicking; the needs and the interests of the majority have been over-ridden by a tiny, self-interested minority generating misinformation, and I agree with her.

Hon Bill English: Why is it that the Minister is blaming everyone but herself, when she had the choice to take action many times—for instance, in January of this year, when National’s leader, John Key, stated that National would support the legislation if complementary medicines were removed and, in fact, discussed this option with John Howard, the Australian Prime Minister?

Hon ANNETTE KING: It will be interesting to see what John Howard said to John Key. Even though I know that John Howard says that he has a father-son relationship with Mr Key, I suspect that Mr Howard would have said the same as he said to the Prime Minister of New Zealand, which is that the negotiations over a joint regulator included complementary medicines and that, in fact, they were interested in a second-tier arrangement as proposed—first of all, I have to say, by Gordon Copeland before he became a National member and is no longer allowed to vote for the thing he proposed. A Supplementary Order Paper was proposed by the New Zealand First *Party, which was sensible, and work was done with the ACT party in an honourable manner to look at a way in which we could compromise. But what we never got from the National Party was any compromise at all.

Sue Kedgley: Why did the Minister so doggedly pursue legislation that would have set up an Australian-based regulatory system, which would have decimated New Zealand small businesses, undermined our sovereignty, increased compliance costs, reduced consumer choice, made many dietary supplements illegal even if they had been safely used for centuries, and allowed the dietary supplements industry in New Zealand to be taken over by a handful of Australian companies; and how did she believe that this was in New Zealand’s best interest?

Hon ANNETTE KING: What I believed was in New Zealand’s best interest is the truth. What we have just heard from the member is some of the misinformation that the complementary medicines sector in New Zealand—80 percent of which wanted to be in a joint regulator—has had to put up with for years. First of all, the member knows that it is not Australian-based. Eighty percent of the products on the market in Australia are on the market in New Zealand, so how could two-thirds be taken off the market? Sadly, the list of misinformation goes on. I would like to believe those manufacturers who said they wanted to be in this joint regulator because it is good for their businesses and good for New Zealanders—and why should not New Zealanders have the best?

Hon Bill English: Can the Minister confirm that all this *carry-on today is just bluff and bluster from someone who miscalculated and embarrassed her Government because she thought she could do the deal without National’s support—in fact, she thought she could do it without the small parties’ support—and in the end found she could not?

Hon ANNETTE KING: No. I believe that the National Party was once an honourable party that spent 3 years working with the Australian Government on a joint therapeutic agency, and I am happy to table some documents so that the rest of New Zealand can see what it was doing in Government. I believe that the work it had done was good work. I picked it up and said that we ought to continue with it. What I did not reckon on was that John Key was unable to persuade Tony Ryall to support it, even though he did try. He was rolled by Tony Ryall. National members know it, and they have told other people that that is the truth.

Keith Locke: Does the Minister agree that the failure of the *Therapeutic Products and Medicines Bill shows up a major flaw in our constitutional system, whereby Governments can sign us up to treaties that do not have majority support in Parliament?

Hon ANNETTE KING: Treaties become actionable only when they are ratified. This treaty has never been ratified, even though Tony Ryall told New Zealand it had—another thing he got wrong in this respect. This treaty is signed with Australia. It is not ratified—and it will not be ratified—until this Parliament agrees to the legislation.

Hon Bill English: Can the Minister confirm that Murray McCully wrote to Phil Goff on 12 May 2006 setting out National’s concerns, that Tony Ryall wrote to her on 12 September 2006 setting out National’s concerns, and that Don Brash met with Annette King, Phil Goff, and the Prime Minister in July 2004 and then wrote to them on 7 July 2004 setting out National’s concerns; and does she now regret that she did not listen to the other parties she needed to work with to get this legislation through?

Hon ANNETTE KING: That was a very one-sided list of who wrote to whom. It would have been nice to have heard some of the replies that Dr Brash and others received from me, including replies that set out what we intended to do to address their concerns. In fact, a reply to Dr Brash dated 6 November 2006 sets out in quite a lot of detail exactly what we would do to help ameliorate some of the problems National saw with the legislation, including, in some detail, a support package to industry, as one of National’s major concerns was the cost of compliance. That support package provided support that the Australian industry never got, but which the Australians agreed to. It was provided to the National Party. National members talked about it. Half of them wanted to go with it and the other half did not, but John Key could not push it through. It is a failure of leadership by a man who talks big behind the scenes but does not deliver when it comes to the mark.

Hon Bill English: Can the Minister confirm that the answer to the substantive question was that she has left the bill on the *Order Paper because there is still the opportunity for sensible discussion; and how does she think she is going, after this question time, in getting the cooperation of the parties she needs to pass a sensible bill?

Hon ANNETTE KING: I do truly believe that there are some sensible people in the National Party. I believe, for example, that Dr Lockwood Smith is one of those. I know that Dr Lockwood Smith is one of those people, along with Tim Groser and others, who understand the importance of our close relationship with Australia. In fact, I am pleased to say that Dr Smith, in his own statement just before the last election, after which National left power, set out why he thought it was important to have such an arrangement. So I think there are people over there capable of working with the Government, and I want to pay a tribute to the parties here in Parliament who have worked in a sensible way, who have worked constructively, and who have worked to look for the best interests of New Zealand at heart. I believe there is still an opportunity to do that.

Hon Trevor Mallard: Can I ask the Minister whether she has been briefed on the sources of funding for the campaign in opposition to this agreement, whether in fact the major source of funding is a Christchurch pusher of benzylpiperazine—someone who has made a fortune from that—and whether in fact this source has donated to the National Party, as well, in a vote for drug pushing?

Madam SPEAKER: The first part of the question is in order; the second is not.

Hon ANNETTE KING: I am aware that a party pill manufacturer in Christchurch who also makes complementary medicines has been a major funder of a campaign against this legislation. I do not know whether he has provided funds to any political party, but there does seem to me to be an unholy alliance between some parties in this Parliament and those who have a lot of *self-interest in making sure that there is very light-handed regulation indeed.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. We are up to just question *No. 4 and the barracking from one part of this House has been terribly noticeable since the first question. I do not know what makes these people think they are special, but they have been out of Government for a long, long time, and will probably be out of Government a lot longer if they carry on the way they are. But my point is, how can they get away with this barracking day in, day out, in the middle of this term? They have not learnt one lesson despite your admonishment over and over again. I think, with respect, you should start throwing a few of them out of the Chamber for a few days.

Gerry Brownlee: I raise a point of order, Madam Speaker.

Madam SPEAKER: I do not need any assistance on this, Mr Brownlee. The barracking was coming from all sides of the House, not from just from one side of the House. But I think the member has a useful point of reminder to us all that, in fact, members have a right to be heard.

Keith Locke: I seek the leave of the House to table a copy of my International Treaties Bill, which would require a parliamentary majority before a Government agrees to a treaty.

Madam SPEAKER: Leave is sought to table that document. Is there any objection? Yes, there is objection.

Ron Mark: I raise a point of order, Madam Speaker. Whilst you were on your feet responding to a point of order and giving a judgment and a ruling, you clearly heard an interjection from the National side of the House. You, for reasons known only to you, paused, decided not to act on that, and continued. Could I suggest that such continued favourable treatment in one direction or another leaves minor parties with a view, or a perception, that there is favour being given to the National Party. It may well be that you decided that that interjection by the National Party member during a point of order, and during a judgment in which you, the Speaker of the House, were on your feet, was worth ignoring. But such a decision leaves minor, or alternative, parties in this House with only one perception. I would like, please, for you to explain why you did not throw that member out of the House.

Madam SPEAKER: The member’s comment is a reflection on the Chair. I ask him to leave the Chamber please. The Speaker is, in fact, the person—[Interruption] That member who just laughed will please join Mr Mark as he leaves the Chamber.

* Ron Mark withdrew from the Chamber.Mark, Ron

* Allan Peachey withdrew from the Chamber.Peachey, Allan

Madam SPEAKER: Who was the National Party person who laughed during that? Would you please leave the Chamber.

* Dr Wayne Mapp withdrew from the Chamber.Mapp, Wayne

Keith Locke: I seek leave to table a list of the submitters to the Government Administration Committee on the bill that shows that a great majority of health product producers were against this bill, not for it.

Madam SPEAKER: Leave is sought. Is there any objection? Yes, there is objection.

Rt Hon Winston Peters: I raise a point of order, Madam Speaker. You asked for the member of Parliament who laughed during that period of your comment to leave the House. Mr Mapp left, but it came from back here as well.

Madam SPEAKER: Mr Peachey also left the Chamber.

Rt Hon Winston Peters: Well, he did not acknowledge it.

Madam SPEAKER: He has left.

Hon Trevor Mallard: I raise a point of order, Madam Speaker. I want to be very careful about trying your patience, given what has happened—

Madam SPEAKER: Yes, I think you should be. To the point of order, please.

Hon Trevor Mallard: The point of order is that during your ruling Mr Bennett interjected.

Madam SPEAKER: If that is the case, and I did not hear it, it is the final warning for members. Unfortunately from that section of the House there frequently come murmurings of interjections when they are inappropriate. I would ask those members in that area to please desist.

5. School Zoning—Enrolment Scheme

5. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister of Education: Kei hea a ia i te whakanuitanga o tana kupu here i te Hui-tanguru 2006 i kī nei: “Ka āwhinatia ngā kura ki te whakatika i ngā mahi tātai a ētahi mātua”, ki te whakatau tikanga mō ngā raruraru e pā ana ki te whakauru kura, pēnei i te rīhi whare i tētahi takiwā kātahi ka nuku whare, te pānuitanga wāhi mahi hei kāinga noho i te wāhi here ā-kura, te tono a ētahi i a rātou tamariki ki te kāinga o tētahi atu hoa, whānau rānei, te rīhi kopa ā-noho rānei i te takiwā ake o te kura, kia āhei ai rātou ki te tuku tamariki ki ngā kura?

[What progress has he made in honouring his commitment in February 2006 that “schools would be helped to deal with the tactics some parents used” to solve school enrolment scheme problems, tactics which include renting a house in a zone then moving out, using a business address in the school’s zone as a postal address to get their children in, and moving their children to friends or extended family, or renting rooms in the school’s area?]

Hon STEVE MAHAREY (Minister of Education) : What I said at the time was: “If that is something that the schools brought to us that’s something we would look at.” I also indicated that schools would be helped with such tactics if they approached the Ministry of Education; the ministry does that when schools approach it. I should note in general, though, that the boards are required to make judgment calls on the few enrolments that the present boards see as having unusual circumstances. I am confident that the boards are in the best position to be able to make these kinds of judgments, and they are assisted in this by the guidelines made available to them through the ministry.

Te Ururoa Flavell: Can the Minister explain how school enrolment schemes or school zoning protects against the polarisation of schools along racial lines?

Hon STEVE MAHAREY: Enrolment schemes are part of the way that we ensure we have a fair amount of choice while we guard the quality of education in each of the schools. I say to people around the House that over many years different Governments have struggled with trying to provide a balance between choice and protecting quality, and all of us have arrived at the same answer, which is the current system.

Te Ururoa Flavell: I raise a point of order, Madam Speaker. Tēnā koe, Madam Speaker. With respect, the Minister gave an explanation about school enrolment schemes and school zoning, but the thrust of the question was about the polarisation of schools along racial lines. I ask you to get the Minister to reconsider and give us a little bit more clarity around that part of the question.

Madam SPEAKER: I thought the Minister did address the question, but if he wishes to add to his answer, then please do so.

Hon STEVE MAHAREY: I was explaining to the member that the way we have worked out the balance between quality and choice has been through such mechanisms as the enrolment scheme. The issue raised by the member, of course, is not directly addressed only by such schemes; it has to do with things like the choice of housing that people make, which school they want their children to go to, and their preparedness to drive them around the city to that school. So this would be only part of the solution to it. If we were to look at the wider question that the member is raising, we would have to look at a whole range of portfolios, to look at the choices that parents make.

Moana Mackey: What assistance does the Ministry of Education give to schools that have difficulties administering the enrolment scheme legislation?

Hon STEVE MAHAREY: Schools have the power to annul enrolments if they believe that enrolments are not genuine, and some schools do exactly that. The ministry provides schools with advice and support in these cases. In one case, the ministry has worked extensively with a school to assist it with the management of its enrolment scheme, and this has seen the ministry uphold some of the board’s decisions to annul enrolments. It is a difficult issue but one that we work closely with schools on to ensure the fairest treatment for students.

Hon Brian Donnelly: Can the Minister confirm that the Government was alerted to all of these potential difficulties when it introduced balloting in the 2000 legislation, and that these tactics are employed largely by parents wanting their children to attend just a few specific schools; if so, why has it taken so long for these few schools to have available to them the additional resources needed to combat such tactics?

Hon STEVE MAHAREY: The member, of course, has been around these issues for some time, and he is right that these issues have been canvassed since the year 2000. I have to say, though, that not many schools have difficulties with these areas of enrolment. At the moment, for example, I am aware that we are working with only one school around the country that is directly involved in these kinds of issues. I imagine that the member from the Māori Party is raising the debate around Christchurch at the present time, where we will have to have a discussion with schools about these kinds of issues to ensure that people are being treated fairly.

Te Ururoa Flavell: Kia ora, Madam Speaker. Following on from the statement from the Minister, what will he do to address the situation described in the comment of *Aranui High School principal **John Rohs, as reported in yesterday’s *Press, that enrolment schemes were failing to stem white flight across Christchurch *City—a phenomenon that Rohs described as parents “deserting the eastern suburbs for schools with whiter, richer students.”?

Hon STEVE MAHAREY: In the view of another principal from the area who is quoted in the Press this morning, **Paul Armitage, there is no better system than the current enrolment scheme system we have. As I say, it really comes down to the pretty complex issue of where people choose to have their houses, and what they are prepared to do in terms of driving their children around the city to the schools that they want them to go to. As I say, this is an area where we will probably have to take up a broad discussion with schools, just to ensure that people are being treated fairly.

Te Ururoa Flavell: Is the Minister aware of the findings of the *Smithfield project in the 1990s that the biggest beneficiaries of the removal of zoning were Māori and *Pasifika families, and what strategies is he developing to address the fact that zoning has resulted in a reduced ethnic mix in many schools in New Zealand?

Hon STEVE MAHAREY: Yes, I am aware of those findings, but I say to the member that since then quite a lot of effort has been made to ensure that the enrolment scheme process is one that maintains choice—that is, that people can take their children to their local schools. It is only when that school reaches the point where capacity is being threatened—that is, the quality of the school is being threatened by *overcapacity—that the enrolment scheme is put in. We are saying that in those circumstances we have the best possible arrangement we can have. Now it is about ensuring that communities do not fulfil the fear that the member has that we are seeing the winnowing out of people from one school to the other as we see the “white flight” that he is concerned about.

Te Ururoa Flavell: I seek leave to table the article from the Press of Monday 16 July 2007, “White flight skews lopsided school rolls”.

* Leave granted.

6. Hawke’s Bay District Health Board—Conflicts of Interest

6. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: Does he stand by his verdict on the inquiry into conflicts of interest at Hawke’s Bay District Health Board that “I don’t think there’s going to be much to be found”; if so, why?

Hon PETE HODGSON (Minister of Health) : Yes, I do. The *Hawke’s Bay District Health Board considered the issue of conflicts of interest 18 months ago, and cancelled the request for proposal process at that time. That is the board’s role. Legal advice to the board at that time did not find that Mr **Hausmann’s company had been particularly advantaged. My remarks simply reflect my best guess that the second time round, the findings are likely to be similar. However, the terms of reference have been made very broad, so that any stone that needs to be turned can be.

Hon Tony Ryall: Why has the Minister agreed to one of his political appointees investigating this matter, someone who is beholden to him for his job, rather than involving the independent Auditor-General, especially given that the allegations involve conflicts of interest and various political links: a Labour Party appointee, a personal friend of the previous Minister of Health, and the chief executive of the hospital board, who is a former executive assistant of Helen Clark?

Hon PETE HODGSON: The member continues to draw long bows. Let me remind him of the sequence of events. I asked the director-general to look at these issues afresh after I received a letter from Mr Hausmann, asking for such a review. I then asked the director-general to broaden the inquiry when issues concerning the *whistleblower were raised in the media. The Ministry of Health has been in touch with the Auditor-General’s office more than once, so that each knows what the other is contemplating. The Auditor-General has indicated that he does not intend to undertake an inquiry of his own at this time, though, of course, his office reserves the right to inquire into whatever it likes, whenever it likes.

Ann Hartley: What differences, if any, exist between the possibility of the mismanagement of conflicts of interest in the Hawke’s Bay District Health Board and the case involving three Auckland district health boards?

Hon PETE HODGSON: The differences are very stark. In the case of the *Hawke’s Bay District Health Board, Mr **Hausmann’s potential conflict of interest was known at the time of his appointment and was recorded from the outset. In the case of the Auckland district health boards, one board member had a conflict of interest that kept changing, was not always known to other board members, and was certainly not updated in anything resembling an open and a transparent manner. In the event, that board member’s behaviour led to a large contract being overturned by the High Court, at a very high cost to the health system. I refer, of course, to National Party member Dr *Bierre.

Hon Tony Ryall: Is the Minister confident that Mr Hausmann has been completely open and transparent as to the level of his involvement in the community services issue in Hawke’s Bay; if not, what action is he going to take?

Hon PETE HODGSON: Mr Hausmann claims transparency and openness and has himself been the first person to ask for such a review. However the review, now that it is *under way, will come to its own findings, and I look forward to them.

Hon Tony Ryall: Will the Minister agree with me that in fact he knew that letter from Mr Hausmann was coming, because the Government knew these details were going to be released in an Official Information Act request that would be soon be made available to the National Party, and that all that the Hausmann letter shows is that Labour is involved in a sham *cover-up to try to get Annette King off the hook?

Hon PETE HODGSON: The member accords himself an importance that is probably higher than Mr Hausmann, or indeed the Hawke’s Bay District Health Board, might accord him. It is true that Mr Hausmann had written to me on the basis that he had used language such as that there had been continuing innuendo against him, and on that basis he had asked for a review. It seemed to me, given that the first review had been done by the Hawke’s Bay Health Board and was the source of some of the ongoing innuendo that Mr Hausmann spoke about, that it would be smart if I were to get a third party to take a look, and that is what the director-general has put together.

Hon Tony Ryall: When did the Minister first become aware that official documents would be released to show the full extent of Mr Hausmann’s involvement in this matter, which is way beyond what has been reported to date, and what action did the Minister take?

Hon PETE HODGSON: I afraid I cannot give the member a direct answer to the question; there are some hundreds of official information releases each year. It would, however, have been in recent weeks.

Hon Tony Ryall: Does the Minister want to reconsider his comments made earlier in question time, when he said that all guidelines and procedures were followed in respect of Mr Hausmann’s appointment, and would he care to confirm, or will he not confirm—because he cannot—that there was no interview panel called of a ministry official, the district health board chairman, and a local iwi representative, although that is required in the Government’s own guidelines for the appointment of district health board members?

Hon PETE HODGSON: The Ministry of Health advice on this matter is very clear. Its advice is that the appointment of Mr Hausmann met all of the ministry’s standards, that the potential conflict of interest was identified at the outset—as was the obligation to manage it—that no shortcuts were taken at all, and that the particular issue about the nature of the interview is at variance with the facts. The facts are that whenever there are *one-off appointments to district health boards at any time in between elections, the panel of interviewers that the member speaks of is not called—not for any of them. The member chooses to ignore that fact, and in doing so he manages to disturb the truth.

Hon Tony Ryall: In putting together the panel in this sham inquiry, was *Noel Ingram not available?

Hon PETE HODGSON: The panel was put together by the *Director-General of Health.

7. Auckland—One Council Proposal

7. RODNEY HIDE (Leader—ACT) to the Minister with responsibility for Auckland Issues: Does she agree with the *Employers and Manufacturers Association (Northern) call for “One Auckland Council” as set out on its website **FixAuckland.com; if not, why not?

Hon MARK BURTON (Minister of Local Government) on behalf of theMinister with responsibility for Auckland Issues: The Government is working in collaboration with Auckland councils on governance arrangements, because it is committed to promoting Auckland’s future as a world-class, internationally competitive city region. Key elements of this work include a stronger regional governance structure, an overarching regional strategic plan—that is, a “one plan”—and the regional sustainable development forum to develop such a plan.

Rodney Hide: Does she not think that one Auckland city council might be a good vehicle for stopping the 245-plus percent mark-up by territorial council water retailers, and costs to householders; if not, what alternative has she to stop such price gouging?

Hon MARK BURTON: I think that a thorough process of review of the arrangements is appropriate, and that is precisely what is happening right now. There has been a process that has involved an invitation to all ratepayers to contribute to that process earlier this year through the long-term community plans. The work has continued on through the councils with central government, and there will be a further opportunity, should that process proceed, for further engagement with local people. There will be many points of opportunity for participation to address those issues of concern to Aucklanders.

Rodney Hide: Does the Minister not see that the problem for Auckland with its high costs and the poor service from councils is a direct failure of governance from eight councils, seven mayors, and over 6,000 bureaucrats, and that what the Government is actually proposing in consultation with Aucklanders is just more bureaucracy, more process, and that the answer is a simple governance structure of one council that can actually do the business and be accountable to the people of Auckland?

Hon MARK BURTON: I do not accept the member’s assertion that that case is proven—it is certainly not in the material, which is relatively high-level material, on the Employers and Manufacturers Association (Northern) website. That material does not offer any real financial analysis of its proposition. I would also point out to the member that, as in the rest of the country, one of the most significant realities of cost drivers for local authorities is the simple fact that one of the most expensive areas of council activity—construction—has a rate of inflation roughly triple that of the consumer price index*. There will always be significant cost drivers for councils meeting their obligations for infrastructure to their ratepayers.

8. Budget Policy Statement—Government Spending

8. Hon BILL ENGLISH (Deputy Leader—National) to the Minister of Finance: Is Government spending in the 2007 Budget more than that signalled in the *Budget Policy Statement released in December 2006; if so, by how much?

Hon Dr MICHAEL CULLEN (Minister of Finance) : Yes, because there was additional headroom due to higher revenue. The increased spending was largely because of the introduction of further KiwiSaver elements, and, particularly, a significantly large increase in capital spending on infrastructure and the like. Between the two, capital and operating, the increase compared with the Budget Policy Statement was $1.045 billion against a projected revenue increase of $0.967 billion, so that the actual fiscal *out-turn was very close to that in the Budget Policy Statement.

Hon Bill English: Can the Minister confirm that the recently released Budget papers show that despite Treasury’s warnings that “any additional spending compared to the intentions announced in December would risk further rate increases and a higher exchange rate”, he and his Cabinet went ahead and spent hundreds of millions more anyway?

Hon Dr MICHAEL CULLEN: What I can confirm is that we introduced very significant changes to KiwiSaver, which will drive a stronger savings culture within New Zealand. That is in the long-term interest. We did not abandon the proposals around the business tax package, because that is seen as part of investing for stronger growth in the future. I can confirm further that the tax revenue increase above forecast almost entirely offset the increase in both operating and capital expenditure, and the Government has no plans, unlike his colleague, for a massive increase in debt to fund tax cuts.

Shane Jones: Has the Minister seen any reports on the main drivers of inflationary pressures in the economy?

Hon Dr MICHAEL CULLEN: According to the most recent statement by the Reserve Bank, the main driver remains the housing market. The governor also noted the impact of a marked increase in dairy prices. Yesterday’s quarterly figure, of course, was heavily influenced by the increase in oil prices, which accounted for 40 percent of the 1.0 percent quarterly increase. The remainder of the increase in prices was actually within the target band.

Hon Bill English: How does the Minister think homeowners feel when they are told by everybody except him that Government spending is one of the factors driving their interest rates to the highest in the developed world, and when Dr Cullen then gets up in the House and says it is OK because the Government is collecting more tax than it expected from those homeowners, so they should think it is all right?

Hon Dr MICHAEL CULLEN: I would say they would look at a Government where the revenue increase has pretty much weighed up against the expenditure increase. They will compare that with an Opposition whose leader is promising $2.5 billion a year of tax cuts, promising local government whatever it wants, and promising every interest group whatever it wants, and Mr English is going to cut the rest of expenditure by only $500 million a year, and they will say to themselves: “Bill may be grinding away, but John is still hopping from cloud to cloud.”

Hon Bill English: When will the Minister show some leadership in his economic management and tighten his belt and the Government’s belt the way that homeowners have to because they face the highest interest rates in the developed world, and because if they are on the average wage they now pay 15 percent more of their wage in tax because of fiscal drag, which is what is financing his big spend?

Hon Dr MICHAEL CULLEN: I thank the member for finally confirming in absolute black and white terms that his position is that Government spending should be cut. Given that the growth in Government spending has occurred in infrastructure, in health, in education, and in law and order, and that Government reductions in spending have occurred in welfare payments, which have gone down by 2 percent of GDP under this Government, I want Mr English now to tell this House which of those big spending areas he would cut, given Mr Key’s promise not to touch anything in all those major areas.

Hon Bill English: Can the Minister confirm that it is now Labour’s position that all of the burden of fighting inflation, caused partly by the Labour Government, must now fall on exporters paying, who face a record exchange rate, and on homeowners, who face the highest interest rates in the developed world, and none of it will be carried by this big-spending Government?

Hon Dr MICHAEL CULLEN: No. What I can confirm is that this Government has run extremely strong surpluses for the last 3 or 4 years, and has been attacked in every one of those years by the National Party for running excessively large surpluses. Indeed, their mouthpieces described them as obscene, in some of the media; yet Mr English now says that the surpluses should be even larger.

Hon Bill English: If Dr Cullen believes that so many New Zealanders have total faith in his economic management, why is his own caucus suggesting he should stand aside so that either Mr Goff or Mr Mallard can take his job?

Hon Dr MICHAEL CULLEN: Unlike that member, I can count the numbers in caucus. That is why I have been the deputy leader of the Labour Party for 11 years and Minister of Finance for nearly 8 years—and will continue to be so—and did not decide, as that member did, to say: “Let’s allow John Key to bounce from cloud to cloud, while I grind away in the background and run the policy.”

9. General Practice—Fees

9. MARYAN STREET (Labour) to the Minister of Health: What reports, if any, has he received on general practice fees?

Hon PETE HODGSON (Minister of Health) : I have seen a report in the New Zealand Herald of 7 July, the headline of which states: “Cost of GP visit dives as Government boost kicks in”, and a subheading that states: “Survey of health centres shows average fee has dropped nearly $27 this week”. That is another triumph for the health policies of this Labour-led Government.

Maryan Street: What has been the reaction to this report?

Hon PETE HODGSON: Today’s New Zealand Herald states that National will leave Labour’s Primary Health Care Strategy* “undisturbed”, which of course is a big fat flip-flop, because National has been publicly opposed to low doctors’ fees at every step of the way. I would not be surprised if the flip-flop announced today were to be a “flop-flip” announcement later.

Barbara Stewart: Is he aware that in spite of reduced general practice fees, New Zealand is reportedly lagging behind the industrialised world with regard to child vaccination rates, especially those of Māori and Pacific children, and how will he move to improve that inequitable situation?

Hon PETE HODGSON: The member asks a very good question indeed. Depending on quite what is being measured, our child vaccination rate in New Zealand is somewhere in the order of the mid-eighties or the low to mid-eighties, which is well below the 95 percent target that we have set for our district health boards, yet well above the 60 percent rate that existed in 1992 under National. Details of how we will improve the inequitable situation that the member refers to will be announced in the next month or so.

10. Early Childhood Education—Free Hours Participation

10. KATHERINE RICH (National) to the Minister of Education: Does he stand by his statement that “86,000 children will definitely get 20 free hours under Labour”; if so, by what date?

Hon STEVE MAHAREY (Minister of Education) : Yes. Nearly 67,000 children are already benefiting from the Labour-led Government’s policy of 20 hours’* free early childhood education, and that number will continue to rise as the policy rolls out in the months ahead.

Katherine Rich: Does the Minister appreciate that when he said 86,000 children would definitely get access to 20 free hours, most parents assumed that that access would be in July 2007; what happened to the 27,000 kids who are left out during that month?

Hon STEVE MAHAREY: At the time that that number was articulated, there were 86,000 3 to 4-year-olds in early childhood centres. That number has now risen to around 92,000. I imagine the eligible number will continue to rise, and we will fund to that number.

Hon Marian Hobbs: How many children will be worse off if the policy of 20 hours’ free early childhood education is abolished?

Hon STEVE MAHAREY: Almost 67,000 children currently are benefiting from this policy, and, of course, those numbers will continue to rise in the months ahead. That translates into probably more than 100,000 parents facing fee rises if this policy is cut, and into restrictions on fees if it is done away with. That is a lot of parents, and that is a lot of centres. Right now, the one question they want an answer to is where does the National Party stand on this policy.

Katherine Rich: How much are parents actually saving under the 20 free *hours policy: is it the $90 a week that the Prime Minister pre-election said parents would save, is it the $60 a week that the Minister is currently using as a figure, or is it the fewer than $20 a week that New Zealand Kindergartens* is saying parents are actually saving under this policy?

Hon STEVE MAHAREY: As I told journalists yesterday, we will know more information when we can audit all of the sector after one financial year. But I have heard a range of figures. For example, I have heard people say they will save $30, $35, $60, and up to $90. There is a wide range of savings out there in the sector. That is why the policy is so popular, and that is why all of those parents want to know what Katherine Rich’s policy is on 20 hours’ free early childhood education.

Katherine Rich: Why is there a big gap between the pre-election rhetoric, when the Prime Minister told parents they would save $90 a week, and what is being said this week with the New Zealand Kindergartenssaying that parents are actually saving less than $20 a week; is it like the big gap in rhetoric between what the Minister is telling Massey University* in private and what he is telling the newspapers in public?

Hon STEVE MAHAREY: There is never any gap between rhetoric and action when the Prime Minister is involved.

Paula Bennett: How many early childhood education centres have opted in to the 20 hours free policy, and can the Minister confirm that centres are listed on the ministry’s website as having opted in when they have not, as happened in the case of **Tinytown Learning Centre in Pakuranga, whose name was taken off the website yesterday only after a number of complaints were made; are any of the Minister’s figures factual?

Hon STEVE MAHAREY: The ministry stands by all of its figures. I think we began with 1,703, and since 26 June, when we counted the number of services, 73 more services have joined. I expect that that number will continue to rise.

Paula Bennett: Is it not correct that at this stage up to 66,800 children might get 20 free hours—but, of course, they will not be free—but the Minister is not sure of that number, and that 1,776 centres have opted in but the Minister’s own website tells a completely different story; is it not true that the only thing we can be sure of is that at least 10,000 children in New Zealand are not accessing any early childhood education, at all, and this policy has not helped them in the slightest?

Hon STEVE MAHAREY: The Ministry of Education stands by its numbers, and the only thing that people around this country is that they are better off with a Labour Government.

11. Accident Compensation—Levy Rates Comparisons

11. DARIEN FENTON (Labour) to the Minister for ACC: How do current employers’ ACC levy rates compare with rates from previous years?

Hon RUTH DYSON (Minister for ACC) : To the end of March this year, the average *employers’ levy has dropped under the Labour-led Government’s nationalised accident compensation* scheme by 43 percent since National’s costly privatisation experiment in 1999.

Darien Fenton: Has she seen any reports linking the appointment of a new Accident Compensation Corporation (ACC)* board chair with changes to levies?

Hon RUTH DYSON: As a matter of fact, I have. National Party accident compensation spokesperson Pansy Wong has stated that the new ACC board chairman has some work to do to assure levy payers that he is not anti-employer. She stated: “Employers will be understandably nervous about what this means for them.” Considering that levies for employers under National’s privatised scheme were 43 percent higher than they are currently and that National wants to return to that situation, the only party that needs to assure employers that it is not anti-employer is the National Party. I have also seen a report from the National Party leader, John Key, stating that ACC levies are rising rapidly and going through the roof. That claim is demonstrably wrong and deliberately misleading, but Mr Key has used it to justify his plans to return to the flawed policies of the 1990s and to privatise accident compensation. If I may quote Pansy Wong, employers should be “understandably nervous” about National’s plans to sell out their lower levy rates in exchange for financial backing for the National Party from the insurance industry.

Peter Brown: Noting the Minister’s concern about levy rates, is she aware that more and more mature people are working and paying ACC levies, yet in the event of an accident they have fairly severe limitations on the length of time that they can receive financial compensation, and will the Minister tell the House whether she believes that is fair; if she says it is not fair, will she tell us how she will address the problem and whether she will make mature people exempt from paying ACC levies?

Hon RUTH DYSON: I think that the member raises a legitimate point. There is an increasing anomaly in that people who are over the age of 65 are contributing levies but are not entitled to earnings-related compensation.

12. Employment Disputes—Dispute Resolution Process

12. KATE WILKINSON (National) to the Minister of Labour: Does she stand by her statement that “employers are unnecessarily paying costly settlements at an early stage rather than entering a dispute resolution process because they mistakenly perceive it to be expensive and protracted.”; if so, why?

Hon RUTH DYSON (Minister of Labour) : Yes, I do, although the full statement is that research shows that “some employers” are doing this. The Department of Labour’s research shows that the most common settlement using formal dispute resolution procedures was between $2,000 to $5,000. I am concerned that employers are paying out more than this because of the perception of costs and time to use the formal systems; a perception stoked by statements such as that made by David **Lowe of the *Employers and Manufacturers Association (Northern) that employers can expect costs of up to $5,000 if they win and $20,000 if they lose. That is not consistent with the research facts.

Kate Wilkinson: Why is the Minister telling employers that they are mistaken if they think that mediation is expensive when, according to her own department’s research, employers are telling her: “Employers seem to have to pay for everything.”, “Whether you are right or wrong, you always have to bring your chequebook out.”, and “Even if I win I am $10,000 out of pocket.”?

Hon RUTH DYSON: It is a sort of “rest my case” situation, actually. It is no wonder that employers do not continue to move away from the misperceptions they have about the process when examples like that one, based on that misperception, are perpetuated by the member in this Parliament, rather than relying on the facts of the situation.

Lesley Soper: Has the Minister seen any proposals for an alternative dispute resolution process?

Hon RUTH DYSON: Yes. I have seen a proposal in which there would be no dispute resolution processes or access to personal grievance proceedings for an employee’s first 90 days of employment. This probationary employment proposal is National Party policy and it was warmly endorsed by its future employment relations spokesperson Bob Clarkson, who said that a probationary period is a good idea as he would be able to “fire young Māori workers more easily”.

Kate Wilkinson: Does the Minister believe that employers were lying or exaggerating when they told her department that “The department’s mediators appear to have an attitude of ‘Take out your cheque book—[Interruption]

Darren Hughes: I raise a point of order, Madam Speaker. I am sorry to interrupt the questioner but while she was asking that question, Mr Clarkson called out twice. The first word was a swear word and the second word was an unparliamentary word.

Madam SPEAKER: Well, if the member did, I did not hear—

Bob Clarkson: Point of order—

Madam SPEAKER: Just be seated for a minute please—just for a minute. I did not actually hear the member. If he did use that language I ask him to withdraw and apologise to the House. Now, if the member wishes to say something, please?

Bob Clarkson: I raise a point of order, Madam Speaker. I do not swear, at any rate, so the member is a twit. Secondly, I did call someone over there a liar, and that person is a liar.

Madam SPEAKER: Well, I am afraid that the member—I will now ask the member to withdraw and apologise.

Bob Clarkson: I will not, sorry.

Madam SPEAKER: Would you please leave the Chamber.

* Bob Clarkson withdrew from the Chamber.Clarkson, Bob

Hon Ruth Dyson: I seek leave to table the quote from Tauranga’s member of Parliament, Bob Clarkson, from the Transport and Industrial Relations Committee when he said that he wanted to hire young Māoris on his building sites, but was put off by the fact that he could not get rid of them easily enough.

* Leave granted.

Kate Wilkinson: Does the Minister believe that employers were lying or exaggerating when they told her department that “The department’s mediators appear to have an attitude of ‘Take out your cheque book and we will go home.’ ”?

Hon RUTH DYSON: Neither. I think they are relaying their truthful but incorrect perception of the process. That is exactly the point of the research, which shows quite clearly that their perception is not backed up by facts.

Kate Wilkinson: How can employers have confidence in the mediation process of the Minister’s department, when many of them believe that resolving problems outside the formal institutions is “quicker, fairer, and yields a clearer outcome that satisfies both parties.”?

Hon RUTH DYSON: I wonder whether the member is, in part, in her question alluding to the proposal from her colleague Chris Finlayson, who has suggested in his statements over the weekend that the dispute resolution process, both through the mediation process and through the *Employment Relations Authority, should be abolished, and that all industrial issues should go straight to the Employment Court. If the member is concerned about cost and time in the current process, she needs to talk to Chris Finlayson and say that abolishing the *Mediation Service and the authority is not a sensible proposal.

Kate Wilkinson: How can the Minister stand here and defend the Mediation Service, which is seen as so expensive and protracted, when, according to her own department’s research, some employers are not willing to take on more staff because they are worried about having to go through it?

Hon RUTH DYSON: Actually, the intention of the Employment Relations Act is to have any industrial issues resolved at the least formal level and inside the workplace as a preference. But employers should not be put off from using the free Mediation Service, offered through the Department of Labour, because of misperception. That is the point of the research, and the member should try to understand that.

Hon Dr Michael Cullen: Can the Minister confirm that almost every survey taken of business over about the last 3 or 4 years has cited shortage of labour as the main problem facing businesses, not an unwillingness to take on additional labour?

Hon RUTH DYSON: That is exactly the biggest challenge facing employers in New Zealand at the moment. We have a very proud record of reducing unemployment, which we will continue to maintain, but that has caused us another problem, as with the increasing availability of work we still do not have enough workers to fill those jobs.

Peter Brown: Will the Minister clarify the situation: has she received any reports from employers that tell her that the mediation system under the Employment Relations Act is much simpler and more cost-effective as against what it once was under the Employment Contracts Act, and that employers much prefer the current system of mediation and settling disputes; and is that true or false?

Hon RUTH DYSON: That is not a specific part of the research being undertaken at the moment, which is not a comparison between the previous system and the current system. But it certainly does indicate that the proposal by Chris Finlayson—which is to abolish the low-level free or low-cost mediation and resolution services in favour of going straight to the Employment Court—would not be favoured by any employer. It would be favoured only by the National Party.

ENDS

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