Tuesday, 24 March 2009
Questions For Oral Answer
Questions To Ministers

1. Television New Zealand Programme—Statements Made by Prime Minister

[Uncorrected transcript—subject to correction and further editing.]

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by all the statements he made on TVNZ’sQ+A programme on Sunday, 22 March?

Hon JOHN KEY (Prime Minister) : Yes.

Hon Phil Goff: Does he stand by the Government’s promise at the Job Summit that the 9-working-day fortnight would help 100,000 people keep their jobs, given his statement on Sunday that he did not know how many people had signed up to it, but, anecdotally, one or two companies were taking a look at it?

Hon JOHN KEY: There was no promise at the Job Summit; there was an estimate before the Job Summit. But, in broad terms, that might be the case. I take it as a sign of success that New Zealand companies are able to keep manufacturing for 5 days a week; Mr Goff takes success as being put out to retirement—something that may well happen to him quickly.

Hon Phil Goff: Was the Prime Minister aware when he went on the programme on Sunday that his other promise to the Job Summit, which was to build a cycleway from North Cape to the Bluff to create 4,000 jobs at a cost of $50 million, was utterly unachievable, given the estimate that he will have from environmental engineers that the real cost would be six times that amount, and for many fewer jobs?

Hon JOHN KEY: Again, they were fairly rough estimates at the time. Just before the Leader of the Opposition gets too excited, I have good news for him. He should go out and buy himself a bike, because he may well get to see a lot of New Zealand.

Hon Phil Goff: Does the Prime Minister understand why the interviewer on Sunday’s Q+A programme, GuyonEspiner, was saying this morning that the Job Summit had failed to deliver, and that the reality had not matched up to the rhetoric, given that the two key proposals to emerge from the summit are now falling well short of expectations?

Hon JOHN KEY: Let us get a few facts right. Firstly, it was Mr Goff who was saying that the Job Summit would be a talkfest and nothing would come out of it. In fact, within weeks of the Job Summit a 9-day fortnight was rolled out, with the full support of the Council of Trade Unions. It is Mr Goff who does not want to believe that the cycleway will happen. It is Mr Goff who does not want to believe that the 40 other proposals that Cabinet is considering will become an option. Overall, it is Mr Goff who was not involved in the Job Summit, and who, therefore, does not really know what is going on.

Hon Phil Goff: How did the Prime Minister calculate the figure of $40 billion, which he said on Q+A was the amount that National was borrowing over the next 3 years to preserve public sector jobs; or did he just make that figure up, as well?

Hon JOHN KEY: I can read and that figure came from the December Economic Fiscal Update. Quite frankly, this Government is going to borrow somewhere in the order of $40 billion over the next 3 years. The reason we—

Hon Phil Goff: Public sector jobs!

Hon JOHN KEY: —are doing that is we are preserving—that is right—the vast bulk of public sector jobs. We are preserving the entitlements that we campaigned on. There will be no cuts to New Zealand superannuation, no cuts to Working for Families, and no cuts to the entitlements New Zealanders need. We are borrowing to do that in the short term, but we are making sure we get on top of the expenditure, so that we can afford initiatives in the future—something that member’s Government never did.

Hon Phil Goff: Is the Prime Minister, then, telling the House that he is borrowing $40 billion just to preserve public sector jobs—that is what he said on Q+A—and how does that match up with his claim earlier that he was borrowing to pay for superannuation, when, in fact, everybody knows he is borrowing to pay for the tax cuts?

Hon JOHN KEY: I can assure the member that we are not borrowing $40 billion for tax cuts. What we are doing is borrow $40 billion over the next 3 years, over and above—

Hon Phil Goff: You’re not borrowing $40 billion to pay for public sector jobs, either, and the Prime Minister knows it.

Hon JOHN KEY: The Leader of the Opposition needs to get out the Crown accounts and understand what is happening. Over the next 3 years, about $200 billion will be spent by the Government. There is a shortfall of about $40 billion. The reason the Government is borrowing is because at this time that is the appropriate thing to do in order to maintain those entitlements and those services.

Hon Phil Goff: Is the Prime Minister now reneging on his promise not to cut Public Service jobs but to cap them, given his comment on Sunday that he did not know how many jobs would be lost but the number would not be as high as 4,500?

Hon JOHN KEY: The Minister of State Services will be making an announcement later in the week, but the policy is very straightforward. We will be capping the size of the State sector. It grew enormously under the Labour Government, which had no control over its expenditure. We will not be cutting 4,500 jobs; what we will do is move some jobs from the back office to the front office, but, by and large, the vast bulk of Public Service jobs will stay.

2. Recession—Position of New Zealand Economy

[Uncorrected transcript—subject to correction and further editing.]

2. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: How is the New Zealand economy placed to ride out the current economic downturn?

Hon BILL ENGLISH (Minister of Finance) : The economy starts from a mixed position. It has some long-term strengths, including a flexible exchange rate and labour markets, a banking sector that has remained healthy, and relatively low debt and unemployment levels. However, this week’s statistics will show that the balance of payments deficit for 2008 is in the order of 9 percent of GDP, one of the worst in the OECD, and this week’s GDP statistics will show that output declined in the December quarter to a level of around 2 percent lower than a year earlier—that is, the economy will have contracted by about as much as that. The pre-election fiscal update showed ongoing fiscal deficits, and the outlook has worsened considerably since then. So New Zealand faces a challenge of chronic twin deficits as a result of 10 years of mismanagement, chronic fiscal deficits, and balance of payments deficits.

Peseta Sam Lotu-Iiga: What steps has the Government already taken to improve the ability of the economy to ride out the downturn?

Hon BILL ENGLISH: We cannot deal immediately with the chronic twin deficits that we have inherited, but we have taken action on a wide front to improve the position. This includes—so far—successfully maintaining the orderly operation of the banking system, a range of packages that were focused on assistance to small and medium sized businesses, and an early start to infrastructure spending. We have also engaged actively with the unions and business via the Prime Minister’s Job Summit—and more announcements will be following on from that.

Hon David Cunliffe: Can the Minister confirm why, if the IMF has expressed concern over New Zealand’s current account deficit, he has gutted KiwiSaver—a scheme that makes a critical contribution to reining in the same current account deficit?

Hon BILL ENGLISH: In the first place, there is no evidence that KiwiSaver is achieving that, or would achieve it. Secondly, KiwiSaver has not been gutted. The Government in this fiscal year will commit something around a billion dollars of subsidies to KiwiSaver. We are effectively still subsidising savings when the Government is in considerable debt.

Hon David Cunliffe: Can the Minister confirm that IMF mission chief Ray Brooks stated recently that New Zealand’s macroeconomic policies, particularly monetary and fiscal policies, have been very sound in recent years, and that he also praised the low level of Government debt and the strength of the Government’s accounts, and said it was prudent fiscal management of the previous Government that should be credited for this?

Hon BILL ENGLISH: If he said that, I disagree with him. In fact, the current Government is working, day after day, to try to bring under control the loose and reckless decisions on spending made by the previous Government.

Hon Sir Roger Douglas: Will the Minister explain to the House and the public of New Zealand how paying people to do nothing 1 day in 10 will help grow the New Zealand economy?

Hon BILL ENGLISH: The 9-day fortnight is a measure designed to cushion the effects of significant restructuring that may occur as a result of the downturn. It is not intended to be a growth measure. Along with the Restart package, which cushions the effects of redundancy for people who lose their jobs, it is part of the Government’s programme of protecting people from the sharpest edges of the recession while we take longer-term measures to get us through this recession and grow the economy to replace the jobs that are currently being lost.

Hon Jim Anderton: Can the Minister of Finance tell the House which of the Government’s highest economic priorities he thinks will make the greatest dent in the effects of the global economic crisis on New Zealanders: the bicycle lane; the 9-day fortnight, which not one business has signed up to; or privatising the prisons?

Hon BILL ENGLISH: As I pointed out to that member before, we went to the shed to get the “jobs machine” when we became the Government, and found that even when the economy was growing, his “jobs machine” could not create jobs.

Hon Darren Hughes: I raise a point of order, Mr Speaker. The Hon Mr Anderton asked the Minister of Finance a pretty straight question. He gave him three options in a question with regard to what would create jobs. Instead, he got a political answer from the Minister of Finance that had nothing—[Interruption] The point I am trying to make is that it was not a political question. It was not loaded. [Interruption] Mr Speaker, are you going to let them interject during my point of order? I have had two interjections on my point of order from Government members.

Mr SPEAKER: The member’s point of order should be heard in silence.

Hon Darren Hughes: We are trying to comply with your ruling, which is that we should ask questions of the Government that contain facts. Mr Anderton did that. He did not put in a little flick to the Minister, but the Minister, in response, just made an attack on Mr Anderton. That did not help the economy, at all.

Mr SPEAKER: I think the member has made his point. I understand the member’s point. I think he heard the impact of the assertion he made that it was not a political question. The member who asked the question realised that it was very much a tongue-in-cheek question, and he got a similar kind of answer. I cannot judge the quality of the answer but I would not call the member’s question a straight question.

Hon David Cunliffe: Can the Minister of Finance confirm that if this is the rainy day that we have been saving for, then it was the Labour Government that did the saving, contrary to his own advice to spend more on tax cuts for the rich, and does that explain why his boss is so keen to see him replaced by Mr Steven Joyce in his current role?

Hon BILL ENGLISH: I can confirm that the Prime Minister was very pleased to see Dr Cullen replaced by me.

3. Government—Ideas

[Uncorrected transcript—subject to correction and further editing.]

3. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social Development and Employment: Does she stand by her comment that National is a Government that is “willing to listen to ideas outside the Beehive, and that’s what we’re there to do.”?

Hon PAULA BENNETT (Minister for Social Development and Employment) : Yes.

Hon Annette King: Has the Minister seen the programme arranged for Auckland’s regional employment summit, held yesterday; if so, does she believe that setting aside a total of 10 minutes for ideas from participants out of a 3-hour talking heads session indicates a Government that is willing to listen?

Hon PAULA BENNETT: Yes.

Hon Annette King: Well, so much for the public! If the Government is so keen to hear the views of New Zealanders, why did no single National member of Parliament turn up to the Auckland regional job summit that was held yesterday, or did those members not want to be insulted by the once-over-lightly pep talk that told participants to “read a book” and to “think with the mind of a cunning fox.”?

Hon PAULA BENNETT: The feedback I have had from regional job summits has indeed been positive. The summits are giving a snapshot of what is happening regionally. Local businesses and chambers of commerce are stepping up with ideas, and doing a very good job of that. The feedback coming back to this Government has been hugely impressive.

Tim Macindoe: What examples can the Minister provide of ideas, generated by New Zealanders, being put into action by this Government?

Hon PAULA BENNETT: We are certainly a Government that is prepared to listen and to put ideas into action. For example, tomorrow we are holding our third meeting with community and voluntary sector groups about working through the Budget process and what happens there. The 9-day fortnight job-support scheme, which was actually an idea formed by unions and businesses, has already been announced. Officials are working through about 40 ideas and are doing a fine job on that.

Hon Annette King: Does the Minister agree with the Prime Minister’s statement that “improving insulation in New Zealand homes will play an important part for social, health, and climate change reasons.”; if so, why did she label those same ideas, when outlined in a Labour Party pamphlet, as “petty politicking”?

Hon PAULA BENNETT: I certainly stand by the Prime Minister’s comments. That is why we are already insulating State houses, and why this Government has gone into action—and the private sector is next. I think the petty politicking was in a Labour taxpayer-funded brochure that was brought along to a regional job summit. It was blatantly, quite frankly—[Interruption] Oh, sorry—yes, there are three nice photos of Mr Goff on the inside of the brochure for taxpayers to have a look at.

Tim Macindoe: What is the Government doing to help people stay in jobs?

Hon PAULA BENNETT: I actually think that the “rainy day” that a member talked about previously was coming long before we came into power. In the last 3 financial quarters under the Labour Government, unemployment was rising. In fact, just 9 months ago the Hon Ruth Dyson said that losing 29,000 jobs was not “bad news at all.” The Labour Government had all that time to start doing something; this Government is about action.

4. Genesis Energy, Board—Confidence

[Uncorrected transcript—subject to correction and further editing.]

4. JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister for State Owned Enterprises: Does he have confidence in the board of Genesis Energy?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister for State Owned Enterprises: Yes.

Jeanette Fitzsimons: How can the Minister have confidence in the board of Genesis Energy, when it told the Rodney District Council that it had “sufficient gas arrangements” to operate the proposed Rodney power station, but told the Electricity Commission that it does not have “access to a sufficient, secure forward quantity of gas” for it?

Hon GERRY BROWNLEE: I am advised that the board of Genesis Energy has given the go-ahead for a consent to be sought, but has not made any decisions about the building of that plant.

Jeanette Fitzsimons: What advice, if any, has the Minister received from the chair of the board about the company’s Gasbridge project in New Plymouth to import liquefied natural gas to fuel its power stations, which, under international contracts, would tie the price of electricity to the international price of oil?

Hon GERRY BROWNLEE: I am unable to answer that. I do know that New Zealand is a very prospective country. There are lots of opportunities for new gas finds, and this Government is encouraging people to go out and make those finds.

Jeanette Fitzsimons: How can the Minister, then, have confidence in the board of Genesis Energy, when it proposes to build the Rodney gas-fired power plant and the Gasbridge liquefied natural gas (LNG) facility, which, together, will tie power prices for Kiwi households and businesses to the rising international price of oil, under the contracts that govern LNG trade?

Hon GERRY BROWNLEE: I am advised that neither of those decisions has been made.

Jeanette Fitzsimons: Has the chair of the board advised the Minister that Genesis Energy so far has spent $74 million of electricity consumers’ dollars just on planning for the power station, but that it probably will not be built, given its statement to the Electricity Commission that it should not consider the power station as “committed or likely in a real world commercial sense”; and does he think that that is prudent spending?

Hon GERRY BROWNLEE: I am unable to answer that question, because I do not know what conversations the Minister has had with the chair of Genesis Energy. But I do know that if it were not for Genesis Energy, the lights would have gone out in this country last year. It was Genesis Energy’s e3p gas plant at Huntly that kept the lights on.

Jeanette Fitzsimons: Is the Minister saying that any future waste of electricity consumers’ money by that company is completely OK because it has a power plant that it built previously—underwritten by the Government on its gas contract—and that that entitles the company to do anything?

Hon GERRY BROWNLEE: No.

Hon Annette King: I would like to table the Auckland regional employment summit programme, which points out—

Mr SPEAKER: We know what the document is. Leave is sought to table that document. Is there any objection to that course of action? There is no objection.

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

Jeanette Fitzsimons: I seek leave to table two documents. The first is a letter from Genesis Energy to the Electricity Commission, which is the source of one of those quotes I used. The other is from Genesis Energy to the Rodney District Council, and is the source of the other quote.

Mr SPEAKER: Is there any objection to those two letters being tabled? There is no objection.

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

5. State-owned Enterprises—Increased Dividends

[Uncorrected transcript—subject to correction and further editing.]

5. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister for State Owned Enterprises: Why is the Government seeking increased dividends from State-owned enterprises in the current economic climate?

Hon BILL ENGLISH (Minister of Finance) on behalf of the Minister for State Owned Enterprises: Each State-owned enterprise has a stated dividend policy in its annual statement of corporate intent. The statement of corporate intent that each is operating under was signed off by the previous Labour Government. We are expecting that State-owned enterprises will adhere to that policy.

Hon Clayton Cosgrove: Does the Minister not agree that the primary concern of State-owned enterprises in the current economic climate should be to save jobs, rather than to line the Government’s pockets with increased dividends?

Hon BILL ENGLISH: The primary concern of the Government in the current economic climate is that State-owned enterprises pay a great deal more attention to running their businesses. In recent years they have spent more time on managing news coverage of Ministers and complying with the no surprises policy, and not enough time on controlling their costs.

Katrina Shanks: Has he seen any reports of Governments being prepared to accept a lower dividend than in previous years?

Hon BILL ENGLISH: The Minister has seen a report from June 2007 that states that the then Labour Prime Minister, Helen Clark, rejected suggestions that the Government had a responsibility to reduce power prices, despite the Government having collected $1 billion in dividends from its State-owned enterprises in 2006. This year the interim dividend is $45 million.

Hon Clayton Cosgrove: Does he not accept that any undue pressure on State-owned enterprises in the current economic climate to return greater dividends to the Government will lead to an increase in lay-offs, higher prices for consumers, a decrease in services, or, most likely, a combination of all three?

Hon BILL ENGLISH: No. Every Government organisation should be paying attention to the effective delivery of services to the public. We think that State-owned enterprises could focus on that more than they have done, because in recent years they have spent too much time paying attention to the Government’s political needs.

Hon Clayton Cosgrove: Does he think that the 90 jobs to be cut at Television New Zealand, the 52 jobs already lost at Quotable Value, and the expected redundancies at New Zealand Post are acceptable responses from State-owned enterprises to the Government’s demand for better financial performance, and how many more jobs is he prepared to see lost in State-owned enterprises in order to meet the Government’s unrealistic goals?

Hon BILL ENGLISH: In each those organisations, the fundamental problem is that their revenue is dropping. It is actually nothing to do with Government demands, and a lot to do with the fact that the money coming in each week is less than it was. That means that they have to restructure their organisation. I have to say that many New Zealand businesses and Government and non-governmental organisations are, unfortunately, experiencing the same phenomenon.

6. Student Loans—Repayment Schemes

[Uncorrected transcript—subject to correction and further editing.]

6. AARON GILMORE (National) to the Minister of Education: What steps has the Government taken to help individuals pay off their student loans quicker?

Hon ANNE TOLLEY (Minister of Education) : Yesterday the Government announced that its voluntary repayment bonus would come into effect on 1 April this year. Under this policy, student loan holders who make voluntary repayments totalling $500 or more across the year will be eligible for a 10 percent bonus. That means that if someone makes voluntary repayments of $1,000 across the year, the Government will deduct $1,100 from his or her loan balance.

Aaron Gilmore: How does the scheme announced yesterday differ from the one announced prior to the election?

Hon ANNE TOLLEY: The scheme announced yesterday is a significantly expanded version of the one announced before the election. First of all, voluntary repayments are eligible for the bonus, regardless of how long after graduation the payments are made. Secondly, student loan holders who reside overseas and are fully compliant with their repayment obligations will also be eligible for the voluntary bonus. Finally, the bonus will not require the minimum qualifying payment of $500 to be made in a lump sum; instead, it can be made across the course of the year.

Hon Maryan Street: Does the Minister agree that it is likely to be people on higher incomes who are able to make additional student loan repayments, and that these are the same people who will benefit most from next week’s tax cuts; if so, can she explain why this Government is intent on giving cash to those on higher incomes, rather than to those on low to moderate incomes who need it more?

Hon ANNE TOLLEY: This Government has been able to extend this proposal to allow students to make a continuous number of repayments throughout the year, rather than one lump sum. I think that goes some way towards addressing the concerns the member has raised.

7. Accident Compensation Corporation—Solvency

[Uncorrected transcript—subject to correction and further editing.]

7. Hon DAVID PARKER (Labour) to the Minister for ACC: Does he stand by his statements that “if ACC was an insurance company, it would be insolvent,”, and that “we need to get costs back under control.”?

Hon Dr NICK SMITH (Minister for ACC) : Yes, I do. The dictionary defines insolvency as “liabilities exceeding assets”. The Accident Compensation Corporation (ACC) has liabilities of $22 billion and assets of $10 billion. ACC’s costs have more than doubled, from $1.5 billion a year in 2000 to $3.2 billion this year.

Hon David Parker: Has the Minister seen reports from Brian Fallow that the Government’s “shrill scaremongering and scapegoating is gratuitous”, and from Rod Oram that “there is a huge gap between the rhetoric of John Key and Smith and reality”, and will he now concede that his exaggerations around ACC were irresponsible?

Hon Dr NICK SMITH: I note that there have been other commentators who have been very critical of the financial state of ACC. I simply say to members opposite that if all is well with ACC, why did the Government need to bail it out for $300 million this financial year?

Michael Woodhouse: What has happened to ACC’s solvency over recent years?

Hon Dr NICK SMITH: The solvency ratios of ACC have been in decline over the last 3 years. The decline pre-dates the financial crisis and has arisen because costs have been rising at three times the rate of inflation—three times the rate of inflation. I also note that ACC’s liabilities increased rapidly by more than $2 billion in 2004, 2005, 2006, and 2007, which was well before the financial crisis was anywhere near New Zealand.

Hon David Parker: Has the Minister seen the report by Fran O’Sullivan in the New Zealand Herald on Saturday, where John Key was quoted as having no room for “phone throwers” or “temper tantrums at the top”, and has the Prime Minister spoken to the Minister about his performance at the select committee on the Thursday before last?

Hon Dr NICK SMITH: Yes, I have seen the piece, and I also have to say that I read Bill Ralston’s piece. He stated that it was high time for a Government to start taking into account the levy payers in the scheme and ensuring the scheme is viable long term.

Michael Woodhouse: How does the Minister reconcile the claim made by the Opposition that the corporation does not have financial problems with the fact that the non-earners account alone required a $300 million bail-out this financial year and will need another $900 million over the next 3 years just to keep it afloat?

Hon Dr NICK SMITH: The member makes a good point. The $300 million bail-out exceeds the total of the incoming Government’s spending commitments on Herceptin, PlunketLine, ReStart, the 9-day fortnight, voluntary bonding, and the student loan discount all combined together. Of course, that covers only the problems in the non-earners account, not in the other four accounts. We on this side of the House are grumpy, because we went to great effort to be fiscally responsible, and we were blindsided by a problem in the scheme costing over $300 million for this financial year.

Hon David Parker: Is the Minister still proposing making cuts to the scope of the scheme’s cover and the privatisation of parts of the scheme, when his main justifications have been demolished by the media, and does he agree with Fran O’Sullivan that there is a fine line between using the worldwide recession to force radical change and downright chicanery?

Hon Dr NICK SMITH: The facts about ACC’s finances speak for themselves. The reality is that this organisation had to be bailed out by more than $300 million, that huge levy increases will be required if we do not make changes, and that this Government is committed to securing the future of the accident compensation scheme by improving its financial management. We will look at reviewing the scheme to ensure it is affordable for ordinary New Zealanders.

8. Schools—Building Projects

[Uncorrected transcript—subject to correction and further editing.]

8. PAUL QUINN (National) to the Minister of Education: What recent announcements has the Government made to fast track school building projects?

Hon ANNE TOLLEY (Minister of Education) : Last week I met with representatives of the four Upper Hutt schools that the Prime Minister, John Key, had pledged before the election would receive an additional—that is, an extra—$30 million in school property funding, and I outlined the share of this funding that each school will receive. The schools will receive an overall package of $44.6 million, made up of the $14.6 million already allocated and the additional, extra, over-and-above $30 million that this Government promised and is now delivering on. The significantly increased package for each school will allow these schools to address 100 percent of their essential infrastructure projects, to replace all building projects that are beyond their economic life, and to complete 70 percent of their lesser priority projects.

Paul Quinn: Why was this additional funding given to these four schools?

Hon ANNE TOLLEY: The previous Government was content to let three successive education Ministers maintain a funding freeze while they toyed with these schools, the Upper Hutt community, and a whole cohort of students—in fact, for some students, for their entire school life—over the idea of having a super-school. The extra funding that this Government has made available allows the schools to modernise and recognises that these schools and the Upper Hutt community were treated disgracefully by the previous Government.

Hon Chris Carter: Is the Minister aware that her officials told members of the Education and Science Committee on 18 February that very little of the extra school property money was new money; if so, which schools missed out in order to fast track her so-called stimulus package?

Hon ANNE TOLLEY: I am delighted to tell the member that these four schools have not missed out on anything. In fact, they have got an extra $30 million from this Government—extra money that is going to those schools, which that member, when he was a Minister, would not give even an idea that they could get on with these building projects. That member was content to let those students rot in classrooms that were growing mushrooms in the wall.

Hon Chris Carter: I raise a point of order, Mr Speaker. The Minister was asked where the money came from. She has not told us that.

Mr SPEAKER: If the member reflects back, he may recollect that he asked whether the Minister was “aware”. When he asks whether the Minister is aware of something, the answer will not be very precise.

Hon Chris Carter: I raise a point of order, Mr Speaker. I point out that the Minister did not tell us whether she was aware, either.

Mr SPEAKER: The honourable member is seeking a little too much assistance. Members need to be aware of the fact that when they ask whether a Minister is aware of something, the answer will never be very precise.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Which school building projects is the Minister fast tracking to support the increasing demand for Māori immersion that has resulted from population growth and calls from iwi for kura kaupapa Māori?

Hon ANNE TOLLEY: The Government will continue to make announcements about bringing forward school building projects in the future, and I intend to work with my Associate Minister the Hon Dr Sharples to ensure there is provision for parents who wish to send their children to kura. But I am aware that the process has begun, in the member’s own electorate, to construct a kura kaupapa in Tauranga.

Hone Harawira: Tēnākoe, Mr Speaker. How will the building projects respond to the significant population growth, particularly in the Maori population, forecast for parts of Auckland, including Waitakere and Hingaia in Te Tai Tokerau electorate?

Hon ANNE TOLLEY: I am pleased to tell the member that one of the school building projects that this Government is bringing forward is the building of Hingaia Primary School, in his own electorate. The building of this school is being brought forward by 2 years, with construction to start early next year.

9. Roading and Public Transport Projects—Consistency with Speech from the Throne

[Uncorrected transcript—subject to correction and further editing.]

9. Hon DARREN HUGHES (Labour) to the Minister of Transport: How are last week’s transport announcements totally consistent with the statement in the Speech from the Throne that “of particular focus will be the development of new roading and public transport projects.”?

Hon STEVEN JOYCE (Minister of Transport) : I am pleased to report that they are totally consistent, because in the course of last week’s announcements we have committed very sizable investments to both. Last week we announced a 31 percent increase in actual funding for public transport services over actual expenditure for the last 3 years, in addition to a Government commitment to provide $750 million worth of electric trains in both Wellington and Auckland. This is on top of the half a billion dollars worth of rail-track upgrades that ONTRACK is already committed to, and the further $600 million spent by the previous Government on the double tracking of Auckland’s rail. For roading, we have increased funding for new State highway construction by almost $1 billion over the next 3 years, and $4.1 billion over the 10-year period.

Hon Darren Hughes: Does the Minister believe that there is a mandate to increase taxes by 6c a litre, thus forcing all New Zealanders to contribute funding to only part of Auckland’s transport needs—a plan that was well developed by local people—and why was such a move not signalled in recent pre-election documents or in the Speech from the Throne?

Hon STEVEN JOYCE: I can report that 3c of the 6c the member refers to was scheduled by the previous Government, which scheduled a 4.5c a litre increase in national taxes over 3 years, alongside the 9.5c Auckland regional fuel tax that it scheduled. It just forgot to tell Auckland that that added up to 14c a litre over 3 years.

Nicky Wagner: How does this Government’s approach contrast with previous approaches to transport funding?

Hon STEVEN JOYCE: Unfortunately, the previous Labour Government left office having signed off on a Government policy statement that projected a 9 percent reduction in new State highway construction over the next 3 years. This was despite the fact that 70 percent of all freight in New Zealand goes by road, and about 84 percent of people go to work by car, truck, or motorbike. The Labour Government’s slow-down of State highway construction would have occurred at the very time that the economy most needed State highway construction to increase.

Hon Darren Hughes: Why does the Minister of Transport think Kiwis will accept paying an additional 6c a litre to fund his half-baked ideas for Auckland, when his own Cabinet papers show that he is cutting spending on the renewal, maintenance, and operation of State highways by $123 million, and is cutting spending on the same issues for local roads by $75 million? How is that fair?

Hon STEVEN JOYCE: The reality is that we are not cutting expenditure on those items. We are increasing expenditure, but just not at quite the same rate that Labour was proposing, so that we can invest more—in fact, $1 billion more—in State highway infrastructure around the country over the next 3 years.

Keith Locke: How many new public transport projects has the Minister announced since he took office, or are all they all pre-existing projects, some of whose public funding is less certain now, such as the building of new railway stations in Auckland?

Hon STEVEN JOYCE: We have not announced significant new public transport projects. What we have done is change the funding of Auckland transport projects. We have focused transport expenditure to match the modes of transport available to New Zealanders to get to and from work every day, such as car, truck, motorcycle, bus, or train.

Hon Darren Hughes: Do the deep cuts to public transport of nearly half a billion dollars over what had been scheduled mean that the prospect of new electric trains working before the Rugby World Cup in 2011 has now disappeared, and that Kiwis and tourists will still have to fork out $70 for a taxi ride from the city to the airport?

Hon STEVEN JOYCE: The member has two problems with his numbers. I do not know where he gets the half a billion dollars from, and the electric trains were not scheduled to be in place by the 2011 Rugby World Cup in anybody’s imagination except that of the previous member for Ōtaki.

10. State Highway Projects—Expected Increase in Spending

[Uncorrected transcript—subject to correction and further editing.]

10. HEKIA PARATA (National) to the Minister of Transport: What is the expected increase in spending on new State highway construction over the next 3 years?

Hon STEVEN JOYCE (Minister of Transport) : The Government will spend almost a billion dollars extra on new State highway construction over the next 3 years. This represents an increase of 45 percent compared with that proposed by the previous Government. This increase will allow us to build safer and less congested roads. We will invest in infrastructure that will boost this country’s productivity, help our companies grow, and create jobs.

Simon Bridges: What roading projects will the Government focus on?

Hon STEVEN JOYCE: The Government has identified the first seven roads of national significance, on which we expect very significant progress to be made over the next 10 years, alongside other projects already planned for around the country. These are in or adjacent to our five largest metropolitan centres. They include the Pūhoi to Wellsford link, the Auckland western ring route completion, the Victoria Park bottleneck, the Waikato Expressway, the Levin to Wellington corridor, the Christchurch motorway projects, and of course the Tauranga Eastern Motorway corridor, which leads into the member’s electorate.

Amy Adams: What commitment has the Government given to roading projects in the Canterbury region?

Hon STEVEN JOYCE: The roads of the Christchurch motorway projects have been named as roads of national significance. This means we expect to make significant progress in development over the next 10 years, which will be a heck of a lot more development than was made over the last 10 years. By investing in these corridors we will improve freight efficiency to Port Lyttelton, provide an improved western bypass around Christchurch, and improve safety on those roads. In addition, improved roading corridors will improve public transport performance and encourage more people to commute by bus.

Hon Darren Hughes: Is it correct that no additional funding has been tagged to any of these seven roads of national significance; if so, could the Minister assist the House by ranking the Government’s priority list of these so-called significant roads from No. 1 to No. 7?

Hon STEVEN JOYCE: The member may not be aware that the New Zealand Transport Agency is responsible for the particular projects. It is the Government’s job, firstly, to provide some funding—which the previous Government signally failed to do when it cut funding by 9 percent—so we have increased that by about $4.5 billion over the next 10 years, and, secondly, to signal projects of national significance, which we have chosen because they are the most important projects for New Zealand’s economy and productivity.

David Bennett: How will the Government improve transport links through the Waikato?

Hon STEVEN JOYCE: Following on from our election pledge to complete the Waikato Expressway within 10 years, we have nominated this road as being one of national significance. This reinforces our commitment to the people of the Waikato that they will not have to wait the decades they would have waited under the previous Government. This section of State Highway 1 is the main southern road access to Auckland, and links New Zealand’s golden triangle of population and economic growth—Auckland, Waikato, and the Bay of Plenty. It is clear that completing the Waikato Expressway will fuel long-term economic growth and boost national productivity.

Keith Locke: I raise a point of order, Mr Speaker. Is it possible for the Minister to table the list of new roading projects that he has referred to?

Mr SPEAKER: I just ask the honourable Minister whether he was reading from an official document or material prepared for his answer.

Hon STEVEN JOYCE: It was material prepared for my answer, Mr Speaker. I would be happy to table the press release that announces the seven projects, if the member would prefer.

Mr SPEAKER: That will not be necessary. The point of order related to the fact that if the Minister was quoting from an official document, then leave could be sought to have it tabled, but it does not relate to material prepared just for his answer.

Keith Locke: I seek leave to table a list of the new public transport projects—namely, a blank sheet of paper.

Mr SPEAKER: I guess I have to ask the House whether there is any objection to a blank sheet of paper being tabled. There is no objection—[Interruption] There is dispute as to whether there was objection; I will seek leave again before the document is tabled. Leave is sought to table a blank sheet of paper. Is there any objection? There is no objection.

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

11. Drinking-water Standards—Statements to Community Boards Conference

[Uncorrected transcript—subject to correction and further editing.]

11. BRENDON BURNS (Labour—Christchurch Central) to the Minister of Local Government: Can he explain what he meant in telling the New Zealand Community Boards Conference in Christchurch last Friday that the new drinking-water standards being implemented are “ridiculous” and under review by the Government?

Hon RODNEY HIDE (Minister of Local Government) : Of course I can.

Brendon Burns: Does the Minister maintain that it is “ridiculous” for rural communities such as Cheviot in the Kaikōura electorate to expect safe drinking-water, when Canterbury’s medical officer of health has warned that he will declare a public health emergency if the township’s supply is not urgently improved?

Hon RODNEY HIDE: On taking over the job as Minister of Local Government, what I found to be “ridiculous” was that representatives of local government were coming to see me complaining about the tens of millions of dollars of cost being imposed on them by the previous Government. When I went back to Ministry of Health officials, they disputed those costs up to an order of magnitude. I have undertaken to get a proper assessment of the costs, as I think is prudent, and they will be put before us by 9 April. I have also written to the Minister of Health and said that, in the meantime, we should put this on a moratorium. I think that is quite reasonable. It is ridiculous to impose this cost without knowing what it will actually cost.

Brendon Burns: Can the Minister confirm whether the Government will maintain the $136 million in funding to be provided over the next 10 years to assist small communities to achieve safe drinking-water standards?

Hon RODNEY HIDE: One of the problems we have with that is that it is another promise that the previous Government made without setting aside any of the money. The second problem is another one that we have constantly come across: the money that has been promised is woefully inadequate, because the costs that local government has cited total $700 million—for example, $56 million in Taupō, $20 million in Thames-Coromandel, and $20 million in Hauraki. What I am saying is that before proceeding we should get an assessment of what this will cost and what will be required.

12. Retail Deposit Guarantee Scheme—FAI Finance

[Uncorrected transcript—subject to correction and further editing.]

12. JOHN BOSCAWEN (ACT) to the Minister of Finance: Does he believe it was “necessary or expedient in the public interest” to grant a guarantee to FAI Finance Ltd as required by the Public Finance Act; if so, why?

Hon BILL ENGLISH (Minister of Finance) : One of the overarching principles of the retail deposit guarantee scheme is that the grant of a Crown guarantee to an entity must be necessary or expedient in the public interest, where the public interest is either in the maintenance of public confidence in the financial system, or in maintaining the confidence of general public depositors in New Zealand’s financial institutions. The effect of this requirement has been that in the early stages of the guarantee those who are delegated to grant entry have been focused principally on maintaining public confidence in the financial system, rather than only on credit risk.

John Boscawen: Does he feel it adds insult to injury for investors who have lost money in the Hanover group of companies to now, as taxpayers, have to guarantee losses in FAI Finance Ltd, which is a member of the same Hanover group?

Hon BILL ENGLISH: I can understand people having concerns about any number of the activities that have gone on in the financial markets but I stress that the point of the guarantee, when it was brought into place, was to maintain public confidence in the whole system. It has put those who are delegated to provide the guarantee in the situation of having to weigh up general public confidence on the one hand with the particular aspects of any individual applicant for the guarantee.

Hon Jim Anderton: Can the Minister advise the House what it was specifically about FAI Finance and its parent company Hanover Finance that convinced him that a guarantee for that company complied with Treasury policy guidelines for Crown guarantees of “the maintenance of public confidence in New Zealand’s financial system; and ... maintaining the confidence of general public depositors in New Zealand financial institutions.”?

Hon BILL ENGLISH: Any company that has the guarantee has it because it complied with the requirements. I think Parliament needs to keep in mind that the fundamental intent of the guarantee was to prevent a series of collapses of financial institutions for the reason that depositors felt their money was not safe, and that has been a significant factor in determining who the guarantee applies to.

ENDS

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