(uncorrected transcript—subject to correction and further editing)

TUESDAY, 16 FEBRUARY 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

GDP Growth—New Zealand’s Performance

1. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What does the latest GDP data show about New Zealand’s recent growth performance?

Hon BILL ENGLISH (Minister of Finance): Revised GDP data up to the September quarter of 2009 was released just before Christmas. It revealed that the economy had, for a number of years, been growing more slowly than was previously reported. In fact, GDP output in 2009 was barely above the level 4 years before—that is, 2005. In the 3 years to September 2008 the economy grew, under the revised figures, by less than 1 percent per year through the third term of the last Government and before the impact of the global crisis.

Craig Foss: How should the economy have performed over this time?

Hon BILL ENGLISH: The years 2005-08 were the best of times internationally, and we should have done much better than 0.9 percent growth per year. Inflation was low, our terms of trade were high—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I sat back because I thought you might have intervened. The question asked: “How should the economy have performed over this time?”, and that is something for which that Minister has no responsibility whatsoever.

Hon Rodney Hide: It is quite clear that the present Minister of Finance had no responsibility for that, and I do not think he would want to have it. I can also see Trevor Mallard’s point—trying to avoid responsibility. But the question was about the reports that were received, and the obvious supplementary question is what the Minister of Finance, having received those reports, thinks about them. It follows directly from the primary question.

Mr SPEAKER: When a point of order is being considered, the House should be silent. The point of order raised by the Hon Trevor Mallard is marginal. I will be carefully listening to make sure that the Minister of Finance does not get into criticising or commenting, in particular, on the policies of the previous Government, for which he has no responsibility. He does have some reporting responsibility for what happened during that period, so he can comment on what happened and what maybe should have happened, but I do not want to hear criticism of the previous Government’s policies.

Hon BILL ENGLISH: During that period the economy should have grown at the same rate as the economies of other developed countries did, but it grew at less than half the growth rate of Western economies. It should have grown at the same rate as Australia’s economy did, but it grew at less than one-third the rate of Australia’s. To deliver so little growth through that period of such favourable times was a remarkable underachievement.

Hon Jim Anderton: Can the Minister tell the House whether the GDP growth of New Zealand has caught up to or passed that of Australia over the 15 months under the National-led Government, or has it fallen further behind?

Hon BILL ENGLISH: It has not caught up, and that is not so much because of the global crisis—everyone has had to suffer from that—as because the New Zealand economy was in such a weak and lopsided position when the global crisis came along.

Craig Foss: To what does he attribute this performance of low GDP growth over recent years?

Hon BILL ENGLISH: In the first case, it is important to understand that the revised GDP figures show that an economy that we thought had been performing poorly was actually performing very poorly. For instance, at that time Government spending rose by 50 percent over 5 years, causing persistently high interest rates and depriving our export sector of the resources it needed in order to thrive. The result is that we have a very anaemic export sector, which has been in recession for 5 years.

Craig Foss: What steps is the Government taking to improve New Zealand’s GDP growth?

Hon BILL ENGLISH: The Prime Minister’s statement last week laid out a comprehensive plan to lift economic performance and to shift economic growth towards savings and exports, and for there to be less reliance on borrowing and consumption. In recent years the New Zealand economy has been far too dependent on spending more than we earn and borrowing to fill the difference, and we have an export sector that has now been shrinking for the last 5 years.

GST Increase—Prime Minister’s Statement

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: How many times, if any, has he told New Zealanders that he would not increase GST?

Hon JOHN KEY (Prime Minister): Before the last election I was asked whether National would raise GST in order to increase overall tax revenue to fund Government deficits. I said we would not be doing that, and if a reporter asked me the same question today I would give the same answer. I can also say that prior to the advice of the Tax Working Group, increases in GST, as well as changes to the taxation of property, were not on the Government’s radar. On that basis, if I were asked directly about raising GST, in good faith I would have said no.

Hon Phil Goff: In addition to saying, as was clearly shown on the DVD, that he would not raise GST, does he recall telling Radio Dunedin that there was no prospect of National raising GST?

Hon JOHN KEY: No.

Hon Phil Goff: Point of order—

Hon Ruth Dyson: What meeting? What email?

Mr SPEAKER: If the honourable member was sitting very close to her leader, she would have heard him call a point of order and know it must be heard in silence.

Hon Phil Goff: I seek leave of the House to table the transcript from Radio Dunedin yesterday where the interviewer said clearly that Mr Key did make the promise not to raise GST.

Hon JOHN KEY: Is the member saying that he is tabling a transcript, or a transcript of a reporter saying he thinks he remembers that?

Mr SPEAKER: I do not need this debate to go on any further. I will not seek leave, because I do not seek leave for the tabling of recent media reports.

Hon Phil Goff: I raise a point of order, Mr Speaker. Can I seek clarification? My understanding of your ruling to date was that something that is easily accessible to members, like a newspaper article, could not be tabled. This is a transcript of a radio station that most members of this House would not have seen. I do not believe that that is within your ruling earlier.

Mr SPEAKER: I hesitated a moment because the honourable Leader of the Opposition has raised a perfectly fair and serious point of order. My ruling did refer to recent media articles from major daily newspapers and national weeklies or their websites, and from major television and radio broadcasters or their websites. I am sure people from Dunedin would consider Dunedin to be a

fairly major place. It is one of New Zealand’s major cities. I feel I have to stick with my ruling, or I start to unwind a very important ruling that I have made.

Hon Phil Goff: Which of the various statements that the Prime Minister has made about GST is the accurate one: his promise not to raise it, his comment last week on Newstalk ZB that he would raise it, or his comment on Radio New Zealand last Friday that he might not raise it?

Hon JOHN KEY: Well, firstly, none of those are actually accurate transcripts of what I have said. They are an interpretation from the Leader of the Opposition and, therefore, should be taken with a grain of salt. I tell the member that the one he should take accurately is the one in my statement last week, which was written in black and white. It said that the Government is seriously considering a move to increase GST to 15 percent.

Hon Sir Roger Douglas: How much revenue would a hike in GST to 15 percent raise, taking into account the automatic adjustments that would be made to benefits levels, as well as the compensation for other low-income earners, which he has guaranteed; or does he not know?

Hon JOHN KEY: We know that the increase in GST raises about $2 billion. There is clearly an offset. I can say to the member that it is an extremely complex calculation, but if one looks at the net effect of raising GST, lowering personal taxes right across the board—the top, lower, and middle end—and taking into consideration the other moves the Government is making, it will make the bulk of New Zealanders either better off or a lot better off, and on a straight GST income tax no one will be worse off.

Hon Phil Goff: Does he stand by his statement reported on Radio New Zealand last week that he would not put the rate of GST up if that put the Government’s relationship with the Māori Party at risk, which apparently gives the Māori Party a veto power?

Hon JOHN KEY: That was not the statement I made.

Hon Phil Goff: I raise a point of order, Mr Speaker. I seek your guidance on this. One of the reasons for tabling documents in the House is to substantiate a question such as I asked. I asked a question based on a transcript of a Radio New Zealand programme. The Prime Minister has denied that he said that. It is easy to resolve that by tabling the document.

Mr SPEAKER: Points of order cannot be used to litigate the answer the Prime Minister has given. The Prime Minister denied making a certain statement. That is the end of the matter as far as the Speaker is concerned.

Hon JOHN KEY: I raise a point of order, Mr Speaker. It is very simple. If the Leader of the Opposition wants to read out the exact quote and ask me a question about it, I am happy to answer any of those questions. That is not what the Leader of the Opposition is doing. He is—

Mr SPEAKER: I apologise to the Hon Prime Minister. The Prime Minister will resume his seat. The Speaker will deal with these issues. He does not need assistance from the backbenchers. These matters cannot be litigated by way of point of order. I have ruled that the Prime Minister’s answer was a perfectly fair answer. The Leader of the Opposition can ask further questions if he wishes to challenge that answer, but not by way of point of order.

Hon Sir Roger Douglas: Given that the Tax Working Group estimated that a hike in GST to 15 percent would raise $1.9 billion after automatic benefit increases, which, after a compensation package for low-income earners he has promised, would likely leave only $1 billion, could he not afford to pay for personal tax cuts by lowering the various expenditures that he opposed while in Opposition, such as the Working for Families programme, which he labelled “communism by stealth”?

Hon JOHN KEY: When someone loses 100 percent of what he or she earns, that is communism by stealth. The answer to that question is that there are a lot of other benefits involved— [Interruption]

Mr SPEAKER: I apologise to the Prime Minister—[Interruption] I am on my feet. I apologise to the honourable Prime Minister, but I cannot hear his answer, and if I cannot hear it, then I am

sure that many other people cannot hear it. It is fair enough to make interjections, but they must be reasonable. That was just out of all proportion.

Hon Trevor Mallard: Point of order—

Mr SPEAKER: I am calling the Prime Minister, and I fail to see where the point of order can be raised here.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. My suggestion to you is that you might be assisted in hearing if you followed the normal practice of asking Ministers to address the Chair.

Hon Annette King: Yes—not turn his back on you.

Mr SPEAKER: I am considering a point of order. The member Trevor Mallard makes a perfectly good point. The Prime Minister should address the Chair, and then the Speaker can hear. Although it does not have to be at all times, it is a little bit helpful now and then.

Hon JOHN KEY: Maybe I am the only one with amnesia, but I remember Helen Clark spending 9 years looking out here at some sort of picture in the distance, but anyway. It is quite clear—[Interruption] Well, that is the answer. If we play the footage, she was looking out there into the distance for 9 years. I do not think she ever looked at me while she was answering a question.

Mr SPEAKER: I am on my feet, and someone will be taking an early shower if I see who is interjecting. We will just take a deep breath and settle down a little. What the Prime Minister must not do is to comment on my rulings. But a question was asked by the Hon Sir Roger Douglas, and I ask whether the Prime Minister recollects the question.

Hon JOHN KEY: Yes.

Mr SPEAKER: I invite him to answer it.

Hon JOHN KEY: I do. If one were to look at the Tax Working Group’s recommendations, one would see that the recommendations and the belief behind why a change in the GST versus income split could be beneficial were manifold. They include the benefits of encouraging New Zealanders to save more—which we know is a real issue—giving New Zealanders much greater choice about their own money, making sure that there was equity in the system, and making sure that there was more sustainability in the future tax system. That is the range of reasons why we are considering such a move. It is not just about redistribution.

Hon Sir Roger Douglas: I raise a point of order, Mr Speaker. With respect, I do not think the Prime Minister tried or endeavoured to answer the question that I asked. The question was—

Mr SPEAKER: What I will do, because of the large gap between when the honourable member asked his question and when the Prime Minister got to finally answer it, is to invite the member to repeat his question, without penalty, so that the House can be satisfied that a reasonable answer has been given to it.

Hon Shane Jones: Excellent decision.

Mr SPEAKER: There will not be any comment on my ruling.

Hon Sir Roger Douglas: My supplementary question was, given that the Tax Working Group estimated that a hike in GST to 15 percent would raise $1.9 billion after automatic benefit increases, which, after a compensation package for low-income earners he has promised, would likely leave only $1 billion, could he not afford to pay for personal tax increases by lowering the various expenditures that he opposed while in Opposition, such as the Working for Families programme, which he labelled “communism by stealth”?

Hon JOHN KEY: The Government is addressing that issue in relation to cutting expenditure. For a start, we have saved over $2 billion with our value for money exercise; secondly, we are increasing Government expenditure by about a third of what the previous Government did; and we are continuing to look for areas where there is waste. So the member is right; of course one could just slash expenditure to pay for tax cuts, but that would have significant implications for New Zealanders in terms of the delivery of their health, education, welfare, and retirement services, and that is not a place that I particularly want to go.

Hon Phil Goff: When he said in the House last week that he had not said he would raise GST, when on the DVD and in the transcript, he clearly does say that, it is in his own words, why did he not follow the lead of his deputy leader and simply come clean and say “Yes, I have broken my word; I’ve reversed my policy.”?

Hon JOHN KEY: There are a couple of things. In answer to the primary question today I made it clear that if someone had directly asked me that question prior to the election—[Interruption] Members opposite should not cry. I know it is not all going well for them, but the basic point is that if someone had directly asked me I would have said no, because that was never considered at the time. But members should go to the DVD and have a look. The question was in relation to raising GST to cover deficits. I was also asked whether I would raise the top personal rate to 45 percent to cover the deficit. The answer then was no, and it remains no. [Interruption] I know that the Leader of the Opposition does not like it when I directly answer a question, because he has spent a lifetime not doing it, but that is the way we operate on this side of the House.

Hon Phil Goff: Which assurance has greater credibility: the Prime Minister’s promise not to raise GST; the Prime Minister’s promise that he will raise GST but it will be fair to all; or, having been caught out in a conflict of interest on his Tranz Rail shares, his promise to sell his mining shares and his uranium shares?

Hon JOHN KEY: Well, let us sort one thing out. No one thinks Phil Goff is sexy, anyway. [Interruption] If we are going to go down to that sort of gutter material, we might as well sort it out. I stand by my statements.

Mr SPEAKER: I say to the Hon Parekura Horomia and many other members—he just happened to be the member I saw—that I am on my feet and members will cease interjecting. I must say to the Prime Minister that that is not an acceptable way in which to start to answer a question. He may have a view on the quality of the question, and that is why I hesitated to get to my feet immediately, but the Prime Minister should attempt to answer the question.

Hon JOHN KEY: I stand by the statements I have made in the House.

Warm Up New Zealand: Heat Smart—Retrofitted Homes

3. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Energy and

Resources: How many New Zealand homes have been retrofitted through the Warm Up New Zealand: Heat Smart scheme, and is he satisfied with the quality of that retrofit work?

Hon GERRY BROWNLEE (Minister of Energy and Resources): I am advised by the Energy Efficiency and Conservation Authority that 30,003 homes have been insulated in the 7 months since the scheme began. That is 30,000 homes that are warmer and drier for thousands of New Zealand families. All retrofits have been subject to a 100-point audit. The checkpoints range from safety issues to the removal of debris. I am assured by the Energy Efficiency and Conservation Authority that all installations have been checked and rechecked to ensure that all safety requirements have been met. The audit is rigorous, and New Zealand families can be assured that the Government wants and expects high-quality work from installers. I am satisfied that they are making every effort to comply with that.

Peseta Sam Lotu-Iiga: Has the Minister seen reports regarding faults in the Australian home insulation scheme?

Hon GERRY BROWNLEE: Yes, and I can assure New Zealand families that we do not use either macerated paper or foil installation in the Warm Up New Zealand: Heat Smart scheme. We use fibreglass batts and wool installation, both of which have a much higher fire-retardant capacity.

Charles Chauvel: Is the Minister aware that according to the New Zealand Herald this morning, 359 of the 570 houses initially audited, or fully 63 percent, were found to have insulation problems, half of which were described as serious; if so, what will he do to find out whether 63 percent of the entire 30,003 homes retrofitted so far that he has just mentioned—some 19,000 Kiwi homes—have received shoddy insulation jobs, and to help those householders get a remedy?

Hon GERRY BROWNLEE: I think the report this morning, although factual, does not take account of the fact that we are working off a 100-point audit document. We have, right from the start, made sure that there was high quality in the system; for example, debris left on a site would mean that, on a quality issue, the audit failed. We are doubling the number of audits. We have made it very clear to installers that if they fail an audit on more than three occasions, then they will be out of the scheme. We hold back payments until audits are sent in. The check-audit system, as I said before, is being doubled. Some firms will be required to pay a $300 fee for a further audit. I say to New Zealanders who have had insulation installed under the scheme that, firstly, we have checked to ensure that there are no safety issues, and, secondly, if they have concerns they should phone their installer. If, after that, they are still unsatisfied, they should phone the Energy Efficiency and Conservation Authority.

Vulnerable Citizens—Prime Minister’s Statement

4. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he stand by his statement “This Government is not prepared to turn its back on our most vulnerable citizens”?

Hon JOHN KEY (Prime Minister): Yes.

Hon Annette King: Does he still consider the people living at McGehan Close to be the underclass of New Zealand; if so, why after saying the vulnerable will be his priority in Government has he failed to deliver on his promise to improve their lives, leaving many of them disillusioned and underwhelmed?

Hon JOHN KEY: Actually, things have improved, as the article in the Sunday Star-Times made quite clear, and in a moment, probably in answer to some of the other supplementary questions, I will go through the list of what this Government has achieved in a short space of time.

Hon Annette King: Does he agree with social worker Vince Tuisamoa that “His biggest mistake was coming here. … He’s used the street, this is the street he names all the time and yet the street is still the same, we haven’t got anything.”; if not, why not?

Hon JOHN KEY: No, for two reasons. First, I front up when I make statements, and second— [Interruption] Actually, I do. Second, let us just quote from the article so we can get a few facts— quoting directly from the article, and not making it up. The article states: “some things have improved on the street. There is no outward sign of the street gangs that had plagued the area— residents say they have disappeared … There is less graffiti and a brand new footbridge … And the homes are looking smart. One woman, who would give her name only as Mary, showed the Star- Times new carpet, curtains and bathroom she has received through a state housing upgrade programme.” That was part of—and I congratulate the Minister—the $125 million upgrade undertaken by this Government.

Hon Annette King: Why did he exploit Joan Nathan and her daughter Aroha for political purposes; and does he agree with Joan Nathan, who said that she feels used by him, that he has not made things better, and that her daughter does not want anything more to do with him?

Hon Rodney Hide: I raise a point of order, Mr Speaker. I ask you to reflect on the language of that question and whether it is appropriate to insert the word “exploit”. A question that starts by asking why a member exploited a particular person is a bit like asking: “Have you stopped beating your partner?”. An unfounded allegation is being put forward by the member asking the question; it is not a factual question.

Mr SPEAKER: I hear the point the member has raised. Certainly, on a strict interpretation of the Standing Orders I would have to agree with the honourable member. I felt that the Prime Minister was probably capable of handling the question, and I did not want to insert myself as Speaker into this question and answer exchange too much. But I must acknowledge that on a strict interpretation of the Standing Orders that kind of assertion should not be built into a question. It gets a bit technical; if it is essential to convey the meaning of the question, then one could argue that

it does fall within the Standing Orders, and that is why it is a fairly tricky area. I accept the thrust of the point being made, but I invite the Prime Minister to answer the question because I do not believe that it was intended in a particularly unacceptable way.

Hon JOHN KEY: All I can say is that I would encourage the member to go and speak to Joan directly, take with her a journalist with a tape—and be prepared to play the whole tape—and ask Joan those questions directly. I have not spoken to her for the last 10 days or so, so I have no vested interest in it, but let us just see whether the member is right. I would make one other comment, and that is to repeat a direct quote from Joan in that article. She said: “I could have voted for Labour, and we’d be going through the same old bull—”excrement.

Hon Annette King: Who is right: the factory worker from McGehan Close who said that the promises made to vulnerable New Zealanders were lies and that the Government puts something into one pocket and takes out of another, or the Prime Minister, who said that dealing with the underclass is a priority for National?

Hon JOHN KEY: The last statement.

Accident Compensation—Government Actions

5. MICHAEL WOODHOUSE (National) to the Minister for ACC: What steps is the Government taking to secure the long-term future of ACC and why are these necessary?

Hon Dr NICK SMITH (Minister for ACC): The Government has strengthened the financial governance skills on the Accident Compensation Corporation’s (ACC’s) board and reversed the decisions of the previous Government in costly areas like physiotherapy and suicide coverage extensions. We have taken steps to improve rehabilitation rates, and we have extended the fullfunding date for the scheme to 2019. These steps are necessary to address the steep rise in the accident compensation scheme’s claim costs, large losses, and the huge increase in the scheme’s unfunded liabilities.

Michael Woodhouse: What reports has the Minister received on the claims today by former ACC Minister Maryan Street that the corporation was in financial good health at the change of Government?

Hon Dr NICK SMITH: The audited accounts of ACC for the year 2007-08, signed by Ms Street and ex - Council of Trade Unions chair Ross Wilson, declared a loss of $2.4 billion—the largest in ACC’s 35-year history. Those reports also showed that the scheme’s unfunded liability during the previous Government’s term ballooned by $9 billion, and that claim costs were growing at five times the rate of inflation. Labour is clearly in denial on the scheme’s mismanagement.

Michael Woodhouse: What message does he take from today’s protest on Parliament’s steps of about 150 people over accident compensation, when it is compared with the 6,000 who protested last year?

Mr SPEAKER: I apologise to the honourable Minister, but I could not hear that question. I ask Michael Woodhouse to repeat it.

Michael Woodhouse: Thank you, Mr Speaker; I would be delighted to. What message does he take from today’s protest on Parliament’s steps of about 150 people over accident compensation, when it is compared with the 6,000 who protested last year?

Hon Dr NICK SMITH: The message I take is that the public now well understands the reasons for the changes the Government is making to the scheme. The bikers today were taken for a bit of a ride by the unions. It was an ideological protest, led by those responsible for the scheme’s financial woes, against a pragmatic Government determined to make the scheme affordable and fair, and to secure it for the future.

Tax System Changes—Fairness

6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by his statement: “any move with tax, tax affects everybody, any move with it has to be not only fair but seen to be fair”?

Hon BILL ENGLISH (Minister of Finance): Yes.

Hon David Cunliffe: Does he agree with John Key’s statements that either the “bulk” or the “vast bulk” of New Zealanders will be better off as a result of the Government’s tax package, including the full impact of new taxes and their flow-on effects, or does he stand by his statement that the tax package is an opportunity only to ensure that people are not worse off?

Hon BILL ENGLISH: Yes.

Hon David Cunliffe: I raise a point of order, Mr Speaker. With an either/or question, surely a Minister cannot simply answer “Yes.”?

Mr SPEAKER: I listened to the member’s question quite carefully, and I have to acknowledge that Ministers are entitled to answer just one part of a question. Although I accept that the thrust of that question was either/or, the member asked fairly bluntly whether the Minister agreed with a certain statement, and the Minister in answering said “Yes.” I cannot really do a lot about that. I think it is within the member’s ability to reword the question in order to pin down the Minister a bit more tightly, if he wishes.

Hon David Cunliffe: I raise a point of order, Mr Speaker. You are therefore interpreting the Minister’s answer as confirming that the Prime Minister’s statement was correct and the Minister’s was not correct?

Mr SPEAKER: No, no—that is not a point of order. I ruled that the Minister had answered the first part of the question.

Hon David Cunliffe: I raise a point of order, Mr Speaker. How can it be that the Minister has addressed the question, when he was given two alternatives and he has not chosen—apparently— either one?

Hon Rodney Hide: It is clear in the Standing Orders that we cannot expect a Minister to answer a yes or no question with either a “Yes” or a “No”. An either/or question is in the exact same category. A member can ask a question; it is then up to Ministers to frame the answer as they best see fit, as Ministers, and in the public interest. It is also quite within the wit, I think, of the front bench of the Labour Party to ask that question in two parts.

Mr SPEAKER: I invite the Hon David Cunliffe to ask a further supplementary question, should he wish.

Hon David Cunliffe: Has the Minister seen reports that say that almost two-thirds of New Zealanders oppose an increase in GST; does he think that that is an indication that the vast bulk of hard-working Kiwis see the increase as unfair?

Hon BILL ENGLISH: No, I do not agree with the last statement. As to whether people agree with the increase, or not, will depend on two things: one, what changes the Government actually decides to make; and, two, I think the vast bulk of hard-working Kiwi families know they need a stronger economy that produces new jobs, sustainable jobs, and higher incomes. If we keep doing what that member’s party did when in Government, we would be strangling the export sector and running up unsustainable debt. We are not willing to do that.

Amy Adams: What steps is the Government considering to make the tax system fairer?

Hon BILL ENGLISH: Under the previous Government a proliferation of loopholes was created by a wide range of differential tax rates, particularly for people on higher incomes, with the effect that, for instance, half of the Inland Revenue Department’s wealthiest taxpayers reported taxable incomes of under $70,000. The number of people paying tax on a million dollars did not change in the whole time Labour was in Government. That means high-income New Zealanders are not paying their fair share of tax, and we are going to fix that.

Hon David Cunliffe: Can the Minister confirm, on that point, that the net effect of his proposed tax cuts now will take more tax reduction to the top few percent than the tax cuts he cancelled in Budget 2009; how can that either be fair or do anything for the New Zealand economy?

Hon BILL ENGLISH: No, I cannot. The member needs to take into account any changes the Government makes in respect of the taxation of property. It is clear from the data the Government holds that the ownership of property is in the hands of higher-income people, so calculations on GST and income tax paint only part of the picture. If there is revenue that comes from property, it is almost certainly revenue coming from higher-income New Zealanders. We will have to wait and see how the numbers shake out.

Mackenzie Country—Government-owned Land and Dairy Farming

7. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Land Information: How many hectares of land does the Government own in the Mackenzie Country, and has the Government given consent for any of this land to be converted to irrigated dairy-farming?

Hon MAURICE WILLIAMSON (Minister for Land Information): The Mackenzie District is 744,000 hectares, of which approximately 323,000 hectares are in Crown pastoral leases. It is not the Government but the local authority, acting under the Resource Management Act, that consents to a land-use change.

Dr Russel Norman: Does he consider that converting the Crown’s high country land to irrigated dairy-farming land to be an activity that would affect or disturb the soil?

Hon MAURICE WILLIAMSON: I am not going to offer a view on that matter. I know that the statutory independent Commissioner of Crown Lands makes the decision on any disturbance to the soil, not the Minister for Land Information.

Dr Russel Norman: In light of the fact that it is hard to see converting land to irrigated dairyfarming as doing anything other than disturbing the soil, is it not the case that a lessee of Crown pastoral land must not undertake any activity affecting or disturbing the soil without the express consent of the Commissioner of Crown Lands? Has that consent been applied for?

Hon MAURICE WILLIAMSON: The member is right. There are two instances where consent is required: the first is for soil disturbance and the second is where there are changes to the stocking of that land—that is, moving from sheep to dairy, or whatever. In both cases those applications are made to the Commissioner of Crown Lands. I am aware of only one application for soil disturbance consent being made, and that was for a pipeline that passes over three successive pastoral leases.

Dr Russel Norman: Has he discussed with the commissioner the fact that in spite of around 5,000 hectares of Crown land currently being before the regional council to be converted and irrigated, none of the pastoral land lessees has asked permission from the commissioner to actually irrigate this land in the Mackenzie Country?

Hon MAURICE WILLIAMSON: My understanding is that because the Commissioner of Crown Lands is a statutory independent authority, I would be acting ultra vires if I were to discuss such a matter with him.

Dr Russel Norman: Is it not the case that the Commissioner of Crown Lands must take into account the objectives of ecological sustainability and protecting significant inherent values in the land—the public’s land—when deciding whether the land should be allowed to be converted to intensive dairying?

Hon MAURICE WILLIAMSON: I understand that the conditions that the Commissioner of Crown Lands must take into account are very, very well laid out in the Crown Pastoral Land Act 1998, which some of the conditions the member referred to are part of.

Dr Russel Norman: Does the Minister believe that in losing 5,000 hectares of dry tussock country—a native ecosystem that is habitat for many species of endangered birds and plants, such as the black stilt—we will be losing ecological values?

Hon MAURICE WILLIAMSON: Again, I ask the member to be very careful about asking for my opinion. I am very, very careful not to act ultra vires on such matters. A resource consent for land use should go through the proper Resource Management Act consent for the local authority; for soil disturbance or a change to stocking rate, an application should be made to the Commissioner of Crown Lands. I can get myself into a lot of trouble if I start expressing, in this House, opinions that I am not allowed to.

Dr Russel Norman: What steps will he take to ensure that the public, which owns approximately 40 percent of the land that is affected by these proposals in the Mackenzie Country, will have a right to decide what happens on that land? Will he support any changes to the legislation to enable the Government, which represents the people of New Zealand, to have a say over what happens on the public’s land?

Hon MAURICE WILLIAMSON: I am very sure the public, especially the members of the public in this part of the Mackenzie District, are very, very well aware of the law and how it operates. I am sure lots of those people will make their views well known whenever any resource consent, soil disturbance, or stocking change applications are lodged.

Dr Russel Norman: I raise a point of order, Mr Speaker. My question was not about the people of the Mackenzie; my question was about the Government’s position—whether it would support legislative change to enable the people of New Zealand to have a say over these land-use changes. The Minister talked about the people of the Mackenzie, which is fine, but my question was specifically about the Government of New Zealand.

Mr SPEAKER: I have to confess I did not pick up on that part of the member’s question. I will take his word for it, and therefore invite him to repeat his question because I did not hear that part of it.

Dr Russel Norman: Thank you, Mr Speaker. Will the Minister support a legislative change to enable the public of New Zealand, via their Government, to have a direct say over the future of these 10,000 hectares, which they consider to be extremely valuable?

Hon MAURICE WILLIAMSON: One of the things I have learnt in this House over many years is to say never I will support something until I have seen the details and the specifics, and I know the exact proposal rather than something that Russel Norman may be proposing by way of legislative change on the minute and on the hoof.

Iain Lees-Galloway: Given that uses such as intensive dairy-farming now appear possible in the fragile Mackenzie Basin, will the Minister consider placing caveats on environmentally significant land released into private ownership under tenure review to prevent these activities?

Hon MAURICE WILLIAMSON: The process of tenure review will take a long time, probably 2 to 3 years in the case of those that are right down the pipe already, and 5 to 7 years for some of the ones that are only just having applications made. During that very long, long process a huge amount of consideration will be given to the issue. Those factors will certainly be taken into account.

Accident Compensation—Legislative Changes

8. Hon MARYAN STREET (Labour) to the Minister for ACC: Does he stand by his statement “This legislative reform is part of the Government’s objective to secure the long-term future of ACC as an efficient and fair 24/7, no-fault insurance scheme for all New Zealanders”?

Hon Dr NICK SMITH (Minister for ACC): Yes. The legislation is needed to push out the fullfunding date and reverse scheme extensions that were introduced by that member, Maryan Street, but never funded. The alternative was excessively high levy increases for workers, motorists, and business.

Hon Maryan Street: Which part of the accident compensation scheme bill is fair, when Te Puni Kōkiri advice is that it will have a disproportionate effect on Māori, who are frequently employed in

more dangerous and lower-income occupations; and can he tell the House whether the Māori Party will vote for the bill?

Hon Dr NICK SMITH: It is also important to recognise that Māori are levy payers. As a consequence of the quite reckless mismanagement of the accident compensation scheme, the levies on Māori—those low income workers—who are struggling with families—

Hon Parekura Horomia: Oh, rubbish! Come on, Nick; come on, Nick.

Hon Dr NICK SMITH: Well, Mr Parekura Horomia’s mind obviously was not on that when he was in Government. Actually, Māori pay accident compensation levies—

Mr SPEAKER: I apologise to the Minister, but this is getting very messy. What led to the messiness was that the Minister was asked whether he stood by a statement. He could have said yes, but he went on to give a lot more information, which the primary question did not ask for. It did not ask for a reason; it asked just whether he stood by his statement. I did not intervene then. The member then asked a supplementary question, which was not an unreasonable supplementary question. I believe that it did not deserve to be treated quite like that. I think the questioner should be treated with a little more respect.

Hon Dr NICK SMITH: The issue for Māori and the accident compensation scheme is that Māori are substantive payers of accident compensation levies. In fact, the accident compensation levy is quite regressive. It impacts on lower-income households more than it does on others. That is why the Māori Party’s concern has been as much about the viability of the scheme and the levies as it is about the claims from accident victims.

Michael Woodhouse: What advice has the Minister received on the 12 extensions to the scheme’s entitlements introduced in October 2008, just 3 months after the Accident Compensation Corporation (ACC) declared its record $2.4 billion loss, and what funding was set aside to fund these additional benefits in areas like suicide, seasonal workers, and superannuitants?

Hon Dr NICK SMITH: Absolutely no funding was set aside for those extensions. It was, quite frankly, reckless, after ACC had declared a loss of $2.4 billion, for Labour, just prior to the election, to extend the scheme and, amazingly, also promise cuts in levies. It was reckless, it was irresponsible, and it is why some of the changes are required today.

Carol Beaumont: How can the Minister say his legislative reform is fair, when overwhelmingly submitters have said that the shutting out of those below an arbitrary hearing-loss threshold that particularly affects the elderly is “a breach of faith with older people.”?

Hon Dr NICK SMITH: The 6 percent threshold for hearing loss is exactly equivalent to that in overseas schemes. For instance, in Australia, where they have 6 percent thresholds—

Hon Annette King: So what? They don’t have accident compensation like ours.

Hon Dr NICK SMITH: Annette King says that it does not matter. Let me tell Annette King something: if our economy is smaller and less able to provide incomes, then the benefits—

Hon Maryan Street: Is that called catching up with Australia, Nick?

Hon Dr NICK SMITH: Members opposite think they can afford a whole lot more social benefits, without the incomes. In my view, the huge increase that has occurred in the scheme’s hearing costs is part of the problem, and that is why to be fair to levy payers we need to get those cost increases under control.

Darien Fenton: How can it possibly be fair to force injured workers to use holidays to recuperate in, and will he not even listen to Treasury, which raised concerns in one of his own Cabinet papers that that was unfair?

Hon Dr NICK SMITH: It is a very simple principle. Should people be able to receive accident compensation simultaneously with holiday pay? My view is that our social services schemes were never meant to make people better off than they would be if they were working. This change was made only at the last moment by the previous Labour Government, after a $2.4 billion loss. Members on this side of the House say accident compensation was never about people being able to double-dip with both accident compensation and holiday pay simultaneously.

Hon Maryan Street: Does the Minister agree with consultant advice to ACC that it is “too customer focused” and that there is a need to “drain the swamp” to exclude people from cover; and does he think it is appropriate that ACC is being advised to view injured New Zealanders as swamp-dwellers?

Hon Dr NICK SMITH: Not at all. What I would say, though, is that over the last 5 years and during that Minister’s tenure, the scheme’s rehabilitation rates constantly declined. That had a huge negative impact on the scheme’s liabilities. Members on this side of the House make no apologies for wanting the scheme to improve its rehabilitation rates and, wherever possible, to get people back to work and independent again.

Hon Maryan Street: I seek leave to table the section from the Morrison Low report to ACC Cost Savings Review July 2009”, which recommends to the Government that it should “drain the swamp”.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Darien Fenton: I seek leave to table page 28 of the Cabinet paper to the social policy Committee outlining the proposal for the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, which contains the Treasury comment referred to in my supplementary question.

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

Young Offenders—Supervision Orders

9. CHESTER BORROWS (National—Whanganui) to the Minister for Social Development

and Employment: What reports has she received on the effectiveness of current supervision orders for young offenders?

Hon PAULA BENNETT (Minister for Social Development and Employment): A report released yesterday by the Ministry of Social Development shows that the current sentencing orders available lack effectiveness in dealing with our worst young offenders. This report is the first of its kind, despite the fact that judges have been asking for an evaluation for more than 10 years. The report shows that 80 percent of young people reoffended after sentencing, and over half of those who reoffended committed two or more offences. That is exactly what we said when we were in Opposition: the youth justice system is working for the bulk of our young people, but for the 1,000 worst offenders things have to be done differently.

Chester Borrows: How is the Government addressing the issues raised in this report?

Hon PAULA BENNETT: The report makes it clear that longer sentences and greater supervision are needed if we are to make a lasting impact on the behaviour of our worst youth offenders. Under our Fresh Start legislation we are doubling the Youth Court orders, increasing supervision periods, increasing mentoring, increasing drug and alcohol rehabilitation, plus introducing parenting education programmes to ensure that these young people have every chance to change their lives.

Jacinda Ardern: Does she agree with the report’s finding that 84 percent of reoffenders went on to commit offences as early adults, although proportionally fewer young people who had been in a youth justice residence did so; if so, why has her Government closed Te Hurihanga, a residential programme that led to an 82 percent reduction in reoffending?

Hon PAULA BENNETT: We will be taking the learnings and the best from the Te Hurihanga programme and delivering a Fresh Start programme that will reach more young people. I think that that is important. There will be more mentoring, and there will be more rehabilitation. As Mr Goff would say—although I never thought I would quote him—it’s “the many, not the few.”

Whānau Ora Task Force—Recommendations

10. Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) to the Associate Minister for

Social Development and Employment: Does she agree with all the recommendations proposed by the Whānau Ora task force in the report released to her last week; if so, when does she intend to release the report?

Hon TARIANA TURIA (Associate Minister for Social Development and Employment): The Government is currently considering all the recommendations of the report, and the report will be released once it has gone through the appropriate process.

Hon Nanaia Mahuta: Does the Minister believe that the integrity of Māori Party policy regarding Whānau Ora will be compromised when the concept is implemented by the Government, or had she always intended that there be a one-size-fits-all approach to Whānau Ora?

Hon TARIANA TURIA: No, I do not believe that the integrity of the Whānau Ora programme will be compromised, because it was always believed that this particular concept could be translated into any community within Aotearoa. I have been very clear about that, right from the beginning.

Hon Nanaia Mahuta: I did not think—[Interruption]

Mr SPEAKER: Order!

Hon Nanaia Mahuta: —was in the Māori Party’s vocabulary. Does the Minister still believe that she retains support from the Ministers of Health and Pacific Island Affairs to initiate her original Whānau Ora policy, and will this support extend to a preferred-provider pathway to implement Whānau Ora?

Hon TARIANA TURIA: I am very happy to report to the House that all of the Ministers involved in this particular project have been supportive, and that it is my firm belief that it will be rolled out as soon as possible.

Te Ururoa Flavell: Tēna koe, Mr Speaker. Kia ora tātou e te Whare. Has the Minister heard any reports about how Māori have received the concept of Whānau Ora?

Hon TARIANA TURIA: I have been advised that over 600 people attended the 22 hui held throughout the country by the task force to discuss Whānau Ora, and that there were over 100 submissions. Overall, the responses indicated enormous enthusiasm.

Hon Parekura Horomia: Does she agree with the Prime Minister, who likened Whānau Ora to a waterbed and suggested “If you push down on one side, if you don’t address the problems, it’s going to rise on the other side.”; if not, why not?

Hon TARIANA TURIA: I am hoping that the bed has just the Prime Minister in it and not the member who asked the question, but I think—[Interruption]

Mr SPEAKER: I apologise to the Minister. The House has enjoyed a bit of fun on this, but I cannot hear the Minister, and I think it is only reasonable that I should be able to. I ask members to please be a little more reasonable with the noise.

Hon TARIANA TURIA: Of course, I always agree with what the Prime Minister says.

Hon Nanaia Mahuta: When was the Minister informed that her comments to Q+A suggesting that Whānau Ora was guaranteed $1 billion in funding were incorrect, given that yesterday the Prime Minister confirmed that her desired funding was clearly not possible as the bulk of the funding will need to come from baseline budgets?

Hon TARIANA TURIA: There was never any agreement by the Government that it would hand over $1.2 billion. In fact, that amount was suggested at the economic conference that was held in Auckland—that 1 percent of the Budget might be a fair amount to look at changing the way in which services are provided in the social and health sector.

Te Ururoa Flavell: Does the Minister know of any organisations that will be able to run with Whānau Ora?

Hon TARIANA TURIA: There are too many to mention, but I will be supporting is an expression of interest process that will be rolled out, seeking expressions of interest from those providers that are interested.

Hon Nanaia Mahuta: I seek leave to table a document of a preferred-provider pathway model that was presented to the Minister, so that the House can have access to it.

Mr SPEAKER: Would the member mind telling the House where the document is from?

Hon Nanaia Mahuta: Te Whānau o Waipereira Trust.

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

Te Ururoa Flavell: For the purposes of the House, could the Minister explain why Whānau Ora is needed?

Hon TARIANA TURIA: Because the results for w’anau have been disappointing because of the poor performance across the State sector. There have been inconsistencies, fragmentation, overlaps in service delivery, duplication of effort, and, frequently, confusion and frustration for those who have sought assistance.

State Housing—Government Actions

11. KATRINA SHANKS (National) to the Minister of Housing: What steps is the Government taking to get the best out of State housing for those most in need?

Hon PHIL HEATLEY (Minister of Housing): I am pleased to announce the formation of an independent group that will advise on how we can get the best out of 69,000 State houses, worth $14 billion, for those most in need, to address the mismatch of housing size and location to demand, and all within the current income-related rents environment.

Katrina Shanks: Who are the members of the group, and what skills do they bring to the table?

Hon PHIL HEATLEY: Ministers were keen to bring together individuals with strong business and property backgrounds, like Dr Alan Jackson from Fletcher Building, as well as those from the social housing sector, such as Major Campbell Roberts from the Salvation Army and Diane Robertson from the Auckland City Mission. We are confident that this team can help us make sure that the Government’s investment in social housing is getting to the right people.

Moana Mackey: Has he made it clear to the Housing Shareholders’ Advisory Group that any privatisation of the Housing New Zealand Corporation’s State housing stock is categorically out of the question?

Hon PHIL HEATLEY: We are yet to brief the shareholders’ group; it has only just been set up today. Ministers will make it clear to the group that income-related rents will stay. We will be increasing the number of State houses, but before we do that we want to make sure that the 69,000 State houses we currently have are being used to the best effect—for the most needy. That is what we will be doing. We are not privatising State housing.

Mining in Conservation Areas—Prime Minister’s Interest in Company

12.Hon PETE HODGSON (Labour—Dunedin North) to the Prime Minister: Did he declare his interest in Jackson Mining when any Cabinet papers concerning mining in the Department of Conservation estate were discussed; if not, why not?

Hon JOHN KEY (Prime Minister): Jackson Mining is an Australian company that does not currently operate in New Zealand, and, to the best of my knowledge, has no plans to do so. There cannot, therefore, be any conflict of interest between my shareholding and any decisions the Government may make in relation to exploring options for new mining on Crown land in New Zealand. But for the member’s benefit I advise that I sought confirmation from the Cabinet Office this morning, and I have been advised that a conflict of interest does not arise in this case.

Hon Pete Hodgson: Why has he declined my official information request seeking details about which Ministers have declared any conflict of interest; and does he still stand behind the argument that it would take too long?

Hon JOHN KEY: Yes, and because that has been a longstanding policy.

Hon Pete Hodgson: Can he assure the House that his other overseas investments are not investing or considering investing in New Zealand?

Hon JOHN KEY: Yes. I am more than happy for anyone to read my pecuniary interests. I own some shares in a company called The Little Nell, which happens to be a ski-in, ski-out resort in Aspen—and I doubt that it will be doing much in New Zealand anytime soon. I own some Bank of America shares that used to be Merrill Lynch shares. They were converted over there, and because of my long-term contract with Merrill Lynch from when I was employed there it is hard to transfer them. But to the best of my knowledge the Bank of America has no operations in New Zealand.

Hon Pete Hodgson: As a shareholder, how was he not aware that Jackson Mining merged last year and sold its non-uranium interests? Was he simply not advised?

Hon JOHN KEY: There was the small technical issue—I have been busy running the country. But I am the first to admit it was a bit sloppy. I bought the shares in 2001, and the last time I looked at them, from memory, was 2007 or 2008. At the time they were trading at 3.5c, and when I offered them to my son, who was 12 at the time, even he did not want them.

ENDS

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