(uncorrected transcript—subject to correction and further editing)

WEDNESDAY, 24 MARCH 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Benefits—Beneficiary Numbers

1. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social

Development and Employment: How many beneficiaries are living “the dream” on a benefit?

Hon PAULA BENNETT (Minister for Social Development and Employment): I did not say people were living the dream on a benefit. I said, and I directly quote: “If someone genuinely can’t find work in 12 months, they’ll be able to demonstrate their job search when they reapply. If a real, demonstrable effort has been made, their benefit will be reinstated. If not, well I’m afraid the dream is over.”

Hon Annette King: Does she stand by her statement about having been on the receiving end of the domestic purposes benefit and knowing what it is like to live and struggle day to day; if so, why was it a struggle for her with all the assistance available at that time, but in her view a dream for an undisclosed number of beneficiaries now?

Hon PAULA BENNETT: I reiterate that I have not said that it is a dream for those who are struggling. Let us make it clear. What I did say yesterday is that it is not easy to put one’s head up and juggle a family, and juggle those sorts of educational requirements, to get oneself into a job, but I back people that they can. I know that the member herself said on the radio this morning that she worked full-time as a sole mother, so she is a classic example of people who can do it.

Hon Annette King: If the objective of the changes she is introducing is to create a fairer benefit system, as she has claimed, why are 5,896 women in receipt of the widows benefit, many of whom are caring for dependent children, not required to face a part-time work test?

Hon PAULA BENNETT: It is interesting that it is Labour’s policy to work-test those on the widows benefit, but it is not the—

Hon Annette King: I raise a point of order, Mr Speaker. I asked a very specific question. I did not talk about Labour’s policy; I talked about the Minister’s policy.

Mr SPEAKER: A point of order has been raised and there should be no interjections. I will just remind members of that at this stage. The member raises a fair point—that the Minister should not allege in answering that something is the Labour Party’s policy, because she has no right to allege that. I ask the Minister to answer the question.

Hon PAULA BENNETT: We will not be work-testing those on the widows benefit, but the implication is that members on the other side would be.

Hekia Parata: Tēnā koe, e te Mana Whakawā. Why is it so important to take action now to reduce welfare dependency?

Hon PAULA BENNETT: The cost of doing nothing is enormous, both financially and socially. With demographic changes looming, the rising tide of welfare dependency threatens to mortgage our children’s and grandchildren’s futures, and we will not sit back and let that happen.

Hon Annette King: Did the Attorney-General tell her and the Prime Minister before yesterday’s announcement that the legislation she tabled discriminates on three prohibited grounds under the New Zealand Bill of Rights Act—namely, sex, marital status, and family status—and, in the words of the Attorney-General, the different treatment of people “does not create a fairer benefit system or encourage beneficiaries to enter or return to employment”; if so, why did she ignore his advice?

Hon PAULA BENNETT: Yes, I certainly did have a conversation with the Attorney-General on where he was sitting on this with regard to the New Zealand Bill of Rights Act, and certainly we could see that at some level he felt there was discrimination. But, as I said, members on this side of the House have made the decision that we will not be work testing those on the widows benefit or on the woman-alone payment. I stand by that. We will be working with those who are on the domestic purposes benefit with children and who are working part-time, helping them to get ahead under their own steam. I am incredibly proud of this move and I think it is going in the right direction. I think that it is a discrimination that most New Zealanders will see as being fair and reasonable.

Rahui Katene: Would she agree that over 3,000 young people involved in Community Max, being meaningfully engaged in a real-life working environment with the support of the community, have indeed been living the dream; and what action is she taking to ensure that 3,000 graduates are supported to take up further training and employment opportunities post - Community Max?

Hon PAULA BENNETT: Yes, Community Max has been a great success. Everywhere I go I hear such positive stories about where that is at. One of the examples I recently heard of was with Tamaki Ki Raro Trust, based in South Auckland. All of the 16 young people whom it has taken on have gone into work, so they have all gone into a job. Others are going into training. Work and Income is working very closely with them to make sure that there is a transition once they come out of Community Max.

Hon Annette King: Why did she and the Prime Minister cover up this scathing report from the Attorney-General, which they must have had yesterday when they released their announcements, but did not give to the House until 2 o’clock today?

Hon PAULA BENNETT: I am not responsible for when the Attorney-General puts his papers before the House, but I have faced criticism from members on that side before when our legislation has not been tabled in time, and this was very technical legislation relating to the Social Security Act, so I wanted to make sure that members on the other side of the House had enough time to get into the detail of it, so that they could stand up and be the Opposition for once instead of sitting back and leaving a whole lot of people on welfare wondering.

Hon Annette King: In light of that answer, did the Attorney-General raise the concerns he had as long ago as the Cabinet policy committee, or Cabinet itself; if so, why did she and the Prime Minister fail to act on his advice or to disclose it to the public until today?

Hon PAULA BENNETT: As I previously said, yes, I have had conversations with the Attorney-General on this matter. I find it absolutely incredible that members on the other side of the House are standing up and saying that we should be work testing those on the widows benefit and those on the woman-alone benefit. We are proudly standing up and saying that we will see the right obligations and incentives for New Zealanders to get ahead and take responsibility for themselves. I will stand by that every time, and I think New Zealanders see that as very fair.

Welfare Reforms—Future Focus

2. KATRINA SHANKS (National) to the Minister for Social Development and

Employment: Who will be better off under the Future Focus welfare package announced yesterday?

Hon PAULA BENNETT (Minister for Social Development and Employment): New Zealand will be better off. All of the 345,000 beneficiaries will benefit from the legislated CPI changes, including 28,000 who will be better off as a result of abatement changes: 14,000 sole parents who

are working part-time now, 9,100 invalids, 1,600 widows, and 3,200 superannuitants and veterans. In addition, 3 million taxpayers will be better off knowing that we are getting support to the people who really need it.

Katrina Shanks: How much better off will those beneficiaries be?

Hon PAULA BENNETT: The CPI increase will be up to $5.34 a week. The combined changes mean that a widow working part-time could be up to $9.89 better off a week. A sole parent working 16 hours a week could be $19.34 better off a week. Those figures do not include the extra income they will get in wages.

Carmel Sepuloni: Does she agree with her ministerial colleague Peter Dunne, who said that children could become collateral damage in her welfare reforms? Will she give a guarantee to this House that no child will suffer as a consequence of her changes?

Hon PAULA BENNETT: The changes that we are making in sanctions mean that instead of the 100 percent cut-off of benefits if people were not meeting their obligations, which is what happened previously under the Labour Government, there will be an in-between step. Under Labour there was a 100 percent cut-off. If people were not meeting their obligations, they could lose 100 percent of their benefits. We are putting a fair step in the system that says they could first lose half. We are also making an absolute guarantee that no one on the domestic purposes benefit would lose more than half of their benefit. They can still get the accommodation supplement and the extras that go on top of their benefit. Actually, parents need to take responsibility for their children. The obligations are not onerous. Parents need to step up and make sure that they are there.

Hon Darren Hughes: I raise a point of order, Mr Speaker. That was a long and interesting answer, but there was not one reference to the Hon Peter Dunne, which was the basis of the question.

Mr SPEAKER: Had his colleague asked just that question, I would have asked the Minister to answer it, but Carmel Sepuloni asked two parts to the question, and the Minister focused on the second part, which she is perfectly entitled to do.

Katrina Shanks: When was the abatement level last changed?

Hon PAULA BENNETT: The amount beneficiaries can earn before their benefit is abated has not been changed since it was increased by the previous National Government in 1996. So it was obviously not a priority for the last Labour Government through all of the good years, when it chose not to return some money to people’s own pockets.

Mr SPEAKER: I say to members that it has been very noisy today. I realise this issue arouses quite a lot of feeling, so I accept a bit of noise. But I ask, please, for a little respect.

Health Services—Minister’s Statement

3. Hon RUTH DYSON (Labour—Port Hills) to the Minister of Health: Does he stand by all his statements regarding health services?

Hon TONY RYALL (Minister of Health): Yes, including the statement that despite doubling the health budget, the previous Government got less for it.

Hon Ruth Dyson: Does he still support the Southland and Otago district health boards cutting home support services; if so, what does he say to Lisa Gray, who said in her local paper: “When mum’s home help is cut her meals on wheels will end, too. Receiving help is a prerequisite for eligibility for meals on wheels.”? She goes on to ask the Minister: “Can I coin a new word— geriatricide.”

Hon TONY RYALL: I would say to that lady—and I am unaware of the particular circumstances that she has raised—that it would be very important for her to be in touch with her district health board, because the chairs of the boards have been quite clear that no one will be unsafe or forced from home as a result of these changes.

Hon Ruth Dyson: What does he say to the Christchurch man who received a letter from his doctor on 17 March, stating “My request for you to have a knee X-ray has been declined because of

financial restraints. We could try again later if things get a lot worse, or you could pay to go privately.”?

Hon TONY RYALL: I would say to the member that if she has a specific case that she would like me to look into, I will be very well prepared to do so. I can tell her that the Canterbury District Health Board last year received a substantial funding boost of $52 million.

Michael Woodhouse: What reports has he received on improving front-line health services, and in particular, childhood immunisation?

Hon TONY RYALL: I have received a report from the Ministry of Health on progress in getting more Kiwi kids immunised. I am pleased to be able to report that the national immunisation coverage for 2-year-old children has now reached 85 percent, the highest that it has ever been, and that the June 2010 target figure has been met already. This is an amazing achievement, when we consider that the figure was only 75 percent a few short years ago under the previous regime.

Hon Ruth Dyson: What advice would he give to the 66-year-old south Dunedin man who received a letter on 26 June last year, telling him that he would get his eye surgery within 6 months, but who is still waiting for that surgery 9 months later?

Hon TONY RYALL: I would say that it would be very concerning, if the facts are as the member represents them. If she is prepared to give me details of the case, I will look into it. I can observe that far more elective surgery is being provided for patients than was provided under the previous Government.

Hon Ruth Dyson: What does he say to the people of Canterbury, who have been told in an article headlined “Health cuts ‘hitting the front line’” that they have lost a Samoan community health worker, a Māori community health worker, and contracts for chronic conditions care and child health care, which are all front-line services, and which have all been cut?

Hon TONY RYALL: I would say to people in Christchurch that they know we have inherited a very difficult situation in their district health board area, and that despite our putting $52 million of extra money into the area, there are problems. I would also say to those people they should not necessarily believe everything that is put to them by the member opposite. Yesterday she said a general practitioner—

Hon Darren Hughes: I raise a point of order, Mr Speaker. It cannot help the good order of the House for Ministers, in their replies, to suggest that members of the public should not believe certain statements that are made by members. This is a very clever Minister, and I am sure he can craft an answer—

Mr SPEAKER: The member’s point of order is perfectly valid; he does not need to comment on the Minister. He is pursuing under a point of order the kind of thing that he was just saying should not happen. The member is quite right. I ask the Minister to desist from referring in any derogatory way to the questioner. That is not really necessary in answering a question.

Hon TONY RYALL: Members of the public in Christchurch should not accept everything that the member opposite says, because, under scrutiny, what she often represents to be the case does not prove to be the case. I would say that work is under way in Canterbury to look at the various contracts, and that work is being led by general practitioners, nurses, and primary health organisations.

Hon Ruth Dyson: I seek leave to table three documents. The first is the letter to the 66-year-old south Dunedin man to whom I referred, telling him that he would get his surgery within 6 months, and who is still waiting for it 9 months later. It has his name removed.

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.

Hon Ruth Dyson: I seek leave to table a second document, which is a letter from a local general practitioner in Christchurch, stating that a patient’s knee X-ray has been declined because of

financial constraints, and that the man could try again if things got worse, or could pay to go privately. Again, it has been “anonymised”.

Hon Tony Ryall: I raise a point of order, Mr Speaker. Can the member confirm that the general practitioner whom she says is a general practitioner is actually a general practitioner?

Mr SPEAKER: I blame myself for allowing this to happen, but in the interests— [Interruption]—a point of order is being considered—of the House being better informed about what the document was, I did not interrupt the Minister. I come back to the Hon Ruth Dyson seeking leave to table that letter. Can she give the House an assurance that it is a letter from a general practitioner?

Hon Ruth Dyson: Actually, you do not need to ask that, Mr Speaker, because I said it was.

Mr SPEAKER: I accept that. Leave is sought—

Hon Members: Oh!

Mr SPEAKER: —I accept that the member had a perfectly fair point—to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon Ruth Dyson: I seek leave to table a third document, which is the letter to the Southland Times that I referred to in my first supplementary question from Lisa Gray in relation to her mother’s home support cuts.

Mr SPEAKER: Can I check whether that letter was published in the Southland Times?

Hon Ruth Dyson: Yes.

Mr SPEAKER: Well, we will not be seeking leave to table that.

Budget 2010—Tax Package

4. AARON GILMORE (National) to the Minister of Finance: What issues will the Government consider in deciding on its tax package for the Budget?

Hon STEVEN JOYCE (Associate Minister of Finance): on behalf of the Minister of

Finance: There are a number of considerations for the Government. Any changes need to contribute to a better-performing economy. We need to encourage more productive investment, savings, and exports, and have less borrowing, consumption, and Government spending so we can increase the wealth of families in New Zealand. The tax system is one large policy lever we can pull to achieve this. Unlike the previous Government, which was all talk and no action around the economy, this Government is doing a number of things to turn round the economy. For example, we are investing billions of dollars to build schools, ultra-fast broadband, electricity transmission, and roads—all of which will help increase productivity, create new jobs, and help families get ahead.

Aaron Gilmore: What will the Government take into account when considering options for improving the tax system?

Hon STEVEN JOYCE: Another important issue is ensuring the tax system is fair and equitable for all New Zealanders. That is why our starting point is considering personal income tax cuts across the board, and not just for those on the top marginal rate. The vast bulk of households will be better off as a result of the package of tax measures in the Budget delivered on 20 May. We will also make sure that individuals’ taxable income more accurately reflects their true income, and we will move from a system that has nominally high tax rates, which both harm growth and are being widely avoided, to one that is fair to all taxpayers.

Stuart Nash: Talking of “fair” and “equitable”, how will tax rate alignment and significantly reducing the top marginal rate for the 8 percent of New Zealanders earning over $70,000 benefit the 70 percent of Kiwis earning under $40,000?

Hon STEVEN JOYCE: I note that, according to a number of surveys, the proposal to reduce tax rates across the board is widely supported by New Zealanders. I think it is important to point out to the member that we currently have a tax system that taxes labour and investment income at

relatively high rates, taxes consumption at relatively low rates, and generally gives money back to people when they invest in investment property. Therefore, is it any wonder that our economy is tilted towards consumption and property investment, that we have a shortage of savings, and that a high proportion of our skilled labour lives overseas? Those are the problems we have to solve.

Stuart Nash: I raise a point of order—

Mr SPEAKER: Before I call the next question, I say that that was a very interesting answer but I am not sure it said anything about how changes to the top tax rate would assist someone under $40,000. I invite the Minister to answer the question asked.

Hon STEVEN JOYCE: I was making the point that if we did not reduce the top tax rate, then a number of things would not happen. That is what I was seeking to explain to the member.

Mr SPEAKER: If the member has a further supplementary question, he can explore it further.

Aaron Gilmore: What are some of the problems with the current tax system that means it is neither fair nor equitable?

Hon STEVEN JOYCE: The Tax Working Group identified a number of problems that show that the current tax system is unfair for hard-working New Zealand families. For example, since the previous Government increased the top personal tax rate there has been very slow growth in the number of taxpayers reporting higher incomes compared to growth rates in earlier years, and a major spike in those earning almost exactly $60,000 a year, which was quite magical. This is most evident for people earning more than a million dollars a year. Between 1999 and 2007 the number of people in this category barely grew at all, unlike previous years, indicating a greater use of income sheltering and undermining of the integrity of the tax system.

Hon Ruth Dyson: You’d know all about that.

Hon STEVEN JOYCE: Careful. The Government will make a number of changes that will not only make the tax system fairer and more equitable but also help increase productivity and exports.

Hon Sir Roger Douglas: In deciding on the Government’s tax package in this year’s Budget, why does he intend to trade off horizontal equity for vertical equity, as he indicated in an earlier reply today, when horizontal equity—that is, the same treatment for taxpayers with the same capacity to pay—is likely to increase savings, investment, and entrepreneurial activity, and to lift our productivity growth?

Hon STEVEN JOYCE: The Government acknowledges that high marginal tax rates are a disincentive to people to work hard and get ahead, but, by the same token, the Government thinks it is inequitable in the New Zealand context to have flat income tax rates, which, I think, is what the member was proposing in his question.

David Garrett: How can taxpayers have any confidence in this year’s Budget when Paul Morgan and Wayne Mulligan can rip off Tekau Plus to the tune of millions and all the Government will do is call for a “value-for-money” audit” when the Minister should be asking the Auditor- General or the Serious Fraud Office to conduct a fraud investigation?

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. That is a fair way outside the original question.

David Garrett: Speaking to the point of order—

Hon Trevor Mallard: Can I speak to the point of order?

Mr SPEAKER: The member who asked the question was on his feet first, wishing to speak to the point of order.

David Garrett: The primary question uses the word “issues”—what issues will the Government consider? Surely one of the prime issues must be the integrity and the use to which money is put and the controls on the use of that money, given that it is taxpayers’ money. That has to be a primary issue, surely.

Mr SPEAKER: I will hear the Hon Trevor Mallard very briefly.

Hon Trevor Mallard: I would like in fact to defend the Minister. That question was well wide of the primary question. There might be an issue around the level of revenue to be got, and if a

supplementary question had led to that, it could have been possible for the member to get there, but—

Mr SPEAKER: I think we have spent enough time on it.

Hon Trevor Mallard: —this issue is about revenue.

Mr SPEAKER: We have heard enough. Rather than just rule the member’s question out of order, I invite the member, because he asked a question in good faith, to ask a question that does relate to the primary question. Although David Garrett mentioned the word “issues” in the question, it is issues in respect of the tax package that the primary question covers. So I invite the member, if he would like to, to ask a supplementary question that is consistent with the primary question.

David Garrett: Does the Minister intend to conduct investigations where there is good evidence that taxation moneys have been ripped off?

Hon STEVEN JOYCE: In terms of the tax package, the Government is definitely working to improve the quality of our taxation system to ensure that tax avoidance and evasion are much less able to be done, but I have no comment to make on the individual case the member mentions.

Education, National Standards—Alternatives

5. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: What alternatives to her current approach to national standards did she consider before she introduced legislation on that subject?

Hon ANNE TOLLEY (Minister of Education): I considered the approach of the outgoing Labour Government, which saw almost one in five students leaving school without the skills needed to succeed in the modern economy. I rejected that approach in favour of legislating for the ability to set national standards, to meet National’s promise to New Zealanders in the 2008 election.

Hon Trevor Mallard: How many school annual reports did she read as she was finalising this decision?

Hon ANNE TOLLEY: Many.

Hon Trevor Mallard: What is her understanding of the reporting requirements for schools’ annual reports in relation to academic progress for the year 2009?

Hon ANNE TOLLEY: I am very happy to answer the question, but I do not actually have responsibility for the variance reports that individual schools report. They are required to report to their communities and to the Ministry of Education, but what they actually put in those reports is entirely their responsibility.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a pretty simple question about her understanding of the reporting requirements. The Minister got close to it at the end—

Hon Anne Tolley: I just told you.

Hon Trevor Mallard: No, she told us what she did not have responsibility for; she did not tell us what she did.

Mr SPEAKER: I hear the point the member is making. I invite him to repeat his question because he was not, as I understand it, asking about the contents of any particular report but about the requirements, which the Minister does have responsibility for. I invite him to repeat his question.

Hon Trevor Mallard: Thank you, Mr Speaker. What is her understanding of the reporting requirements of schools’ annual reports in relation to academic progress for the 2009 year?

Hon ANNE TOLLEY: My apologies, I misheard the question. Schools are required to report on variances from targets that they have set against their charter, on an annual basis, both to their community and to the ministry.

Colin King: Why did the Government introduce the Education (National Standards) Amendment Bill in December 2008?

Hon ANNE TOLLEY: The Government was elected with a strong mandate for change. Parents told us they wanted clear and plain-language reporting on their child’s progress at school, and they

should not have to wait for that. The national standards legislation was passed in the first 100 days of the John Key - led Government, because this Government knows that raising educational standards is critical to New Zealand’s success in the modern economy.

Hon Trevor Mallard: As she has read many school reports—which she indicated to the House earlier—and understands the importance of the variance part of those reports, which of those reports did she refer to the ministry for follow-up?

Hon ANNE TOLLEY: I received my warrant as Minister on 18 November, and the legislation that enabled the Minister to set national standards was passed on 9 December. I referred no reports to the ministry in that time.

Hon Trevor Mallard: Do I take it from the Minister’s response that in spite of the fact that she saw many reports as she was finalising this decision, and understood the variance requirements, none of them required further attention?

Hon ANNE TOLLEY: I referred none of them to the ministry between the date of accepting my warrant and my putting the legislation through the House.

Hon Trevor Mallard: If none of those many reports that she received in that time period was bad enough to require ministry attention, what was the problem she was trying to legislate for?

Hon ANNE TOLLEY: This Government was elected with a mandate to improve educational standards because almost one in five children in our education system—almost 150,000 children— is failing. They are leaving school without the skills in reading, writing, and maths that they need to succeed. That was the mandate. That was why the legislation was passed in the first 100 days.

Surgery, Breast Reconstruction—Improvements in Treatment

6. Dr JACKIE BLUE (National) to the Minister of Health: What reports has he received on improving treatment for women requiring breast reconstruction surgery?

Hon TONY RYALL (Minister of Health): I have been advised that the Hutt Valley District Health Board has announced that it is to restart delayed breast reconstruction surgery for women in the lower North Island for the first time since 2006. For the first time in nearly 4 years women in Hawke’s Bay, Whanganui, Manawatū, Wairarapa, Wellington, and Nelson-Marlborough can ask their general practitioner to refer them to Hutt Hospital for breast reconstruction. The Hutt Valley District Health Board plans to undertake 300 of these delayed operations over the next 3 years.

Dr Jackie Blue: Is it expected that the women who will benefit from the surgery will be new referrals? When are these operations expected to commence?

Hon TONY RYALL: Some of these women were told that they would get their operations and were put on waiting lists in 2006, when the district health board stopped taking referrals and stopped doing delayed breast reconstruction. But I am further advised that the first of these delayed operations has already been delivered. Although some of these patients have been waiting for up to 10 years, by the end of June 18 women who were on the list in 2006 will have received their breast reconstruction surgery.

Dr Jackie Blue: What other advice has he had in relation to the recommencement of this surgery?

Hon TONY RYALL: I have been advised that for the first time the Hutt Valley District Health Board is contracting the neighbouring Boulcott Hospital to help deliver delayed breast reconstruction operations. This is a good example of how the public and private systems can work smarter together for the benefit of patients, and of how district health boards are trying to reverse the legacy of the previous Government.

Mining in Conservation Areas—Reaction from Mining Industry

7. Hon SHANE JONES (Labour) to the Minister of Energy and Resources: Why should New Zealanders have confidence in his handling of the minerals stocktake given reported concerns from mining industry leaders about his handling of the issue, especially the proposal to remove protection

from parts of Great Barrier Island, which those same mining industry figures reportedly described as a “blunder”?

Hon Dr NICK SMITH (Minister for the Environment) on behalf of the Minister of Energy

and Resources: New Zealanders can have confidence because for the first time the industry has a Minister who is committed to growing the contribution of the minerals sector to the New Zealand economy. This commitment is reflected in the strong, positive statements of support from Straterra, the mining industry’s group; from the Petroleum Exploration and Production Association of New Zealand; and from many of our mining companies, which have made very complimentary remarks about the Government’s policies.

Chris Auchinvole: Has the Minister seen the comments of Minerals West Coast, West Coast mayors, and other elected representatives supporting the Government’s balanced approach to minerals and the conservation estate?

Hon Dr NICK SMITH: Yes. The support in the member’s electorate has been very strong. That region was founded on mining and feels betrayed both by Labour and by Damien O’Connor. This Government is committed to growing the West Coast mining industry.

Hon Shane Jones: Which of the following figures is correct for the potential value of minerals on Te Ahumata Plateau: the figure on page 21 of Maximising our Mineral Potential: Stocktake of Schedule 4 of the Crown Minerals Act and beyond, which values it at $4.3 billion; or the figure in the geologist’s report that says it is about $1.28 billion?

Hon Dr NICK SMITH: The information about the value of New Zealand mineral resources is not well known, and that is why the Minister of Energy and Resources has committed $4 million for GNS Science to go and find out the detail. My worry is that members opposite refuse and do not want to know the value of New Zealand’s mineral resources.

Hon Jim Anderton: Does the Minister stand by his claim that the mining of pristine conservation park areas is the equivalent of one postcard on the whole of Eden Park, or does he agree with the well-regarded mathematician on Television One last night who said that his own calculation shows that the correct comparison is not one postcard but 121 postcards; if so, is the mining contemplated 121 times worse than the Minister has been telling the public?

Hon Dr NICK SMITH: The analogy that the Minister gave was intended to give New Zealanders an idea of the scale and of how infinitesimally small the area that is proposed to be mined is. It depends on whether the area is the area of the field or of the entire stadium grounds, and it also depends on whether we take the area where the mining will actually occur, as compared with the area that is explored. Depending on which approach one takes, the numbers can be different. However, I have to say that the number will be a whole lot bigger than the infinitesimal amount of economic growth that occurred under the previous Government.

Hon Shane Jones: How was the $1.5 billion figure on page 27 of the discussion document for the value of minerals in the Ōtahu Ecological Area and the Parakāwai Ecological Area reached, given that the geologist’s report on the two areas says that there is no reliable basis for determining a dollar value for the Crown minerals within the Ōtahu Ecological Area, and that the Parakāwai Ecological Area has a potential value of several tens of millions of dollars?

Hon Dr NICK SMITH: I do not have that specific detail. But I point out to the member opposite that we are unlikely to know what the value of those mineral resources is while they are included in schedule 4, as there is no incentive to even find out. Members on this side of the House are saying that we need to get a better understanding of the value of this country’s mineral resources, and leverage off them so that we can be a prosperous country.

Hon Shane Jones: Why should New Zealanders have any confidence in the Minister’s handling of the mineral stocktake, when there are billion-dollar inconsistencies in the figures he is using, and when, after having spent about 8 months and having made some supposedly important changes in the terms of reference, the discussion document was released with tracked changes still included?

Hon Dr NICK SMITH: In terms of having an exact figure for the value of New Zealand’s mineral resources, the honest answer is that we do not know. Perhaps if the previous Government had actually made a wise investment in GNS Science to find out some of that information, it would be more reliable. The Minister is committed to making a smart investment in getting additional information so that we can have a more accurate estimate of New Zealand’s mineral resources.

Dr Russel Norman: I raise a point of order, Mr Speaker. If the Minister was referring to an official document, could he table the official postcard from which his estimates have come?

Mr SPEAKER: That is not a point of order.

Question No. 8 to Minister

METIRIA TUREI (Co-Leader—Green): I seek leave, as the Prime Minister is not in the Chamber today to answer my question, to defer my question to the next sitting day’s question time when the Prime Minister is present.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.

Welfare Reforms—Prime Minister’s Statement

8. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: How many people exactly does he think need “a kick in the pants” from the welfare system?

Hon TONY RYALL (Minister of Health) on behalf of the Prime Minister: As he said yesterday, this Government believes in a welfare system that supports people when they are most in need, encourages them to get back to work, and occasionally gives them a kick in the pants when they are not taking responsibility for themselves, their families, and other taxpayers. Therefore, only those who fail to meet their obligation to try to find work will need a kick in the pants.

Metiria Turei: I raise a point of order, Mr Speaker. This is a very specific question that asks for a very specific number. The question has been set down for some hours now, and I would expect the Prime Minister to address the question directly. That has not been done.

Mr SPEAKER: If the member looks carefully at her question, she will see that she asks “How many people exactly does he think …”. There is no specific answer to a question like that. Members putting down primary questions need to be mindful of that if they want precise answers.

Metiria Turei: Is the Prime Minister telling the House—given the failure to provide the answer requested, which was the number of people—that he has introduced major changes to the benefit system to punish more beneficiaries without assessing exactly how many people are actually being targeted by this policy?

Hon TONY RYALL: I think it is quite clear that people who fail to meet their obligations to try to find work will be the people to whom these sanctions apply. The purpose of this policy is to give folks a nudge towards making themselves available for work. As the member knows, the longer that people are out of work, the harder it often is for them to get back into it.

Metiria Turei: What is the point of a targeted policy when he has no idea who the target is?

Hon TONY RYALL: I think New Zealanders and this Parliament know full well whom we are seeking to support. It is not good for people to be long-term unemployed. It is good for the Government to do everything it can to encourage those people into work and to provide them with the support and encouragement they need.

Metiria Turei: How will his Government apply sanctions to people who need a “kick in the pants” without also delivering a “kick in the pants” to the children who rely on those people for their very well-being?

Hon TONY RYALL: A benefit will be cut only if someone fails to meet his or her obligations to look for work. That means doing things like attending interviews when they arise, and making oneself available to take a job if it is the right one. All that people need to do to get back their full

benefit is to meet those obligations. Parents have responsibilities to their children, and part of their responsibility is to make sure that they meet the expectations around their receiving income support.

Metiria Turei: Do the children of parents on the unemployment benefit deserve a “kick in the pants” if their parents are unable to find work in an increasingly competitive market in a recession?

Hon TONY RYALL: Nothing will happen to people’s benefits if they are unable to get a job. The purpose of this policy is to say that it is not good for people to be long-term unemployed. New Zealanders know the consequences of it for people. Under the Government led by Annette King and Phil Goff during the 1980s, the number of New Zealanders who languished in the long-term unemployed category increased massively. That was bad for our society.

Metiria Turei: Do children with disabilities and with serious illnesses deserve a “kick in the pants” if their parents are forced out to work instead of staying home to care for them?

Hon TONY RYALL: It is very clear what this policy is about. It is about saying to New Zealanders that we think being in work has value and importance, and that those who are long-term unemployed or who are in need of encouragement to get into work should get that encouragement, because being in work is good for people.

Metiria Turei: Is it not the truth that the Prime Minister made his abusive comment just because he wants to join with his National Party colleagues in putting the boot into our most vulnerable families?

Hon TONY RYALL: No, that is just absolute nonsense. This Government and this Prime Minister want to help New Zealanders to get ahead. Part of that is saying to people that it is not good for them to be long-term unemployed. We want to put in place policies and supports that encourage those people into work when it is available for them, because that will be good for them, good for their children, and good for New Zealand.

Housing New Zealand Corporation—Savings from Enterprise Transformation Programme

9. MOANA MACKEY (Labour) to the Minister of Housing: Does he agree with Housing New Zealand that the Enterprise Transformation Programme to replace existing IT systems is expected to result in savings of $70 million per year; if so, how was this figure calculated?

Hon MAURICE WILLIAMSON (Acting Minister of Housing): Although this is an operational matter, I have been advised by the chief executive that the draft business case on the Enterprise Transformation Programme, which has yet to be approved by the board, has outlined up to $70 million per annum of expected efficiencies. With regard to the second part of the question, I advise the member that this figure was calculated very carefully.

Moana Mackey: Given that last week Housing New Zealand Corporation was forced to admit that the cost of scoping the business case had almost doubled, to $10 million, can he guarantee to the House that costs will not blow out even further, given claims from insiders that the costs to date are in excess of $20 million?

Hon MAURICE WILLIAMSON: I really do not quite understand where the member is coming from. This project was initiated by Housing New Zealand Corporation when her party was in power. Deloitte was chosen by Housing New Zealand Corporation to be the key partner when her party was in power, so—

Mr SPEAKER: I apologise to the Minister for interrupting him, but I think the question that Moana Mackey asked was a reasonable one, about whether there are risks of the costs of the project escalating. I think the answer should focus somewhat on that.

Hon MAURICE WILLIAMSON: I will be very happy to come to that point, as the last part of my answer. Therefore, so much of what is happening now was put in train before National came into Government. But we have put all sorts of extra monitoring in place. This programme is being looked at by Treasury, and the State Services Commission did a check on it. Yes, we will make sure that best practice is followed, even though in the end all the decisions that are made are a fully operational matter for Housing New Zealand Corporation itself.

Moana Mackey: How does he reconcile claims by Housing New Zealand Corporation that its systems are so outdated that it is becoming difficult to conduct its business with a report from Resultex, commissioned by Housing New Zealand Corporation, that says the existing information technology systems are reliable and “there was not a single issue raised that related to the reliability of the underlying infrastructure. This is so unusual as to merit specific mention.”?

Hon MAURICE WILLIAMSON: I can tell the House that a number of the information technology systems that Housing New Zealand Corporation is currently using, such as Rentel, were developed in 1993. That, by my calculation, is 17 years ago. I tell that member that any information technology system as old as that is not valid for modern-day requirements. The specifics that this Government has put on Housing New Zealand Corporation for the delivery of service require the corporation to have modern-day information systems in order for it to do its job.

Moana Mackey: Is he even aware that Housing New Zealand Corporation commissioned a report from consultancy firm Resultex, which independently reviewed its systems and concluded that the existing systems are very reliable and suffered remarkably little downtime, and which conclusively rejected claims that the existing systems are no longer fit for their purpose?

Hon MAURICE WILLIAMSON: I and the Minister of Finance, as shareholding Ministers, are doing what we should be doing as Ministers—that is, keeping a watching brief, asking the corporation to keep us well informed of progress, and using State agencies like Treasury and the State Services Commission to do the detailed monitoring. But in the end, finally, after the business case is finalised, this decision will be made by the corporation. The chairman of the corporation has offered to that member the opportunity to come and discuss it with him, and she has not yet taken him up on that offer.

Moana Mackey: Given how much at pains he was at yesterday’s Māori housing conference to stress that there is not a single extra cent left in the coffers to fund housing projects, does he think it is good value for taxpayer money for his department to spend $10 million on preparing a business case for the replacement of an information technology system that Housing New Zealand Corporation’s own reports say does not need to be replaced?

Hon MAURICE WILLIAMSON: When we are developing information technology projects, best practice determines that we do a very detailed business case before the final decision to spend is made. Developing such a detailed business case requires the expenditure of money, and to date I am convinced that the spending by Housing New Zealand Corporation on the development of that business case has been within what the Government considers to be value for money.

Prisons—Increase of Existing Capacity

10. MELISSA LEE (National) to the Minister of Corrections: Has she received any reports on measures to cope with the forecast increase in prisoner numbers?

Hon JUDITH COLLINS (Minister of Corrections): Yes. I am very pleased to report that great progress has been made with the implementation of double-bunking in our prisons. More than 700 bunks have been restored in the Northland, Spring Hill, and Otago corrections facilities. Installation of the final 170 bunks at Auckland Region Women’s Corrections Facility is now under way. When completed in September, double-bunking will have added nearly 900 prison beds. This is one of the measures that will help avoid the prison bed crisis that we were heading into under the previous Government.

Melissa Lee: Has the double-bunking project tracked to budget so far?

Hon JUDITH COLLINS: It has done better than that. I am very pleased to report that savings of $30 million against the original capital budget have been achieved so far. These savings have been obtained through design innovations, good planning, and excellent collaboration between the onsite project teams, custodial staff, and the contractors. An independent capital cost review of the project will occur shortly so that the positive lessons from this project can be applied to future projects.

Question No. 11 to Minister

PHIL TWYFORD (Labour): Does he stand by his statement that “given how these councils have been run I would be surprised if there wasn’t some ability to make savings”?

Mr SPEAKER: Before I call the Minister—[Interruption] The noise on my right, on this occasion—from the Government benches—was so loud that I could not hear Phil Twyford, so I invite the member to repeat his question.

Auckland, Local Government Reform—Management of Councils

11. PHIL TWYFORD (Labour) to the Minister of Local Government: Does he stand by his statement that “given how these councils have been run I would be surprised if there wasn’t some ability to make savings”?

Hon RODNEY HIDE (Minister of Local Government): Yes, indeed. The present Auckland councils’ combined operating budget is $2,000 million, and I am confident that the structure will ensure better value from rates and central government funding by reducing duplication and delays in previously intractable problems such as transport issues. Services such as administration, office systems, finance, human resources, and information technology will be integrated and streamlined. Each council now operates its own systems, so there are real savings to be made. Unified decisionmaking, better transport and infrastructure, and more efficient delivery of services will all contribute to a great Auckland region where people will want to live and do business.

Phil Twyford: Can he confirm that, under his third super-city bill, six of the seven councilcontrolled organisations planned for Auckland will be required to pay tax on council activities that are currently non-taxable?

Hon RODNEY HIDE: We are still working through the tax details, but I can say this. Inland Revenue Department officials have advised the Minister of Revenue and me that there will be no increased tax exposure for the Auckland Council. Indeed, they advise that there will be less tax. For example—

Phil Twyford: I raise a point of order, Mr Speaker. I asked the Minister whether he can confirm that, under his third super-city bill, six of the seven council-controlled organisations would be liable for tax, and the answer so far does not address the question.

Mr SPEAKER: In fairness, I think the Minister said in answer that some of these decisions have not yet been finalised, but he then went on to advise the House of Inland Revenue Department advice that contains quite helpful information for the member, I would have thought. Had the Minister been political, I would have stopped him, but it seemed that he was being helpful to the House. If the member is now seeking the call to ask a supplementary question, I will let him do that.

Hon RODNEY HIDE: But I want to finish answering.

Mr SPEAKER: I think we have heard enough answer.

Phil Twyford: Why did the Minister say that no decisions have been made on tax issues for the Auckland Council, when his third bill clearly makes six of the seven council-controlled organisations tax-liable; and is this not just another example of his rushed and shoddy handling of the super-city process?

Hon RODNEY HIDE: Au contraire. Indeed, over $100 million of existing tax losses that are now stranded will be made available to the entire Auckland Council as a consequence of the work that I and the Minister of Revenue have done. I have been advised by officials that the tax savings for the entire Auckland region as a result of the restructuring is estimated to be about $10 million a year ongoing. If the New Zealand Herald told the truth, that would be its headline, because there will be tax savings for the new Auckland Council as a consequence of the work that this Government is doing.

Hon Jim Anderton: As the Minister seems to be relying on tax losses to make up for the extra tax involved in these council-owned companies, is the Minister aware that the Christchurch City Council runs its council-owned organisations at a significant profit, and that dividends of hundreds

of millions of dollars are regularly made to offset rates charged in our city; if so, is he seriously telling the House that he and the Government are planning to run the new council-controlled organisations at a loss in order to prevent tax from being paid to the Government?

Hon RODNEY HIDE: No, I am not saying that; I am saying that, tragically, there already is $100 million worth of losses within the structures of the Auckland councils that cannot be realised and is lost, and the new structure adds up to savings of $10 million a year for ratepayers. That is real money that will be saved. Indeed, the advice that we have had from the Inland Revenue Department officials is that there will be savings, in terms of taxes, of $10 million each and every year—I repeat for Mr Anderton—as a consequence of the restructuring. That is good news for Auckland.

Phil Twyford: Is it not true that even if we believe the Minister’s promise to make the councilcontrolled organisations tax-neutral, Aucklanders will still have to pay more under his plan in rates, water rates, and GST on rates, and, to top it off, $34 million in consultancy fees and executive salaries for the transition to a super-city they do not even want?

Hon RODNEY HIDE: No. Once again, that is not true.

Phil Twyford: How is it fair for Aucklanders to pay all those extra costs when they have been given no choice on the super-city, when his council-controlled organisations will lock them out of decision making on three-quarters of the council’s operations, and when his local boards will have no powers to make by-laws?

Hon Member: Have a think.

Hon RODNEY HIDE: Well, I am thinking, because I am trying to work out how to explain in a simple way for the member that the restructuring saves the tax liability of the Auckland Council to the extent of $10 million a year. I would have thought that was extraordinarily fair.

Phil Twyford: I raise a point of order, Mr Speaker. My question asked him about the fairness of Aucklanders paying the costs of the super-city while having no input into, and no decision-making on, the outline and the shape of the super-city. He did not answer that.

Mr SPEAKER: I listened very carefully to the member’s question, because I feared that a point of order might be raised. The member made a series of statements in his supplementary question—a series of statements. How the Minister responds to a series of statements contained in a supplementary question is really up to the Minister. If the member wants detailed answers, he has to ask precise questions. Some of his colleagues could give him some lessons on that.

Migration, Business—Progress in Attracting New Migrants

12. DAVID BENNETT (National—Hamilton East) to the Minister of Immigration: What progress has the Government made in attracting business migrants to New Zealand?

Hon Dr JONATHAN COLEMAN (Minister of Immigration): Last July the Government announced it would revamp the business migrants scheme to boost economic performance. The changes have made it easier for migrants to invest or set up a business in New Zealand and to gain permanent residence. There has been healthy interest in the new policy. Immigration New Zealand reports that over 100 expressions of interest have been received by prospective migrant investors since last July. In total, new immigration policies have attracted approximately $194 million in potential new investment.

David Bennett: How does the performance of this Government in attracting business migrants to date compare with that of the previous Government?

Hon Dr JONATHAN COLEMAN: The current Government has attracted more business migrants in 8 months than the previous Government did in 2 years. In other words, the previous Government took three times as long to produce less than half the result.

Rahui Katene: How confident is he that the business skills being sought after in attracting migrants are not evident in the 64,000 New Zealanders officially registered as job seekers and, in particular, the 21,000 Māori job seekers?

Hon Dr JONATHAN COLEMAN: Business migration policies aim to complement existing capital and entrepreneurial skills within the economy, so there is no such thing as having too much of either.

ENDS

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