(uncorrected transcript—subject to correction and further editing)

TUESDAY, 21 SEPTEMBER 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Tax System Changes—Effect on New Zealanders

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “the vast majority” of people will be “better off” as a result of his tax switch on 1 October 2010?

Rt Hon JOHN KEY (Prime Minister): Yes, because that is what the facts clearly show. Raising GST will increase prices by a touch over 2 percent, but will be more than compensated for by income tax cuts and an increase in benefits, Working for Families, and superannuation. Therefore, it is plain for everyone to see that people will be better off.

Hon Phil Goff: Does he really think that the more than 400,000 Kiwis who earn $15 a week or less and who will at best get a net $5.70 a week will be better off when, in addition to GST, they are paying rents that are going up by $20 a week in Auckland, paying rates that are up, paying accident compensation charges that are up, and, for some people, paying $20 to $25 a week extra in early childhood care? I ask whether he is really saying that those people will be better off, because they do not believe it.

Rt Hon JOHN KEY: Yes, they will be better off. What is so often the case is that when the Leader of the Opposition comes into the House, he says things that are factually incorrect; in fact, his story last week about rents is wrong—

Hon Darren Hughes: I raise a point of order, Mr Speaker. All members of the House are honourable members who give their word as they see it as being correct when they are asking questions. For Mr Key to say that another member is factually incorrect, and imply that an honourable member is not being truthful—

Hon Rodney Hide: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Before I hear the honourable Rodney Hide, members may not agree with a point of order, but it must still be heard in silence. I will rule on the matter in a moment.

Hon Rodney Hide: It is certainly true that members cannot question another member’s integrity in this House. But a member can certainly say that a member is factually incorrect; that has to be allowed in this House.

Mr SPEAKER: I thank members. There will be silence. The dilemma that the member asking the question faces is when one builds supposed facts into a question—and that question contained a number of statements of alleged fact—Ministers are at liberty to dispute those facts. It does not mean that they are impugning the integrity of the questioner at all. They just have a different view of the facts. That is why the Standing Orders strictly do not allow members to load additional supposedly factual material into questions. I do not stop it, because I think we would constrain question time too much. But the risk is that the Minister answering the question—in this case, the Rt Hon Prime Minister—may dispute the supposed facts, and that is what has happened on this

occasion. I do not believe he was saying that the Leader of the Opposition was misleading the House. He was just disagreeing with the supposed statement of fact.

Hon Phil Goff: When he says that the vast majority will be better off, does he not really mean that the top 10 percent of taxpayers, who get 41 percent of the tax cuts, will be a whole lot better off, but the bottom 20 percent of taxpayers, who get 2 percent of the tax cuts, will be a lot worse off?

Rt Hon JOHN KEY: No, I mean what I say, which is that the vast majority of New Zealanders will be better off. I point out that two-thirds of the entire tax cut package was applied to the lowest two rates. But I say to the Leader of the Opposition that if he is so convinced that he is on to a winner, he should go to the election campaign in 2011 agreeing to reverse the personal tax cuts that National has introduced.

Jo Goodhew: Has he seen any reports of people being confused about the tax switch?

Rt Hon JOHN KEY: Actually, I have. I have seen pamphlets from the Labour Party implying that GST is going from zero to 15 percent on 1 October. No only is this completely false and an attempt to mislead the public, but one would think that Phil Goff, of all people, would know that GST is 12.5 percent, because a Labour Government introduced it, and raised it, with no compensation.

Hon Phil Goff: If people are to be a whole lot better off, why are debt collection agencies like Baycorp predicting that over the next 6 months there will be “a massive spike in the number of people who just won’t be able to pay their bills.”?

Rt Hon JOHN KEY: Because the country is coming out of a recession, which was caused by 9 years of economic mismanagement by Labour.

Hon Phil Goff: In the press statement put out today the Government has claimed a high level of extra income from after-tax incomes, and why did he neglect to say in that press statement that just under half of those tax cuts were introduced under Labour; and of the tax cuts, the other half that he introduced overwhelmingly benefit the very rich and not the average New Zealander?

Rt Hon JOHN KEY: Because they form the first tranche of National’s tax cuts. Let us be honest: the only reason Labour ever introduced tax cuts, after 9 years in office, is that it was desperate and heading for the exit door.

Jo Goodhew: Has he seen any reports of alternative tax switch policies?

Rt Hon JOHN KEY: Yes, I have. I have seen reports of policies to take GST off fresh fruit and vegetables. Such a policy would needlessly complicate the tax system and create all sorts of perverse anomalies. New Zealanders would rightfully wonder, for example, why GST was being taken off out-of-season asparagus and imported figs but not for a packet of Wattie’s frozen peas. In addition, this policy would cost somewhere near $450 million in revenue and would be paid for by more borrowing.

Hon Phil Goff: Can the Prime Minister name just one other country in the world with GST at 15 percent, or higher, that does not exempt fresh fruit and vegetables?

Rt Hon JOHN KEY: I do not have that information to hand, but, for once, I will take my guidance from Michael Cullen, who said: “I am aware of many countries that have appallingly inefficient GST systems where they exempt various articles … Thank goodness we have not followed those very bad policies.” But when one is desperate, one will do anything.

Marine and Coastal Area (Takutai Moana) Bill—Burden of Proof

2. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Attorney-General: What requirements must the Crown meet in relation to the burden of proof in the Marine and Coastal Area (Takutai Moana) Bill, and how different is this to former legislation in respect of how the full burden of proof falls on hapū and iwi?

Hon CHRISTOPHER FINLAYSON (Attorney-General): Under clause 105 of the bill, if the Crown does not accept that customary title exists in an area, then the Crown has to prove customary

title has been extinguished. This requirement is consistent with what the Court of Appeal said in the Ngāti Apa case. Under the current legislation, applicant groups have to prove the negative— namely, that extinguishment has not occurred. The requirement is contrary to what the Court of Appeal said in Ngāti Apa and goes against the usual rules about the burden of proof.

Rahui Katene: What did the Court of Appeal say in the Ngāti Apa case, which has led to the development of a shared burden of proof; and can he name any other precedents in which indigenous peoples have called for a shared burden of proof, and the law has responded?

Hon CHRISTOPHER FINLAYSON: The Court of Appeal said: “the onus of proving extinguishment lies on the Crown and the … purpose must be clear and plain”. I cannot immediately recall any other precedents involving indigenous peoples, but I refer the member to a general affirmative defence—for example, a limitation argument under the Limitation Act 2010. Anyone wanting to argue that a claim is time barred has the burden of proving that that is the case.

Rahui Katene: Does he agree that the tests applied in the takutai moana bill reflect New Zealand’s experience better than overseas case law by incorporating tikanga, and how will this be achieved in a practical sense?

Hon CHRISTOPHER FINLAYSON: Yes, I do. I think the tests better reflect New Zealand’s experience, because they do draw on both the common law and tikanga. In a practice sense, clause 97 of the bill will allow the High Court to refer questions of tikanga to the Māori Appellate Court or to obtain the opinion of a court expert on the question.

Local Government, Minister—Confidence

3. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement: “All I can say is that in the 22 months that Mr Hide has been a Minister in my Government, he’s shown very good judgment and he has my full support.”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Hon Phil Goff: How was it good judgment on Mr Hide’s part to choose to cover up the theft of a dead baby’s identity by his law and order spokesperson, Mr Garrett?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You may recall—and I am sure that the Clerk will be able to advise you—that there are Speakers’ rulings about the relationship between the Prime Minister’s responsibility for his Ministers and the Prime Minister’s responsibility for the actions of Ministers as leaders of parties. This, of course, was canvassed very well by the Opposition in question time in 2002, when the Rt Hon Helen Clark came up with the theory that it depended on what hat—I believe that was the term used—a Minister had on at the time. That question is right outside of those Speakers’ ruling provisions and cannot stand.

Hon Darren Hughes: The Leader of the House is quite right that this issue has been canvassed by the House quite a lot. I refer you, Mr Speaker, to Volume 648 of Hansard, at page 17315, where the then Leader of the Opposition, John Key, asked: “Is the Prime Minister saying that the new standard for the way she will measure her Ministers is solely on their performance in their portfolio …”. He was very critical that that would be the only measure. The Leader of the Opposition is asking about the judgment of Ministers beyond just their narrow portfolio responsibilities to the way that they conduct themselves in the execution of their warrants to be Ministers, to be members of the Executive Council. The confidence and supply agreement for this Government relies on the parliamentary ACT Party, which has signed up to a no-surprises policy in respect of advising the Prime Minister of its composition. The Leader of the Opposition’s question to the Prime Minister is about the judgment of one of those Ministers who is party to the confidence and supply agreement, with the Prime Minister’s own previous statement making the point that Prime Ministers should not have a new standard for the way in which Ministers are measured that is solely based on their performance in their portfolios.

Hon Gerry Brownlee: Mr Speaker, you need to see the whole of that Hansard, which, in fact, saw the Speaker rule—from my recollection—that that was not a reasonable position, because of

Speakers’ rulings established in 2002 that dealt with the then breakdown of the Alliance party and, particularly, the position of the Hon Jim Anderton, who at the time was the Deputy Prime Minister at the time but, for a time, not the leader of the Alliance party. There were numerous questions posed to the Prime Minister at that time. All of them were ruled out of order because it was ruled that although Prime Ministers have responsibility for Ministers and their actions as Ministers—in other words, the discharge of their portfolio responsibilities—they have no responsibility for their activities as leaders of a party.

Mr SPEAKER: I will hear the Hon Rodney Hide, because this is an important issue.

Hon Rodney Hide: I will go further, Mr Speaker: it was established by Prime Minister Helen Clark that she did not even have responsibility for herself when she was acting as party leader—

Hon Ruth Dyson: How is that a point of order?

Hon Rodney Hide: The point is that one could not ask a Prime Minister about her decisions as a party leader, only about her decisions as a Prime Minister. So it seems odd that one cannot ask, if you like, the Prime Minister of New Zealand about his decisions as leader of the National Party, yet somehow one can ask the Prime Minister of New Zealand about the decisions of another party.

Hon David Parker: I suggest another reason why this is relevant. The Prime Minister has responsibility for supervision of the application of the Cabinet Manual. I refer the Speaker to 11 September 2008, and a series of questions relating to the Hon Winston Peters from the Hon Bill English, and from John Key around the same time. This question is one that, for example, was in order: “Can the Prime Minister confirm that one of her roles is to supervise the application of the Cabinet Manual to her Ministers, which says at all times Ministers are expected to behave in a way that upholds and is seen to uphold the highest ethical standards?”. That is a reference to paragraph 2.52 of the Cabinet Manual, which notes that “A Minister of the Crown, while holding a ministerial warrant, acts in a number of different capacities”—ministerial, political, and personal—and paragraph 2.53 states that “In all these roles and at all times, Ministers are expected to act lawfully and to behave in a way that upholds, and is seen to uphold, the highest ethical standards.” I suggest that this is a matter on which there can be questions to the Prime Minister.

Hon Gerry Brownlee: I refer you to Speaker’s ruling 146/5—the repeated rulings of Speaker Wilson in 2006 and 2008. The 2008 rulings particularly apply to the situation that the honourable member raises. It is quite clear that the Prime Minister is not responsible for answering questions that relate to activities of Ministers in their capacity as leaders of parties. In any event, in this case the question goes back to a point where the Hon Rodney Hide was not a Minister, and, clearly, there would have been no responsibility on the part of the Prime Minister, who at the time was Leader of the Opposition.

Mr SPEAKER: May I check with the honourable member as to which Speaker’s ruling he was citing?

Hon Gerry Brownlee: It was146/5.

Hon Darren Hughes: Mr Speaker, while you have Speakers’ Rulings open, I note that Speaker’s ruling 147/1 states: “Where a question impinges on the Prime Minister’s official responsibilities as Prime Minister, it will not be ruled out of order just because there is a party connection.” Clearly, there is a party connection here; the Leader of the Opposition is asking a question about the judgment of one of the Prime Minister’s Ministers and the no-surprises policy that exists in the confidence and supply agreement, which has been tabled here in the House as part of the Government formation process, and which is underpinned by the Cabinet Manual. So there is a case not only of public interest but of ministerial responsibility in terms of the views of the Prime Minister on the judgment of one of his Ministers, and the attempt here to deflect or refuse to answer questions about that serves only to further highlight why the store the Prime Minister puts on, and his level of respect for, the judgment of one of his Ministers is a matter of public interest.

Mr SPEAKER: I thank honourable members for their contribution to this particular issue of order. It is a serious issue of order, and that is why I have taken some time to listen to members’

views on it and to check on various Speakers’ rulings—and members have quite rightly cited some important Speakers’ rulings. This is a tricky issue—I freely acknowledge that— because the Prime Minister is certainly not responsible for the conduct of another political party. Even in this House, as Prime Minister he is not responsible for the conduct of the party from which he himself comes. The issue simply relates to whether the Prime Minister can be questioned on the judgment of a Minister. And the Prime Minister is responsible for the judgments of his Ministers—there is no question about that. What makes this particular question tricky is that the Prime Minister was questioned about the judgment of a Minister, and the example given was an example relating to a matter to do with the ACT Party. The question therefore turns on whether that rules out the question under our Standing Orders. Let us look at the various Speakers’ rulings that guide me. One of the members mentioned Speaker’s ruling 147/1, which states that “Where a question impinges on the Prime Minister’s official responsibilities as Prime Minister, it will not be ruled out of order just because there is a party connection.” Yet there are other Speakers’ rulings, and I think the Hon Gerry Brownlee mentioned 146/5, which points out that “(1) The Prime Minister and Ministers are responsible for only those matters that fall within their responsibilities as Ministers, not as leaders of parties.” But the Prime Minister has not been questioned on this occasion in his role as leader of the National Party; the Prime Minister has been questioned on the judgment of a Minister, and the example that was given related to a matter to do with a party. It would seem to me that the most appropriate ruling for me as Speaker—and it treads a pretty fine line, I acknowledge—is to ask the Prime Minister to answer the question in so far as it addresses the Minister’s judgment, and judgment generally, and the Prime Minister is not required to comment particularly on the detail of the matter relating to party matters. This is a most unusual question and a most unusual circumstance, and I am being very cautious here, but I believe that the Prime Minister is responsible for the judgment of his Ministers—there is no question about that. Therefore, although the example given does relate to matters to some extent within the ACT Party, it is a question principally about the judgment of a Minister, and in that regard I invite the Prime Minister to answer it but to be mindful of the fact that he is not responsible for matters within the ACT Party itself.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I do not want to dispute the position that you have come to, but I ask you to consider it a little further. We have Speaker’s ruling 146/6, which states: “The Prime Minister is answerable for any statements made as Prime Minister. But the Prime Minister is not answerable for actions taken in a non-ministerial capacity, whether as Leader of the Opposition or as leader of a political party.” If that ruling stands, then the Prime Minister would not be responsible for anything, for any question of judgment on his part, as leader of the National Party or in the time that he was the Leader of the Opposition. But now we seem to be saying that the Prime Minister does become responsible for answering questions about matters that were undertaken, decided, or whatever by another political party leader prior to the formation of the Government. xxxfo The Prime Minister, it would seem to me, under Speaker’s ruling 146/4, and even 147/1, which you quoted, is responsible for matters that relate to ministerial judgment but surely not judgment that political parties make; otherwise, we are a very short step from the Prime Minister being responsible for the political policies of parties that are party to Government or are in some sort of governance arrangement with the party that is leading the Government, and that would be very unfortunate. I think this is not a fine line. I think it is patently clear that matters that relate to Mr Hide’s relationship with Mr Garrett prior to the formation of the Government are in the past and have nothing to do with the way in which he has exercised his responsibilities as a Minister, for which the Prime Minister is directly responsible. To now require the Prime Minister to reflect back on matters that are in the past is, I think, quite unreasonable.

Hon Peter Dunne: Mr Speaker, Mr Brownlee has substantially covered the point I was going to raise, but I really wanted to raise a question that arises out of your original ruling. If the Prime Minister is to have a responsibility, is it not for the conduct and judgment of Ministers as they relate to their particular portfolios and the overall performance of the Government, rather than in just a blanket sense? There may be issues that fall outside the impact on a Minister’s portfolio or the overall activities of the Government, and, therefore, how can the line be that the Prime Minister has a responsibility in those areas as well? I think this is an extension of the point Mr Brownlee was raising, but I think it goes to the heart of what is the point at issue here.

Hon Clayton Cosgrove: If I could address the matter that Mr Brownlee raised, Mr Brownlee, it seems to me, was saying—if I am correct—that because the alleged lack of judgment had occurred initially prior to Mr Hide becoming Minister, somehow it was not the Prime Minister’s responsibility to answer in that respect. But I put it to you, Mr Speaker, that the judgment question may have occurred sometime before the member held the warrant, but continued—and the question goes to it—right up to when the warrant was picked up by Mr Hide, and continued up until, shall we say, a few days ago. So it does form ministerial responsibility. The alleged cover-up continued right through when he was a Minister.

Hon David Parker: I want to develop that argument, because I think Mr Cosgrove is right. If we take an example where something is withheld from a Prime Minister, and the Prime Minister, but for that withholding, might not have made someone a Minister, because he might not trust him or her, that must be a matter that goes to the responsibility of the Prime Minister if in the future he decides to get rid of a Minister, as the Prime Minister chose to do in respect of Richard Worth. So I think there is no doubt that the Prime Minister has responsibility for the conduct of his Ministers. He can say he thinks that conduct is perfectly acceptable to him, but he can be asked whether it is.

Hon Gerry Brownlee: The point that is being suggested by both the Hon Clayton Cosgrove and the Hon David Parker is that the Prime Minister as Prime Minister holds ultimate responsibility for everything his Ministers do and have done. Speakers’ rulings over a period of time—clearly, the incident concerning Winston Peters in 2008 comes to mind, but more poignantly, I think, the breakdown of the Alliance in 2002—clearly established that the Prime Minister does not have any responsibility for actions undertaken by leaders of political parties. We know that, for example, the Prime Minister cannot be questioned in the House about National Party dealings; because he is the leader of the National Party is of no relevance to, or business of, this House. For this question to stand, there would need to be the citing of a particular failure of ministerial judgment as opposed to a perception or an allegation of a failure of judgment in relation to activities as a party leader. The issues around judgment as a party leader will, in fact, be judged by voters and by the general public. But the Prime Minister is not required to have a particular view on that. His responsibility is to ensure that he has a functioning ministry that can form a Government, and that is where it should stop. If we open this up, then I think it is, as I said before, a very short step to the Prime Minister having to answer for policy decisions and policy positions taken by other parties prior to their coming into Government arrangements.

Mr SPEAKER: I thank honourable members for their further points on this matter. I repeat what I said: this is actually a very tricky issue in relation to our Standing Orders, and an important issue, which is why I have allowed time on it. If I come back to the point raised by the Hon Peter Dunne, I have to disagree with the point made by him in so far as the Prime Minister not just is responsible for the conduct of his Ministers in pursuit of their ministerial responsibilities but has a wider role of responsibility in respect of the conduct and judgment of his Ministers. I think there is no question that the Prime Minister has wider responsibility there, as distinct from individual Ministers—the Prime Minister has wider responsibility. Of course, the Prime Minister has no responsibility for what another party or its leader might do, and that is where this issue gets quite complex in that we have a leader of a party who is also a Minister, and the Prime Minister has responsibility for the judgment of that Minister in his capacity as a Minister. Therefore, the question

would normally have been a perfectly proper question, but the example given in the question related to an action of the Minister that it could be argued was in some way related to his role as party leader of the ACT Party, and I accept argument down that track. But where I face a dilemma is that if I rule the question out totally, I am tending to shift the line somewhat in terms of the Prime Minister’s responsibilities in respect of the conduct and judgment of Ministers, and I do not want to do that, because the Prime Minister must be accountable for his Ministers. He is not accountable for statements made by any National Party person. He is not accountable in this House for his role as the leader of the National Party—not at all; there is no way it is getting confused with that, at all. Someone mentioned Speaker’s ruling 146/6. That is a totally different issue; it is not relevant to this particular issue. This issue is the very difficult point of the example given in the question, which asked the Prime Minister whether he had confidence, or whatever it was—he was being questioned about the Minister’s judgment. The example given was right on the margins. If the question had been directly to do with that issue, I would have ruled it out. But the question was not directly to do with that issue, at all. The question was about the Prime Minister’s acceptance of the judgment of a Minister acting in a certain way. A lot of time has gone by. I believe that I cannot rule out the question. However, I stress to the Prime Minister that he is in no way required to comment on the particular detail of a matter relating to the ACT Party. So that the House can remember what the supplementary question was, I invite the honourable Leader of the Opposition to repeat the question.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Given your ruling, I think it would be useful now if you were able to give us a steer on what Speaker’s ruling 146/1 now means. It reads: “The Prime Minister is not responsible for the decisions of another party, but she”—it was in the case of Helen Clark—“may address the question as long as she does not address the other parties’ attitude on it.” We all know, whether or not we want to dance round the words, that we are talking about the attitude of another party to a particular set of circumstances. In that event I think this ruling almost seems slightly contradictory to the advice you have just offered the House.

Hon Darren Hughes: Speaking to the point of order—

Mr SPEAKER: No, I do not need further help on this one, because we must not take further time of the House today on this. I accept fully that the Leader of the House is raising important issues, but I would argue that this is not a matter of a decision of another party; this is the judgment of one of the Prime Minister’s Ministers. Remember, I have made very clear, and the Standing Orders make it very clear, that the Prime Minister is responsible for the behaviour and conduct— and therefore the judgment—of all his Ministers, regardless of their party affiliations. They are all Ministers, and the Prime Minister is accountable for all of those Ministers, regardless of their party. So one can argue, I believe reasonably, that the Prime Minister has a responsibility in respect of the judgment of all of those Ministers. I accept that the Prime Minister in answering the question can be very careful, and need not trespass on the affairs of another party. It does make answering the question very difficult; I accept that, and I do not pretend that it is easy. But if I were to rule out that entire question, I believe that I would be contravening that fundamental responsibility of a Prime Minister. That is why I am ruling in this way, and I make it very clear that I am not seeking to shift the goalposts or the dividing lines on this, at all. The Prime Minister is not responsible for leaders of other parties; he is not responsible for political party issues, or for leaders’ issues. This is a matter, though, of the judgment of one of his Ministers, and he is responsible for that—but not for the detail of what went on in a party.

Hon Phil Goff: How was it good judgment for his Minister Mr Hide to have covered up his law and order spokesman Mr Garrett’s theft of a dead baby’s identity?

Rt Hon JOHN KEY: With regard to Mr Hide’s portfolio responsibilities, I believe he has exercised good judgment.

Hon Phil Goff: I raise a point of order, Mr Speaker. I think you recognised that the Prime Minister did not answer the question, which was about how that action showed good judgment on the part of his Minister.

Mr SPEAKER: The difficulty I have with this is that, as I have pointed out, the Prime Minister is responsible for his Ministers’ conduct beyond their portfolio responsibilities. So I would ask the Prime Minister to respond a little more broadly than that, because he is responsible for his Ministers beyond just their portfolio responsibilities. He has a wider accountability for his Ministers.

Hon Gerry Brownlee: Point of order.

Mr SPEAKER: I call the Hon Gerry Brownlee. [Interruption] I apologise to the Minister. This is a very serious issue, and the Opposition should, in my view, respect the fact that the Speaker is putting a fair bit of pressure on the Government over an issue that is important to the Opposition. If those members do not want me to close it down totally, they will respect that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. A few moments ago you advised that the Prime Minister did not need to answer questions that related to actions or activities that were to do with any particular member’s or Minister’s role as a leader of a political party. The question from Mr Goff related specifically to the activities of a leader in accepting a position related to a member. The Prime Minister, quite rightly—

Mr SPEAKER: I think I have heard the member sufficiently.

Hon Gerry Brownlee: But you have contradicted yourself—

Mr SPEAKER: No. I have heard the member sufficiently. I have stressed on several occasions that the Prime Minister is responsible for the general conduct of his Ministers; there is no questioning that. The Prime Minister is responsible for more than their judgment and conduct in respect of their portfolio responsibilities. Although I say it is a bit tricky and a bit difficult, an answer is fairly obvious to me. With regard to avoiding the specific detail of the question, it was not totally necessary to try to confine the answer to portfolio responsibilities, because I do accept that that was dodging the question, pretty clearly. I think it is not unreasonable to ask the Prime Minister to answer the question as it was asked, and not to try to confine it just to portfolio responsibilities. The Prime Minister has responsibilities more widely than that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. That seems to be a most unreasonable position, because the question started with “How was …”, and asked how that was an exercise of good judgment. But the Prime Minister can judge his Ministers only on their performance as Ministers. So to start widening it out, and to say that the Prime Minister has some sort of jurisdiction over all sorts of other aspects of the lives of Ministers—or, for that matter, of members of their parties—I think is extremely dangerous territory to run into. I do not think that we should allow that question. I think that the Prime Minister answered very clearly: in his experience, Mr Hide has exercised good judgment in the discharge of his portfolio responsibilities. How clear can that be?

Mr SPEAKER: I do not need further assistance on this, because we are taking a great deal of time. Under our constitutional arrangements a Prime Minister who is not prepared to take responsibility for the conduct and behaviour of his Ministers is not fulfilling the role. Our requirements are that a Prime Minister is responsible not just for the conduct within the portfolio areas but for the general conduct of all his Ministers. Parties have nothing to do with this; this is the responsibility of the Prime Minister. I would not have thought it difficult for the Prime Minister to answer that he has general confidence in his Minister’s judgment. That is not constraining it to the portfolio responsibilities, and it avoids the detail to do with the ACT Party. I would not have thought it was difficult to find an answer to the question.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I know we are taking up a lot of time, but you may have missed it that in the process of the point of order, Mr Goff changed his question. His first question was about the ACT Party’s decision to have Mr Garrett as a candidate. The

second question that Mr Goff put alleged, somehow, that I covered something up. It might be true— [Interruption]

Mr SPEAKER: No. The member is starting now to debate the issue of the substance of the question asked. That leads to disorder. We will not have that. I do not believe the Leader of the Opposition did ask, as the member suggested, as the first supplementary question what the honourable member had done as leader of the ACT Party, because the Prime Minister clearly has no responsibility for that whatsoever. If I got that wrong, then I do apologise to everyone concerned, but I do not believe I got that wrong. I will check the Hansard and certainly apologise to the House if I got that wrong. The point that I cannot allow the House to avoid is the Prime Minister’s responsibility not just for the judgment of all his Ministers in their portfolio areas but also for their conduct, behaviour, and judgment. Those are matters for which the Prime Minister is responsible. But he does not have to go into any great detail at all about this particular issue. He is responsible for the judgment of his Ministers only in general terms, not on any particular issue.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I am sorry that I may not have expressed it well, but my point was this: to allege a cover-up is to suggest an action. It would suggest that a person as a Minister did something to hide it. There are plenty of things that we know about MPs that we do not tell others about, and that is not covering them up.

Mr SPEAKER: In my view, the Prime Minister is perfectly capable of answering the question. He does not need to go into any of that sort of stuff. The question does not require him to do any of that, at all. The question purely required that the Prime Minister express whether he had confidence in a particular Minister’s judgment. That is an important constitutional matter in this country. If the Prime Minister loses confidence in a Minister’s judgment, then that is a serious matter. The only extent to which the Prime Minister has to answer this question is in relation to whether he has confidence in the judgment of a Minister. But it cannot be confined just to portfolio responsibilities, because the Prime Minister has a wider responsibility than that. That is all I am asking the Prime Minister to answer, not to get into detail about whether there was any particular cover-up or what constitutes a cover-up. That is irrelevant to the Prime Minister’s role. He was questioned about whether he has confidence in a Minister’s judgment, and that is a matter for which the Prime Minister is responsible.

Hon Peter Dunne: I raise a point of order, Mr Speaker. I am sorry; I have no desire to prolong this any further. But an important issue arises out of your comments in relation particularly to Speaker’s ruling 146/5(1). You have made it very clear in the House this afternoon that the Prime Minister has a responsibility for the judgment of his Ministers as well as for their particular actions. Speaker’s ruling 146/5(1) says: “The Prime Minister and Ministers are responsible for only those matters that fall within their responsibilities as Ministers,”, which, on the face of it, would appear to be a different emphasis. I appreciate that the House is in very unusual territory. I wonder whether the way through it might be for you to give a considered ruling, not today but perhaps tomorrow, on this point, bearing in mind what Speaker’s ruling 146/5(1) says and the rulings you have made in the House today. This issue may well arise in the future, and I think it would be in everyone’s interest to make sure we get it absolutely right at this point. As things stand at the moment, it could be held that there is a contradiction between your ruling and the ruling that was in place previously.

Hon Darren Hughes: I appreciate that this is taking some time, but I hope you will note that it is not because the Opposition is continuing to raise points of order. It seems to us that you have stated a position on two or three occasions now, and Government Ministers and Ministers from support parties in the Government who take ministerial warrants are now trying to argue their way back from it, but the ruling you have given makes it quite clear. If Mr Goff had been asking questions about Mr Garrett as a member of Parliament, then there is no question that those questions would have been ruled out of order. He was asking the Prime Minister questions about one of his Ministers. Regardless of which party Ministers come from—it does not make it any worse or better if they come from a party that is not the National Party—the Prime Minister retains responsibility

for them. Part of our system, which Mr Parker has gone through with regard to the Cabinet Manual, means that when multiple parties make up an executive, they are still accountable to Parliament in exactly the same way. You have given a ruling to us on this already, and we have been thwarted from the continuation of question time today by multiple points of order from the Government.

Mr SPEAKER: I hear all members. I would point out to the Hon Peter Dunne in relation to Speaker’s ruling 146/5(1) that had the Prime Minister been asked about whether he agreed with the actions of the Hon Rodney Hide as leader of the ACT Party, as a Minister in his actions, or as the leader of the ACT Party, that would have been totally out of order. The Prime Minister is not responsible for a Minister’s actions, as that Speaker’s ruling points out. That is not the substance of the question. The substance of the question is whether the Prime Minister has confidence in the judgment of a Minister, and that is a slightly different question. I am very conscious that this is a very important issue—this boundary between the Prime Minister’s role as Prime Minister, party responsibilities, and Ministers’ roles. I accept fully that this is a vexed area for responsibility. Rather than screw it up as Speaker, I am prepared to give a more considered ruling: to give some further thought to the matter, and take into consideration all the issues that have been raised. I make it clear for the future, though, that Prime Ministers are responsible for the conduct of their Ministers. Sometimes that is not easy, but I do not believe the Speakers’ rulings that have been referred to in any way relieve the Prime Minister of that responsibility. I am very happy to look at the matter further, in the interests of making progress. At this point, if I am going to do that, I probably should abandon this question for today. [Interruption] So that I do not cost the Opposition further on the matter, I will listen to further questions, but clearly they cannot follow exactly this track. If I am to consider the matter further, as the House appears to want me to do, then the questions cannot be exactly the same as before.

Hon David Parker: I raise a point of order, Mr Speaker. The Opposition has put up with repeated challenges of your initial ruling. The Cabinet Manual is absolutely clear. The precedents—

Mr SPEAKER: The member will resume his seat immediately. I have indicated to the House that I will give this matter serious consideration. Had that member been in the executive, he would have wanted the Speaker to do exactly the same thing. I would not mind betting that he has never seen a Speaker push an executive as hard as this before. I make it very clear to the House that I will make a very fair ruling on this. If I give it further thought, it will not be to let any Minister or Prime Minister escape from his or her responsibilities, but I will not have that sort of thing in the House today.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I respect you, but we have a dilemma. I accept in good grace what you are trying to do to give a definitive ruling, but I ask how the questions of Mr Goff or other members are to proceed if members have very little guidance now as to what is in order to ask and what is not in order—

Mr SPEAKER: The member is just taking further time of the House. It is very clear that if I rule on the matter, the issue has not gone away. If I give a fully considered ruling on the matter, then the honourable Leader of the Opposition will be able to pursue the matter with absolute clarity. But my concern is that this is a hugely important issue, and I want to make sure that I do not blur boundaries or muddy waters when I make a definitive ruling on this matter. I have been sufficiently convinced that I run a risk, perhaps, of shifting the current boundary lines. Some would argue that the Prime Minister has already answered the question today. If members want me to go down that track, I could have said “OK, the Prime Minister has already answered the question. Let it all roll.”, but I am not sure whether the questioner would have felt comfortable with that, at all. In fact, the questioner raised a point of order about the Prime Minister’s answer. So I could have just got off the hook by saying “OK, let us keep going, treat that as an answer, and ignore the point of order from the honourable member’s own leader.” But I take question time too seriously to allow that to happen. This is a serious matter, and I have to make very clear the issue of the responsibility of the Prime Minister, so that we do not have this problem in the future.

Hon Darren Hughes: I raise a point of order, Mr Speaker. If we just go back to where we were before that last volley of points of order started, the Prime Minister had given a response to the Leader of the Opposition, and the Leader of the Opposition took a point of order to say he was not satisfied with that answer and you ruled in his favour. So we are still at the point where those points of order started, when you said the Prime Minister had the responsibility to answer his first supplementary question before we go back to that—that is the first point. The second point is that we have sat and listened respectfully to the rulings you have made, and we have not challenged that process. We have sat and watched Government Ministers repeatedly get up and, after you had given a ruling, be able to give very long points of order in response to what was said. We want to support you in your role as Speaker and in the reforms you are making to question time, but we do feel very uncomfortable that once you have given a ruling, Government Ministers are repeatedly able to stand and speak to that ruling at length, and to give the impression that that has somehow altered the course of question time for that day. I think that would be a very bad impression to give. I know that it is not the one that has happened, but I think we have to be very mindful of the fact that when the Opposition sits back and supports your rulings, we do not want to see Ministers then abuse that by taking point of order after point of order. I think the smirk on the Leader of the House’s—

Mr SPEAKER: The member is now getting into dangerous territory. [Interruption] Members are lucky that I could not pick who was making the interjections then. If members do not want me to give a considered ruling on the matter, then that is fine, but I have indicated to the House that I will give a considered ruling on this matter because I sense it is so important. If members agree with that, I will invite the honourable Leader of the Opposition to ask further questions in so far as we are able to today, given the uncertainty about the way that the Standing Orders and Speakers’ rulings apply to this particular situation.

Hon Darren Hughes: It’s the last question.

Mr SPEAKER: The answer to the last question I have to accept as having been given at the moment. If I am to consider the Standing Orders further, then I have to accept that last answer. I call the honourable Leader of the Opposition.

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

Mr SPEAKER: It had better be helpful.

Hon Gerry Brownlee: I do not want to prolong things, but this is far too important for the trivialising of it by the shadow Leader of the House to stand. Mr Speaker, I would ask also that when you consider your judgment, you look back through the Hansard of the time when the Hon Taito Phillip Field was in some difficulty. The Prime Minister was being questioned at that time, and that may give you quite a strong lead as to how much a Prime Minister has been required to be accountable for the judgment of Ministers, given that a number of Ministers were in full knowledge of some of Mr Field’s activities at that time.

Hon David Parker: Speaking to the point of order—

Mr SPEAKER: I will not hear any further on the matter. I assure the honourable member that the Leader of the House’s last contribution will not alter my judgment at all.

Hon Members: Why was he allowed?

Mr SPEAKER: I call the honourable Leader of the Opposition.

Hon Phil Goff: Mr Speaker—

Hon David Parker: That’s just rub—

Mr SPEAKER: I apologise to the honourable member. The Hon David Parker will get to his feet and apologise for that outburst, or he will leave the Chamber.

Hon David Parker: I withdraw and apologise.

Hon Phil Goff: Why has the Prime Minister continued to argue to the House today that Rodney Hide has good judgment, when Mr Hide himself in recent days has admitted to lacking judgment to a serious degree?

Rt Hon JOHN KEY: Because in my experience, in carrying out his portfolio responsibilities he has exercised good judgment. [Interruption]

Mr SPEAKER: I now ask Grant Robertson to rise to his feet and apologise to the Speaker for asking the Speaker to stand up for himself.

Grant Robertson: I withdraw and apologise.

Hon Phil Goff: When the Prime Minister promised that his administration would set high standards, does he believe that his Minister Mr Hide has complied in every respect with the high standards he promised to set?

Rt Hon JOHN KEY: Yes.

Hon Phil Goff: Has he, as Prime Minister, ever sacked a Minister for a reason other than lack of good judgment; if so, when, and for what reason?

Rt Hon JOHN KEY: No.

Hon Phil Goff: Did the Prime Minister force Richard Worth to resign as Prime Minister; if so, for what reason if not for the good performance of his office?

Rt Hon JOHN KEY: Richard Worth has never been Prime Minister.

Hon Phil Goff: I raise a point of order, Mr Speaker. You said this was a serious matter. I asked a serious question. Would you like me to reword it?

Mr SPEAKER: I cannot assist members if they get their supplementary questions wrong.

Hon Phil Goff: Did he force Richard Worth to resign as Minister for a reason other than good performance; if so, for what reason?

Rt Hon JOHN KEY: Because I lost confidence in him.

Hon Phil Goff: Does he accept that he is now almost alone in this country in believing that Rodney Hide has good judgment and has shown it in recent years?

Rt Hon JOHN KEY: No.

Hon Rodney Hide: Has he received my report to him that the difference between Mr Goff and myself is that Mr Goff wants me to go and, like the rest of the House, I want Mr Goff to stay?

Hon Darren Hughes: I raise a point of order, Mr Speaker. That member, in particular, has gone to some lengths today to try to prevent questions from being asked, by dancing on the head of a pin in that respect. How was that question in order? It is hard for anyone to see how he has responsibility for a member of the Opposition, given that he did not want any questions to be asked about him as a Minister of the Crown.

Hon Rodney Hide: I raise a point of order, Mr Speaker. My question asked whether the Prime Minister had received my report.

Mr SPEAKER: That is the dilemma that I face, given the broad nature of the question asked and the supplementary questions relating to confidence in people. The Prime Minister has been asked whether he received that member’s report, comparing his behaviour with someone else’s, and the Prime Minister, I believe, is entitled to answer about that report.

Rt Hon JOHN KEY: Yes, I have received that report, and I can confirm that I have more confidence in Mr Goff than Mr Cunliffe has.

Hon Phil Goff: Is the only real reason that he has not sacked Mr Hide that he relies on him to prop up his Government?

Rt Hon JOHN KEY: It might be lost on the Leader of the Opposition, but we have a wide variety of confidence and support arrangements. Therefore no, he is not correct.

Tax System Changes—Benefits for New Zealanders

4. CHRIS TREMAIN (National—Napier) to the Minister of Finance: How will the tax changes on 1 October benefit New Zealanders?

Hon BILL ENGLISH (Minister of Finance): Treasury advice I have released today shows that even—

Mr SPEAKER: I will ask the Minister to resume his seat for a moment, and I apologise to him. I say to members on both front benches that this has to stop. It is simply not a good enough performance today, at all. I blame myself partly for that, and I will be sorting out this matter; members can rest assured I will be sorting it out. Interjections across the front benches will cease.

Hon BILL ENGLISH: The Treasury advice I have released today shows that, when all forecast cost of living increases are taken into account, real after-tax wages are forecast to rise by 1.2 percent in the last 3 months of the year on the back of the 1 October tax cuts. This calculation uses the same data series that is used to calculate the rate of New Zealand superannuation, adjusted for tax and inflation. It captures the effect of personal tax cuts, the increase in GST, and all other forecast price increases in the period, including tobacco price, the effects of the emissions trading scheme, and accident compensation levies. Even when those cost of living increases are taken into account the vast majority of New Zealanders come out better off, after the tax changes on 1 October this year.

Chris Tremain: How does the forecast rise in real after-tax wages due to 1 October tax changes compare with previous years?

Hon BILL ENGLISH: This is a significant increase in real after-tax earnings, especially when we compare it with the 3 percent increase in the 9 years to September 2008, under Labour. It is even more remarkable when we consider that almost all of that growth under the previous Government occurred before 2004, and there was almost no growth in real after-tax earnings between 2004 and 2008. So the 1.2 percent increase in real after-tax earnings in the final quarter of this year, after the tax changes, will be just a bit less than half of the increase that New Zealand achieved in the 9 years to September 2008.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I seek this point of order under Standing Order 106 on misrepresentation. It has been previously established in this House, and the Minister has not denied it, that the numbers that he quotes include Labour’s 2008 tax cuts as part of National’s purported growth rate—

Mr SPEAKER: Forgive my taking so long to respond but that is a matter for debate, not question time. The member cannot do that by way of point of order during question time.

Chris Tremain: How will the 1 October changes help hard-working New Zealand families get ahead?

Hon BILL ENGLISH: After the 1 October tax changes an average family will be about $25 a week better off. An individual on the average wage will be around $15 a week better off, while a couple living on New Zealand superannuation, with no other income, will be about $11 a week better off. That is setting off the benefit of the income tax cut against the increase in GST. All New Zealanders, including the Opposition, can go to taxguide.govt.nz to see these benefits for themselves. The benefits, of course, will grow over time as wages grow. Across-the-board personal tax cuts will give New Zealanders more incentives to save, invest, work, and export, while the increase in GST will discourage New Zealanders from spending too much and borrowing too much.

Hon David Cunliffe: In addition to the fact that the Government’s tax calculator omits the effects of inflation, can he confirm that a wide range of commentators are, effectively, contradicting his claim that Kiwis will be better off, including the New Zealand Institute of Economic Research analysis showing that at least 50 percent of households will be worse off after the tax switch; the Reserve Bank governor holding interests rates steady because “growth is losing momentum”; the New Zealand Institute of Economic Research consensus reports stating that unemployment will not improve over the next 2 years; and Baycorp forecasting a massive spike, over the next 6 months, of people unable to pay their bills?

Hon BILL ENGLISH: No. If the member uses the same numbers that are used for calculating New Zealand superannuation, which the previous Government used for its whole term in office, and applies those after the tax cuts, they show that after taking into account all inflation effects New Zealanders’ real after-tax wages will rise by 1.2 percent.

Chris Tremain: How will the 1 October tax changes help lift New Zealand’s economic growth?

Hon BILL ENGLISH: Treasury has made what one could argue is a pretty conservative estimate of the effect of the tax changes, but Treasury says the changes will increase New Zealand’s real GDP by about 1 percent over the next 7 years. This is a significant increase compared with any other policy change that the Government could have made. Getting sustainable jobs and faster growth are the only ways that New Zealanders will get higher incomes and better living standards. The tax changes are just part—but a significant part—of a wide-ranging Government programme to achieve this.

Question No. 3 to Minister

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Speaker. I am sorry to raise a point of order that takes us back to question No. 3 but I have been advised, during the course of that last question, that when one of my colleagues interjected during question No. 3 she was sworn at by the Hon Rodney Hide during the course of that interchange. What I have been told is a serious direction of words towards her, and if that is the case, then the member should be forced to withdraw and apologise to her for it. I am certainly not going to repeat it; I am happy to tell you privately. I think the member—

Mr SPEAKER: I can do no more than ask the member whether he uttered any words that could have been construed as swear words towards another member. If the member denies it—

Hon RODNEY HIDE (Minister of Local Government): Absolutely and categorically no. [Interruption]

Mr SPEAKER: There is nothing much more I can do about that.

SUE MORONEY (Labour): I raise a point of order, Mr Speaker. I was the subject of that abuse and I take offence.

Mr SPEAKER: We are not going to have this sort of carry-on in the House. I have asked the honourable member whether he uttered words that could have been construed as swear words. He has said no. As Speaker, that is the end of the matter, because only that member can know what he said. Others might think they might have heard something but only that member can know what he said, and I must take the member’s word.

Sentencing and Parole Reform Act—Minister’s Statements

5. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister of Justice: Does he stand by his statement in relation to the Sentencing and Parole Reform Act 2010: “I am very relaxed about where it ended up. I was involved in the negotiation of the policy right up to the end.”?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Justice): Yes.

Hon Clayton Cosgrove: Were the offences of common assault, perjury, and the stealing of a dead baby’s identity in order to obtain a false passport ever considered as possible strike offences during those negotiations; if not, why not?

Hon CHRISTOPHER FINLAYSON: No. The question would have been a generic question; particular offences would not have been addressed in the course of negotiations or discussions.

Hon Clayton Cosgrove: Did either the Hon Rodney Hide or David Garrett ever reveal during negotiations on the Sentencing and Parole Reform Act that Mr Garrett had previous criminal offences and charges that could call into question the credibility of this Act, which he had promoted?

Hon CHRISTOPHER FINLAYSON: To the best of my knowledge, no.

Hon Clayton Cosgrove: Does he agree with the Hon Rodney Hide’s statement that “The focus of our police and court system should be keeping law-abiding citizens safe from thugs and bullies. That means a zero tolerance approach to crime,” or does he agree with the Hon Rodney Hide’s

statements in more recent days in relation to David Garrett’s crimes: “Anyone can turn their life around,” and “a person should get a second chance,”?

Hon CHRISTOPHER FINLAYSON: We are getting away from the primary question, but I am happy to say that I agree with both propositions.

Roading—Transmission Gully

6. HEKIA PARATA (National) to the Minister for the Environment: Is he aware of the importance of Transmission Gully to the people of Mana; if so, what steps is he taking to facilitate a timely process to consider this critical project?

Hon Dr NICK SMITH (Minister for the Environment): Yes, I am very aware of the strong interest in Mana and the wider—

Hon Darren Hughes: No, it’s a good road; keep Nick away from it.

Hon Dr NICK SMITH: Well, the member who is chipping in did absolutely nothing on Transmission Gully—absolutely nothing for 9 years. I am pleased with the support of Hekia Parata.

Catherine Delahunty: I raise a point of order, Mr Speaker. I can’t here a thing.

Mr SPEAKER: Catherine Delahunty has made her point that she cannot hear a thing. I am not surprised that she cannot hear a thing. If members interject, they might get a reaction from Ministers. I am not going to rule out Ministers reacting to interjections.

Hon Dr NICK SMITH: I acknowledge the very strong advocacy by Hekia Parata for getting a timely process in place for dealing with Transmission Gully. Today I announced that there will be an application going through the national consenting process under the changes that National has made to the Resource Management Act. I also announced the members of the board of inquiry and that they are to be led by Environment Court judge Brian Dwyer.

Hekia Parata: Is the Minister aware that the Wellington City inner bypass took over a decade to get consented after multiple appeals and delays, and can he assure the people of Mana that this process will be far more timely?

Hon Dr NICK SMITH: Yes, I can. First, the process then was for a council hearing.

Hon Darren Hughes: This has been going since World War II.

Hon Dr NICK SMITH: It is just a pity that Darren Hughes did not do anything on this issue in the 9 years that he was in Government. Thank goodness that we have a National Government that has been prepared to amend the law and ensure that we have a timely process for dealing with important infrastructure projects like Transmission Gully. The three key changes are that there is a one-stage process for a decision, that they are required in 9 months, and that there are only limited appeals.

Hekia Parata: What projects other than Transmission Gully are benefiting from the new national consenting system?

Hon Dr NICK SMITH: The new Environmental Protection Authority has now over $7 billion worth of infrastructure projects before it, covering the Tauhara geothermal power project, the Waterview Connection, the wind farm near Raglan, and the Turitea wind farm. The changes that National has made to the Resource Management Act are a crucial part of our programme of ensuring that we have infrastructure in place and that it will support growth of the economy and jobs.

Gareth Hughes: Why is the Minister fast tracking this expensive motorway with a negative cost-benefit ratio when Ministry of Transport officials advise that many trucks will not use it, that it will take longer to clear in the event of an earthquake than the coastal highway, and that it will just increase traffic congestion in Wellington?

Hon Dr NICK SMITH: We need only to look at the events of the earthquake in Canterbury to realise the importance of having alternative lifelines into the capital city of this country. Although I acknowledge the Green’s consistent position to be opposed to new infrastructure all over New

Zealand, this Government is committed to infrastructure that will support the growth and jobs of this country.

South Canterbury Finance Statutory Management—Potential Conflicts of Interest

7. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Commerce: Did any members of the Securities Commission declare potential conflicts of interest in respect of the recommendation to place Allan and Jean Hubbard into statutory management; if so, on what date and in relation to what potential conflicts of interest?

Hon GERRY BROWNLEE (Acting Minister of Commerce): No. One commission member raised a potential conflict of interest in relation to South Canterbury Finance. The commission considered that the circumstances did not disclose any conflict of interest. Legal advice sought by the commission confirmed that view. As the member will know, South Canterbury Finance is not and never has been in statutory management.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has misquoted the question in two respects. Firstly, it asked whether any members of the Securities Commission declared potential conflicts of interest. He answered no to that question and then described one. Secondly, he talked about South Canterbury Finance going into statutory management, whereas the question asked about placing Allan and Jean Hubbard into statutory management. I ask that you ask the Minister to answer the question that was asked.

Mr SPEAKER: This is a primary question; I ask the Hon Gerry Brownlee to reply.

Hon GERRY BROWNLEE: Yes, it is, and the answer is quite correct. The question asked whether anyone declared a conflict of interest. That would assume that people were sitting at a proper meeting of the Securities Commission and made a declaration there. At no formal meeting was there such a declaration. I went on to explain that one commission member raised a potential conflict of interest in relation to South Canterbury Finance, such that the commission itself sought legal advice to confirm, ultimately, that there was no conflict. I am not trying to be clever; it is a matter of form. Was there a formal meeting at which a conflict was declared? The answer is no, but it is clear, from the answer, that the issue was raised.

Hon David Cunliffe: I do not wish to detain the House. It may be a semantic point, but the question was around a potential conflict. The Minister cannot answer no to that question and then say that there was a potential conflict.

Mr SPEAKER: The Minister explained his answer and I am very grateful to him for that. He said no in relation to the specific question asked, and then added a little further information about another potential conflict of interest relating to another interest.

Hon GERRY BROWNLEE: There is no intention here to create any murk or otherwise. The question asked whether any members of the Securities Commission declared potential conflicts of interest. I assumed that meant whether anyone at a formal meeting of the commission declared a potential conflict of interest. The answer is no, but clearly the issue was raised at a subsequent point by a member. It was checked to see whether there was a conflict, and the legal advice was that there was no conflict. It is somewhat pedantic. If members would prefer me to answer as to whether someone declared a potential conflict of interest, I am in difficulty. The member, I understand, questioned whether there was one, rather than whether someone declared that there was one. I think that that is a fine and important point.

Mr SPEAKER: Normally I would not spend any time at all on this, but this is a primary question, and the Minister has had some time to prepare the answer for it. The question is fairly clear: it talks about the declaration of a potential conflict of interest in respect of the recommendation to place Allan and Jean Hubbard into statutory management. It specifically mentions those two people and asks on what date and in relation to what potential conflicts of interests. That question is clearly answerable.

Hon GERRY BROWNLEE: I am advised that the answer is no. There was no formal declaration of potential for conflict, but there was clearly—and I am not familiar with the circumstances—a discussion. Everyone knows that. The most salient point is that legal advice was sought by the commission, which confirmed that there was no conflict of interest. Was there a declaration? No, there was no declaration. A question was asked whether there was a conflict.

Mr SPEAKER: The Minister has explained that, in so far as it is possible.

Hon David Cunliffe: Can the Minister confirm that the question or declaration in relation to Mr Botherway’s brother’s business being put into receivership by Allan Hubbard and South Canterbury Finance occurred only after written parliamentary questions regarding the potential conflict of interest were raised by my colleague the Hon Ruth Dyson, and that the Chief Ombudsman is now investigating the adequacy of that conflict management?

Hon GERRY BROWNLEE: I can confirm that the Securities Commission member concerned raised the potential conflict of interest in respect of South Canterbury Finance on 24 June 2010. I can further confirm that legal advice has made it very clear that the member did not have a conflict. I can confirm that the Ombudsman is looking into this matter, although I have no responsibility as a Minister for that.

Hon David Cunliffe: I seek leave to table a letter from Beverley Wakem, the Chief Ombudsman, dated 1 September 2010, confirming that that matter is under investigation.

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 David Cunliffe: Has Mr Botherway declared any potential or perceived conflict of interest in relation to his former business relationships with Mr George Kerr—for example, at Spicers, Brook Asset Management, Sterling Grace, or Tempus Capital—given that Mr Kerr is a director of the Torchlight Fund, the largest single beneficiary of the bail-out of South Canterbury Finance, which was repaid in full, plus interest, plus fees described by the New Zealand Herald as usurious?

Hon GERRY BROWNLEE: I am unable to confirm that, but I can say that clearly the incident that was referred to in part of the primary question has caused the commission to be mindful of these things, and has caused the commission to seek legal advice on this particular matter. I am also certain that in light of the Ombudsman’s investigation into this matter, parties concerned will be acting with all caution and prudence.

Hon David Cunliffe: Has Mr Botherway declared any potential or perceived conflicts of interest in relation to his former professional and business relationship with Mr John Key, for whom he was reportedly recruited as his deputy at Bankers Trust; if not, does the Minister think it would have been prudent for the country’s most senior regulator to make such relationships fully transparent?

Hon GERRY BROWNLEE: I am unable to confirm that, but I can tell the member that one of my best friends was the first person ever to employ Mr Key after he left university. If that disclosure is helpful I am pleased to have made it.

Superannuation—Compensation Available from 1 October

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

Employment: What compensation to superannuitants will be available from 1 October?

Hon PAULA BENNETT (Minister for Social Development and Employment): GST compensation will be made available to those receiving New Zealand superannuation and veterans pensions. Tax cuts will also see these payments increase. A typical single superannuitant living alone will receive an extra $31.26 a fortnight in GST compensation and tax cuts. Couples receiving superannuation will get an increase of about $42 a fortnight between them.

Katrina Shanks: Who else will be eligible for GST compensation?

Hon PAULA BENNETT: Benefits will be going up to compensate for the rise in GST. These benefits include the unemployment benefit, the sickness benefit, the domestic purposes benefit, the widows benefit, and the invalids benefit. We are also compensating in terms of student allowances, the disability allowance, the child disability allowance, childcare subsidies, and Working for Families payments.

Katrina Shanks: Is the Minister aware of any precedent where there has been compensation for a GST increase?

Hon PAULA BENNETT: I am aware that when GST was last raised in 1989 by the then Labour Government, from 10 percent to 12.5 percent, there was no compensation whatsoever for these groups of people.

Health System—Minister’s Assurances

9. Hon RUTH DYSON (Labour—Port Hills) to the Minister of Health: What assurances can he give the public that no one will be left unsafe in their own home due to “changes” in health policy?

Hon TONY RYALL (Minister of Health): I can pass on the assurances given to me by relevant chairs of district health boards that no one will be left unsafe in their homes as a result of any changes to the way boards allocate their home support. In any year about 75,000 people receive home support, 15,000 come on to the scheme, and 15,000 come off, as circumstances change.

Hon Ruth Dyson: Can he guarantee that not one of the thousands of older people in the Wellington region who are about to have their home help cut will be unsafe; if so, how does having a community services card make them more at risk?

Hon TONY RYALL: The member is referring to an announcement by Capital and Coast District Health Board that it will means test its home cleaning services, and this actually brings the board into line with the rest of the country and returns it to the approach it had before 2005. I can tell the member that we spent more money on home support last year and we are spending more money this year.

Hon Damien O’Connor: How does the Minister respond to this editorial comment in the Nelson Mail of 15 September with regard to the plight of the 14 residents of the Joan Whiting Rest Home, all of whom are frail and some of whom are in very poor health: “The prospect of uprooting and transplanting them to a foreign environment, because in essence the health bureaucracy can’t get its act together, is scandalous. If ever there was an unjust problem with a straightforward solution simply begging for some sensible leadership, this is it. ... We look forward to Mr Ryall filling the vacuum.”; or is the problem that he is the vacuum?

Hon TONY RYALL: The local member of Parliament, Mr Auchinvole, has come to me with a solution, which is more than that member has ever come to the Government with. That solution, I am sure, will see very positive progress made in that area. The important thing that I would underline is that if members of Parliament come to me with solutions, there can be progress; if a member opposite comes to me with a complaint, there will not be.

Hon Damien O’Connor: Will he guarantee that residents of the Joan Whiting Rest Home will not be thrown out from their home without any option of care in their community; if not, what does he suggest they do?

Hon TONY RYALL: The local member of Parliament, Mr Chris Auchinvole, has come to me with a proposal that we are working through very closely, and I am certain it will result in a very positive outcome for the people affected. There has been a lot of talk in that community about a new integrated health centre. We have not had a time line on that, and I know that the Ministry of Health is working closely with the local people on it.

Students—Minister’s Statement

10. GARETH HUGHES (Green) to the Minister for Tertiary Education: Does he stand by his statement: “Today’s students are the future of our economy, and we can’t afford to get this wrong.”?

Hon STEVEN JOYCE (Minister for Tertiary Education): Absolutely.

Gareth Hughes: If students are the future of our economy, why have so many students missed out on studying because universities are limiting entrants?

Hon STEVEN JOYCE: It may be news to the member but universities have always, to some degree, limited entrants, and some of them are doing so this year. I can tell the member that we are funding more core places at both universities and polytechs this year than the country ever has before. Next year, we will be doing the same, including funding about 6,500 more places than in 2008.

Gareth Hughes: If students are the future of our economy, why has spending on tertiary education been cut in 2010?

Hon STEVEN JOYCE: On the contrary, spending on tertiary education is being maintained at current baseline levels. We are not increasing the amount of tertiary education looking forward, because tertiary education already takes a large and significant proportion of the Government’s expenditure as a percentage of economic wealth compared with other countries.

Gareth Hughes: If New Zealand is trying to catch Australia in wage terms, why has it cut the tertiary education spend, according to the Parliamentary Library, while Australia has increased its spend by A$5.3 billion over the next 6 years?

Hon STEVEN JOYCE: As I said, the Government is increasing its spend, and as a proportion of GDP we have a slightly higher spend than the Australians do. Our problem is not the way the cake is cut in this country; our problem is the size of the cake. If the member and his party would like to join with the Government in looking at ways of growing the economy faster, we would be happy to have their assistance.

Gareth Hughes: If we want a smart and prosperous economy, why do we spend $3,000 less than the rest of the OECD on our per student average?

Hon STEVEN JOYCE: Again, I will explain for the member’s benefit that as a proportion of our economy, our spend is larger on average than spending of other countries in the OECD. Our problem is not what we spend as a proportion of what we are able to spend; our problem is that our economy is not big enough. That is why the Government is focused on ways of growing the economy so that we can increase spending on things that we want to spend money on.

Gareth Hughes: If students are the future of our economy, why has the Minister shut the door on students who want to study and cut funding, and can New Zealand afford to have a Minister for Tertiary Education who gets it so wrong?

Hon STEVEN JOYCE: I think the member is showing the limited benefit of recording his supplementary questions before he comes to the House. I have told him that we are increasing the number of full-time places at universities. Next year, there will be 117,400 places, which is 5,600 places more than in 2008, or at least when I went to school.

Gareth Hughes: I seek leave to table a document prepared by the Parliamentary Library that shows that tertiary education funding has decreased in 2010 versus 2009.

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.

Drink-driving, Blood-alcohol Limit—Public Support for Reduction

11. Hon DARREN HUGHES (Labour) to the Minister of Transport: Is it still his position that the Government will not lower the blood-alcohol content for adult drivers until the move is

regarded as having wide public support and would specifically need “three-quarters support or more” before a change was made?

Hon STEVEN JOYCE (Minister of Transport): I have said repeatedly, including to the member many times, that before lowering the adult blood-alcohol limit the Government would want to ensure that the specific impact on the road toll of drivers with a blood-alcohol concentration of between 0.05 grams and 0.08 grams was known, and that the move had very broad support amongst the driving population of this country.

Hon Darren Hughes: If public opinion is so important to the Minister on this topic, what will he do if his 2-year study comes back recommending that the limit should be lowered, but the polls do not show 75 percent support?

Hon STEVEN JOYCE: As the member is well aware, there is a very strong lobby in both directions in this country between people who want to see the limit maintained at the current level, and people who want to see it lowered. Those who want to maintain the current level are very focused on the lack of information about specific harm in relation to drivers with a blood-alcohol level between 0.05 grams and 0.08 grams. I am confident that if we collect that data and it shows specific harm, then we will be able to build a consensus for change, provided that data does exist.

Hon Darren Hughes: I raise a point of order, Mr Speaker. That was a very interesting answer but I was trying to get from the Minister a sense of what his priorities were. He has set out two criteria for changing the blood-alcohol limit for driving: one is popularity; the other is a 2-year study. I am trying to get a sense of which of those two things would be the priority, if they are in conflict in 2 years’ time, that will lead the Minister to act. That is the point of my question.

Mr SPEAKER: I invite the member to repeat his question if there was some doubt.

Hon Darren Hughes: What will the Minister do if his 2-year study comes back and says that the alcohol limit for adults should be lowered, but the polls do not show 75 percent support for such a measure?

Hon STEVEN JOYCE: I have confidence in my fellow New Zealanders that if the data comes back and suggests that there is a significant benefit to be obtained, then achieving a consensus for change will not be difficult.

Hon Darren Hughes: Was the Cabinet paper that he signed this year correct, on page 9 at paragraph 46, where he states: “When New Zealanders are asked what the limit should be, 85 percent of people support a blood-alcohol limit of 0.05 or lower, and only 2 percent favour the current 0.08”; if so, does this not mean that his own paper shows there is already the support for this measure to lower the blood-alcohol limit for adult drivers?

Hon STEVEN JOYCE: I have signed a number of Cabinet papers this year so I cannot recall the details of that one, but I can say that the study relates to the amount of alcohol people think somebody should be able to drink; then, when it is translated into a level, it can be translated to be the numbers that the member describes. The issue is that New Zealanders do not believe that the amount proposed by the officials is the correct number for 0.05 grams to 0.08 grams. We could have had this issue solved a long time ago if the previous Government had done the research that was required, but when the current Leader of the Opposition in 2001 had the opportunity to do so he never did it.

Hon Darren Hughes: When the Minister said in the media this morning that building public support would be hard if Kiwis thought that one or two drinks would put them over the limit, had he forgotten that his own papers make it clear that such a level of consumption would be lower than the 0.05 grams limit promoted in my member’s bill?

Hon STEVEN JOYCE: The member has paraphrased what I said this morning. I said many New Zealanders are worried—

Hon Darren Hughes: No, not at all. I listened very carefully to what he said.

Hon STEVEN JOYCE: I said two things—

Hon Darren Hughes: I never miss the optics!

Hon STEVEN JOYCE: Does the member want me to answer the question or does he want to keep going? [Interruption]

Mr SPEAKER: Order!

Hon STEVEN JOYCE: As I said on the radio this morning, there are two things that concern people who oppose change. One is as to what level they would then be able drink before they contravened the new law; and, secondly, whether there was a concern that we would be punishing the majority with a law change when we were trying to impact on a minority. That is the reason for doing the research. Once again, I have to say that it is ironic that members opposite are such lambs in Government and lions in Opposition. It seems that they discovered their courage on the way to the Opposition benches.

Foreshore and Seabed Act Review—ACT Party Advice

12. Hon JOHN BOSCAWEN (Deputy Leader—ACT) on behalf of Hon RODNEY HIDE

(Leader—ACT) to the Attorney-General: Why didn’t he follow ACT’s advice to repeal the Foreshore and Seabed Act 2004 and use Parliament’s power to put iwi back to their pre-2004 legal position so Māori could have their day in court?

Hon CHRISTOPHER FINLAYSON (Attorney-General): Two principal reasons. The first is uncertainty about tests to determine customary title. In British Columbia, for example, certain indigenous groups have been involved in litigation for years, trying to work out the tests for customary title. The Government thought it better to prescribe tests using the principles set out in the Ngāti Apa case and in common law. The second is uncertainty about what customary title is. The Court of Appeal in the Ngāti Apa case observed that it could mean anything from use rights to exclusive ownership equivalent to fee simple. The Government has provided certainty by setting out what rights may be conferred by a customary marine title order.

Hon John Boscawen: Does the Attorney-General agree with the decision of the court in the Ngāti Apa case that “Any customary property in the areas vested seem unlikely to survive”; if so, why is it that under National’s policy, which he stated publicly, up to 10 percent or 2,000 kilometres of New Zealand’s foreshore and seabed could end up in iwi hands?

Hon CHRISTOPHER FINLAYSON: Actually I do not think that what the court said was part of the holding, or what they call the ratio. I think it was more an obiter comment; none the less I do agree with it.

Hon David Parker: Was the real reason he did not follow ACT’s advice because he was annoyed and embarrassed by the loss of reputation his Government has suffered as a result of Minister Hide’s lack of judgment and ACT’s double standards?

Hon CHRISTOPHER FINLAYSON: No. I was particularly interested in seeing a just result for iwi—a just and durable solution—and the answers I gave to the primary question accurately and, if I may so, admirably set out the position.

Hon John Boscawen: Supplementary question—

Mr SPEAKER: I believe that the ACT Party has exhausted its questions.

Hon John Boscawen: I raise a point of order, Mr Speaker. I understand that we have an agreement with National to have one of its supplementary questions.

Hon Members: Oh!

Mr SPEAKER: Members are lucky that everyone was out of order there. The honourable member will be aware that if parties are to trade questions, which they are at liberty to do, they must advise the Speaker. We received no advice that National had allocated any questions to ACT today. ACT had a supplementary question on question No. 3 and a supplementary question on question No. 12. That is the full ACT allocation. If the member wishes he could seek leave to—

Hon John Boscawen: I will seek leave to ask a further supplementary question, but my understanding was that agreement had been reached, and, obviously, I understood that that advice had been made clear to the Speaker.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I take your advice that ACT’s questions have expired, and we have no objection to ACT having the leave.

Mr SPEAKER: Leave is sought for the ACT Party to have a further supplementary question. Is there any objection? There is none.

Hon John Boscawen: Why does he think it better that politicians like him determine the extent of iwi ownership of the foreshore and seabed, guided by politics, than the courts, guided by common law and the facts of the case?

Hon CHRISTOPHER FINLAYSON: It is not a question of preferring politicians like me to judges. A fact of litigation is that often it makes more sense for parties to reach agreement on something out of court, rather than spend time and money engaged in the court system for years. That sort of thing happens all the time. Just a couple of months ago, after a High Court decision, when it was on its way to the Court of Appeal, the Government entered into an agreement with certain trading banks over a tax issue. These sorts of things are not uncommon, and to characterise it as the member characterises it is silly.

QUESTIONS TO MEMBERS

Electoral (Disqualification of Convicted Prisoners) Amendment Bill—Purpose

1. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Member in charge of the

Electoral (Disqualification of Convicted Prisoners) Amendment Bill: What is the purpose of the Electoral (Disqualification of Convicted Prisoners) Amendment Bill?

PAUL QUINN (Member in charge of the Electoral (Disqualification of Convicted

Prisoners) Amendment Bill): The purpose of the bill is to remove the right of persons serving time in jail to be able to vote.

Hon Clayton Cosgrove: Is he satisfied with the fact that the bill as reported back from the Law and Order Committee will give our worst and longest-serving prisoners, such as William Bell, Graeme Burton, and Clayton Weatherston, the right to vote, a right they do not have under current law?

PAUL QUINN: Notwithstanding the fact that that member was serving on the select committee that reported back on that bill, I am currently—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I asked a very straight question. It did not receive a straight answer. We voted against the bill, and the member knows that.

Mr SPEAKER: I believe that the member did not prevaricate long; he just happened in passing to mention that the honourable member was on the select committee. I think he was going to answer the substance of the question.

PAUL QUINN: I am advised that there is conflicting advice on the matter, and I am still awaiting official word.

Electoral (Disqualification of Convicted Prisoners) Amendment Bill—Proposed Changes

2. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Member in charge of the Electoral (Disqualification of Convicted Prisoners) Amendment Bill: Does he intend proposing any changes to the Electoral (Disqualification of Convicted Prisoners) Amendment Bill as reported back from the select committee; if so, what?

PAUL QUINN (Member in charge of Electoral (Disqualification of Convicted Prisoners)

Amendment Bill): Whether I propose any changes to the bill will depend on whether any changes are required to the purpose.

Hon Clayton Cosgrove: Does the member agree that had the chair of the Law and Order Committee, Sandra Goudie, not blocked the Ministry of Justice from advising on this bill when requested to by Opposition members of the select committee, the mistakes in this reported-back bill could have been avoided?

PAUL QUINN: Not being a member of the Law and Order Committee, I am not in a position to comment on that accusation.

ENDS

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