QUESTIONS TO MINISTERS

Inequality—OECD Report 1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he agree with the OECD that “when income inequality rises, economic growth falls”?

Rt Hon JOHN KEY (Prime Minister): No, it is not that simple, because there are a number of factors that contribute to economic growth.

Dr Russel Norman: Is the Prime Minister saying that the OECD Secretary-General, Angel Gurria, got it wrong when he said yesterday that “addressing high and growing inequality is critical to promote strong and sustained growth”?

Rt Hon JOHN KEY: No, I think that that helps. That is one of the reasons why the Government is proud of its record, as defined by the OECD in a table that it put out last night. It showed that between 2007 and 2011, income inequality has actually narrowed under this Government. The great tragedy is that it also put out a report last night that showed that between 1985 and 2005, when a Labour Government was in office for a reasonable period of time, income inequality got worse. Shame on Labour—

Mr SPEAKER: Order!

Dr Russel Norman: Why does the Prime Minister continue to defend a failed right-wing ideology—trickle-down economics, which the OECD has now rejected—when this economic ideology has fuelled the biggest rise in inequality amongst OECD countries and has knocked 10 percentage points off New

Rt Hon JOHN KEY: That is not right. All I can say is that under a National-led Government, income inequality has actually narrowed, as defined by the OECD, between 2007 and 2011. Interestingly enough, if the member is quoting the OECD as the oracle of all good information when it comes to growth and issues of inequality, maybe he would like to follow this comment from the OECD. It said in 2010 in its report: “A growth-orientated tax reform would improve the design of tax regimes by broadening the base and lowering the tax rates of New Zealand.”

Dr Russel Norman: With regard to tax rates, does the Prime Minister believe that when he cut taxes for the top 10 percent of income earners in the middle of the global financial crisis, in 2010, it reduced inequality?

Rt Hon JOHN KEY: As Treasury noted at the time and as has proven to be correct, actually, the changes to the tax system that were made by the National-led Government in 2010 were distributionally neutral. Actually, as time has gone on, it has been proven that higher-income taxpayers have paid more as a result of those tax changes. That is because the Government changed the rules around depreciation of rental properties, the bulk of which are owned by better-off New Zealanders, and it is because even though there was an increase in GST, a large amount of nominal GST is, of course, paid by higher-income taxpayers. They were very good tax changes, and that is (uncorrected transcript—subject to correction and further editing) why New Zealanders voted for them in an overwhelming way and why they rejected the Green Party policies, and delivered what was—

Mr SPEAKER: Order!

Dr Russel Norman: Will he now revisit his policy of keeping benefits low as “an incentive to work” in light of the OECD finding that the resulting inequality is bad for people and bad for the economy?

Rt Hon JOHN KEY: Inequality is narrowing under a National-led Government. I am proud of that record, as confirmed by the OECD last night in its report. Secondly, the Government is not keeping benefits low. In fact, this is a Government that has legislated to ensure that there are increases in benefits in line with the CPI. The most important thing we can do for beneficiaries—where possible for the bulk of them; clearly not all of them—is to find them work. That is why a strong economy that delivers job opportunities and lifts people out of the welfare trap into work is one of the most beneficial things we can do for low-income families in New Zealand.

Dr Russel Norman: Does he accept the finding of the OECD that the increase in inequality in New Zealand, one of the largest increases in the developed world, resulted in a 10 percent reduction in the size of the New Zealand economy?

Rt Hon JOHN KEY: Well, I do not accept all elements of the report, but I do say this. It was a report that took place on statistical data between 1985 and 2005. In the period between 1999 and 2005, if my memory serves me correctly, the then Labour Government did that with support in various forms from the Green Party. So I say to Russel Norman that, yes, he should apologise to New Zealanders—

Mr SPEAKER: Order!

David Seymour: Would the Prime Minister agree that what the report really found was that growth is driven by the quality of investment in human capital across all income levels; if so, could he share any initiatives that this Government is taking to improve the quality of investment in human capital across lower-income New Zealanders?

Rt Hon JOHN KEY: Yes, I would, and I would say that the OECD actually made a very interesting point when it said that redistribution policies that are poorly targeted and do not focus on the most effective tools can lead to a waste of resources and general inefficiencies. One of the ways I know to do that when it comes to human capital—

Hon Member: What about charter schools?

Rt Hon JOHN KEY: —is to make sure they get access to a world-class education. That was the point I was actually going to come to. I myself, with the member, visited Vanguard Military School and saw the great young New Zealanders who are coming out into employment. I must say how proud I was to be part of a Government that is championing those partnership schools that are making a difference to those young New Zealanders.

Dr Russel Norman: Why can the Prime Minister not see this OECD report as an opportunity to move away from failed trickle-down economics towards a form of economic policy that is both good for people and good for the economy, and has a win-win solution for poor children and for the broader economy?

Rt Hon JOHN KEY: If the member wants to talk about failed policies, he should read the Green Party manifesto, as it was so utterly rejected by New Zealanders. I remember that member parading before the cameras a couple of days before the election, telling New Zealanders that the Green Party would be polling a massive number—basically, throwing the Labour Party overboard because the Greens did not want to be part of it, and in the end, they polled 10-odd percent. It was a terrible result. Bad policies are the Green Party’s policies. This Government is delivering for New Zealanders. (uncorrected transcript—subject to correction and further editing)

Inequality—OECD Report 2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he agree with yesterday’s OECD report that “focusing exclusively on growth and assuming that its benefits will automatically trickle down to the different segments of the population may undermine growth in the long run”; if not, why not?

Rt Hon JOHN KEY (Prime Minister): With regard to New Zealand, under this Government that is a hypothetical question. That is because the Government is providing billions and billions of dollars of targeted income and welfare support to the most vulnerable New Zealanders every year. So it is simply incorrect to characterise our economic approach as trickle-down. I would also point out to the member that the data covered the period from 1985 to 2005. I became Prime Minister in 2008. I know he wants to blame me for everything, and he will for the next 3 years, but it is a little bit difficult to blame me for something when I was not even Prime Minister.

Andrew Little: In view of the figures in the report relying on data to 2011, and in light of his previous answer, what specifically does he think was wrong with the OECD’s analysis when it found that economic growth is undermined by inequality?

Rt Hon JOHN KEY: There are many, many things in the report, but what the report last night showed is that there was a growing income inequality in a period that started with a Labour Government and ended with a Labour Government. That is called a failure of Labour’s policies. Since we have had a National-led Government income inequality is narrowing, and that is because this Government is providing enormous support to those most in need. One great example of that is that under this Government the support that is given to households earning under $60,000 a year—that is, just under half of all households are expected to pay no net income tax at all. The members opposite do not like it, but I will tell you what we do not like—the failure, between that 1985 to 2005 period, of a Labour-led Government.

Andrew Little: Does he accept Statistics New Zealand’s finding that incomes for the top fifth in the year to June 2014—after the date for the OECD report—grew by 14.7 percent, while incomes for the bottom fifth grew by just 2.9 percent, thereby increasing inequality in New Zealand?

Rt Hon JOHN KEY: The last bit is the assumption of the member and it is simply incorrect.

Hon Members: Ha, ha!

Rt Hon JOHN KEY: No, I am sorry, but it is simply incorrect. The first point may be correct, but if my memory serves me correctly, and the member is talking about the data series I have seen in the past, that is because it includes returns on investments and other things, and as the member will—

Hon Member: When was it you got your memory back again?

Rt Hon JOHN KEY: That is right—that is right. The member will know that between 2008 and some period, I think, in 2011 or 2012, there was a decrease each year because those returns were negative.

Andrew Little: Does he accept the finding of theNew Zealand Institute of Economic Research that loan-to-value ratio restrictions have led to home purchases by speculators leaping as high as 45 percent, while the number of first-home buyers has fallen, all of which is making inequality in New Zealand worse?

Rt Hon JOHN KEY: No, I do not accept that as being correct. I will remind the member that it was his party that actually supported loan-to-value ratios in the early days, but that is another issue. Here is the point: loan-to-value ratios were part of the tool box deployed by the Reserve Bank governor. Without that, interest rates would have gone up by at least half a basis point for all New Zealanders, and that would have had a very significant impact on lower-income New Zealanders. Actually, what we know is that economic growth is being delivered at high levels by this Government, and that follows the economic disaster that we inherited from the previous Labour Government. (uncorrected transcript—subject to correction and further editing)

Andrew Little: Does taking away the rights of low-paid workers to better pay, secure work, and even tea breaks make them economically stronger or weaker compared with their employers?

Rt Hon JOHN KEY: We are not doing that. What we are doing is providing flexibility in the labour markets. Interestingly enough, last week Mr Little was trying to tell New Zealanders that somehow small businesses are now working New Zealanders, and that they would have his support. They would have his support so much that they would not be allowed a 90-day probationary period, they would not be allowed flexibility in their labour markets, and they would have to pay a much higher starting-out wage or a much higher minimum wage. I know why the member is supporting his policies; it is because his caucus did not vote for him, but the unions did.

Mr SPEAKER: Order! That answer will not help the order of the House.

Andrew Little: Given the OECD’s finding that increased inequality has made the economy 15.5 percent worse off since 1990, how does he plan to reduce inequality in order to grow the economy faster?

Rt Hon JOHN KEY: Income inequality is narrowing under a National-led Government, as supported by the OECD. The members cannot have it both ways. They cannot say one OECD report is right and another one is wrong. The only point I would make is simply that the member needs to go away and get his facts right. Under the report where income inequality was widening was under a Labour-led Government. I know it is a disgrace, but that is why they were hammered at the polls—it is because they were a disgrace. [Interruption]

Andrew Little: Save your applause for a decent performance. Why is he so unambitious that he does not want to boost future economic growth for all New Zealanders? Is it because he is still trapped in a 1980s time warp?

Rt Hon JOHN KEY: I am very ambitious for New Zealand and for the growth rate of New Zealand. We are delivering on that growth rate for New Zealand, which is why it was nearly 4 percent this year. I am so ambitious that if I put my leadership up for a vote, I would expect more than four people to vote for me. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I am on my feet.

Economy—Progress 3. TIM MACINDOE (National—Hamilton West) to the Minister of Finance: What progress has the Government made in delivering on its economic objectives for 2014?

Hon BILL ENGLISH (Minister of Finance): The Government has made good progress in its economic objectives for 2014. However, there is much more to be done in a world facing significant challenges from low growth rates, particularly in Europe and Japan, too much debt, and lower commodity prices. New Zealand is relatively well placed. Our economy grew by 3.9 percent in the year ended June 2014, one of the highest growth rates in the developed world. Updated GDP figures will be released next week, and they are expected to confirm that this solid growth will continue. This is delivering benefits to hard-working Kiwis. Average wages have increased by around $3,000 in the past 2 years to nearly $55,700, and the average, ordinary-time weekly wage is forecast to grow to $62,300 by 2018 from $55,700 today.

Tim Macindoe: How are the benefits of the Government’s economic programme being reflected in the labour market, and how do average wage increases compare with the cost of living changes?

Hon BILL ENGLISH: In the past year alone 72,000 jobs were created across New Zealand, and Treasury forecasts more than 150,000 further jobs over the next 4 years. Back in Budget 2011 Treasury predicted 171,000 new jobs up to June 2015. So far, we are 12,000 new jobs ahead of that prediction made in 2011. These new jobs are bringing down unemployment, which has fallen to 5.4 percent and should continue to fall to under 5 percent. Cost of living increases for New Zealand families have been low. Average hourly earnings increased by 2.3 percent in the last year compared with inflation of 1 percent. (uncorrected transcript—subject to correction and further editing)

Tim Macindoe: How is the Government’s economic programme helping to keep interest rates lower for longer?

Hon BILL ENGLISH: The Government has some influence on interest rates and we are using that influence where we can. In the first place, we are limiting our operating allowance—that is, our additional discretionary spending in our Budgets—to an average of $1.5 billion over the next 3 years rather than having a spend-up because the economy is better. Secondly, we are focusing strongly on increasing the supply of housing to housing markets across New Zealand so that we can help to moderate the housing cycle and, therefore, moderate the inflation cycle. We seem to be doing a lot better as a country than in 2008 when floating mortgage rates reached 11 percent—a bit less than twice what they are today.

Rt Hon Winston Peters: What effect will continuing Russian sanctions, which have displaced 3 billion litres of European milk, have upon Treasury projections for a return to surplus in 2015, 2016, and 2017?

Hon BILL ENGLISH: I think, as the member knows, they will probably have a negative impact. We need to keep it in perspective though. Although the dairy industry is a large, successful industry—it represents about 7 percent of our GDP—and is under pressure, the other 93 percent is in pretty good shape and that will offset some of those negative effects.

Rt Hon Winston Peters: Does he agree with the Prime Minister that New Zealand dairy exporters taking advantage of the gap left by other nations’ trades sanctions on Russia is a “terrible look”; if so, why?

Hon BILL ENGLISH: Yes, because the Prime Minister has remarkable insight and intuition at all times.

Rt Hon Winston Peters: Can I take a moment to have a laugh?

Mr SPEAKER: No, the member can take a moment to ask a supplementary question.

Rt Hon Winston Peters: Will he be so lofty and principled if, in 2 years’ time, we have a banking crisis precipitated by low returns coming to the New Zealand dairy industry as they are right now and getting worse; if so, why?

Hon BILL ENGLISH: You know, a lot of the things that you worry about in this world just do not happen quite as badly as you think they will. I think that the dairy industry is a pretty resilient industry. The New Zealand economy is a pretty resilient economy. Yes, there may be some tougher times ahead, but although that might bother the member, we are confident New Zealand can find its way through even a period of lower dairy prices.

Government Financial Position—Impact of Dairy Prices 4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: What impact will Fonterra’s revised forecast payout have on the Government’s 2014/15 surplus?

Hon BILL ENGLISH (Minister of Finance): I will give him the same answer that I gave to the leader of New Zealand First who, not unsurprisingly, was quicker out of the blocks on this issue.

Mr SPEAKER: Order! Just answer the question.

Hon BILL ENGLISH: The impact is likely to be negative, but we need to keep it in perspective. The dairy industry represents about 7 percent of the economy; the other 93 percent is in reasonably good shape. But there is no doubt that the drop in commodity prices has the effect that the tax base is not growing as fast as was expected.

Grant Robertson: What advice has he had on the impact on farmers and rural communities of the $4.70 payout, given that Dairy New Zealand has estimated that a quarter of farmers could struggle to meet interest payments and expenses on a payout below $5?

Hon BILL ENGLISH: I have seen that advice, along with other advice that I think is pretty predictable, and that is that the significantly lower cash flow will have an impact on the servicing industries in rural and provincial areas. The question really is how long is that going to last and (uncorrected transcript—subject to correction and further editing) whether they are in shape to handle that, and in our view they are relatively resilient, but some of them are in for a bit of a tough time.

Grant Robertson: In light of that answer, does he agree with John Kuyf, managing director of the rural service business Rakaia Engineering Ltd, or REL Group, who said that the effect of a reduced payout will be “quite severe” and that “Even if you live in Auckland, if you naively don’t believe it will affect you, it will. We won’t come out of this overnight.”?

Hon BILL ENGLISH: I think that the sentiment of those words is roughly right, but, again, we have got to keep it in perspective—93 percent of the economy is in reasonable shape, and the growth projections are pretty solidly around 3 percent for the next 2 or 3 years. The dairy industry, which has had an absolutely record year, announced yesterday a payout that is just a little bit below the average for the last 10 years. So it is not a horrifically low payout, but it certainly is down from the last couple of years, and it will be a bit of a struggle for the industry, but I think it is up to it.

Rt Hon John Key: Given that the dairy payout is reducing, what impact would it have on dairy farmers if they faced a higher minimum wage, if they faced a capital gains tax on their farm, if they faced an emissions trading scheme that was far more expensive, if they faced more charges, if they faced a water tax, if they faced—

Mr SPEAKER: Order! We get the gist of the question. The Minister can now answer it.

Hon BILL ENGLISH: One measure of it—at least my impression of how dairy farmers voted in the election—is that even at an $8.40 payout, the dairy industry could not afford a Labour Government, so imagine how bad it would be at $5.

Grant Robertson: Is he seriously suggesting that a $6 billion hole in the economy and a flow-on reduction in revenue to the Government’s books will be filled by other sectors of the economy?

Hon BILL ENGLISH: What I have said consistently is that the negative impact of the lower dairy prices will be offset to some extent by the relative strength of the rest of the economy. That is not naive optimism; that is just looking at the fact that the dairy industry is 7 percent of the economy and the other 93 percent is in reasonable shape. I do not know why the member is so set on the idea that the drop in one commodity price—

Hon Member: It’s a crisis.

Hon BILL ENGLISH: —is a crisis. Those members are determined to have a crisis, which means it must start turning round soon.

Grant Robertson: Does he take any responsibility for the billion-dollar deficit in today’s Government accounts—$260 million more than expected—and will he finally admit that there will not be a meaningful surplus in his Budget?

Hon BILL ENGLISH: Yes, of course we take some responsibility for the public accounts—I think my signature may even be on them—and of course that means we also take responsibility for the fact that after 6 years of pretty tight Budgets, the public perception of public services is more positive than it ever was under the Labour Government. We are delivering more value to more people, with more to come, and we also take responsibility for that success.

mDeployment in Iraq—Prime Minister’s Statement 5. RON MARK (NZ First) to the Minister of Defence: Does he stand by all his statements regarding a potential deployment of combat troops to Iraq?

Hon GERRY BROWNLEE (Minister of Defence): Yes, in so far as they have been accurately reported and not conveniently misinterpreted.

Ron Mark: If no decision has been made to deploy troops, why would combat troops from the First Royal New Zealand Infantry Regiment have been told by their superiors to expect to deploy at the end of February or at the beginning of March?

Hon GERRY BROWNLEE: There has been no decision to deploy to Iraq. There has been no instruction to the military around any deployment to Iraq. I am not responsible for what various army commanders might say to their troops. (uncorrected transcript—subject to correction and further editing)

Ron Mark: If, as he says, no decision to deploy troops has been made, when does he expect that that decision will be made?

Hon GERRY BROWNLEE: Well, a question that asks “When does someone expect to make a decision about something they haven’t made a decision about?” is not a question at all.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, it is your decision as to whether the question is adequate, not the decision of the Minister of Defence. He should be asked to answer the question.

Hon GERRY BROWNLEE: Speaking to the point of order, how can I answer a question about making a decision about a decision that has not been made? It is ridiculous.

Mr SPEAKER: The question I allowed; the question was then addressed by the Minister. Does the member have further supplementary questions?

Ron Mark: If no decisions have been made, Minister, why then is the army moving all communications regarding the Iraqi deployment to secure networks and deleting orders previously sent? Is it just covering the tracks for the Minister?

Hon GERRY BROWNLEE: I know that the army has its own communications systems that it uses—in fact, it is asking the Government at the moment to spend a lot more money giving it new systems so that it can be even better networked. As for the actual keystroke operations day to day, I cannot answer about that. All I know is there is no Government decision, and there has been no Government instruction to prepare for deployment to Iraq.

Ron Mark: I raise a point of order, Mr Speaker. Taking your advice previously, I specifically kept this question short and I specifically asked around what is currently happening in the army, moving communications to secure networks and instructing officers to delete—

Mr SPEAKER: Order! I invite the member to in the future try to get his questions even shorter; I think that would help. But in this case if the member goes back and studies the question he has asked about the movement of information to securer networks etc., that question was addressed by the Minister.

Hon Phil Goff: What is the full extent of planning and preparation being undertaken now with soldiers in New Zealand for potential deployment to Iraq?

Hon GERRY BROWNLEE: There is no training being undertaken for potential deployment to Iraq, but the member will know from his own time as Minister of Defence that the New Zealand military always trains for the contingency. They may be asked to do anything.

Hon Phil Goff: If the Minister’s answer to the House just now is correct, why did his spokesperson say on 2 December that the Defence Force has begun “some training and preparation on a contingency basis” and go on to say “This is required to ensure that there is a suitable time to build an effective level of capability should the Government decide to deploy.”?

Hon GERRY BROWNLEE: As I have said before, the military has about 100 personnel based in the Middle East at any time.

Hon Member: Just tell us.

Hon GERRY BROWNLEE: I just answered you by saying that the military do train for—

Hon Phil Goff: I raise a point of order, Mr Speaker. The question is not about wider deployment in the Middle East; it is about Iraq. That is what the Minister’s spokesperson was talking about.

Mr SPEAKER: Order! Allow the Minister to finish. It was about contingency arrangements that are under way, as I understood the question. I call the Hon Gerry Brownlee to complete the answer.

Hon GERRY BROWNLEE: If the question is about a deployment to Iraq, there is no decision to deploy to Iraq; therefore, the question cannot stand.

Ron Mark: An easy one. Does the Minister think it is fairer on the troops, their families, and their extended families to confirm they are deploying to Iraq before Christmas, or is he going to hang out and wait until after Christmas?

Hon GERRY BROWNLEE: The Government has made it very clear that it is not sending combat troops to Iraq. It has further said that there will be a small group of personnel looking at the (uncorrected transcript—subject to correction and further editing) possibility only of capacity-building in, potentially, Iraq. But there is no decision. We have received no reports. And even though Mr Mark might think he knows everything because he has got a few mates from his days when he was a storeman in the army, he is just not right.

Ron Mark: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I apologise. Is this a point of order?

Ron Mark: Yes, just a point of order. I just would like—

Mr SPEAKER: What is the point of order?

Ron Mark: My point of order is that I have been inaccurately described.

Mr SPEAKER: Order! The member can resume his seat. [Interruption] Order! The member will resume his seat.

Canterbury Recovery—Progress 6. MATT DOOCEY (National—Waimakariri) to the Minister for Canterbury Earthquake Recovery: What progress has the Government made in 2014 towards its vision for the rebuild of Christchurch?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): We have made excellent progress during 2014. Demolitions in the city are now all but complete. Two hundred commercial buildings are either under construction or have already opened. The key Government-funded projects under construction include the hospital, the justice precinct, the bus interchange, and the Avon River precinct, and these are at an estimated cost of over $1 billion. Repair work has made good progress, with the Stronger Christchurch Infrastructure Rebuild Team programme 57 percent complete, and the Earthquake Commission has completed nearly 70,000 home repairs. A positive working relationship with the Government, Canterbury Earthquake Recovery Authority, and the Christchurch City Council has continued to strengthen, and this relationship will be vital for the extraordinary growth we will see in 2015.

Matt Doocey: What economic results can be attributed to the Government’s programme?

Hon GERRY BROWNLEE: The Government’s rebuild programme has provided certainty and a clear vision. This is driving investment in Christchurch and is undoubtedly a factor in the very strong economic statistics coming from the city. Over 2014 we have seen unemployment fall to historic lows, with 34,400 new jobs created in Canterbury. In the year to September of 2014, the economic growth in Canterbury was upwards of 4.7 percent, well ahead of the national average, and more than five and a half thousand new businesses have registered in Canterbury this year. This is a testament, I think, to the confidence of the business community in the recovery, and it is in stark contrast to some of the predictions made at the time of the earthquakes, suggesting that business would flee Christchurch and our economy would collapse.

Matt Doocey: What further progress does he expect to see in 2015?

Hon GERRY BROWNLEE: Next year the bus interchange will be completed, reconnecting the city and its people through public transport. Key parts of the Avon River precinct will also be finished, creating a very attractive public space at the heart of the city. The innovation precinct will be established, with an information and communications technology graduate school, Callaghan Innovation, and Vodafone as anchor tenants. The convention centre will be under construction, along with the hospital and the justice centre continuing, and key projects like that will continue to drive tourism and economic growth in the city. And the New Zealand opening of the Cricket World Cup being broadcast to the world will show the world what a dynamic city Christchurch is.

State and Social Housing—Sale of Housing Stock 7. PHIL TWYFORD (Labour—Te Atatū) to the Minister responsible for HNZC: When did he last discuss the sale of state housing stock with Cabinet or a Cabinet Committee?

Hon BILL ENGLISH (Minister responsible for HNZC): I have had many discussions about this issue, probably most recently, I suspect, this morning, maybe, but always in the context of (uncorrected transcript—subject to correction and further editing) doing a better job for tenants who are often stuck for long periods in housing dependency, and doing a better job of looking after taxpayers’ assets, of which State housing constitutes $18 billion worth. With that much asset value, plus the subsidies, we can do a better job for people in serious housing need than has traditionally been the case.

Phil Twyford: Why did his Cabinet agree this week to move ahead with the sale of State houses?

Hon BILL ENGLISH: The member will just have to wait and see about that. But he is going to have trouble arguing that decisions made 60 years ago about where houses should be and what size they should be are decisions that we must stick with in 2015. Decisions made in the 1950s should not determine how the needs of today’s tenants are met. I know that is Labour’s position. Everything was perfect in the 1950s. But on “Planet Earth” things have changed a bit.

Phil Twyford: In light of that confirmation of the decision to sell off State houses, how long does he expect Housing New Zealand to remain the main provider of social housing?

Hon BILL ENGLISH: I think they will remain the main provider of social housing for a long time. But they will certainly have to alter the houses that they have because the needs of tenants do not align with the decisions made by Peter Fraser or Sid Holland. I think they had great foresight—

Hon Paula Bennett: Or Annette King.

Hon BILL ENGLISH: —or Annette King—but actually they could not predict the needs of tenants today.

Hon Annette King: A very good decision maker.

Rt Hon John Key: You’ve outlasted the other two.

Hon BILL ENGLISH: And you have outlasted the other two. We are willing to change the nature of our housing to meet the needs of our tenants.

Phil Twyford: In light of his answer that Housing New Zealand would be the dominant provider for a long time, how does he reconcile that answer with the housing Minister’s letter to Housing New Zealand’s board, saying: “In the future we envision Housing New Zealand will be one of a range of social housing providers”, and they would only be the main provider of social housing in the short to medium term?

Hon BILL ENGLISH: I am not exactly sure which letter the member is referring to, but Housing New Zealand is one of the housing providers now. There are 23 registered community housing providers, and the number is growing by the week. To the extent that they can better meet the needs of people with serious housing need, then we will do business with them. It is Labour’s policy that even if they can do better, they are the wrong people, so tenants have to stay in garages and overcrowded houses. We do not think that is good enough.

Phil Twyford: I seek the leave of the House to table two letters from the Minister of Housing to the board of Housing New Zealand, setting out the expectations—

Mr SPEAKER: Order! Leave is sought to table those two particular letters. Is there any objection? [Interruption] Order! I am putting the leave for the member. They do not need to be described further. Leave is sought to table those two particular letters from the Minister to Housing New Zealand. Is there any objection to them being tabled? There appears to be none. They can be tabled.

Phil Twyford: Why was he not straight with the public before the election about his plans for a State house sell-off, given that his housing Minister had already told Housing New Zealand to begin work on the sell-off, saying: “We expect that as a result Housing New Zealand will likely own a significantly smaller number of houses in 10 years’ time.”?

Hon BILL ENGLISH: Actually, this has been talked about for, I think, 3 years. In fact, I can recall the whole of Parliament debating the relevant legislation that set up the Ministry of Social Development as a purchaser, as well as publishing a series of reports going right back to 2010. If the member did not know about it, that is not our fault. Our policy was clear before the election, and (uncorrected transcript—subject to correction and further editing) the Government is moving to do a better job of meeting the needs of people who have serious housing need. In our view, that is pretty urgent.

Phil Twyford: Why is he selling off State houses on the open market, where they can be bought by property developers and speculators, given that these homes have provided so many New Zealanders, including the Prime Minister, with a decent start in life?

Hon BILL ENGLISH: One of the reasons is that there are New Zealanders being born today who want a decent start. They want a better start than being forced into a State house the wrong size, in the wrong place, and in poor condition. That is why—because we can get a better deal for those New Zealanders who need a good start in life today.

Cancer Care—New Zealand Cancer Plan 2015-18 8. BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Health: What improvements to cancer care are expected as a result of the New Zealand Cancer Plan 2015-18?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yesterday at Wellington hospital I launched the new comprehensive New Zealand cancer plan for 2015 to 2018. The new plan pulls together the wide range of investments and services that will deliver treatment to 90 percent of cancer patients within 62 days of the first serious suspicion of cancer. This streamlining of the previously segmented cancer service into one integrated treatment pathway means that patients can have greater confidence in earlier treatment and better treatment from the earliest point.

Barbara Kuriger: What investments have been made to assist the delivery of faster and more streamlined cancer services?

Hon Dr JONATHAN COLEMAN: Since 2008 the Government has made significant investments to improve cancer services, including $62 million for the faster treatment programme, $10 million in digital mammography technology, and $4.3 million in prostate cancer awareness. We have purchased 10 new linear accelerators. There has been $15 million put into hospice care, and, of course, we provided public funding for 12-month Herceptin courses. These investments have ensured that we are in a position to deliver an international gold standard in cancer care for New Zealanders.

Oil and Gas Exploration—Impact on Māui Dolphin 9. EUGENIE SAGE (Green) to the Minister of Conservation: Did she raise any concerns with the Minister of Energy and Resources about the potential impacts on the Māui’s dolphin, a critically endangered species, of granting an oil and gas exploration permit in their habitat, including in a marine mammal sanctuary?

Hon MAGGIE BARRY (Minister of Conservation): No, I did not.

Eugenie Sage: Is the reason the Minister did not raise any concerns that she knows that her Government does not care about protecting the world’s rarest dolphin, the Māui’s dolphin, despite there being fewer Māui’s dolphins left on the planet than there are MPs in this House?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Down here, we cannot hear the question because of the barracking over there from a number of nervous backbenchers.

Mr SPEAKER: Order! [Interruption] Order! I acknowledge that the level of noise was louder. I heard the question. The question will now be answered. The reason why there was an interjection was actually because of the tone of the question that was raised by the member. I am not ruling it out of order, but that certainly gives plenty of licence to the Minister.

Hon MAGGIE BARRY: This National-led Government is committed to ensuring the long-term survival and safety of every single Māui’s dolphin, and there is proof of that. In 2012 the Department of Conservation established a collaborative forum of experts that reviewed the potential risks to Māui’s dolphins and what more could be done to ensure their survival. That forum found that the threat to the Māui’s dolphins from oil and gas development is negligible. Fishing-related (uncorrected transcript—subject to correction and further editing) activities, specifically set nets, were identified as the biggest threat—some 95 percent—to Māui’s dolphins, and in response we roughly doubled the area of the set net ban, which is now an area of 6,200 square kilometres.

Eugenie Sage: How is the Minister fulfilling her obligations under the Conservation Act to protect our threatened species and their habitats when the Minister of Energy and Resource has granted oil exploration permits affecting 302 conservation areas and over 700 square kilometres of conservation land?

Hon MAGGIE BARRY: I am entirely confident that we have the right level of communication and processes between the various ministries that effect the long-term care and protection of all of our species that are under threat. When it comes to a Cabinet process, when we look at the Department of Conservation, we were, as a department, consulted by the advisers to the Minister of Energy and Resourcesduring the initial phase of yesterday’s block offer proposals—that was earlier this year—and again when the bids were received. I am very confident that that process is working well and that the Cabinet process, which involves me as the Minister and a ministerial sign-off across Cabinet, was completed on Monday of this week. Let that member and that party be reassured that the conservation of our endangered species—flora and fauna—is absolutely a priority, and we have absolute confidence in the processes that are in place.

Eugenie Sage: How can the Minister be so confident that the department cares more about the protection of our threatened species when it is allowing oil exploration in the habitat of threatened species like the great spotted kiwi and the Māui’s dolphin—those areas are now open for oil exploration?

Hon MAGGIE BARRY: I would draw the attention of that member to one aspect of this. Let us take the Māui’s dolphin, for example. We formed the Māui Dolphin Research Advisory Group, which is meeting and currently developing research solutions to ensure the long-term survival of the dolphin. We have convened the group under the Department of Conservation and the Ministry for Primary Industries, and that consists of representatives from universities, iwi, central government, and regional councils, as well as mining, fishing, and conservation organisations. Our marine mammals are being kept safe, and that is because we have put in place a code of conduct for minimising acoustic disturbance to marine mammals from seismic survey operations. That became mandatory in the law last year, and it is yet another example of where this Government has moved in—where the former Labour Government, propped up by Greens, had absolutely no provisions for protection at all and drilled a number of wells. We have—

Mr SPEAKER: Order! That answer is certainly long enough.

Businesses—Financial Support from Government 10. DAVID SEYMOUR (Leader—ACT) to the Minister for Economic Development: Is he concerned at the scale of corporate welfare in New Zealand under this Government; if not, why not?

Hon STEVEN JOYCE (Minister for Economic Development): I am always concerned about the scale and effectiveness of Government expenditure that I am involved in as a Minister, and in ensuring it is well spent. However, I do reject the rather pejorative term that was used in the member’s question.

David Seymour: Given that the Government has, among other things, invested in research and development, rugby games, railways, and yacht races, can he define anything that is outside the role of Government, or does he agree with former Prime Minister Helen Clark that the role of Government is whatever the Government defines it to be?

Hon STEVEN JOYCE: Well, there are a lot of things in life that the Government would prefer not to be involved in, but, nevertheless, the Government does have to balance economic and social considerations and so on. One of the examples that the member raises is the issue of research and development. I should think that that is a very important issue for New Zealand. Other members in this House spend quite a lot of time talking about the need to diversify the New Zealand economy. I (uncorrected transcript—subject to correction and further editing) happen to agree, and, as a result, this Government invests hugely alongside firms in building research and development innovation to ensure that businesses do diversify and that we get strong new industries like information and communications technology and high-tech manufacturing, which are actually growing very strongly in New Zealand now.

David Seymour: Supplementary.

Mr SPEAKER: Order! No, the member has two supplementary questions today and he has used those two supplementary questions.

Serious Fraud Office—Commentary 11. Hon DAVID PARKER (Labour) to the Minister of Police: Does he know whether or not the allegations in Matt Nippert’s 31 August 2014 article in the Sunday Star-Times that Cameron Slater and Carrick Graham were paid to undermine the Serious Fraud Office are correct?

Hon MICHAEL WOODHOUSE (Minister of Police): Although I have absolutely no ministerial responsibility for the allegations, the answer is no.

Hon David Parker: I raise a point of order, Mr Speaker. That question was addressed to the Minister as the Minister responsible for the Serious Fraud Office so I do not understand why he can deny responsibility for answering.

Mr SPEAKER: When I saw this question on the sheet, I have got to say, I thought it was a very marginal question. I accept that the Minister is responsible for the Serious Fraud Office and that it is his responsibility. But the question actually asks something entirely different, which I do not believe is strictly the Minister’s responsibility. I will allow the member to continue with his supplementary questions, but he must address them in a way for which the Minister is responsible.

Hon David Parker: Speaking to the point of order, if the Minister responsible for the Serious Fraud Office is not responsible for the undermining of the Serious Fraud Office or for issues that might do so, could you tell me whom I would ask questions to?

Mr SPEAKER: The question asked is about whether the allegations are true. I do not see how the Minister could possibly be responsible for responding to that. [Interruption] Order! We are now getting to the stage where the member is prolonging this discussion and effectively disputing a ruling I have given. I am inviting the member to continue his supplementary questions provided they clearly have ministerial responsibility.

Hon David Parker: Does the Minister believe it is proper and in the public interest for persons under investigation by the Serious Fraud Office to pay others to actively undermine and smear the Serious Fraud Office and its director?

Hon MICHAEL WOODHOUSE: Well, I have absolutely no responsibility for the actions of people who are not under the purview of the Serious Fraud Office. My responsibility is to ensure that the Serious Fraud Office has the resources and tools to discharge its responsibilities independently and effectively, and I am satisfied it did so then and does now.

Hon David Parker: What steps has the Minister taken to ascertain whether these serious allegations about people being paid to undermine the Serious Fraud Office are true?

Hon MICHAEL WOODHOUSE: None. What I have done is sought an assurance that the Serious Fraud Office has discharged its responsibilities fairly and independently, and I have received that assurance.

Hon David Parker: Would attempts to intimidate a witness, as referred to in paragraph 185 of the Chisholm report, undermine the operation of the Serious Fraud Office and be illegal; if so, what is he doing about that?

Hon MICHAEL WOODHOUSE: It would if it were true, but my understanding is that the inquiry found that there was absolutely no evidence that any attempts to undermine witnesses had any impact on the Serious Fraud Office’s decisions subsequently taken.

Hon David Parker: Given the allegations in the Sunday Star-Times, why is he putting the interests of people like Slater, Graham, and Hotchin ahead of his responsibility as Minister for the (uncorrected transcript—subject to correction and further editing) Serious Fraud Office to the 16,000 New Zealanders who between them lost half a billion dollars, some of them losing all of their life savings?

Hon MICHAEL WOODHOUSE: Well, I do not have any interest in the activities of Messrs Slater and Carrick, and Odgers. I am certainly not interested in emails that might have been circulating around in mid-2011. Since then the All Blacks have won a world cup, Osama bin Laden has been taken out, Prince George has been born, National has won two elections, and Labour has had four leaders. I think it is time to move on.

Border Control, SmartGate System—Updates 12. Dr SHANE RETI (National—Whangarei) to the Minister of Customs: What updates can she provide about the SmartGate passenger processing system?

Hon NICKY WAGNER (Minister of Customs): Following a successful trial, I am pleased to announce that today, in time for Christmas, we are welcoming Canadian passengers by extending the SmartGate automated border system to Canadian e-passport holders over the age of 12. Each week approximately 75,000 people use SmartGate, and we have just reached the milestone of the 10 millionth passenger, ahead of budget and time. [Interruption]

Mr SPEAKER: Order! Can I have a little less barrage from one particular member on my left.

Dr Shane Reti: What has the Government done to improve passenger processing?

Hon NICKY WAGNER: SmartGate has been extended to US and UK e-passport holders and passengers aged 12 years and older, allowing more families to use it. SmartGate allows passengers to be processed faster, allowing customs to focus on high-risk travellers. Let me take the opportunity to welcome passengers passing through New Zealand’s borders during this busy holiday period. Welcome to New Zealand, I hope you enjoy your stay, and have a very merry Christmas. Thank you.

Grant Robertson: I raise a point of order, Mr Speaker. I seek leave of the House for Maurice Williamson to be allowed to ask Gerry Brownlee—

Mr SPEAKER: Order! The member will resume his seat. It is not a valid point of order. [Interruption] Order! Christmas will start shortly, not just yet. Have you got a point of order or a supplementary question now?

Hon Steven Joyce: It is a supplementary question. Can the Minister confirm that when Santa Claus arrives this Christmas, he will be allowed to come in via SmartGate and bring in his presents for—

Mr SPEAKER: Order! Much as I am sure that everybody is interested in that, there is no ministerial responsibility.

ENDS

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