ORAL QUESTIONS

QUESTIONS TO MINISTERS Budget 2017—Health, Education, Housing, and Police and Tax Cuts

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Did the Minister of Finance tell him that Budget 2017 invests less in new initiatives for health, education, housing, and police combined than it spends on tax cuts?

Hon STEVEN JOYCE (Minister of Finance) on behalf of the Prime Minister: No, because if he had, he would have been wrong. The new initiatives highlighted by the member include $3.9 billion for health; $1.2 billion for education, including tertiary; $1.5 billion for housing, including the accommodation supplement; and $400 million for police, bringing the total to $7 billion against the total cost of the personal income tax changes of $6.25 billion over the 4 years. This is, of course, only operating expenditure, not capital, and these figures do not take into account the clawback on the tax changes, nor the rather large $130 billion - odd in baseline spending over 4 years on these particular portfolios that the member identifies.

Andrew Little: In light of that confirmation of my original proposition, why did he give a tax cut of a thousand dollars a year to himself and me, but not put one cent of new money into insulating cold, mouldy homes owned by either homeowners or landlords?

Hon STEVEN JOYCE: Because we have now made a law change to make it compulsory for rental homes to be insulated. We went through a long and large period of assisting landlords and people with the insulation, and now we are actually offering a law change that will ensure that landlords are required to do the insulation. In terms of the tax cuts, I note that the member, at least recently, was in favour of threshold changes.

Andrew Little: Given that paediatrician Dr Innes Asher has told the Government Administration Committee today that we need to improve home insulation to reduce the number of kids going to hospital with a respiratory disease, why are more sick kids the price he is willing to pay for tax cuts?

Hon STEVEN JOYCE: I agree; we need more insulation. That is why this Government has changed the law to ensure that it takes place. The member can try to ignore it—as he tries to ignore many things as he desperately searches around for something not to like about the Budget—but that is the reality of it. We are very focused on increasing the amount of insulation in homes.

Andrew Little: Why did he give the members of this House—including Maggie Barry, who has just arrived—a total of $130,000 a year in tax cuts while cutting funding for elective surgeries?

Hon STEVEN JOYCE: The member needs to stop saying that things are being cut when they get more money, because he has no credibility when he does so.

Andrew Little: Why did he think it was more important to give a tax cut that puts $20 a week into the pockets of MPs than it was to end the freeze on per-pupil funding for early childhood education?

Hon STEVEN JOYCE: Again, the member is wrong. He needs to stop taking Grant Robertson's advice to questions, because the data is wrong. Actually, this Government does believe that it is important to adjust the tax thresholds for hard-working Kiwis around the whole country. This Government does believe that. Up until quite recently, Mr Little believed it too. He recently quoted that thresholds should be adjusted from time to time and that he is supportive of it.

Andrew Little: Why should he and I get a tax cut given that funding for Computers in Homes, a programme that helps close the digital divide for our poorest families, has now been ended?

Hon STEVEN JOYCE: The member's tax situation was not uppermost in the Government's mind when it was considering making sure that people on the median wage and on the average wage did not have to pay 30c on the dollar in tax, at the same time as it was considering very large investments in public services—$7 billion over 4 years—and very big investments in infrastructure. Those are the decisions that this Government made, and we believe that it is a very balanced Budget.

Andrew Little: Does he see that the cost of $2 billion of tax cuts, $400 million of which goes to the top 10 percent of earners, is that we do not have the money for health, education, housing, police, and infrastructure that Kiwis want and need?

Hon STEVEN JOYCE: I do not know what planet this member is on. There is $7 billion—$7 billion—for more public services in this Budget, and he tries to pretend it is not there. No wonder those members are not getting any cut-through. You know, they have had more positions on this Budget than Sean Spicer has on Donald Trump. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Less interjection, please, from both sides of the House. Finance, Minister—Economy

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: Will he tell New Zealanders the true state of this country's economy; if not, why not?

Hon STEVEN JOYCE (Minister of Finance): Yes; and, for the member's benefit, I regularly inform New Zealanders about the true state of the economy, including as recently as last evening in Christchurch, then this morning in Christchurch, and in the Budget speech last week. In the Budget speech I reported that we have a strong and growing economy. Today the Reserve Bank's Financial Stability Report confirms that the financial system remains sound and is operating efficiently. Of course, there are always risks to be managed, and this Government continues to prudently manage these risks, as it has for the last many years.

Rt Hon Winston Peters: Why is he claiming that GDP growth will be over 3 percent, when many experienced economists, such as Michael Reddell, a former Reserve Bank adviser, and David Snell, an Ernst & Young executive tax director, and a whole host of others are stating that the real growth will be under 1 percent?

Hon STEVEN JOYCE: Of course, there are a wide range of commentators. I appreciate that the member has been talking to Mr Reddell a bit, but in terms of the economic predictions, this is not just me. This is Treasury and the Reserve Bank. I see that the New Zealand Institute of Economic Research (NZIER) came out and said that it sees a strong economy for New Zealand over the next 5 years. ANZ has just come out and said that business confidence has lifted in May, and it is expecting strong growth. Of course, the members can find, I am sure, some people who disagree, but I think the general consensus is that New Zealand is growing very well.

Rt Hon Winston Peters: If, when mass immigration of 2 percent is extrapolated from the figures, these economists say that the growth rate is 1 percent or lower, are they lying or is he?

Hon STEVEN JOYCE: I have said many things in this House, but lying about the economy is not one of them. Actually, I think Mr Peters should stop living up his own slightly wonky dream of the New Zealand economy, because a whole bunch of Kiwi companies are working hard, delivering growth, and delivering job growth, and Winston Peters comes to this House and tries to pretend it is not happening.

Rt Hon Winston Peters: If any of that is remotely true, why is labour productivity decreasing by 0.7 percent, and how are hard-working Kiwis benefiting from the so-called growth that he constantly refers—or are the officials wrong and he right?

Mr SPEAKER: There are three supplementary questions there—or, in fact, four. The Minister can address any of them.

Hon STEVEN JOYCE: We are talking about the actual figures as reported by Statistics New Zealand, which, I am assured, is not part of Mr Peters' conspiracy—which I think probably includes Treasury, the Reserve Bank, NZIER, and most of the banks—that, apparently, New Zealand is not growing. But Kiwis know it, in fact. They have seen good, strong job growth. We now have, for the first time, over 2.5 million New Zealanders employed. They have seen wage growth ahead of inflation, and one piece of evidence in favour of that is the number of Kiwis returning from overseas to live in this country—unlike when the member was last in Government, when they were rushing to leave the country.

David Seymour: When a near-record 60 percent of New Zealanders say the country is heading in the right direction, after three terms of Government, are they lying, or is Winston Peters on "Planet Cuckoo"?

Hon STEVEN JOYCE: All I can say is the Hon Mr Peters obviously does not like the good news that the New Zealand economy brings at the moment from all the hard work of Kiwis and companies. He is determined to talk it down, and I encourage him to keep doing so, but he is a long way from reality.

Rt Hon Winston Peters: Is it not a fact that Treasury's output gap forecast shown here in this graph—all those lines are National's lines—will be negative for 10 consecutive years, since National came into Government and next year as well? If that is true, according to Treasury, how will Kiwis benefit from the so-called growth, or are his own officials wrong and he and "Junior" over there right?

Hon STEVEN JOYCE: I do not know who the member thinks he is fooling, but the reality of the situation is that New Zealand did borrow money through the global financial crisis, and we did borrow money through the Canterbury earthquakes. The member may have only just now woken up and realised what happened over the last 8 years, but the reality is that we are now back in surplus and investing in the New Zealand economy.

David Seymour: I raise a point of order, Mr Speaker. I seek leave for Winston Peters to explain to the House—

Mr SPEAKER: Order! The member will resume his seat. He cannot seek leave—[Interruption]. Order! I have dealt with the first point of order. You cannot seek leave on behalf of another member. I have a further point of order.

Hon Anne Tolley: I raise a point of order, Mr Speaker. It is the rules of this House that we refer to one another by our names. It is offensive to refer to someone as "Junior".

Richard Prosser: Speaking to the point of order.

Mr SPEAKER: No, I do not need any assistance from Mr Prosser. It is not helpful—[Interruption] Order! If the member wishes to stay to complete his very interesting line of supplementary questions, I expect cooperation. It is certainly not helpful to the House when such insults are cast across the House by any member. And, in fact, this question has been marginal from the time the first supplementary question was asked when there was reference to members lying, or somebody else lying, and it was repeated from both sides of the House. I, perhaps, should get tougher by ruling out some of the supplementary questions that are being asked at the moment to return some decorum to the way this House functions.

Grant Robertson: Does Budget 2017 show exports as a percentage of GDP decreasing or increasing?

Hon STEVEN JOYCE: We now know we are definitely scraping the bottom of the barrel when we get to that one. Exports are targeted to increase, and the Government's target is that they be at 40 percent of GDP by 2025.

Grant Robertson: I raise a point of order, Mr Speaker. That was a very specific question. I did not ask about exports generally; I said exports as a percentage of GDP.

Mr SPEAKER: And I listened. It was not easy to listen to the answer. I think it was answered, but I may well have been wrong. The reason I could not hear it clearly enough was because of interjections from my left-hand side. I have addressed it.

Rt Hon Winston Peters: Why will he not admit that when these economists say that real GDP growth is low, real GDP growth per capita is low, wages are stagnant, productivity is down, manufacturing is down, and output cap forecasts have been down for almost 9 years—why does he not admit that these economists are telling the truth and that he is not?

Hon STEVEN JOYCE: I am not sure that members are actually allowed to accuse other members of not being truthful in this House, and, certainly, Mr Peters is not being truthful if he continues with those accusations.

Rt Hon Winston Peters: If I am not telling truth, relying upon these Treasury forecasts, and the latest one is June this year, is he prepared to sack them or what?

Hon STEVEN JOYCE: I cannot read what his graph says; it is too far away.

Mr SPEAKER: It does not matter. That question was whether he is prepared to fire some Treasury officials on the basis of that information.

Hon STEVEN JOYCE: Well, yes I do get a lot of advice from Treasury officials and, actually, their advice is that the New Zealand economy is growing strongly, particularly relative to most other advanced economies in the world. The member may choose to deny it, but it just happens to be reality. I am not sure about his relationship with that reality.

Rt Hon Winston Peters: Was Lincoln University's Greg Clydesdale wrong in 2014 when numbers were much less and he said: "For 20 years, New Zealand has maintained high levels of immigration in the hope it would generate economic growth. We can now conclude, thanks to a wealth of evidence, that the policy has failed. We were sold a lemon."?

Hon STEVEN JOYCE: I am not familiar with the eminent professor's work that the member refers to. I am familiar with a whole host of other organisations and agencies, including the IMF, Moody's, OECD, Treasury, Reserve Bank, Statistics New Zealand—generally seen as reasonably reputable—who suggest that the New Zealand economy is travelling very well relative to most of the developed world. We currently have the second-highest rate of adult employment in the OECD—it is 67.1 percent, and, actually, if we want to keep growing, and this Government does want to see us keep growing, we will have to bring in some skilled migrants in order to do so. I know the member hates migration, but then he wants to stall the economy and it is pretty obvious from his line of questioning that that is what he would achieve if he ever got near the Treasury benches.

Rt Hon Winston Peters: Why persist with that sort of argument, when former Reserve Bank adviser Michael Reddell says "I've done the OIAs, I've asked Treasury and MBIE for any work they've done in the last few years on the economic benefits of immigration. There's nothing hidden. They just haven't got any substantive analysis or evidence to support current policy."?

Hon STEVEN JOYCE: I appreciate the member's elevation of Mr Reddell to something like economist sainthood status this week, but there are other economists, he may be surprised to learn. There are a range of them, from a range of organisations. Can I suggest he read a little more widely. Economic Programme—Performance

3. TODD MULLER (National—Bay of Plenty) to the Minister of Finance: How is the Government's economic plan delivering for New Zealanders?

Hon STEVEN JOYCE (Minister of Finance): This Government's plan for growth is sensible, conservative fiscal policy; strong, orthodox monetary policy; and an ongoing programme of microeconomic reform that is enhancing the competitiveness and confidence of Kiwi businesses. We have experienced positive economic growth in all but one quarter of the last 6 years. As a result, unemployment has been steadily falling and wages are rising. Budget 2017 was an opportunity to provide a bit more support to New Zealanders to help them get ahead, whether raising their kids or saving for a house.

Todd Muller: What else is the Government doing to keep this economic plan on track?

Hon STEVEN JOYCE: A key condition to enable a growing economy is the provision of new infrastructure for growth. This Government has grown infrastructure spending considerably and commenced major transformative investments, such as the ultra-fast broadband programme and the roads of national significance. Budget 2017 boosted infrastructure spending by a further $4 billion for further new schools and health facilities, key transport links like the City Rail Link, and additional water storage through Crown Irrigation Investments. All up, we are investing a total of $32.5 billion in new infrastructure over the next 4 years

Todd Muller: How do New Zealanders know the Government's economic plan is working?

Hon STEVEN JOYCE: This question could have been written for Mr Peters. New Zealand has a positive economic outlook, driven by our strong economic plan and confident New Zealand companies, which are investing, innovating, exporting, and creating skilled jobs. Employment is forecast to keep growing strongly in the years ahead, and unemployment is expected to steadily decline. Nominal GDP is now forecast to be a cumulative $23.9 billion higher over the next 5 years than was expected at the half-yearly update.

Todd Muller: What risks are there to New Zealand's future economic growth? [Interruption]

Hon STEVEN JOYCE: I might be looking at them. Under the Government's strong economic leadership, New Zealand is shaping globalisation to its advantage. We are embracing increased trade, new technologies, innovation, and new investment. But we must remember that as a small and open economy New Zealand is exposed to a number of risks, some of which the Reserve Bank highlighted in its Financial Stability Report this morning. Our domestic sectors of dairy, housing, and banking all require ongoing vigilance to ensure any shocks are well managed, and there are also political risks facing the global economy, particularly among those countries looking to pursue more inward-looking and isolationist economic policies, which, of course, could potentially affect New Zealand. Budget 2017—Health, Education, Housing, and Police and Tax Cuts

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Why does Budget 2017 invest less in new initiatives for health, education, housing, and police combined than it spends on tax cuts?

Hon STEVEN JOYCE (Minister of Finance): As I explained to that member's leader only minutes ago, the member's calculations are wrong.

Grant Robertson: I raise a point of order, Mr Speaker. This is a question on notice that required authentication through your office. You would not have accepted this question had the calculations been incorrect. The question asks "Why" for a matter that had to be authenticated.

Mr SPEAKER: No, authentication is required for me to accept that the question is valid enough. Having then accepted the question, it is certainly in order for the Minister to then dispute it, and that is exactly what the Minister has done.

Grant Robertson: Does he believe that he has dealt with the housing crisis such that it is not as high a priority to deal with as giving tax cuts?

Hon STEVEN JOYCE: Well, firstly, I do not agree with the member's characterisation but, in terms of housing, the Government is making a very big investment in housing. Minister Adams, for example, has just announced a $2.2 billion investment in building 34,000 houses in Auckland over the next 10 years. The Government is investing hugely in increasing the accommodation supplement. It is investing in the Housing First programme and in emergency housing. On top of that, this Government believes it is time to reward hard-working Kiwi families and allow them to keep more of their own money. I appreciate that that is completely anathema to Mr Robertson. He would see no time ever where that was the right time to do that, but this Government believes now is the right time.

Grant Robertson: Why are tax cuts a higher priority for him than addressing homelessness as a crisis in New Zealand?

Hon STEVEN JOYCE: I just explained to the member, if he had listened, that addressing homelessness is actually something that a good Government with a strong economic plan can do, alongside providing more income to Kiwi families. I have to say, the member seems alone in his protest against tax changes. The Green Party voted for it, New Zealand First voted for it, and his own leader, on 27 April this year, said: "They have indicated they might move thresholds. I think that's fine, because that should happen periodically."

Grant Robertson: By how much were the tax changes greater than bracket creep for inflation since the last tax changes in 2010?

Hon STEVEN JOYCE: I think the member refers to the process by which the thresholds would be increased if you responded to inflation. The lowest threshold is ahead of that inflationary change; the middle threshold is less than that. I do not have the exact numbers for the member, but the middle threshold is less than the inflation adjustment and the bottom threshold is greater. I appreciate that the member would not want to see any change under any circumstances, but his leader does.

Grant Robertson: Does he believe that New Zealanders care about their fellow citizens such that they would rather see investment in health and housing and education than in tax cuts?

Hon STEVEN JOYCE: The member needs to get some more talking points, because this Budget invests $7 billion in all those things over 4 years. Last week the member was pretending that Working for Families did not exist, he then pretended that accommodation supplement changes did not exist, and now he is pretending that the Government is not investing in public services. He needs to look at the Budget as a whole and then come up with some talking points that respond to it. Budget 2017—State Highway Network

5. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport: What investment is the Government making into New Zealand's state highway network over the next four years through Budget 2017?

Hon SIMON BRIDGES (Minister of Transport): The next 4 years will see $9.1 billion in capital invested in New Zealand's State highway network, continuing this Government's strong track record in infrastructure. This is the biggest ever investment in the country's highway network, and it is a core part of the Government's commitment to building the infrastructure we need for a growing country. Budget 2017 provides $812 million for the reinstatement of damaged sections of State Highway 1 between Picton and Christchurch following the Kaikōura earthquakes. All up, Budget 2017 provides essential investment that not only provides for a more resilient and safer transport system but also the increased capacity to support economic growth right across the country.

Jonathan Young: What are the key roading projects that the Government will be delivering?

Hon SIMON BRIDGES: The Government is delivering the biggest ever investment in the country's State highway network, and there are many projects that the Government will be progressing over the next 4 years. They include the completion of Auckland's western ring route, the northern and southern motorway improvements in Auckland, the East-West Link in Auckland, the Pūhoi to Warkworth highway, the Huntly and Hamilton sections of the Waikato Expressway on State Highway 1, the Pekapeka to Ōtaki Expressway, and many others. All up, the Government expects to open 540 new lane-kilometres of State highway over the next 4 years. This will be the largest increase in State highway capacity in many decades.

Jonathan Young: How will the Government's biggest ever investment in the country's State highway network benefit New Zealand motorists and businesses?

Hon SIMON BRIDGES: The Government has embarked upon the most ambitious development of new State highway motorways and expressways seen in several decades. A key focus of Government funding will be the completion of the roads of national significance projects. These are lead infrastructure projects that link our major cities with the regions and link our export sectors with the key ports. They help promote economic growth while increasing the ability to move people and freight around safely and reliably. We are also investing more in regional roading projects right across the country, which improve journey times and reliability, and remove bottlenecks. The regional investments are also hugely important for our growing tourism sector. Budget Speech—Climate Change

6. JAMES SHAW (Co-Leader—Green) to the Minister of Finance: Why did he not mention climate change once in his Budget speech?

Hon STEVEN JOYCE (Minister of Finance): There were any number of important initiatives that did not get mentioned in the Budget speech, because it is limited, unfortunately, to only 45 minutes. However, if the member looks at the Budget in further detail he will see it makes a number of key investments in areas to reduce New Zealand's carbon footprint. If the member would like to move that next year's Budget speech be extended to 90 minutes, on the basis that we are able to have the privilege to give that Budget speech, I would be happy to include every possible initiative in a 90-minute speech. He will also be pleased to note a Ministry for the Environment report showing New Zealand's 2015 greenhouse gas emissions fell, even as the economy and population grew.

James Shaw: Why did Budget 2017 allocate only $1 million a year of new money to reduce climate pollution but an extra $210 million to subsidise polluters through the allocation of free carbon credits?

Hon STEVEN JOYCE: For the member's benefit, the $4 million in terms of climate change emissions work is actually policy work to develop the next stage of the Government's programme, which has proven to be very effective, because we are seeing the economy becoming more carbon-efficient. The Productivity Commission is currently investigating the next stages of that work, so we are making good progress. We have big investments in things like the scientific investment in one of our biggest contributors to emissions, which, of course, is the agricultural sector. That is making good progress. So the Government does invest from time to time in different initiatives, but you would have to say that our emissions are heading in the right direction.

James Shaw: Well, in that case, are New Zealand's net greenhouse gas emissions higher or lower now than when National delivered its first Budget in 2009—are they higher or lower now than they were then?

Hon STEVEN JOYCE: In terms of emissions, gross emissions have grown between 1990 and 2015, but they have actually flattened out in recent times despite population increases. They will always be slightly higher from 2009—

James Shaw: I raise a point of order, Mr Speaker.

Hon STEVEN JOYCE: No, I am just explaining to the member.

James Shaw: I raise a point of order, Mr Speaker. I asked whether our net greenhouse gas emissions were higher or lower. He responded with gross greenhouse gases.

Mr SPEAKER: The member is absolutely right. At this stage he has responded by discussing gross emissions. The Minister has not yet completed his answer. I will deal with the matter at the end of the answer if we have not seen the issue of net emissions addressed.

Hon STEVEN JOYCE: As I was saying to the member, gross emissions in 2015 are slightly lower than in 2014 and have been stable since 2003. But the net emissions—I do not have the exact figures in front of me for the member, but it is, after all, the gross emissions that are most important from the climate's perspective, in terms of reducing the carbon added into the atmosphere.

James Shaw: I raise a point of order, Mr Speaker. I am not clear that the Minister addressed the question in terms of the net emissions since National came to power, as compared with today. It was a very specific question.

Mr SPEAKER: But I am absolutely clear that the Minister did. He said he did not have that exact data with him in the House today. I consider that given the general nature of the primary question, that is an acceptable answer.

James Shaw: May I assist by seeking leave to table documents prepared by the Parliamentary Library showing that climate pollution has increased by 20 percent since National came to power.

Mr SPEAKER: Leave is sought to table that particular Parliamentary Library information. Is there any objection? There is none. It can be tabled. Documents, by leave, laid on the Table of the House.

James Shaw: How much does his Government estimate that New Zealanders will have to spend between 2021 and 2030 on paying other countries to offset New Zealand's climate pollution for us?

Hon STEVEN JOYCE: That is difficult to say. It depends on a range of possible scenarios. I am sure that the Minister for Climate Change Issues would be happy to debate that with the member. Perhaps he would like to put down a question to her.

James Shaw: I raise a point of order, Mr Speaker. This is actually a Budget question to the Minister of Finance in relation to the fiscal liability to New Zealand of the offset requirement.

Mr SPEAKER: I accept the point the member is making, but when I look at the question—how much money will New Zealand have to, effectively, send overseas during the period 2020 to 2021—well, the Minister addressed it straight away. He said he could not finalise that figure at the moment and that it depends on a number of scenarios. So the question has been addressed—I accept not to the satisfaction of the member on this occasion, but I cannot assist the member further.

James Shaw: May I seek leave to table Government analysis, dated 25 May 2017, showing that it will cost almost $10 billion over 10 years.

Mr SPEAKER: I just want to clarify that that information is not already publicly available to all members.

James Shaw: It is not.

Mr SPEAKER: Then on that basis I will put the leave. Leave is sought to table that particular Government analysis. Is there any objection to it being tabled? There is objection.

James Shaw: Given that the OECD said last week that ambitious climate action "offers numerous economic opportunities and can spur economic growth", why is his Budget not more ambitious for New Zealand when it comes to creating a low-carbon, high-value economy?

Hon STEVEN JOYCE: As I said to the member at the outset, New Zealand actually has a strong record of improving carbon intensity. Our economy is growing, and we are increasing the size of the population. But the intensity, in terms of carbon emissions, is dropping. I note the member has asked me a number of things about the cost of emissions out from 2021 to 2030. Those will be the subject of future Budgets. In the meantime this Government is focusing, with the Productivity Commission, on working through a range of next-stage options to reduce carbon emissions. We are doing that in a way that I believe the member supports. He was very positive about that Productivity Commission investigation being undertaken, and we are very genuine about making sure that that is done, and done well, and that New Zealanders see the options and the trade-offs in reducing carbon emissions over the next decade.

James Shaw: After 9 years and nine Budgets, how has it gotten to the point where a young Kiwi like Sarah Thomson feels that she has to take the Government to court in order to get action on climate change?

Hon STEVEN JOYCE: I would say to Sarah that this Government is very focused on reducing emissions and improving environmental outcomes, but we are doing it in a way that ensures we can afford those changes by growing the economy at the same time. We could all do what the Greens want to do, and handicap a whole bunch of our productive industries—and, yes, you would get emissions down. There are many poor countries with low emissions.

Dr Megan Woods: Did he not mention climate change in his Budget speech because he did not want to draw attention to the economic distortions caused by his Government's refusal to finally bring agriculture into the emissions trading scheme?

Hon STEVEN JOYCE: No. I have already given my reasons why it was not included in the speech. The speech was simply not long enough to cover every initiative. But I invite the member to go out and campaign at the upcoming election, actually, on charging farmers a whole bunch for emissions, and she could work alongside Grant Robertson, who wants to take everybody's tax reductions back.

Dr Megan Woods: I seek leave to table a submission from New Zealand Oil and Gas that states that the Government's failure to bring biological emissions from the agriculture sector into the emission trading scheme is creating—

Mr SPEAKER: Order! Can I just check whether that is a submission that is available publicly.

Dr Megan Woods: It was a submission on the emissions trading scheme review. I am not sure whether it is available publicly.

Mr SPEAKER: Then it is available to all members already. Abuse of Children in State Care—Royal Commission of Inquiry

7. MARAMA FOX (Co-Leader—Māori Party) to the Minister for Children: Will she support a Royal Commission of Inquiry into the institutional abuse of children, and if not, why not, given calls from organisations and members of the public?

Hon ANNE TOLLEY (Minister for Children): No. As I have previously said in the House, any kind of abuse of children in State care is absolutely abhorrent. I note that successive Governments have decided against holding an inquiry and the previous Labour Government introduced the Confidential Listening and Assistance Service (CLAS), which was extended under this Government. This service provided more in the way of help than an inquiry ever would, helping people access their old records, funding counselling sessions, and referring them to agencies for investigation. The lessons from this service fed into the expert advisory panel's recommendations, which underpin the new Ministry for Vulnerable Children, Oranga Tamariki. We have also taken steps to resolve claims directly and quickly in a way that is personal to each case. An inquiry would not resolve the claims of individuals or provide payments or offer personal apologies.

Marama Fox: Does she not consider the Children's Commissioner's State of Care report on the Confidential Listening and Assistance Service report chaired by Judge Henwood, of which over 1,100 children who suffered abuse at the hands of the State form the basis of that report, a compelling enough reason to hold a royal commission of inquiry; if not, why not?

Hon ANNE TOLLEY: The Children's Commissioner's State of Care report's recommendations echoed the recommendations of the expert advisory panel. As I said in my primary answer, they underpin the formation of the new Ministry for Vulnerable Children, Oranga Tamariki. In fact, I think that if the member goes back to all of those recommendations from that State of Care report, she will see that Cabinet endorsed all of them. In fact, I am confident that Cabinet went further than the commissioner's recommendations. The design of the new system, which is being rolled out by the Ministry for Vulnerable Children, Oranga Tamariki, is working very closely with the current Children's Commissioner and his office. The recommendations of the CLAS are all on the website. Most of them have been, or are being, addressed.

Marama Fox: What confidence does the Minister have that the new reforms are in the areas needed if a royal commission of inquiry has not identified those areas to ensure that we do not have another 100,000 children and vulnerable adults put into institutional care, with almost of half of those being Māori?

Hon ANNE TOLLEY: Thankfully, the era of borstals and 100,000 children in State care are long gone. The 1988 Pūao-te-ata-tū report highlighted the historic and widespread abuse and trauma suffered particularly by Māori and helped shape the then ground-breaking Children, Young Persons, and Their Families Act 1989, and the findings and the recommendations of the CLAS report were made available to the expert advisory panel. As this new ministry rolls out the new system, which encompasses prevention, intensive intervention, care support, youth justice, and transition support, and reports to this House on a regular basis, I am absolutely confident that we can make sure that this never ever happens again. Budget 2017—Investment in School Property

8. TODD BARCLAY (National—Clutha-Southland) to the Minister of Education: What investment is the Government making in school property in Budget 2017?

Hon NIKKI KAYE (Minister of Education): I am pleased to advise the House that this year's Budget provides $456.5 million for education infrastructure and associated costs all over New Zealand. This will provide six new schools, two new school expansions, the relocation of two special education schools, 11 special education satellite units, and around 305 new classrooms nationwide. We inherited a school property portfolio with lots of issues such as leaky buildings, poor maintenance, and issues with earthquake strengthening. We prioritised extra money to tackle big issues such as earthquake strengthening, weathertightness, and major redevelopments to modernise and transform schools into 21st century learning environments.

Todd Barclay: What investment will be made in school property in the Wānaka region as part of Budget 2017?

Hon NIKKI KAYE: I am pleased to confirm that $19 million will be invested in Wānaka's school network as part of Budget 2017. This includes around $16 million for a new primary school in Wānaka and around $3 million for six new classrooms at Mount Aspiring College. This is about ensuring that we can futureproof for growth in Wānaka and give certainty to the community about education provision for many years to come. This Government has put more than $5 billion into school property. Further announcements will be made in the coming weeks.

Chris Hipkins: Does she stand by her statement that the $350 million announced in Budget 2014 to get ahead of demand "provides for nine new Auckland schools by 2018."; if so, how many of those new schools will be open by 2018 as promised?

Hon NIKKI KAYE: I do stand by that statement for a couple of reasons. In this Budget we will be ahead of the $350 million amount; it will be at $400 million, so we are well ahead in terms of funding. We will be ahead over 17,000 students, and in terms of the new schools we have announced, those new schools in this Budget, some of them will take longer than 2018 but the overall point is that we will be definitely making that commitment of more than 17,000 students, and what is important is that some of them need more classrooms. That is why we have delivered them first. Housing, Affordable—Crown Land and Building Programme

9. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Social Housing: What is the minimum number of new affordable houses which will be delivered as part of the Crown Land and Building programme she announced on 16 May 2017 and how is affordable defined?

Hon AMY ADAMS (Minister for Social Housing): At least 4,500, but up to 10,000, in addition to the 16,000 market homes and 13,500 new, modern, social houses for some of our most vulnerable New Zealanders. As I stated 2 weeks ago and last week again in the House, we use the KiwiSaver HomeStart cap of up to $650,000 to ensure the policy aligns with the ability to access other Government first-home buyer support. Our experience to date suggests that a number will, in fact, be priced well below this level.

Phil Twyford: Was the reason she did not include the actual number of affordable new homes, which is a little more than 4,000 over 10 years, that she did not know it or that she was so embarrassed that it was such a small number?

Hon AMY ADAMS: The member completely mischaracterises what I said, which is that we would have a range that we are aiming for, which is between 20 and 50 percent. So we have said there will be a minimum of 20 percent, which is the 4,500, but, actually, shortly after that announcement I headed out to launch a development with Melissa Lee where, in fact, 100 percent of them were going to be affordable homes. So to come up with a random number somewhere in the band of 4,500 to 10,000 was not particularly helpful. The difference is that we know the numbers in our policy. We have costed them, we can speak to them, and we are more than happy to answer questions on them.

Phil Twyford: Why has she proposed such a small number of affordable houses compared with Auckland's needs when the Reserve Bank today said that the rate of house building is "insufficient to meet population growth and address housing shortages"?

Hon AMY ADAMS: Well, this is exactly the point. When we made the announcement we pointed out very clearly that this is about what the Government is doing with the less than 5 percent of land that we own. As a Government, our primary responsibility is focusing on building social houses for those in need, making sure we have an affordable programme to fund it, and making sure there are opportunities for our tenants to transition. By contrast, Labour is not building any social houses, it cannot fund its project, and is not being up front about where it will be. We have never pretended that this is going to be a new house for every Aucklander, nor, frankly, speaking as a Government, should it be.

Andrew Bayly: What further information does she have on the Crown building project?

Hon AMY ADAMS: The House might be interested to know that when we were setting the affordability criteria for the Crown building project, we were very mindful of the fact that of the nearly 1,436 homes already sold at Hobsonville Point, 28 percent of them have been sold at or under $550,000, and these range from one-bedroom apartments to three-bedroom terraced homes. What we are not doing as part of the Crown building project is building dreamt-up numbers at fantasy prices on land that we do not own, cannot identify, and cannot pay for and that is magically free of any existing properties.

Phil Twyford: How is it credible to promise only 4,500 affordable homes—only half of which were a new promise—when Auckland has a shortfall of 40,000 homes; last year only 7,000 new homes were completed, according to Auckland Council; and only 5 percent of those were affordable?

Hon AMY ADAMS: What we are doing is showing what the Crown will do on its 5 percent of the land in Auckland. We have always said that the largest part of responding to Auckland will come from the 95 percent owned by the market, which is why this Government is supporting things like the HomeStart scheme, like Resource Management Act reform, like the national policy statement on urban development, and like Point England, which Labour is opposing. What is not credible is to pull numbers out of the air that you cannot fund, cannot build, and do not know where they are going.

Phil Twyford: Why should the public take her press release about building houses seriously 4 months out from an election when, after 9 years, this Government has presided over a 2,500 reduction in the number of State houses and a nationwide shortfall of 60,000 homes, built up under her and Nick Smith?

Hon AMY ADAMS: Well, I reject the member's comments. What I would say is that it is because we are a credible Government with a proven track record of doing what we say we will do, which is in sharp contrast to the Opposition. Budget 2017—Investment in Science and Innovation

10. Dr PARMJEET PARMAR (National) to the Minister of Science and Innovation: How does Budget 2017 investment in science and innovation support a growing economy?

Hon PAUL GOLDSMITH (Minister of Science and Innovation): The $372 million extra funding through the Innovative New Zealand programme in the 2017 Budget is designed to generate more of the skills, the ideas, and the scientific capability to drive the New Zealand economy forward. The funding includes $82 million for the Government's pre-eminent applied science fund, the Endeavour Fund, which supports excellent, higher-risk research with the potential for long-term transformative impact in areas of future value; $132 million for tertiary education to ensure young New Zealanders obtain the skills we need; and $75 million for Callaghan Innovation's research and development growth grants. It is all about adding more value to our export volumes. Investment in innovation is designed to lift our productivity, and thereby provide for our future prosperity.

Dr Parmjeet Parmar: What does Budget 2017 provide for high-impact, transformative science?

Hon PAUL GOLDSMITH: As well as providing ideas and innovation to help our companies be more internationally competitive, a strong science and innovation capability provides the evidence for fact-based decision-making for the Government and investors. It also provides solutions for many of our national challenges. Budget 2017 will invest an additional $81.9 million of new operating funding over 4 years to support high-impact, mission-led programmes in science to the Endeavour Fund. New Zealand science already makes a powerful contribution to areas like improving water quality, ensuring our children get a good start, supporting good health in older populations, and developing new industries that create exports and jobs. The Endeavour Fund complements the Government's other investments in mission-led science, and demonstrates its commitment to creating a highly dynamic science and innovation system.

Dr Parmjeet Parmar: Supplementary question. [Interruption]

Mr SPEAKER: Order! If the member wants more, I need less interjection from the Minister.

Dr Parmjeet Parmar: How will Budget 2017's science and innovation investment contribute to the global store of knowledge?

Hon PAUL GOLDSMITH: Of the new operating funding allocated in Budget 2017, $40.5 million is to help reduce the risk to life from natural disasters and hazards, and to explore the unique environment of Antarctica. The $21 million over 3 years from 2018 that is dedicated to Antarctic research will provide an enhanced platform for new scientific discoveries by Kiwi researchers in one of the most dangerous, dynamic, and awe-inspiring places in the world. New Zealand has had a formal presence in Antarctica for over 50 years, and the continent is a hugely important region for research in the natural world in the past, the present, and into the future. District Health Boards—Funding

11. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Health: Does he stand by his office's statement that the $644.8 million calculated by the Ministry of Health as the amount needed by DHBs to meet their total cost pressures this year was a "wish list" figure, and is that why they only received $400 million for cost pressures?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, although I would note that the member's question refers to last year's Budget, while the rest of Parliament has jumped ahead to Budget 2017. I am assuming it was an honest mistake, but I would ask the member to keep up with the play.

Dr David Clark: Was the Ministry of Health wrong when it said that the district health boards (DHBs) needed $644.8 million to meet all demographic, wage, and inflationary cost pressures this year?

Hon Dr JONATHAN COLEMAN: Once again, I would invite the member to get out from behind the eight ball and start focusing on Budget 2017. But, as I said in the primary answer, yes.

Dr David Clark: What was the wish-list figure for district health boards to meet their total cost pressures given to him for the 2017-18 year by the Ministry of Health?

Hon Dr JONATHAN COLEMAN: Now we have got up to date. But, look, the standard formula around cost pressures is the DHB allocation plus around 1 percent savings of the baseline each year.

Dr David Clark: I raise a point of order, Mr Speaker. I listened very carefully, and I did not—

Mr SPEAKER: I am going to invite the member to repeat the question.

Dr David Clark: What was the wish-list figure for district health boards to meet their total cost pressures given to him for the 2017-18 year by the Ministry of Health?

Hon Dr JONATHAN COLEMAN: As I said, it is usually around the amount of the allocation plus about 1 percent of the baseline.

Dr David Clark: Has he seen the Auditor-General's damning report, tabled in Parliament today, which, although narrow in scope, finds that in-patient units have high occupancy rates, sometimes beyond their capacity, that the pressures on in-patient units and community services need to be addressed, and that more work is needed to systematically gather and use feedback from people using mental health services and those supporting them?

Hon Dr JONATHAN COLEMAN: Yes, I have seen that report. That was an audit taken 14 months ago; there has been extensive work by the Ministry of Health since then. In the back of the report there is a letter from the Director-General of Health, Chai Chuah, that details what has been done. There has also been a Health Quality and Safety Commission initiative taken around discharge planning. It is an important report, of course. It is a very helpful report, 3 months out from the election, and the points that it highlights are being addressed and will be helped, of course, by the $224 million of mental health funding allocated in the Budget—part of a record $888 million for health overall, taking the Budget to a record $16.77 billion. [Interruption]

Mr SPEAKER: Order! I certainly do not expect the member to address any member—it may well have been me, actually. I do not expect that member to say that to any other member in this House. He can proceed with his supplementary question.

Dr David Clark: When will he finally concede that a review of mental health services and funding is urgently needed, given the evidence and requests made in the People's Mental Health Review, the resignation of Mike King from the committee reviewing the suicide strategy, the petition of the Life Matters Suicide Prevention Trust currently before Parliament, and, now, today's damning report on mental health provision, delivered by the Auditor-General?

Hon Dr JONATHAN COLEMAN: Last week I was meeting with health ministers at the World Health Organization, and they were all saying that of the three major disease groupings—non-communicable diseases, infectious diseases, and, finally, this big one around mental health disorders—mental health is the big one that everyone across the Western world is really focusing on. It has changed a lot, even in the past 2 years. So what we are going to do is make sure that $224 million goes to improving and strengthening services, and, as I say, it is part of a record $888 million for health in this Budget. Threatened Species—Native Birds

12. METIRIA TUREI (Co-Leader—Green) to the Minister of Conservation: E hia ā tātau momo manu kei te noho tino mōrearea, e ai ki Te Kaitiaki Taiao a Te Whare Pāremata? [How many of our bird species are in serious trouble, according to the Parliamentary Commissioner for the Environment?]

Hon MAGGIE BARRY (Minister of Conservation): Talofa lava. I welcome Dr Jan Wright's report, which has identified 54 species of birds as being in serious trouble. That is broadly consistent, actually, with the Department of Conservation's (DOC) own assessment, as released in the Threatened Species Strategy 2 weeks ago. The Government is under no illusions whatsoever about the danger our native birds are in. That is why we have committed to Predator Free 2050, that is why we have set up a board that has a plan to enact it, and that is why we have spent $45 million on the Battle for our Birds in the last 2 years and the War on Weeds and wilding pines. There is more conservation work being done in New Zealand today than at any other time in New Zealand's history.

Metiria Turei: Why has her Government cut DOC's funding in real terms by $422 million since 2009, when the Parliamentary Commissioner for the Environment has now described the situation with our native birds as "desperate"?

Hon MAGGIE BARRY: I agree with Dr Jan Wright that we have a serious situation with our threatened species, and that we need to do something about it. That is why DOC has moved so quickly into the space of appointing someone who, at a senior leadership team level, will have responsibility for biodiversity. This is an important thing to all New Zealanders, and, as Dr Wright pointed out in her budget, it is not something that one department can do alone. The member remains—and is at least consistent in this—completely wrong in the idea that DOC's spending has not increased. It has; $107 million in this year's Budget is not a decrease by anybody's standards. There has, in fact, been a 20 percent increase in the Government investment in DOC since 2008, when we came into Government.

Metiria Turei: Given her decision to cut DOC's funding, will she—[Interruption] I know you do not agree; look at your numbers. [Interruption]

Mr SPEAKER: Order! Allow the member to complete the question.

Metiria Turei: Thank you, Mr Speaker. Given her decision to cut DOC's funding, will she also accept responsibility for the extinction of the toroa, our wandering albatross, given the Parliamentary Commissioner for the Environment's latest report, which describes this great bird as being in serious trouble and at risk of extinction?

Hon MAGGIE BARRY: I guess, because the member has never been anywhere near Government, she does not understand very much about the Budget process. The increase in spending in DOC is at $107 million this year. It has been a 20 percent increase since 2008. The member's wilful misrepresentation of the figures is pretty pathetic, even by that member's standards. When we look at the birds that are in danger—the whio, for example, has had a 48 percent increase in bird numbers in the Kahurangi National Park alone. Those are figures that were released today. That is because of predator-scale biodiversity protection by DOC.

Metiria Turei: Does the Minister accept that her and her Government have failed New Zealanders and the kākāpō when the Parliamentary Commissioner for the Environment finds: "To say we have brought the kākāpō back from the brink of extinction is not correct; rather it continues to teeter on the brink of extinction."?

Hon MAGGIE BARRY: This Government and the Department of Conversation have worked tirelessly on the recovery of kākāpō. I feel that the work of Dr Andrew Digby and the kākāpō recovery team has been overshadowed by some of the misunderstandings that that member is helping push out there. The kākāpō is a species that is in grave danger, it is one that we have put a great deal of resources into, and there may well be a time when genetic diversity with that particular breed does need another level of action. But at the moment, the results speak for themselves, and we have greatly increased the number of kākāpō in New Zealand that are breeding to a high level. Genetic diversity and the size of a gene pool of such a critically endangered bird is a problem, and it is one that we all need to grapple with. We have scientists on it, and Predator Free 2050 and its board, who have just received a report on this.

Metiria Turei: Supplementary question.

Mr SPEAKER: No—[Interruption] Order! Is the member seeking a further supplementary? No, the Greens have used their full allocation.

Metiria Turei: I raise a point of order, Mr Speaker. As I understand, the allocation is 5-4. It would be worth checking.

Mr SPEAKER: My recording shows six, but on the basis that Mr Shaw is indicating there were not—it is hard for me to keep a tally, and the Greens are normally very accurate in their accounting—I am going to accept that there is room for one more supplementary question.

Metiria Turei: Yeah, we're good at maths. Turns out we're good at maths.

Mr SPEAKER: But I will be checking my maths later.

Metiria Turei: Does the Minister accept that her and her Government have failed the Department of Conservation and our conservation estate when the Parliamentary Commissioner for the Environment has revealed today that "… one in every three [of our native birds] is not far off from following the moa and many others into extinction. The situation is desperate."?

Hon MAGGIE BARRY: It would appear to me that the member has just recently caught up with what most of us have known and understood for more than a decade, and that is that our vulnerable threatened bird species are under threat. As I said in my first response, the New Zealand Threatened Species Strategy, the first one that has ever been released in New Zealand, has detailed pretty much the same things that the Parliamentary Commissioner for the Environment has detailed. So we are very aware. We have put a great deal of resources into this and a great deal of thought. The Predator Free 2050 board has met four times. It is about to announce its chief executive, and the plan is well under way. Threatened species are a concern to all of us on this side of the House, and the unknowing, ignorant stance from that member is woeful. I would check your maths—

Mr SPEAKER: Order!

ENDS

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