QUESTIONS TO MINISTERS

Climate Change Policy—Commentary 1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Does he care what New Zealanders think about climate change, and does he take their calls for action on climate change seriously?

Hon SIMON BRIDGES (Acting Minister for Climate Change Issues): Yes.

Dr Russel Norman: What is his response to Stephen Keach, who asks: “Given that the majority of known fossil fuel reserves must remain unburnt if we are to keep below 2 degrees warming, why is the Government continuing to pursue a programme of fossil fuel exploration?”

Hon SIMON BRIDGES: Because I think the world needs to transition to a lower carbon economy. We cannot turn the tap off overnight—indeed, not all fossil fuels are created equally. For example, gas can play a significant role, given its significantly lower emissions, in displacing coal. As I say, not all non-renewables are created equally.

Dr Russel Norman: What is his response to Michelle Raill from Levin, who asks: “When will the Government start investing in the reforestation of New Zealand’s hills and wetlands in native trees and bush, which will help to offset our emissions?”

Hon SIMON BRIDGES: We are supporting a number of reforestation projects of New Zealand’s hills and wetlands. Examples include, over the next 5 years, $20 million available for afforestation under the Erosion Control Funding Programme. Of course, the Permanent Forest Sink Initiative supports those creating permanent forest sinks of either native or exotic species, and the Government and Fonterra are sharing coordination of a $20 million community investment fund that will allocate funds to protect sensitive water catchments through projects such as plants, pest control, and the like. So I think there are a range of things we are doing in relation to reforestation of New Zealand’s hills and wetlands.

Dr Russel Norman: What is his response to Dennis Tegg from Coromandel, who asks: “When will the Government comply with the terms of the international memorandum it recently signed and end all domestic fossil fuel subsidies, including production subsidies?”

Hon SIMON BRIDGES: I think it is important, first, to outline that the Government does not subsidise the consumption of fossil fuels and has called for other countries, indeed, to phase out their subsidies of fossil fuels in the lead-up to the Paris climate conference in December this year. We are also a leading member of the Friends of Fossil Fuel Subsidy Reform group, and I will also note that the Minister of Energy and Resources has submitted New Zealand recently—in fact, it is the second country to do so—to an APEC peer review of our fossil fuel subsidies.

Dr Russel Norman: What is his response to Iain Palmer from Masterton, who asks: “If the Government is taking climate change seriously, why then is it allowing KiwiRail”—[Interruption]

Mr SPEAKER: Order! Allow the member to ask his question.29 Apr 2015 Oral Questions Page 2 of 15 (uncorrected transcript—subject to correction and further editing)

Dr Russel Norman: “If the Government is taking climate change seriously, why is it allowing KiwiRail to withdraw the electric locomotives on the main trunk line and replace them with fossil fuel - powered locomotives?”

Hon SIMON BRIDGES: We do take climate change seriously and I hope my answers have indicated that to both this House and the public. I understand that KiwiRail is considering a number of options for locomotives used on the Auckland to Wellington line. At this stage no final decisions have been made.

Dr Russel Norman: What is his response to Sam Gribben from Wellington, who asks: “The Government says we are playing our part with regard to ISIS—a small but symbolic role. Why doesn’t the same apply to climate change?”

Hon SIMON BRIDGES: I think, as the Government has repeatedly stated, that we are committed to doing our fair share on climate change. We take responsibility for emissions in a way that does not impose unreasonable costs on households and businesses. We have got a climate change response that is comparable to the efforts of other countries, and we play a leadership role globally where we can make the greatest contribution. One such example is the Global Research Alliance, on which we have seen significant research developments over the last 24 to 48 hours that I think are actually very exciting for our emissions profile.

Dr Russel Norman: What is his response to Jim Robinson from Ōpōtiki, who asks—

Hon Members: Ha, ha!

Dr Russel Norman: You may laugh—you may laugh.

Mr SPEAKER: Order! Just finish the question.

Dr Russel Norman: “Has there been comprehensive forecasting on the total cost to the New Zealand economy resulting from a 1-metre rise in sea level; if not, why not?”

Hon SIMON BRIDGES: No, it is not clear that that would be relevant, given the uncertainty around the time over which a 1-metre rise might occur. The correct approach to preparing for climate change, we believe, is to have robust planning that allows for this uncertainty. The Government provides guidance to local government and recommends a risk-based approach including all hazards, not just the sea level rise.

Dr Russel Norman: What is his response to Stefanie O’Brien from Auckland, who asks: “Given the increasing number of climate change - related deaths, would the Minister agree that it is completely immoral that the Government has issued 16 oil and gas exploration permits in 2014?”

Hon SIMON BRIDGES: I simply do not accept the premise of the question.

Dr Russel Norman: What is his response to Cindy Baxter from Pīhā, who asks: “What is the advice from Treasury on the cost to New Zealand of climate change impacts at 2 degrees Celsius warming or 4 degrees Celsius warming, and does any such advice even exist?”

Hon SIMON BRIDGES: Treasury has not provided such advice.

Dr Russel Norman: In light of the huge increase in net greenhouse gas emissions under this Government, is he prepared for this Government to be remembered as the one that failed today’s generation and future generations of New Zealanders by refusing to act on climate change?

Hon SIMON BRIDGES: I do not accept that at all. I think, and I hope, that I have demonstrated both to this House and to the public that we do take climate change seriously. We are committed to doing our fair share. We have a comprehensive emissions trading scheme. We show international leadership in areas of comparative advantage. Again, I note the Global Research Alliance and the very significant research that it has been doing that, I do not think is an exaggeration to say, is world leading; as well as the significant work that we do at home in our own backyard with many millions of dollars going into Pacific renewables projects and the like. I think that New Zealanders can hold their heads up on this issue and see that we are, as I say, certainly doing our fair share. 29 Apr 2015 Oral Questions Page 3 of 15 (uncorrected transcript—subject to correction and further editing)

Economic Growth—Reports 2. JOANNE HAYES (National) to the Minister of Finance: What reports has he received on the benefits for businesses of the growing New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The New Zealand Institute of Economic Research recently released its Quarterly Survey of Business Opinion. It shows that the New Zealand economy remains on a reasonably solid footing. A net 25 percent of businesses surveyed expect higher business activity, down slightly from a net 27 percent in the previous quarter. However, confidence remains above the long-term average of 15 percent. Inflation indicators collected through the survey remain subdued despite the fact that these businesses are anticipating growth, and there are signs that growth in construction activity has peaked, although activity in Canterbury continues to pick up. The New Zealand Institute of Economic Research says that by its historical measures, this level of business confidence is consistent with growth of around 3 percent in the economy.

Joanne Hayes: What does the quarterly survey say about the outlook for hiring intentions and business investment over the next 12 months?

Hon BILL ENGLISH: Our Government sees that an important part of its role is in supporting businesses to assist them to take the decision to invest another dollar and create another job, so it is good that the New Zealand Institute of Economic Research report shows reasonably strong employment optimism, with a net 15 percent of businesses expecting to hire new workers in the next 12 months. Again, that is down slightly from the previous quarter. A net 18 percent of businesses plan to invest in buildings and a net 24 percent expect to invest in plant and machinery. This has been relatively strong, partly because of the high exchange rate, which makes these kinds of investments more affordable. Overall, this level of business confidence points to a reasonably positive outlook for jobs.

Joanne Hayes: How can the Government contribute to sustained growth that helps to deliver more jobs and higher wages?

Hon BILL ENGLISH: We can continue to take the policy actions that support that kind of confidence in business. The effect of that over the last 4 years is that average wages have increased by around $6,000 from $50,000 to $56,000. Treasury’s most recent forecasts now show the average wage rising to above $62,000 by 2018—that is, $62,000 per annum. I might say the Opposition members also scoffed at forecasts some years ago of 170,000 new jobs by June 2015. I can report to them today that as at December 2014—6 months early—there were 188,000 new jobs. I suspect we will do better on the average wage than they think today too.

Grant Robertson: Can the Minister of Finance confirm, in light of that answer, that there are 38,000 more people unemployed than when he took office, a 36 percent increase?

Hon BILL ENGLISH: Yes. Once again, I thought I might remind the Opposition members—because clearly they have not been listening to the questions and answers in Parliament—that there was a thing called the global financial crisis. I know on “Planet Labour” it did not happen, but in the real world it did.

Joanne Hayes: What other recent reports has he seen on the outlook of New Zealand businesses?

Hon BILL ENGLISH: Because the outlook for New Zealand businesses is pretty positive, there tend to be a number of reports that reflect that. For instance, the ANZ today released its monthly ANZ Business Outlook survey. It shows that business confidence remains pretty good. Investment intentions, profit expectations, employment intentions, and export intentions all remain high. The ANZ also considers that the economy remains on track for around 3 percent real GDP growth this year. Of course, our objective is to do what we can to sustain that level of growth, because it is a level of growth that New Zealand seems to be able to achieve with relatively benign inflation, it creates new jobs, and it delivers moderate but consistent income increases to households.

Rt Hon Winston Peters: I seek leave to table a recent speech that shows that 72,000—29 Apr 2015 Oral Questions Page 4 of 15 (uncorrected transcript—subject to correction and further editing)

Mr SPEAKER: Order! I do not need the content of the speech; I just want to know who made the speech and when.

Rt Hon Winston Peters: Mr Steven Joyce made this speech.

Mr SPEAKER: Order! [Interruption] The member can resume his seat. It is freely available.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am seeking leave to table it.

Mr SPEAKER: And I am not prepared to put the leave. Would the member resume his seat if he wishes to stay in the House.

District Health Boards—Funding 3. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: What impact would a tighter funding path for district health boards in 2015/16 have on their ability to provide quality, safe and timely services?

Hon Dr JONATHAN COLEMAN (Minister of Health): It is a hypothetical question because, of course, district health boards will be getting more money in the Budget, as they always have. The member will just have to contain her excitement until 21 May. What I can say is that despite tight financial times, this Government has always made funding health its top spending priority every year.

Hon Annette King: Would a tighter funding path, as stated in the Cabinet paper he took to Cabinet in December, lead to cuts in service, delays in service, or mounting deficits in district health boards?

Hon Dr JONATHAN COLEMAN: The paper that Annette King refers to was never actually considered by Cabinet. What I can say is that we will be putting more money into health. But what we will not be doing is doubling the health budget, as Annette King did, and at the same time delivering 2,000 fewer surgeries a year and sending 761 people to Australia for cancer treatment.

Hon Annette King: Bearing in mind that it is 10 years since I was the Minister—

Mr SPEAKER: Order! Just ask the question. [Interruption] Order! That is an example whereby if the member would just ask her question, rather than give an introduction at the start, it would help her and me contain order in this House.

Hon Annette King: Do reports of mounting deficits in district health boards for the 2015-16 financial year reflect a funding allocation of $250 million, as recommended by Treasury, or $320 million, as recommended by him?

Hon Dr JONATHAN COLEMAN: What I can say on the matter of deficits is that when Annette King was the Minister—

Mr SPEAKER: Order! Answer the question. I can have the question repeated if that would be of assistance.

Hon Dr JONATHAN COLEMAN: What I can say is that the member is wrong on both counts. She has no idea what is in the Budget, but it will be a nice surprise for her.

Hon Annette King: If there is sufficient funding for district health boards for 2015-16 and they are going to get a nice surprise, why did the chair of Tairāwhiti District Health Board say just 3 weeks ago: “We have used all the fat in the system. We are really stretched. We can’t sustain this pressure”, with a $1.5 million deficit looming?

Hon Dr JONATHAN COLEMAN: Mr David Scott never says things like that. I know that he is very happy with the $27 million extra that Tairāwhiti District Health Board has received under this Government, the nine extra doctors, the 50 more nurses, and the 1,721 extra patients treated there than under Mrs King. David Scott is very happy, and I know because he tells me.

Hon Annette King: I raise a point of order, Mr Speaker. I am asking for your help in this. The Minister just said that the chair of the district health board did not say that. I can table the evidence—

Mr SPEAKER: Order! That is not the approach you must take—raising a point of order. The member certainly made a statement and effectively the Minister gave an alternative view, alleged to29 Apr 2015 Oral Questions Page 5 of 15 (uncorrected transcript—subject to correction and further editing) be from the same man. If the member thinks there has been a misleading of the House she knows the appropriate course of action, and it is certainly not by way of a point of order.

Hon Annette King: I raise a point of order, Mr Speaker. The action I would like to take is to table the report from the chair of the district health board, which is reported in the Gisborne Herald.

Mr SPEAKER: Order! If the member is seeking leave to table something that is in the Gisborne Herald I am not interested in putting it.

Hon Annette King: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! The member will resume her seat. If the member is going to relitigate the fact that we are not tabling pieces of newspaper in the House, then that is something I will take a very dim very on, and she is likely to be leaving the Chamber.

Hon Annette King: I raise a point of order, Mr Speaker.

Mr SPEAKER: A fresh point of order, the Hon Annette King.

Hon Annette King: I would like your advice. When a Minister accuses a person on this side of the House of not telling the truth—

Mr SPEAKER: Order! I have a very good mind to be asking the member to leave the Chamber. [Interruption] Order! I have advised the member what to do if she thinks the Minister has made a statement that is factually incorrect. She knows the procedure. She has been here for a very long time. She does not raise it as a point of order. Supplementary question, the Hon Annette King. [Interruption] Supplementary question, otherwise we will be moving on.

Hon Annette King: Yes, Mr Speaker. Well, there are interjections across—

Mr SPEAKER: Order! Just ask the question.

Hon Annette King: If there is sufficient funding for 2015-16, why did the chair of the Canterbury District Health Board say very recently: We need more resourcing … and the current funding is not keeping up.”, and that compounding the lack of resources will create an even bigger problem?

Hon Dr JONATHAN COLEMAN: What I can say to that member is that over the past 6 years Canterbury has received an extra $269 million. There are an extra 143 doctors. There are an extra 486 nurses—

Mr SPEAKER: Order! I am going to invite that question to be asked again.

Hon Annette King: If there is sufficient funding for 2015-16, why did the chair of the Canterbury District Health Board say very recently: “We need more resourcing… and the current funding is not keeping up.”, and that compounding the lack of resources will create an even bigger problem?

Hon Dr JONATHAN COLEMAN: I have talked to Mr Cleverley on many occasions and he tells me, actually, that there is plenty of money there in that huge budget that Canterbury has. He tells me that he is determined to continue to provide excellent clinical services for the people of Canterbury.

Hon Annette King: Is the Minister saying that the reports from both the chair of Tairāwhiti District Health Board and the chair of Canterbury District Health Board are incorrect, that the members did not say that, and that they were lying?

Hon Dr JONATHAN COLEMAN: Well, the last time Annette King raised a point like this in the House, she was saying that Counties Manukau District Health Board had a hundred-million-dollar deficit. We went away and checked, and it actually had a multimillion-dollar surplus. So no, I do not actually believe anything that member says, I am afraid.

Kaipara District Council—Reappointment of Commissioners 4. Rt Hon WINSTON PETERS (Leader—NZ First) to the Associate Minister of Local Government: Did she consider all relevant factors in reappointing the Kaipara District Council Commissioners; if not, why not?

Hon LOUISE UPSTON (Associate Minister of Local Government): Yes.29 Apr 2015 Oral Questions Page 6 of 15 (uncorrected transcript—subject to correction and further editing)

Rt Hon Winston Peters: Prior to making her decision, did she discuss with the commission its decision to not take action against Beca Carter Hollings and Ferner Ltd concerning that company’s involvement in the Mangawhai waste-water scheme cost blowout of tens of millions of dollars?

Hon LOUISE UPSTON: In coming up with my decision to extend the term of commissioners, I met with them and others and took into consideration a number of issues and challenges that the council faced. The two biggest issues that I considered were the effects of the uncertainty of the Local Government Commission’s reorganisation proposal and unresolved legal proceedings related to the Mangawhai community.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking specifically—

Mr SPEAKER: Order! I am going to invite the member to re-ask that question.

Rt Hon Winston Peters: Thank you very much. Prior to making her decision, did she discuss with the commission its decision to not take action against Beca Carter Hollings and Ferner Ltd concerning that company’s involvement in the Mangawhai waste-water scheme cost blowout of tens of millions of dollars?

Hon LOUISE UPSTON: One of the matters that did come up in my discussions with the commissioners was the issue of Beca. I am advised that, having considered the matter carefully, the commissioners decided that the cost of pursuing a claim with a limited chance of success was not a productive use of ratepayer funds and that it was reasonable to call time on this stream of work.

Rt Hon Winston Peters: Well, when the commission gave the Limitation Act issues as one of its reasons for not taking legal action against the Beca Group, was it not obvious to her that the commission at all times had the power to not be caught by that law; that is, not delay making a decision and then use that delay as an excuse to not take legal action?

Hon LOUISE UPSTON: Members of this House will be clear about the very complex challenges that the Kaipara District Council faced when the intervention was put in place in 2012. One of those included a very comprehensive review by the Auditor-General. The commissioners had a number of issues that they wanted to address and they addressed them in order of priority. Beca was one that they decided was not the best use of ratepayer funds in pursuing a legal challenge.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am putting at issue the question of the Limitation Act—

Mr SPEAKER: Order! No. On this occasion I listened very carefully, and that question has been addressed.

Rt Hon Winston Peters: What investigations has she or her Government initiated into the appalling circumstances behind the sewage scheme cost blowout, thereby demonstrating to Kaipara ratepayers and voters the simple principle of accountability to both of those groups?

Hon LOUISE UPSTON: It will be clear to many that the very reason that this Government put an intervention in place and appointed commissioners was the interests of the Kaipara ratepayers. As you are well aware, there was a significant blowout and mismanagement of a waste-water scheme project, which has been investigated by the Auditor-General, who is an Officer of Parliament.

Rt Hon Winston Peters: Did she consult with the local member of Parliament before making her decision to reappoint the commission; if not, why not?

Hon LOUISE UPSTON: I consulted widely and broadly in coming to my decision. As that member knows, I gave him the courtesy of a phone call before the announcement was made and I have offered to brief him in my office on the issues. I would welcome the opportunity to discuss it with you in detail.

Rt Hon Winston Peters: Now for the truth. Given that she called me within 1 hour of making the announcement and that in the recent by-election in the Northland electorate the Kaipara ratepayers and voters, amongst many issues, made their displeasure over this issue very clear at that time, why did she and her Government not get the message?29 Apr 2015 Oral Questions Page 7 of 15 (uncorrected transcript—subject to correction and further editing)

Hon LOUISE UPSTON: As I said in my last answer, I consulted widely. There were many letters, emails, and phone calls to my office. I also took the time to visit the district and talk to individuals and community leaders. I was very clear then, on the receipt of two different petitions. The one that was in favour of the commissioners retaining their positions for another 12 months was three times the size of any other.

Housing, Affordable—KiwiSaver HomeStart 5. TODD MULLER (National—Bay of Plenty) to the Minister for Building and Housing: How many applications have been made for KiwiSaver HomeStart since the scheme took effect on 1 April 2015?

Hon Dr NICK SMITH (Minister for Building and Housing): Housing New Zealand received the 2,000th application this morning, which is a stunning result given that the scheme has been in place only since 1 April. That is treble the number that was received in April last year under the old schemes, and it shows how the Government is helping hundreds of families every week to get into their first home. The scheme has actually proved so popular that Housing New Zealand has had to expand the number of staff that are processing the applications.

Todd Muller: What response has there been to the HomeStart public meetings from prospective homeowners, building companies, and banks?

Hon Dr NICK SMITH: We have had an average of over a hundred people at each of the four meetings that we have had in west Auckland, in Christchurch, in my own electorate of Nelson, and last night on the West Coast, where there was a very wide level of participation, particularly from young people who are looking to purchase their own home. They are quite excited by the potential to put the HomeStart grant and the changes that have been made to KiwiSaver home withdrawal, as well as the Welcome Home Loans, together for them to be able to realise the dream of owning their own home. I am also quite encouraged by the very high level of interest from building companies that see the opportunity for increased demand for houses in a more affordable range, and I am confident that it is going to result in more homes that are suitable for those people utilising the HomeStart scheme.

Todd Muller: What changes have been made to the support for first-home buyers that will help direct the assistance from the Government towards building new homes?

Hon Dr NICK SMITH: A common complaint has been about the old scheme being very difficult to use for purchasing a new home. That was, firstly, because you could not previously use your KiwiSaver withdrawal for a deposit on a new home; that did not work. Secondly—

Phil Twyford: What did Treasury say about this?

Hon Dr NICK SMITH: Treasury said it was very supportive of the extra support for growing new homes. I am very disappointed that one of the common questions I have had at the meetings has been about how soon people have to get in and get their grant given that Labour is promising to abolish the scheme. I have had to advise people that, yes, they can be guaranteed that this Government is committed to the scheme for the next 3 years, but they will have to vote for a National Government if they want HomeStart to continue beyond 2017.

Phil Twyford: Has he seen the latestAMP360 Home Loan Affordability Report, showing that lower quartile house prices in Auckland rose to $587,000 from February—that is up $32,600 in 1 month, completely wiping out his HomeStart programme in a single month, showing that his tinkering is only making the housing crisis worse?

Hon Dr NICK SMITH: I do find the accusation of tinkering interesting from that member because when I intervened in the Auckland Council with the special housing area this was the member who put hoardings all through Auckland telling me to butt out and that I was doing too much. So it is a bit rich for him now to be telling me I am not doing enough. Actually, in Auckland we have doubled the rate of house build. We were doing 4,000 per year; we are now building 8,000 per year. I accept that the challenge has got more difficult because we do not have 40,000 people a 29 Apr 2015 Oral Questions Page 8 of 15 (uncorrected transcript—subject to correction and further editing) year leaving for Australia. They want to stay here. We are going to need to build more houses, and we are up to that challenge.

Government Financial Position—Return to Surplus 6. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is it Government policy that the Government will return to surplus this financial year and stay there so it can reduce debt, reduce ACC levies on households and businesses, and start modestly reducing income taxes?

Hon BILL ENGLISH (Minister of Finance): Yes, it is the Government’s policy to return to surplus, to maintain surplus so that we can reduce debt to 20 percent of GDP by 2020, to reduce ACC levies on households and businesses, and in 2017 to begin reducing income taxes. One more point the member missed is that if there are any positive revenue surprises, we would use those to get debt down, but there do not look to be any positive revenue surprises.

Grant Robertson: In light of that answer, does the Minister of Finance recall this document Our 2014 Priorities from the National Government, which lists as the first priority “Return to Budget surplus in 2014/15”?

Hon BILL ENGLISH: Yes, I do, and the Government has worked very hard—and I must indicate support for Ministers and public servants who over recent years have worked very hard—to contain Government expenditure at the same time as improving public services consistently across the board. However, they do not have any control over revenue and it is the revenue that amounts to a challenge to getting back to surplus.

Grant Robertson: In light of that answer, can the Minister explain this document, featuring the same photograph of a smiling Prime Minister with Our 2015 Priorities, which lists as the first priority “Return the Government’s books to surplus”—leaving out the date 2014-15?

Hon BILL ENGLISH: Yes, I do, and I am pleased to see that the member, as the new finance spokesman, is studying sound public policy so intently. He can be reassured—

Hon Simon Bridges: No, he’s just looking at the pictures.

Hon BILL ENGLISH: He is just looking at the pictures? No, no, he has read it. He has read it. Give him some credit. And I can assure the member that all the numbers related to the surpluses of course are fully transparent.

Grant Robertson: In light of the Minister’s desire for transparency, why did he ditch his 2014 promise for a surplus this financial year, just months after making that election promise?

Hon BILL ENGLISH: It is not a matter of ditching promises; it is a matter of dealing with reality. The member may not have noticed that in the Half Year Economic and Fiscal Update, which is a statutory requirement of any Government to publish in December, we forecast a $550 million deficit for the 2014-15 year, so there is nothing new or exciting or different about that. We budgeted a surplus, a number of things have changed—like I think there is $6 billion less GDP because of low inflation, and the half-year update forecast a deficit for that year. I do not know why the member seems surprised about that or seems to think it is a secret.

Grant Robertson: In light of that answer, can the Minister of Finance understand why it is not a surprise to New Zealanders that he is once again breaking a promise—this time, one made in 2014 that there would be a Budget surplus in 2014-15; or is this not just the smoke and mirrors that the New Zealand Herald has accused him of, of breaking yet another promise?

Hon BILL ENGLISH: The process is incredibly transparent—in fact, more transparent than almost any other country on earth. That is, at the half-year update, halfway through the financial year, 2014-15, Treasury published a forecast that said that in 2014-15 there would be a small deficit. That is pretty clear and it is an indication that achieving a surplus in 2014-15 is going to be quite difficult.29 Apr 2015 Oral Questions Page 9 of 15 (uncorrected transcript—subject to correction and further editing)

Iraq, Military Deployment—Prime Minister's Statement 7. RON MARK (NZ First) to the Minister of Defence: How does he reconcile not providing any further detail on the deployment of troops in accordance with the NZDF policy of “non-identification of personnel and for reasons of operational security” with the Prime Minister confirming overnight that New Zealand troops were transiting through Dubai?

Hon SIMON BRIDGES (Acting Minister of Defence): As has already been publicly stated, we expect all of the New Zealand contingent involved in the Building Partner Capacity mission to Iraq to be deployed in Taji and Baghdad by mid-May. It should not come as a surprise that personnel have been going to the region in advance of deploying into Iraq. The Prime Minister and the Minister of Defence made it very clear on 15 April that the deployment would be staged, with groups entering Iraq at different times. I also want to reiterate for the member that we have been very clear that, for reasons of operational security and in order to keep our soldiers as safe as possible, we will not be going into detail on specific travel arrangements. Although it should be no surprise that some of our troops are in the United Arab Emirates, just as some have been in Australia, we will not be announcing when they will be moving into Iraq.

Ron Mark: I raise a point of order, Mr Speaker. I made my question very specific, and he has had time to prepare, asking how does he reconcile—

Mr SPEAKER: Order! The question has definitely been answered. The member should listen to the answer.

Ron Mark: Has the Prime Minister breached New Zealand Defence Force operational security by first talking to Gulf News, and then telling New Zealand media: “I just don’t see it as newsworthy. You guys might, but I don’t. I mean, they have to fly through somewhere. That’s the base they use going into Baghdad, so pffft .”? [Interruption]

Hon SIMON BRIDGES: That was pretty good. No.

Ron Mark: Can he explain the Prime Minister’s unauthorised release of official information, when the Chief of Defence Force told Q+A: “I think most people would understand the sensitivities around getting forces into a country like Iraq, and is that a matter for the public? I don’t think so.”?

Hon SIMON BRIDGES: As I say, the statement that troops are in Dubai should not come as a surprise. We have always been clear that this was a deployment that was staged, but we do not go into details on specific travel arrangements, certainly into the theatre of operation in Iraq.

Ron Mark: I seek leave to table a document that suggests that the Prime Minister might be—

Mr SPEAKER: Order! All I want is—[Interruption] Order! I just want details of the document.

Ron Mark: Well, can I refer you to Speakers’ Rulings?

Mr SPEAKER: Yes.

Ron Mark: Speakers’ ruling 147/3—I quote from Deputy Speaker Revell and Speaker Hunt, back in 1998 and 2003, who say that “In seeking leave to table a document members should not only succinctly describe what is in the document but also sufficiently describe the nature of the document to inform members.”, so that they can make a decision.

Mr SPEAKER: Order! The member will resume his seat. If he had adhered to that and succinctly described the document, I would be happy to listen to it. But when it is a long read of the document, I will not be putting up with that. So a succinct description would be very much appreciated.

Ron Mark: Thank you. It is a document that suggests the Prime Minister might be in breach of the Crimes Act 1961 that—

Mr SPEAKER: Order! I am not putting up with much more of this from Mr Mark. He must succinctly describe the document, not whether the Prime Minister is breaching anything, or we will not be putting the leave—simple as that.

Ron Mark: Well, Mr Speaker, when—

Mr SPEAKER: Order! We are moving to the next question.

Ron Mark: Can I take you back to Speaker’s ruling—29 Apr 2015 Oral Questions Page 10 of 15 (uncorrected transcript—subject to correction and further editing)

Mr SPEAKER: No. The member can resume his seat. I will give the member one more chance to succinctly describe the document, as to the source of the document and the date of it, and then I will determine whether to put the leave.

Ron Mark: The document’s title is the Cabinet Manual. The succinct description—

Mr SPEAKER: Order! The member will resume his seat. The Cabinet Manual is available to everybody.

Beneficiaries—Numbers 8. Dr PARMJEET PARMAR (National) to the Minister for Social Development: What reports has she received on welfare numbers in New Zealand?

Hon ANNE TOLLEY (Minister for Social Development): Thanks to a growing economy and this Government’s welfare reforms, benefit numbers are at a 6-year low. There are 11,000 fewer people on a benefit compared with this time last year. Over 5,000 of those people were on job seeker support at that time. This is extremely positive and continues the downward trend in the number of people on welfare. Getting off a benefit and into employment or study reduces long-term welfare dependence and allows individuals and families to thrive.

Dr Parmjeet Parmar: How have the Government’s welfare reforms supported sole parents off benefits?

Hon ANNE TOLLEY: The number of sole parent support clients reduced by 5,471—7 percent—which is the lowest number since 1988. Even better results were achieved for those sole parents aged 18 to 24 years, with a 10 percent reduction. That is 1,700 young people no longer on sole parent support. We have invested millions into intensive support and training, as well as helped with study and childcare for those sole parents, so that working while raising children alone is achievable and rewarding. The evidence is very clear that this means far better outcomes for those parents and the long-term prospects for their children.

Darroch Ball: Will the Minister stand by her Better Public Services target results of reducing benefit numbers, and have them independently scrutinised by the Office of the Auditor-General; if not, why not?

Hon ANNE TOLLEY: Yes, I do stand by the targets that have been set under the Better Public Services targets. But, actually, the best audit of those results is by the public, and that is done on a constant basis.

Welfare Reforms—Productivity Commission Report 9. CARMEL SEPULONI (Labour—Kelston) to the Minister of Finance: Is the Productivity Commission report released yesterday indicative of a Government agenda to privatise the welfare system?

Hon BILL ENGLISH (Minister of Finance): No. It is indicative of a Government agenda to get better results for people who really need them. We are happy to debate the kind of toolset that the Productivity Commission has laid out, but I would like to signal to that member and to the Labour Party that we are focused more on getting better results and less on their ideological obsessions. What we are doing is building a system that allows Governments to invest upfront in personalised interventions for the child, the individual, or the family for a long-term impact, and to track the results of that investment. The Productivity Commission has produced a framework that gives the Government a wider range of tools. It has been heavily consulted on with the social service sector to a draft form, and now it will be further consulted on before it gives us a final report. But I expect at the end of that that the Labour Party will be out of step with pretty much everybody by sticking to its 1970s models.

Carmel Sepuloni: Does the Minister intend to establish a voucher system for social services in New Zealand?29 Apr 2015 Oral Questions Page 11 of 15 (uncorrected transcript—subject to correction and further editing)

Hon BILL ENGLISH: Yes. We are under way in establishing a voucher system particularly for people with disabilities. It is called Enabling Good Lives. It has been broadly welcomed by the disability sector. I suspect that the mass adoption of it by the Australian Government in the form of the National Disability Insurance Scheme is going to put a lot of pressure on New Zealand to further develop a sophisticated voucher system for people with disabilities. The reason why is that it gives them some choices rather than being subject to a system where the Labour Party tells the providers—

Mr SPEAKER: Order!

Jami-Lee Ross: What progress has the Government made in delivering better outcomes from social services?

Hon BILL ENGLISH: We have made considerable progress in focusing on our customers—that is, getting to know much better the circumstances and prospects of those most vulnerable New Zealanders. For instance, a child under the age of 5 who is known to Child, Youth and Family, whose parents are supported by a benefit, and where either parent is in contact with the Department of Corrections—and there are a lot of those families; around 470 of them in Rotorua, for instance—is around five times more likely to end up on a long-term benefit and seven times more likely than the average to get to be in prison before the age of 21. In the light of that information, we feel a moral obligation, as well as a fiscal one, to act now to reduce the long-term costs, and we are not—

Mr SPEAKER: Order!

Carmel Sepuloni: Does he agree with the findings of the draft Productivity Commission’s report he commissioned that the Government faces incentives to underfund contracts with NGOs for the delivery of social services, with probably adverse consequences for service provision; if so, does he agree that greater contracting out could harm service provision?

Hon BILL ENGLISH: I agree with the first one but not the second one. The Government often does deliberately, as a result of Government policy, actually, pay less than the full cost of services, and often the users of those services need a higher level of more sophisticated service that what we currently offer them. There is no evidence at all that contracting out, as the member calls it, will reduce service provision. Sometimes that is the right way to do it. For instance, the Government owns no elderly care beds in New Zealand. It is all contracted out. That has been a bipartisan approach for many years with a highly vulnerable population. There are other areas where there are benefits from competition and also benefits from cooperation.

Jami-Lee Ross: What results has he seen from investment in Better Public Services?

Hon BILL ENGLISH: One of the first results we are seeing from taking an investment approach to public services is a much better understanding of our customers. The reports, now published 6-monthly, into the welfare liability have lifted the lid on a very complex ecosystem of dependency. Now we are starting to take initiatives in order to change the way that system works. For instance, around 70 percent of the people who sign up for a benefit in any given month have been on a benefit before. They are long-term regular and returning customers. In the past we have thought that because we found them a job once, that was the end of it. In fact, they need sustained support and employment, and we expect to be taking more measures in order to back up that initiative. But there will be hundreds of others that will involve contracting out, will involve competition, will involve the private sector, and will involve better results.

Chris Hipkins: I raise a point of order, Mr Speaker. I just ask that you perhaps might reflect on this particular question today, which was set down by my colleague Carmel Sepuloni, regarding a report of the Productivity Commission and a particular aspect of the report that she was questioning on, the very broad nature of the supplementary questions allowed from the Government, and the extensive and lengthy answers from the Minister and whether, in fact, that is acceptable.

Mr SPEAKER: I certainly will reflect very carefully on the questions that have flowed. The answers on this occasion have been long, and on two occasions I have curtailed the answer as it has continued. But it is an issue that is, I think, relatively important to this House, and when I looked at 29 Apr 2015 Oral Questions Page 12 of 15 (uncorrected transcript—subject to correction and further editing) the tone of the question about a suggestion of privatising the welfare system, I felt that the topic was important enough to have a reasonable airing in this House. But I will reflect on the nature of the questions that have flowed from the primary question, and I certainly accept the member’s point that some of the answers have been quite long.

Carmel Sepuloni: Does he agree with the finding of the report, which he commissioned, that “Problems with contracting out are often symptoms of deeper causes such as the desire to exert top-down control to limit political risk.”?

Hon BILL ENGLISH: Yes.

Carmel Sepuloni: Does he agree that the Government needs to take responsibility for system stewardship and for making considered decisions that shape the system, including taking the overarching responsibility for monitoring, planning, and managing resources in such a way as to maintain and improve system performance?

Hon BILL ENGLISH: Yes, the Government can do a better job of what the Government does. We are still unravelling the damage done by the previous Labour Government to our social services delivery, where that Government turned it into what I would call a dumb funding system. Communities and families have an important role as well as Governments—in fact, a more important role. In fact, one of the programmes that the commission refers to is Whānau Ora, which is designed around the radical proposition that a lot of our most dysfunctional families can actually heal some of their own problems and improve some of their own aspirations. We are going to go along with that because—

Mr SPEAKER: Order! [Interruption] Order! The question has been answered.

Surgery, Elective—First Specialist Assessments 10. SCOTT SIMPSON (National — Coromandel) to the Minister of Health: What recent reports has he received on improved access to first surgical assessments?

Hon Dr JONATHAN COLEMAN (Minister of Health): I have received a recent report confirming that over the last 6 years the number of first surgical assessments has risen from 267,000 a year to 317,000. This increase means that now 50,000 more patients each year are seeing a surgeon for a first assessment than in 2008. That contrasts dramatically with the 8 years prior to 2008, where access to first specialist assessments was actually cut in real terms.

Scott Simpson: Has the increase in the number of first surgical assessments resulted in reductions to waiting times?

Hon Dr JONATHAN COLEMAN: Yes, it has led to significant reductions in the time that patients have to wait to see a surgeon. In 2006 there were over 15,000 patients waiting over 6 months for their first surgical assessment. Today there are only two patients waiting over 6 months and only a small number waiting over 4 months. That is the result of the hard work of our dedicated health workforce and the Government’s commitment to increasing health funding despite tough times.

Hon Annette King: How many New Zealanders have received letters in this last year telling them that they cannot have a first specialist assessment because they do not reach the threshold set by the district health board, even though they have not even been seen by a specialist?

Hon Dr JONATHAN COLEMAN: District health boards have always set thresholds. We are the first Government that has ever attempted to count what the member is referring to, and we are in the process of doing that. But what I can say is that we are not going to be removing 30,000 people from waiting lists, which happened when Mrs King was the health Minister.

Mr SPEAKER: Question No. 11, Iain Lees-Galloway.

Iain Lees-Galloway: Thank you. My question is to the Minister for Workplace—[Interruption]

Mr SPEAKER: Order! I am sorry to interrupt the member. If the member Annette King was unhappy, she should have risen to her feet on that occasion, not by interjecting subsequently after I called her colleague. No. 11—29 Apr 2015 Oral Questions Page 13 of 15 (uncorrected transcript—subject to correction and further editing)

Hon Annette King: I raise a point of order, Mr Speaker—if you believe I need to get to my feet. If you go back and look at the answers of the Minister of Health today, at the end of nearly every answer he has referred gratuitously to the time that I was Minister of Health. I was not—

Mr SPEAKER: Order! The member will resume her seat.

Workplace Relations and Safety, Minister—Statements 11. IAIN LEES-GALLOWAY (Labour—Palmerston North) to the Minister for Workplace Relations and Safety: Does he stand by all his statements regarding workers employed by CNR Dalian Locomotive working in New Zealand?

Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): Yes.

Iain Lees-Galloway: Will he clarify the law so that all people working in New Zealand have the same rights—for example, the right to be paid at least the minimum wage and the right to be safe at work; if not, why not?

Hon MICHAEL WOODHOUSE: No, because there is no—[Interruption] No, because all people working who are subject to minimum employment standards in New Zealand are already well covered.

Iain Lees-Galloway: I raise a point of order, Mr Speaker. My question was whether he will ensure that all people working—

Mr SPEAKER: No—[Interruption] Order! The member wants to go back now and study his question. The question was whether the Minister will clarify and change the law, or words to that effect, and the Minister straight away said no.

Iain Lees-Galloway: Why did he compare the railway workers, who have been working in New Zealand for at least 6 months, with pilots and cabin crew who are here for only a matter of hours?

Hon MICHAEL WOODHOUSE: I made the analogy with a pilot because the circumstances are similar. The workers at the hub workshops are employed offshore by a foreign company, they are under employment agreements governed by Chinese law, and they are in New Zealand only to carry out work under a warranty agreement with KiwiRail. The Ministry for Business, Innovation and Employment concluded that it was unlikely that New Zealand employment law applied.

Iain Lees-Galloway: Why did he state that he is: “very happy with the circumstances under which the employees of CNR Dalian Locomotive were asked to do the work in New Zealand”, given that the labour inspector was unable to determine whether the workers were receiving minimum wage, annual leave, or bereavement leave and could only guess as to whether they received sick leave and paid public holidays?

Hon MICHAEL WOODHOUSE: The circumstances as described by the member in his question are absolutely incorrect. The Ministry for Business, Innovation and Employment was able to establish that they did not work on public holidays, they did not work when they were sick, and they were receiving paid sick leave and paid holidays. The ministry did not find any evidence to support allegations that they were living in cramped conditions or allegations suggesting that they had limited access to food, and when they were asked to provide wage records, the workers themselves told the ministry to mind its own business. It is a private matter between them and their employers, and they did not make the complaint.

Sue Moroney: Has he informed the Minister of Immigration, Michael Woodhouse, of his view that these workers are not covered by New Zealand employment law and will he therefore recommend to the Minister of Immigration, Michael Woodhouse, that they should have their work visas revoked to protect New Zealand employment standards?

Hon MICHAEL WOODHOUSE: I have been diligent in consulting my colleague the Minister of Immigration, and he is very satisfied that the Chinese workers in this instance were on short-term visas, and these were generally for no more than 3 months per year. As such, their entry was tied to 29 Apr 2015 Oral Questions Page 14 of 15 (uncorrected transcript—subject to correction and further editing) the terms of the original contract and warranty. I should note that those terms are actually covered by a free-trade agreement—a free-trade agreement that the previous Labour Government put in place.

Iain Lees-Galloway: Why is it appropriate to ensure that workers on foreign fishing vessels working in the New Zealand zone do get entitlements of minimum wages and other minimum employment standards but workers in other situations do not?

Hon MICHAEL WOODHOUSE: Workers employed by foreign charter vessels are in a very different situation from this. Foreign charter vessel workers are fishing in New Zealand-controlled—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! That level of interjection from a member asking a question is totally unsatisfactory. Would the Minister now complete his answer.

Hon MICHAEL WOODHOUSE: Those workers are fishing in New Zealand - controlled waters for permit holders that are based in New Zealand. The Government has introduced reforms that should ensure compliance with both New Zealand employment and maritime laws. The Chinese workers, on the other hand, are in New Zealand temporarily, on behalf of their Chinese employers, to undertake warranty work.

Housing—Rental Properties 12. MARAMA FOX (Co-Leader—Māori Party) to the Minister for Building and Housing: Does he support the Māori Party’s call for guaranteed healthy homes through the introduction of a Warrant of Fitness for all rental properties; if not, why not?

Hon Dr NICK SMITH (Minister for Building and Housing): The Government is open-minded about regulatory changes to ensure a better quality of rental property in New Zealand and is keen to work with the Māori Party on reform that is practical and that fully understands the implications for both supply and affordability. It needs to be sophisticated. For instance, if you have a blunt instrument that simply says that every home that has to be rented has to be insulated, I am advised that there would be about 100,000 homes where, practically, you cannot get under the floor or into the ceiling to insulate them, and to take 100,000 homes out of the rental market would have an enormous impact on supply as well as affordability. Equally so, I have seen some proposals where, for instance, they want to regulate the amount of hot water coming out of a shower. Well, we are not keen on those sorts of—

Mr SPEAKER: Order! [Interruption] Order! The answer is too long.

Marama Fox: Will the Minister work with the Māori Party to create safeguards for tenants who fear eviction if they complain to authorities about the state of the substandard properties they rent; if not, why not?

Hon Dr NICK SMITH: I am keen to work with the Māori Party. The issue is actually around enforcement. The current tenancy Act makes it an offence for a landlord to take action against a tenant who has raised a concern about, for instance, whether the property meets the fit and proper standard of being tenantable now. The situation has been particularly acute in Christchurch following the loss of 12,000 homes, and so we need to look to—

Denis O'Rourke: So what are you doing about it?

Hon Dr NICK SMITH: Well, for a start, we have built 11,000 houses to date. The rents have now stabilised in Christchurch, and so there is the opportunity—

Dr Megan Woods: You have, have you? Where are they? Where are the ones you’ve built?

Hon Dr NICK SMITH: Well, the local member who is screaming has actually objected—

Mr SPEAKER: Order! [Interruption] Order! The Minister will resume his seat. The general debate will take place shortly.

Marama Fox: Will the Minister work to establish a platform for tenant feedback to identify and rate both good landlord practice and poor “slumlord” practice; if not, why not?29 Apr 2015 Oral Questions Page 15 of 15 (uncorrected transcript—subject to correction and further editing)

Hon Dr NICK SMITH: We are open to good ideas, but we want to make sure that things are practical, that they are workable, and that they are actually going to make a difference. That is why, for instance, our Government has insulated over 200,000 homes. That is making a practical difference. We have gone to a particular extent around ensuring that every State house that can be insulated is insulated, and if there are other good ideas that the Māori Party has, we are happy to work with it to ensure we improve the standard.

ENDS

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