• WEDNESDAY, 6 JULY 2016

Mr Speaker took the Chair at 2 p.m.

Karakia.

ORAL QUESTIONS

QUESTIONS TO MINISTERS

Housing—Supply and Affordability

1. DENIS O'ROURKE (NZ First) to the Minister for Building and Housing: Does he stand by the Prime Minister's statement yesterday that the Government has a comprehensive housing plan for New Zealand?

Hon Dr NICK SMITH (Minister for Building and Housing): Absolutely. This Government has under way the most comprehensive programme of housing reform, covering social housing, covering the planning issues, covering emergency housing, and covering the quality of our older housing as well as our new. The fact that residential construction is at an all-time high of over $11 billion per year—30 percent higher in inflation-adjusted terms than the last boom—shows how successful we have been in growing supply.

Denis O'Rourke: Is the comprehensive housing strategy aimed at accelerating house prices to $1 million all over the country or just in Auckland?

Hon Dr NICK SMITH: No. House price inflation is growing too quickly, although I note that it doubled under the previous Government. What I would draw the member's attention to is that in his own city of Christchurch, this Government's housing programme has got housing inflation in that city at under 3 percent and rents dropping by 5 percent over the last year. We need to adopt the same measures that we have in Christchurch in other parts of New Zealand to get house price inflation down.

Nuk Korako: What specific steps has the Government taken to address the planning constraints on new housing, noting that the Productivity Commission identified this as the No. 1 reason for declining homeownership over the past 30 years?

Hon Dr NICK SMITH: Our immediate response to the Productivity Commission was providing for special housing areas, of which we have done 210. That has freed up over 6,000 hectares of land, for a potential yield of 70,000 new homes. We have also passed special legislation for a new plan for both the cities of Auckland and Christchurch, which will be completed next year. The new National Policy Statement on Urban Development Capacity and the Resource Management Act (RMA) reforms that are currently before Parliament are the proper long-term fix to those systematic problems.

Denis O'Rourke: Is the comprehensive housing strategy designed to force skilled workers to leave Auckland or to stop them moving there because houses cost too much?

Hon Dr NICK SMITH: Having skilled workers in Auckland is absolutely crucial to the record building boom occurring in that city. I am surprised at the question by the member because I constantly hear him calling on my colleague to actually shut down immigration and stop us getting the workers that we need in order to build the houses that New Zealand needs.

Nuk Korako: What specific steps has the Government taken as part of its housing plan to improve the quality of New Zealand homes?

Hon Dr NICK SMITH: Our first priority was addressing the lack of insulation in Kiwi homes, which has made them cold and damp. We have, to date, insulated 320,000 homes, and with the law that came into effect last week, another 180,000 will be insulated. That makes 500,000 homes that will have been insulated. That compares with fewer than 50,000 under the previous Government. We have also passed laws for smoke alarms—that is saving lives—and for earthquake-prone buildings. We also have a comprehensive programme about improving our building standards so that our new homes support both innovation and good quality.

Denis O'Rourke: Will the Government adopt New Zealand First's housing policy for a new housing commission to develop a genuine long-term housing strategy for New Zealand, comprising people who know what they are doing?

Hon Dr NICK SMITH: I have seen New Zealand First oppose RMA reform. I have seen it oppose special housing areas. I have seen it oppose the new unitary plan for Auckland and for Christchurch. I have seen it oppose getting skilled building workers into New Zealand—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I cannot let that Minister create dissension and discord in this House by telling a tissue of lies.

Mr SPEAKER: Order! The member will not raise such spurious points of order. His parliamentary colleague asked a question about why the Government will not support a New Zealand First policy. That gives a fairly wide ambit to the Minister in answering the question.

Hon Dr NICK SMITH: I could also recite the many other laws that he and his colleagues have opposed that are part of the real solutions that will help Kiwi families get access to a good-quality home.

Hon Gerry Brownlee: Does the Minister believe that by doubling up on addresses, you can increase the housing supply?

Hon Dr NICK SMITH: I have noted that imaginative solution—having twice as many addresses—as being one of the answers to housing supply, but, no, we are focusing on building new houses, and, actually, New Zealand residential building activity is at an all-time high.

Denis O'Rourke: Why does he not adopt New Zealand First's housing policy to reduce demand in Auckland by making it illegal for non-residents who are not New Zealand citizens to buy houses there?

Hon Dr NICK SMITH: Because this Government is basing its policy on the facts, and the facts are that we have absolute data on the tax residency for every home purchased in the last 6 months. Of 67,000 transactions, there was actually a reduction in the very small number that were overseas, and although the member wants to join up with the Pauline Hansons and those guys who want to blame overseas people, actually, we just need—

Mr SPEAKER: Order! The answer is now too long.

Nuk Korako: What are the next steps in the Government's housing programme?

Hon Dr NICK SMITH: A key priority is advancing the Crown land programme, which has been so successful in Christchurch and in Auckland, and today I announced another block of 10 hectares in Manukau that is surplus from the district health board. That will provide 250 houses, a good portion of which will be social houses and affordable houses, which are needed so much in that part of the city. We have got work under way around urban development authorities, reform of the Unit Titles Act, and reform of the Building Act as the next steps that we need to take to keep up that momentum of record house building.

Richard Prosser: I seek leave for the Minister to table the evidence he has of New Zealand First opposing RMA reform.

Mr SPEAKER: Order! The member cannot seek leave on behalf of another member.

• Government Financial Position—Reports

2. STUART SMITH (National—Kaikōura) to the Minister of Finance: What recent reports has he received on the Government's accounts?

Hon STEVEN JOYCE (Acting Minister of Finance): Yesterday the Government released its financial statements for the 11 months to May. These results show a $2.3 billion surplus in the operating balance before gains and losses, or OBEGAL, $321 million better than forecast. This is the largest full or part-year surplus since before the global financial crisis. Core Crown revenue was $364 million higher than forecast, largely due to core Crown tax revenue being $396 million higher than forecast by Treasury in May. Financial statements for the full 2015-16 year will be published in October.

Stuart Smith: What do the latest monthly accounts mean for the financial results for the full 2015-16 year?

Hon STEVEN JOYCE: The Government has been successful in turning an $18.4 billion deficit in 2011 into a surplus last year. Treasury's latest forecast for the full financial year 2015-16 is for another modest surplus of $668 million. Treasury considers that the current strength in tax revenue is likely to persist, providing an upside risk to the final 2015-16 year-end out-turn. This trend is encouraging. However, as in previous years, we expect growth in expenditure to outpace tax revenue in June, although year-end valuations will also affect the June result. As I said, we will know the final surplus figure for 2015-16 when the Government's annual accounts are issued later this year.

Stuart Smith: What are the Government's fiscal priorities now that it has delivered on its election promise and made a surplus in the 2014-15 year?

Hon STEVEN JOYCE: With the books in surplus, the Government has choices. The Government's focus is on paying down debt that was built up through the global financial crisis and Canterbury earthquakes. That will give the Government more room to support New Zealanders and the economy, should we face another economic shock or natural disaster. The Government is on track to achieve its fiscal priorities over the next few years, which are: maintaining rising operating surpluses; reducing net debt to around 20 percent of GDP by 2020; beginning to reduce income taxes, if economic and fiscal conditions allow; and using any further fiscal headroom to reduce debt faster.

Stuart Smith: How has the Government's focus on targets helped deliver better public services to New Zealanders?

Hon STEVEN JOYCE: The Prime Minister set 10 challenging targets for public services in 2012. That is because we want results from spending, rather than just simply throwing money at problems. Benefit dependency continues to fall; we have made significant progress on crime; we currently have the lowest crime rate since 1978; we have reduced the number of children and young people experiencing physical abuse; and immunisation rates continue to grow, with almost 94 percent of 8-month-olds fully vaccinated. This is a Government that measures success by the results it achieves, not by the amount of money we spend, or by how much Opposition MPs yell.

• Housing—Supply and Affordability

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that he has a "comprehensive housing plan", given the continued decline in home ownership and rapid rise in house prices?

Rt Hon JOHN KEY (Prime Minister): Yes, and here is why. The Government's comprehensive housing plan includes our social housing build, our emergency housing programme, special housing areas, the expanded HomeStart scheme for first-home buyers, freeing up surplus Crown land, the national policy statement, Resource Management Act reform, and extra tax measures that we took last year. On Sunday I announced a new $1 billion Housing Infrastructure Fund to support infrastructure needed for new housing in high-growth areas, and we are considering independent urban development authorities for areas of high housing need. By any definition, this is a very comprehensive housing plan.

Andrew Little: When fewer than 500 affordable houses are being built in Auckland this year, where in his comprehensive plan is the policy to build the thousands of affordable homes that are so desperately needed?

Rt Hon JOHN KEY: The member is incorrect in his assertion.

Andrew Little: If his plan is so comprehensive, why did Nick Smith's Crown land policy find just 13 of the promised 500 hectares?

Rt Hon JOHN KEY: As the member will have seen, the Minister for Building and Housing announced more land today. If one looks across Auckland and looks at the level of building activity, one will see how significant it is and how quickly it is ramping up.

Andrew Little: If his plan is so comprehensive, why have only 1,000 of the promised 39,000 houses been built in the special housing areas? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I just need a little more cooperation from the front bench to my left.

Rt Hon JOHN KEY: The member might want to believe that that is happening, but, once again, it is incorrect. If one looks at the level of both building activity and houses that are being completed in Auckland, they are significantly greater than the member says.

Tim Macindoe: How is the Government's comprehensive housing plan translating—

Mr SPEAKER: Order! I want to hear the question. If I hear that sort of level of interjection again, I will be warning a member, and if it happens again, I will be, sadly, asking that member to leave for the balance of question time. Would Mr Macindoe please start the question again.

Tim Macindoe: How is the Government's comprehensive housing plan translating into more houses being built around New Zealand where they are most needed?

Rt Hon JOHN KEY: There are many signs that the Government's comprehensive housing plan is delivering more houses. For example, we are now in the middle of the biggest housing boom New Zealand has seen. We are on track to build 85,000 houses across New Zealand in this term of Parliament alone. The construction industry is the biggest it has ever been. We have around 40,000 more people working in the sector than just 2 years ago, and there are 42,000 apprentices being trained across the country. The Government will press on with its housing plan, to build on this good momentum.

Andrew Little: If his plan is so comprehensive, why did Bill English build only half the State houses he promised?

Rt Hon JOHN KEY: Well, I think the Minister himself would say that it took Housing New Zealand a little longer—actually, for some of the very reasons we have been trying to resolve ourselves—through slow planning processes and the like. But, actually, the number is increasing to what we had anticipated, and those 2,000 houses, I think, that had been promised will be built.

Andrew Little: If his plan is so comprehensive, why did Paula Bennett have to make up the mythical Ministry of Social Development flying squads?

Rt Hon JOHN KEY: The Minister did not. The Minister put together a team of people through her ministries that engaged with a variety of NGOs and, and I think they have been doing some very good work to help those people.

Tim Macindoe: What reports has the Prime Minister seen on trends in homeownership rates in New Zealand and the factors contributing to those trends?

Rt Hon JOHN KEY: I have seen the Productivity Commission's very thorough report on housing affordability. It made a number of very valid points. First, New Zealand's homeownership rates peaked in the late 1980s and early 1990s, when around 75 percent of private dwellings were owned by their occupants. By 2012 homeownership levels had dropped to around 65 percent, which was about the average for the group of the OECD countries for which data is available. And, third, the commission noted that the house prices increased rapidly through the 2000s, when the rental market expanded to accommodate households that favoured renting over homeownership. So this is a very long-term trend and it matches what has been happening in other countries.

Mr SPEAKER: Order! I want less interjection from both the Hon Dr Nick Smith and the Hon Annette King.

Andrew Little: In light of the answer to that last question, and if it is correct that there is really nothing to see here and nothing is out of the usual, why is it that he is begging the Reserve Bank to just get on with it when it comes to it controlling housing policy?

Rt Hon JOHN KEY: Because the Reserve Bank is the one that can control loan-to-value ratios (LVRs). It is certainly giving some strong consideration to increasing LVRs for investors. There is some anecdotal evidence that by musing on these things it might encourage investors to buy now, and so if it is going to make a change, my preference would be that it does just get on with it.

Andrew Little: After years of failed housing policies, a Budget that completely ignored housing as an issue, last-minute announcements, and panicked flip-flops, does he not agree that his housing policy is just comprehensive chaos?

Rt Hon JOHN KEY: No. If one looks at the level of construction activity in Auckland, it has grown in double digits, year after year, over the last 3 or 4 years. There has been a substantial increase. It is why we have 24,000 more people working in the construction sector in Auckland alone, and 40,000 people across New Zealand. Interestingly enough, if one does spend just a little bit of time in Auckland and goes around and has a look at the level of activity and the number of people engaged, New Zealanders in Auckland, I think, can actually see how much work is being undertaken. They would also appreciate that these things do not just happen overnight, and the reason why Labour continues to poll at 25 or 26 percent—

Mr SPEAKER: Order! [Interruption] Order! The last part will not help the order of this House.

• Housing—Supply and Affordability

4. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Ka tū a ia i runga i te mana o tana kōrero, "if you go back and have a look at the first 3 or 4 years when I was Prime Minister, the issue of housing was not a significant issue"?

[Does]

Rt Hon JOHN KEY (Prime Minister): Yes; certainly in terms of house price inflation. According to the Real Estate Institute data from November 2008 through to the start of 2012, the national median house price increased by around 5 percent—or less than 2 percent a year. More recently we have seen a number of things coming together to boost housing demand, such as low interest rates, growing incomes, more jobs, and a rise in population on the back of a growing economy. The member may not like the statement I made, but, actually, the reality was that a combination of the global financial crisis, a lot of talking heads on television telling people they were going to lose their jobs, and unemployment rising to double digit amounts actually deterred an awful lot of people from buying houses. The member might recall that, actually, the big thing between 2008, 2009, and 2010 was finance companies going broke because they had lent money to property developers for mezzanine finance, who themselves were going broke because they could not sell the properties.

James Shaw: Does he agree with the statement made by the leader of the National Party in 2007 that "We are facing a severe [homeownership] and affordability crisis."?

Rt Hon JOHN KEY: Well, it is going to be pretty awkward if I do not agree with myself. The answer to that question is yes—because the complete mismanagement of the previous Labour Government saw interest rates go to 11 percent. So of course it was having a huge impact on affordability. If the member goes and has a look at the Productivity Commission's report on housing, he would see that one of the really big factors about whether people can afford housing is actually, ultimately, whether they can pay the interest rates on the mortgage.

James Shaw: What was the average Auckland house price when he was elected, and what is it now?

Rt Hon JOHN KEY: The member would have to direct that question to the Minister for Building and Housing.

James Shaw: Can he explain why an average Auckland house price of $493,000 back in 2007 was a severe crisis but today's average Auckland house price of $975,000 somehow is not?

Rt Hon JOHN KEY: If one goes back and has a look at that period of time, for a start, house prices had nearly doubled under the previous Government, and interest rates were extremely high. In fact, I do not overly like referring to it because I think that, in principle, it is just one piece of data. But, actually, the Massey index in these matters points to the fact that affordability is more affordable now for the very reason of the interest rates. Yes, that is cold comfort for people paying a little more, but they certainly can borrow money at much lower rates. That is the difference.

James Shaw: If we were apparently facing a severe home affordability crisis in 2007 but after 8 years of National Government there are still hardly any affordable houses being built, does that not suggest that his plan is a comprehensive failure?

Rt Hon JOHN KEY: No. If one goes back and has a look at the period of time that the member is asking me about—so that is between 1999 and 2008, of the Labour Government—real wage increases were virtually zero. So any wage increases that New Zealanders got were eroded by the level of inflation. Interest rates were steadily going up to over 11 percent. That is why we saw the significant issues that we saw in New Zealand. It is a very different position today. We have interest rates where, at a retail level, you can go to the bank and borrow for 4.25 percent—maybe even potentially less. Unemployment is at 5.2 percent, and the average wage has risen $11,000 in the time I have been Prime Minister.

James Shaw: Does he agree with the Minister of Finance, who said just 2 months ago that "Very little low-cost housing is being built."?

Rt Hon JOHN KEY: Firstly, I would have to look at the context in which the member made the speech. It will be in relation to, I am guessing, probably the release of some sort of land and the like. But part of the overall plan is to make sure that there is more affordable housing being built. As we know, the fastest way to ensure that happens is to ensure land prices do not go up at the rate that they have been. If the Greens want to support us on Resource Management Act reform, to allow us to release that land even quicker, we could do that. So what the member does is parade on TV like he cares about New Zealanders—but he cares so little he is not prepared to change the law. He can keep smiling, but why does he not do something about it?

James Shaw: If there was a severe crisis in 2007, and then it was not an issue for the first 3 to 4 years when he was Prime Minister, and now he is saying that there is not a crisis but there is a comprehensive plan to fix it, does that not just show he is making it up as he goes along?

Rt Hon JOHN KEY: No. There is a housing challenge and we are certainly working our way through it. Between 2008 and 2012 there was very little upward pressure at all on housing, and, actually, real estate agents were not that busy because the economy was different. What has happened in the last 4 years is that under National's plan and under National policies the economy is extremely strong. New Zealanders are no longer deserting the country for Australia, as they did under Labour; interest rates are low; business confidence levels and consumer confidence levels are very high; and, of course, New Zealanders feel a lot more confident about buying a house. They are the policies of success under this Government.

• Social Bonds—Mental Health Services

5. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Finance: Does he stand by his statement that the chances of getting the mental health social bond off the ground was "oh very high"?

Hon STEVEN JOYCE (Acting Minister of Finance): The Minister stands by his full statement, in which he also said: "… the fundamental motivation here is that those who look at the kind of issues where we want to apply social bonds are highly motivated about getting better results. So this is a small part of an overall programme where the government is focused less on just spending more money, because that's often an indication of failure, indicates the previous service didn't have much impact, and more on getting results for real people."

Hon Annette King: Was he not warned a year ago in reports from The New Zealand Initiative, from Government departments, and in examples from overseas that the major risk of this experiment is the costly burden of administration and setting it up, and it can end up being a waste of money?

Hon STEVEN JOYCE: I am not aware of the exact quotes, but actually social bonds have been successful around the world—

Hon Member: Rubbish!

Hon STEVEN JOYCE: Well, people as diverse as the Conservative Party in the UK, President Obama, and the Labor Government in New South Wales have participated in social bonds. It is the sort of innovation that is well worth doing to tackle some of the more challenging social issues.

Hon Annette King: If lessons have been learnt, as he claimed yesterday, why is he continuing with a failed experiment that has wasted $1.62 million of taxpayers' money so far on administration and consultants, achieving nothing, while mental health patients see their services cut?

Hon STEVEN JOYCE: The member exaggerates and is not telling the story in the way that it would be if she was being factual.

Hon Annette King: Well, tell the story then; tell it.

Hon STEVEN JOYCE: I will. I know also that the member is a fan of the old way of doing things. But, actually, this particular programme is about tackling the very issues that she, for example, when she was Minister, could not deal with for many, many years.

Hon Annette King: Will he rule out the Government giving cash sweeteners to investors like ANZ Bank to get them to stump up with the money to get the social bond experiment off the ground—something he promised he would not do last year?

Hon STEVEN JOYCE: I am sure the Minister has not changed his position in regard to what he said last year. But in terms of achieving these results, actually doing innovative financing programmes to encourage people to change behaviour and operate in a different way is very well worthwhile. It is called innovation, and it can deal with some of the intractable long-term issues that, frankly, even that member, who has been in the House a little while, knows that Governments have struggled with over decades.

Hon Annette King: Why is he wasting more taxpayers' money by proceeding with his experiment when the national network of mental health and addiction providers said that the whole approach that has been taken appears to them as: "… tedious, bureaucratic, slow processes that kill things before they're even born."?

Hon STEVEN JOYCE: He will continue because this Government is always interested in doing new things in new ways to achieve better results in some of our more challenging social services. The member always wants to go back to the old ways—she always wants to look back into the past. Actually, there are innovative new ways of doing things, and these social bonds are one of them.

• Housing—Construction

6. ALFRED NGARO (National) to the Minister for Building and Housing: What reports has he received on how much of the $17.8 billion of national construction is being done in Auckland, and what proportion of this is residential building?

Hon Dr NICK SMITH (Minister for Building and Housing): This $17.8 billion of building activity across New Zealand is an all-time high and exceeds the last peak, in inflation-adjusted terms, by 25 percent. The Auckland boom is even stronger. Total building activity in Auckland is $6.5 billion per year, up 33 percent on the last peak, in real terms, a decade ago. Residential building activity in Auckland is at $4.3 billion per year, and this is 37 percent greater in real terms than the last peak more than a decade ago.

Alfred Ngaro: How much has residential building activity in Auckland grown since the Government's intervention and housing accord in 2013?

Hon Dr NICK SMITH: Residential building activity has grown in the last year in Auckland by 26 percent. This is on top of growth of 22 percent in the previous year, and 32 percent in the first year of the accord. Auckland is currently experiencing the longest and strongest boom in residential building in its history, illustrating that the Government's supply measures are working.

• Social Housing—Community Housing Providers

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Social Housing: Does she agree with the Minister responsible for HNZC that one of the groups producing social housing in the next 2 years will be "community housing providers—which are contracted to the Ministry of Social Development"; if so, how many houses will they be completing in the next 2 years?

Hon PAULA BENNETT (Minister for Social Housing): Yes, I do agree with the Minister responsible for HNZC. Contracting with community housing providers is an important part of our comprehensive plan on housing. We have over 500 new social housing places over the next 3 years in Auckland—that is a mix of new builds and leases. We also have Budget 2016, which provided for another 750 places over the next 4 years. Also, another 330 houses are forecast to be completed by the end of 2017 from the Social Housing Fund; I could not give that completed number within 2 years because there is a mix of things going on.

Phil Twyford: Does she accept that the 500 places that she cited for community housing providers is a relatively small amount, given the unmet need, and that if she had not sold off 2,500 State houses since 2011 and failed to build to the targets, there would be thousands fewer people living in cars and garages now?

Mr SPEAKER: Two supplementary questions—the Hon Paula Bennett.

Hon PAULA BENNETT: There are a range of reasons for why we have not got more houses being built—and faster—in Auckland, and there is not just one solution to that, which is why we have such an in-depth and comprehensive plan around it. What I will say is that community housing providers do a fantastic job. It is hard for them, as it is with any homebuyer or builder, to actually be coming up with the deposits—that is why the Government is supporting them.

Phil Twyford: Given the unprecedented surge in families living homeless on her watch, does she believe that her $10 million a year promise for emergency housing, which she had to admit will mostly fund existing places, is anything like enough?

Hon PAULA BENNETT: Last year we put in $2.5 million, and, as the member says, an extra $41 million in this Budget alone. We recently announced 14 providers, one of which is the Salvation Army, which is getting $1.2 million, which will make a huge difference for it in the services it can provide. The next tranche is currently out. We expect those to be in by 13 July. We will be making further announcements at the end of the month, and within that we will see a number of new beds that will be available as well.

Phil Twyford: Why will she not support a cross-party parliamentary inquiry into the causes and solutions for homelessness, or does she think the Government has the situation fully under control?

Hon PAULA BENNETT: We have a range of initiatives—some that are already implemented, some that we are implementing, and some that are still in the negotiating stages—all of which will make a huge difference in the issues of homelessness and emergency housing, and that is what we want to concentrate on.

Phil Twyford: Did she instruct her caucus colleagues on the Social Services Committee to vote against the motion for an inquiry into homelessness, given that they had been supportive of an inquiry?

Mr SPEAKER: I will allow the Minister to answer, but it was a pretty marginal question.

Hon PAULA BENNETT: No, I did not instruct the caucus to do anything. We had a discussion and we came to it as a collective.

• Prime Minister—Statements

8. MARAMA DAVIDSON (Green) to the Prime Minister: Ka tū a ia i runga i te mana o āna kōrero katoa?

[Does he stand by all his statements?]

Rt Hon JOHN KEY (Prime Minister): Yes.

Marama Davidson:

[Authorised te reo text to be inserted by the Hansard Office.]

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—do you accept that homelessness is increasing on your watch?

Rt Hon JOHN KEY: Yes.

MARAMA DAVIDSON:

[Authorised te reo text to be inserted by the Hansard Office.]

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Rt Hon JOHN KEY: I do not have an accurate number of that. You would need to ask the Minister for Social Housing.

Marama Davidson:

[Authorised te reo text to be inserted by the Hansard Office.]

[Authorised translation to be inserted by the Hansard Office.]

Rt Hon JOHN KEY: Firstly, I am not sure any Government would have an absolutely accurate number. They would have an indication, and that work is done by the City Mission and others, for instance. But one of the reasons we know we have a comprehensive plan—but we are certainly prepared to do more—is that we can look at what we are actually doing, which is spending around about $2 billion a year, which is up from $1.3 billion when we came into office, to support New Zealanders in the social housing and private housing rentals. That is why the Budget included $41.1 million to help people in the emergency housing sector. It is why the Government is moving about 135 people a week into social houses. It is why the Budget had $200 million extra for social housing. It is why the Ministry of Social Development providers have been working at places like Te Puea Marae and others to try to assist people who want support. So there is a very broad range of support being offered. If there is more that is required, the Government will look at those issues.

• Tertiary Education and Skills Training—Providers

9. TRACEY MARTIN (NZ First) to the Minister for Tertiary Education, Skills and Employment: Does he stand by his statement yesterday that "we just have the occasional agent and the occasional provider that doesn't do things properly"?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Yes; I stand by my full statement, which went on to say: "and we have to sort that out." For the most part, the international education sector provides an excellent education experience for the 125,000 students—from around 176 countries—who come here, while providing over $3 billion in export returns and jobs for over 30,000 New Zealanders. However, some agents, particularly in the Indian market, and some providers are not complying with expectations, and the Government is robustly addressing the situation.

Tracey Martin: Does he think it appropriate to be so flippant and say "We just have the occasional agent … that doesn't do things properly", when Immigration New Zealand uncovered at least 57 Indian education agents involved in fraudulent methods in the year ending March 2016?

Hon STEVEN JOYCE: Well, I have been described as many things, but "flippant" is generally not one of them. The reality is that the member is right. I am very aware of that number. It is out of a number of around about 1,200 Indian agents that supply students to New Zealand, so my point is that there are some who misbehave and, actually, New Zealand is taking a very robust approach.

Tracey Martin: When did he become aware that these agents are saying that independent English-language assessments and interviews are not required for study in New Zealand; can he confirm that they are saying it falsely?

Hon STEVEN JOYCE: That was last year, and it is false. Commencing on 1 October 2015, New Zealand changed the rules to require International English Language Testing System 5 or 6—clearly, for those people from India who want to apply for student visas to come to New Zealand.

Tracey Martin: In light of his last answer, what resourcing has he provided to the New Zealand Qualifications Authority (NZQA) and his Cabinet provided to Immigration New Zealand to proactively monitor, enforce, and ensure that private training establishments (PTEs) and agents are meeting the new pastoral care obligations; or will they wait until thousands of students are illegally in New Zealand?

Hon STEVEN JOYCE: NZQA has the resources to provide a robust response, and my understanding is that Immigration New Zealand does as well. In fact, they have just been, effectively, provided with more resources because of the new systems that they have, which free up staff to deal with these matters. In relation to the member's question, in actual fact, their robust approach has led to a 22 percent decline in first-time student visas from India this year. I expect that to continue through the year, because of the very robust approach that they are taking.

Tracey Martin: Is it not a fact that his Government continues to allow dodgy PTEs and unscrupulous contractors to exploit these students, treating them like cash cows as long as they—and I quote him—"generate income for us"?

Hon STEVEN JOYCE: I know who wrote that question. The reality is that we do not. The Indian market is a robust market, and it can be challenging. In fact, countries that receive students from India—including Canada, the US, the UK, and Australia—sometimes have similar problems to what we have experienced. But by working together and working aggressively, the immigration departments of those countries and others are able to get on top of some of the issues that we see in India.

• Digital Literacy—Schools

10. MELISSA LEE (National) to the Minister of Education: What recent announcements has she made about digital technology and the curriculum?

Hon HEKIA PARATA (Minister of Education):

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Yesterday I was pleased to announce that digital technology is to be formally integrated into The New Zealand Curriculum and . This is the first change to since its introduction in 2007, and it reflects our Government's commitment to championing 21st century practice in teaching and learning. The decision is an outcome of the Government's Science in Society strategy plan, A Nation of Curious Minds: He Whenua Hihiri i te Mahara.

Melissa Lee: How will this assist our young people to be better prepared for the future?

Hon HEKIA PARATA: It will ensure that we have an education system that prepares children and young people for a future where digital fluency will be critical for success. The digital technology sector is best placed to state how this will impact on young people, and feedback has been overwhelmingly positive. For example, Mind Your Own Business has stated: "We welcome the Government's announcement that digital technology is going to be included in the curriculum. It's vitally important that the next generation is equipped with the skills and knowledge required to compete in the digital world. … There are enormous opportunities out there for young people looking for a career in IT. This announcement ensures that the most up-to-date digital learning practices will help tomorrow's tech graduates gain a foothold in the workforce." From 2018 digital technology will be fully integrated into both The New Zealand Curriculum and .

• Schools—Funding

11. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she considering any proposals to allow schools to spend money, currently committed to teaching staff, on other expenses; if so, why?

Hon HEKIA PARATA (Minister of Education): Tēnā anō koe, Mr Speaker. No, I am not considering any proposals as described by the member. However, the funding review advisory group, made up of the key teacher unions and sector associations, is considering a number of options.

Chris Hipkins: Does the bulk funding, or global funding, proposal outlined in her Cabinet paper involve removing the existing maximum class size guarantee for primary schools?

Hon HEKIA PARATA: It would be disrespectful to the funding group to predetermine the outcomes of options that it is currently considering.

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: Well, I can anticipate—why do I not just ask the member to repeat the question. It may not have been understood by the Minister.

Chris Hipkins: Does the proposal for bulk funding, or global funding, as outlined in her Cabinet paper involve removing the existing maximum class size guarantee for primary schools?

Hon HEKIA PARATA: The proposals that are before the funding advisory group do not preclude it from making recommendations on all the elements that it has in front of it. Once it has made recommendations on that element, or another, then I will be considering them.

Chris Hipkins: Can she guarantee that class sizes will not increase, or the range of subjects on offer decrease, as a result of schools reducing their spending on teaching; if not, why not?

Hon HEKIA PARATA: No decisions have been made around the options that are in front of the funding advisory group, including the particular elements the member raises.

Chris Hipkins: Why has she proposed in her Cabinet paper allowing schools to use money that is currently ring-fenced for teaching staff on other expenses?

Hon HEKIA PARATA: The principles underpinning this review are greater flexibility for schools to make choices, more and better results for students, and diversity of options for parents. Those are the principles and outcomes we are interested in. There are options before the funding review group. It would be disrespectful to its members and the process of consultation to make predetermined decisions.

Chris Hipkins: Can she explain any scenarios in which a school could reduce the number of teachers it employs without either increasing class sizes or reducing the number of subjects on offer; if so, what are those scenarios?

Hon HEKIA PARATA: An explanation of the kind sought by the member would be premature to the considerations of the funding advisory group.

Chris Hipkins: Why has she proposed ring-fencing funding for school property maintenance in order to "protect the Crown's investment in school infrastructure" whilst proposing to remove the ring-fencing of teaching staff funding? Is she really indicating that the Government rates protecting property assets more highly than quality teachers?

Hon HEKIA PARATA: To the second part of the question, no.

Chris Hipkins: Will she guarantee that the level of funding schools receive under any bulk funding model will meet the cost of at least as many teaching staff as they currently have under the existing formula and any increase in operational costs; if not, why not?

Hon HEKIA PARATA: Because bulk funding is not one of the options for funding that the advisory group is being asked to consider.

• Sport, High Performance—Funding

12. TODD BARCLAY (National—Clutha-Southland) to the Minister for Sport and RecreationCan he confirm that the Government is investing an extra $20 million over the next 4 years to support high performance sport?

Hon Dr JONATHAN COLEMAN (Minister for Sport and Recreation): Yes. Today marks 1 month to go till the opening of the Rio 2016 Olympics, where around 220 New Zealand athletes will compete. As part of Budget 2016, High Performance Sport New Zealand will receive a further $16 million over 4 years to maintain the momentum of our high performance system from Rio through to the Tokyo Olympics and beyond. New Zealand's system is recognised as world leading and produces athletes who are succeeding on the world stage. I would like to wish all of our Olympians all the very best for Rio, and I am sure they are all going to make New Zealand very, very proud.

Todd Barclay: What extra support is the Government providing to safeguard the integrity of our sport system from doping?

Hon Dr JONATHAN COLEMAN: Doping is an ongoing concern in sport, and testing protocols have become more complex and costly as doping practices get more sophisticated. As part of this year's Budget, an extra $4 million over 4 years is going to Drug Free Sport New Zealand to fund more tests for more athletes and to increase the agency's capacity for analysis, intelligence gathering, and investigations. This increases its funding from $2.2 million to $3.2 million—an increase of 45 percent. We need to ensure that we keep our clean sporting reputation. International experiences show that doping can creep in wherever controls get lax.

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