Oral Questions — Questions to Ministers

• TUESDAY, 9 AUGUST 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

ORAL QUESTIONS

QUESTIONS TO MINISTERS

Question No. 1 to Minister

METIRIA TUREI (Co-Leader—Green): Tēnā koe, Mr Speaker. Tēnā koutou e Te Whare—and happy birthday, Prime Minister. [Interruption] You have got to be polite. I seek leave to have this question transferred back to the Prime Minister, to whom it was originally directed.

Mr SPEAKER: No. [Interruption] Order! I have ruled on this matter many times. I am not prepared to put the leave. It is the prerogative of the Government to determine who is best to answer the question. The member can proceed if she wishes; otherwise, I am happy to move to question No. 2.

Housing Market, Auckland—Affordability

1. METIRIA TUREI (Co-Leader—Green) to the Minister for Building and Housing: How many years will it take for a median-priced Auckland house to be affordable, at three to four times the median Auckland household income, with Auckland house prices growing almost six times faster than wages?

Hon Dr NICK SMITH (Minister for Building and Housing): The ratio of incomes to house prices is too simplistic and ignores the impact of interest rates, which are at 40-year lows of 4.5 percent. House prices have never been three or four times incomes with interest rates this low. There are too many unknowns, like what interest rates will be in the future, to state what future ratios of house price and income will be.

Mr SPEAKER: Order! Can I just have a little less interjection, please?

Metiria Turei: Does the Minister agree that for houses to be more affordable, the gap between house prices and incomes needs to reduce?

Hon Dr NICK SMITH: That is just part of the equation. Of course, having the lowest interest rates in more than 40 years actually makes housing much more affordable than the 10.5 percent that interest rates were when National came into Government. This Government is also committed to growing incomes, and that is why, for instance, it has had to increase the income caps on its HomeStart scheme—because my colleagues are doing such a good job of growing the economy and growing wages.

Metiria Turei: What was the Auckland median house price-to-income ratio when he became the Minister for Building and Housing 3 years ago, and what is it now?

Hon Dr NICK SMITH: I do not have those exact figures on me, but what is interesting is that, nationally, the ratio of income to house price is less than what it was when National became the Government.

David Seymour: Is the House to take it that the current high ratio of house prices to incomes is high purely because interest rates are low?

Hon Dr NICK SMITH: No, house prices are affected by a significant number of factors. One of the most important factors in Auckland is that a metropolitan urban limit and bad planning policies have made it very difficult for new houses to be built, and that is why this Government is putting so much work into reforming the Resource Management Act. That is something that the Green Party has consistently opposed, and it opposed the very policies that will make houses more affordable in a city like Auckland.

David Seymour: What, then, would be housing affordability by the Minister's measure if interest rates were to return to, say, 8 percent, as they were less than a decade ago?

Hon Dr NICK SMITH: I give credibility to the independent indexes around housing affordability, produced by both Massey University and interest.co.nz. They split the limit at which a portion of an average person's income is spent on a mortgage, and the sort of affordable range for those is about 35 percent. That is not where it is in Auckland and that is why we have work to do.

Rt Hon Winston Peters: If the Minister and his colleagues are doing such a great job to grow the economy, how come senior economists now say that extracting mass immigration and consumption sees the growth rate at less than 0.5 percent, and how will such a non-productive export economy failure provide the housing in the future?

Hon Dr NICK SMITH: I trust those who vote with their feet. Record numbers of people are voting with their feet, particularly New Zealanders returning to this country, because it is doing well. And I challenge that member to state a Western economy that is doing better than the New Zealand economy.

David Seymour: Can the Minister confirm that mortgage interest rates hit 11 percent in each of the periods 1996 to 1999 and 2005 to 2008, and can he identify any common factor in those two periods?

Hon Dr NICK SMITH: It is correct that interest rates were very high, particularly during the term of the last Government, and that drove housing affordability in the years 2006, 2007, and 2008 to the worst levels ever under those independent measures, and despite the high house prices that we have now in all regions of New Zealand, by those independent indexes that measure and include interest rates, housing is surprisingly more affordable than when we became the Government.

Andrew Bayly: What was the core reason identified by the Productivity Commission for the sustained rise in house prices in Auckland since 2000, and what is the Government doing to address this problem?

Hon Dr NICK SMITH: The Productivity Commission identified that the core problem was restrictive planning policies from fragmented councils that consistently blocked new housing developments. That is one of the reasons why the Government merged the Auckland councils and provided a streamlined process for a new Auckland plan that is close to completion. I do note that both the Green and Labour parties opposed that streamlined process for a new unitary plan. That core work has been complemented in the short term by special housing areas, and in the long term by the National Policy Statement on Urban Development and the Government's Resource Management Act reforms.

Rt Hon Winston Peters: Why is the Minister blaming everybody but the Government and himself for a result that sees us building less houses now than we built 42 [Interruption]—or fewer; many less. Call it what you like: it is a crisis, sunshine.

Mr SPEAKER: Order! I think—

Rt Hon Winston Peters: Forty-two years ago—we are building fewer houses now than we built 42 years ago—[Interruption]

Mr SPEAKER: Order! The question has been asked. The question can be answered.

Rt Hon Winston Peters: No, no. Point of order, Mr Speaker.

Mr SPEAKER: Order!

Rt Hon Winston Peters: I have not got to the punchline yet.

Mr SPEAKER: Well, the member will have to wait and use another supplementary question and be far more concise.

Hon Dr NICK SMITH: When I became the Minister for Building and Housing, New Zealand was building 14,000 houses per year. The latest figure is that we are building more than double that—29,000 houses per year. The main crisis that I hear in the building industry is a shortage of skills, and that is why the Government is investing in a record number of apprentices. Only a blind man would not recognise the building boom under way in New Zealand right now.

Andrew Bayly: What impact would a policy of halving house prices in Auckland have on ordinary New Zealanders?

Hon Dr NICK SMITH: A policy of the Government directly halving house prices in Auckland would have a devastating impact on hundreds of thousands of Auckland families, who would be left in negative equity. This policy from the Greens was rejected by Labour, and shows their memorandum of understanding is already in tatters. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

• Economic Outlook—Growth

2. ALFRED NGARO (National) to the Minister of Finance: What is the outlook for economic growth, given elevated business and consumer confidence, rising export values, and higher consumer spending?

Hon BILL ENGLISH (Minister of Finance): In the last month we have seen a range of measures that point to some strength and resilience in the New Zealand economy despite ongoing international uncertainty. Business and consumer confidence continue to run above long-run averages, supporting business investment and consumer spending. Firms are reporting relatively high capacity utilisation. Residential construction and commercial construction intentions are high and rising. The most recent business outlook survey from the ANZ shows a net 16 percent of firms are optimistic. ANZ also reports that advertised jobs are up 9 percent over the past year.

Alfred Ngaro: What are some of the main drivers of economic growth?

Hon BILL ENGLISH: What we are seeing in the recent data is reasonably broad-based economic growth. Both volumes and values of exports are rising, with seven of 10 export categories increasing in value in the June quarter. Overall the trade balance is around a billion dollars better than expected. New Zealand received 3.3 million visitor arrivals in the year to June—a new record—up 11 percent in the year. The manufacturing sector is growing, with the most recent performance of manufacturing index showing reasonable growth.

Alfred Ngaro: What other sectors are supporting growth and jobs through increasing exports as part of building New Zealand's broad-based, resilient economy?

Hon BILL ENGLISH: Growth across a range of exports is fairly positive. For instance, ICT exports have more than doubled since 2008 to $930 million per year, and now employ 23,000 more people in the last 5 years. Horticulture exports are up 17 percent over the last 3 years to $4 billion. Horticulture is now employing 9,000 more people than 5 years ago, a 15 percent increase.

Alfred Ngaro: How is business confidence in the building and construction sector translating to more houses where they are most needed?

Hon BILL ENGLISH: The ANZ reports that confidence in the construction sector, particularly residential construction, is very high, with a net 57 percent of firms reporting a positive outlook for growth in their own activity. Employment and investment intentions in the construction sector are both strongly positive. This is consistent with confidence at a reasonable level across the wider business sector.

Rt Hon Winston Peters: When he was asked about the biggest driver of economic growth, why did he not refer to what the Reserve Bank, Treasury, other banks, and people like Kerry McDonald are saying—that the biggest driver is mass immigration, which cannot be sustained?

Hon BILL ENGLISH: Because the member is not correct. If he breaks down the immigration numbers, he will see that the biggest single influence is that New Zealanders have stopped leaving. Four years ago there was an outflow of 39,000 to Australia; this year this was a net inflow of 2,000. We regard that as success. The member seems to think he should boot them out to try to drop house prices.

• Building and Housing, Minister—Confidence

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in the Minister for Building and Housing, given that, after 3 years in the job and numerous policies that were supposed to make housing more affordable, he now says it's "probably not a good time for a young family to buy" and they "should be patient"?

Rt Hon JOHN KEY (Prime Minister): Yes. I am pleased that the member acknowledges the Minister has advanced numerous policies as part of the Government's comprehensive housing plan. They include a new $1 billion Housing Infrastructure Fund, over 210 special housing areas for 70,000 new homes, an expanded HomeStart scheme for first-home buyers, the national policy statement on urban development, Resource Management Act reform, a raft of extra tax measures, a new unitary plan for Auckland, more tools for the Reserve Bank, and independent urban development authorities for areas of high housing need. By any definition that is a comprehensive housing plan.

Andrew Little: In light of that answer and moving on from good intentions, does he agree it is a bad time for young families to buy, especially given Bill English's estimate that only 500 affordable homes were built in Auckland last year?

Rt Hon JOHN KEY: I think the point the Ministers have been making is it is important for every person who buys a house to consider all the factors and to do so with their eyes open. We have interest rates that are at a 60-year low. Of course, we have a very strong economy with strong wage growth, and that makes it more affordable. But house prices do go down, as well as going up, and I think it is important that people just are observant of those facts.

Andrew Little: Given Auckland house prices have doubled on his watch from $496,000 to $992,000 does he now accept that the average Auckland house is out of reach for most families?

Rt Hon JOHN KEY: No. If you look at the year to 31 March 2016 in Auckland there were 31,963 sales. Sales in the under $600,000 category of existing homes were over 30 percent of that—9,638 sales. For new houses under $650,000 there were 11,842 constructed—37 percent of sales.

Andrew Little: After 8 years why has he failed to stabilise house prices and build enough affordable houses?

Rt Hon JOHN KEY: As I said to the House before, in the early part of the term of this Government there was not strong demand for housing, but because of the economic programme of the Government we have now seen New Zealanders returning from overseas, we have seen New Zealanders not leaving, and on the back of all of that we are actually seeing the biggest housing boom in New Zealand's history. An enormous number of houses are being built—and yes, of course it is taking some time to work its way through the system. It is not unique, I should say: if one looks around the world at cities like Melbourne, Sydney, London, Dubai, New York, and many others, they are also experiencing quite high house price increases.

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

Rt Hon JOHN KEY: 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—

Mr SPEAKER: Order! [Interruption] Order! I apologise for interrupting, but the level of noise now coming from my left is at a level where I am going to have to deal with it rather severely. I do not mind some interjection, but just because members may not like a question or like an answer it does not need to lead to a constant barrage coming from my immediate left.

Rt Hon JOHN KEY: The construction industry is the biggest it has ever been; there are around 40,000 more people working in the sector than 2 years ago. In the year to June residential building consents increased 16 percent to over 29,000—the highest for a June-year since 2004. The Government's comprehensive plan is boosting housing and supply, and we need to build on this good momentum.

Andrew Little: Why is Auckland City 40,000 houses behind what it needs to accommodate today's population?

Rt Hon JOHN KEY: Primarily, actually, it is because of bad planning rules, I think, around Auckland. But the good news is that those planning rules are about to be reformed under the new Auckland Unitary Plan.

Andrew Little: Rather than hoping that the problem will fix itself, is it not time that he got off his backside and he and his Government got in behind Kiwis who want to own their own homes, and just built some bloody houses?

Rt Hon JOHN KEY: The only person who is in hope is Andrew Little, who hopes that one day he will poll higher than Winston Peters.

Tim Macindoe: What reports has the Prime Minister seen about whether alternative approaches would succeed in controlling house price inflation?

Rt Hon JOHN KEY: I have seen one report, which was completely inconclusive about its chances of controlling house price inflation. It said: "It's hard to be specific about that." That was, of course, Andrew Little on his pipedream of building 100,000 houses for just $2 billion.

Andrew Little: Why does he think that the majority of New Zealanders now back Labour's KiwiBuild plan to stabilise house prices and build 100,000 affordable homes for families to buy?

Rt Hon JOHN KEY: A sound bite does not make a plan. [Interruption] If the best that New Zealand can do is 100,000 houses over 10 years then we are in serious trouble, because this Government will see 100,000 constructed over 4 years.

Andrew Little: Is this not the truth: his half-baked policies, his bumbling Minister for Building and Housing, and all the hollow promises will not solve the housing crisis, and that he leads an arrogant and out-of-touch Government that has given up on the Kiwi Dream of homeownership?

Rt Hon JOHN KEY: No. If one looks at the activity that has taken place, the enormous amount of action that we are actually seeing—and actually the inaction that we saw in the 9 years of the previous Labour Government—then we can actually see a credible plan to more houses being built. And that is the reason why most New Zealanders actually can see that that is working. Of course it is going to take some time, but that is a factor that we are working our way through. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Mr Twyford, please, less interjection from you specifically.

Metiria Turei: Does he agree that for homes to be more affordable for families, the gap between house prices and incomes needs to reduce?

Rt Hon JOHN KEY: Well, as the Minister for Building and Housing said earlier in the House today, that is a factor—but there are many other factors, including interest rates. One thing I will say is that if house prices in New Zealand were to halve, that is a war on the poor. It is the poorest New Zealanders who, in percentage terms, borrow the most against their houses. Metiria Turei has been telling New Zealanders—and the Opposition is supporting her—that halving house prices will actually see the poorest New Zealanders have all of their equity eliminated. That is a war on the poor.

Metiria Turei: Given that house prices are rising at more than 10 percent nationwide but Treasury predicts wage growth at less than 3 percent, when does he expect that housing will become more affordable for families in Auckland?

Rt Hon JOHN KEY: There are a number of factors. Firstly, very low interest rates, stronger real wage growth than we have seen for a very long period of time, and strong employment markets actually are supporting young people and, actually, people across the board to be able to afford housing. That is the reality—that they have got the confidence of doing that. One of the reasons why more people are interested in buying houses in New Zealand, particularly in Auckland, is that they do feel that confidence in the Auckland market.

Metiria Turei: How many of the 400,000 Aucklanders aged between 20 and 40 will be locked out of the housing market because of low wage growth and skyrocketing house prices?

Rt Hon JOHN KEY: By any definition, you cannot say there is low wage growth in real terms. When one looks back at the previous Government, there was virtually zero real wage growth in New Zealand because inflation was high. Inflation is running at extremely low levels, interest rates are extremely low—in fact, they are at a 60-year low—and employment markets are very strong. They are the conditions that support young people to get into a property. What we will see, I think, is a change in the nature of the sorts of properties that young people buy—more of them buying apartments and the like. That is an international trend that we are seeing. But to say that someone cannot buy a house in Auckland at under $600,000—which is where the Government's KiwiSaver HomeStart scheme is set—is not true: there are many apartments, townhouses, and some homes in that category.

Metiria Turei: Given that when he became Prime Minister the median Auckland home cost six times the median household income and now it is almost 10 times that, when does he expect that that number will stop growing?

Rt Hon JOHN KEY: When I became Prime Minister, 35,000 Kiwis a year net left for Australia. When I became Prime Minister, interest rates were 8 percent, and 11 percent in some retail numbers. When I became Prime Minister, there was a significant recession and a decade of deficits. One of the reasons why New Zealanders are coming back to this country is that they see the opportunities that are being created. I think most New Zealanders would prefer the conditions they see today than those in 2008 when I first became Prime Minister.

• Construction Activity—Reports

4. JAMI-LEE ROSS (National—Botany) to the Minister for Building and Housing: What reports has he received showing construction activity has topped $18.3 billion and that this is the highest rate ever in inflation-adjusted terms?

Hon Dr NICK SMITH (Minister for Building and Housing): The reports for the year to June—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I seek your guidance on this question. If one reads it, it is simply unintelligible; for example, $18.3 billion—when? Over what period of time? On construction activity—what? None of that is explained, and the Minister is being asked a question that, in terms of what you would expect from any First World Parliament, is simply below par.

Mr SPEAKER: Order! No, I—[Interruption] Order! I find the question intelligible enough for it to be answered, and it can be.

Hon Dr NICK SMITH: The reports for the year to June do show construction activity across New Zealand is now at an all-time high, and 20 percent higher in real terms than any previous peak. I am particularly encouraged by the increased investment in residential housing, at nearly $12 billion per year, and the June figures for consent in Auckland being up 30 percent on the previous June last year. We have now had five consecutive years of strong growth in Auckland house building, taking the rate from 3,500 per year to over 9,500 per year—or, to use the Leader of the Opposition's language, we are building a bloody lot of houses.

Jami-Lee Ross: What reports has he received on further projections of new house construction, particularly in Auckland, and how does the number of houses projected to be built compare with historic numbers?

Hon Dr NICK SMITH: The latest pipeline report, which is independently produced by the Building Research Association of New Zealand, on housing construction in Auckland shows that the equivalent of two Whangareis, or 80,000 homes, are in the pipeline to be built over the next 6 years. It is projecting over 13,000 homes being built in Auckland next year—and that is an all-time high—and it is staying above those record levels all the way through to 2022. The track record of 4 consecutive years of strong growth in housing construction plus this independent report showing continued record construction shows that the Government's programme of increasing housing supply is working.

Jami-Lee Ross: What steps is the Minister taking to ensure that standards of work are maintained through this building boom?

Hon Dr NICK SMITH: There are risks to the quality of building work with the record levels of activity, which are stretching the skills base, the industry capacity, and councils' quality assurance systems. We are making a record investment in new apprenticeships in the building sector, we are reforming the accreditation system for building consent authority so as to raise standards, and I announced over the adjournment changes to 32 building code compliance documents to help ensure that we maintain the very best practice and latest building research in ensuring that we get quality as well as quantity.

• Trade—Steel Imports

5. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that threats of trade retaliation by China if New Zealand investigates substandard Chinese steel imports are "unsubstantiated rumours", given his Government has been discussing that threat with China since May?

Rt Hon JOHN KEY (Prime Minister): Yes. Every time the issue of possible retaliatory action against our exports has been raised, New Zealand has sought, and received, assurances from China.

Andrew Little: Was the Government's decision not to investigate substandard Chinese steel imports connected to trade threats from China, or is that just a coincidence?

Rt Hon JOHN KEY: I am not aware of the decision that the Government has made in regard to that.

Andrew Little: Is it just another coincidence that our kiwifruit exports are now blocked from China after Chinese threats of trade retaliations if we investigate its steel dumping?

Rt Hon JOHN KEY: My understanding is that the issue holding up imports of Zespri kiwifruit into China is a technical matter. It is a technical matter related to some rot that was found on fruit that was imported some weeks earlier. My understanding is that Zespri has voluntarily decided not to export the fruit, because it is going through, now, a pre-examination process that will ensure that when it restarts the exports to China, they are rot-free.

Andrew Little: Why is it acceptable for China to ban New Zealand exports for containing a fungus that poses no health hazard and has been present on our kiwifruit exports to China for years?

Rt Hon JOHN KEY: The member is Leader of the Opposition and, on the basis of that, he has some responsibility at least to get the facts vaguely correct. The fact is that Zespri voluntarily stopped sending exports of kiwifruit to China for about a week. They have not been banned by the Chinese.

Andrew Little: How has he let the relationship with China get to the point where it is allowed to send us shoddy steel but we cannot send it top-quality kiwifruit?

Rt Hon JOHN KEY: The member is just making this stuff up. He does himself a disservice.

• Prime Minister—Statements

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements; if so, how?

Rt Hon JOHN KEY (Prime Minister): Yes; and by celebrating my birthday by having such a wonderful working relationship with the member.

Rt Hon Winston Peters: Oh, sohe has become delusional as well? He has become totally delusional all of a sudden.

Mr SPEAKER: Supplementary question, the Rt Hon Winston Peters.

Rt Hon Winston Peters: In Northland, which of the 10 double-lane bridges he promised is under construction; how many metres of the Pūhoi to Warkworth highway, promised 7 years ago—or metres of the Warkworth to Wellsford highway, promised 17 months ago—have been constructed; and how many cell towers have been built, as promised by Steven Joyce and himself 17 months ago?

Rt Hon JOHN KEY: I do not have all of those details with me, but if the member spent a bit more time going around his electorate he would probably see them.

Rt Hon Winston Peters: That's the problem; I can't see them. Supplementary question—

Mr SPEAKER: And I will have the supplementary question.

Hon Member: Maybe you should pay a visit.

Rt Hon Winston Peters: I have been there more times in one month than the whole time he has been the MP for Helensville, and that is a fact.

Mr SPEAKER: Order! I do not need the interjections, to assist the order of the House, from the right-hand side. Would the member like to ask his supplementary question.

Rt Hon Winston Peters: How does the Prime Minister explain his 2008 policy of "more police on the beat" as there are many fewer police on the beat per capita right now than there were when he made the promise?

Rt Hon JOHN KEY: I know the member struggles a bit with maths, but 600 more police is 600 more police officers on the beat—not to mention the changes in technology, which have seen about an additional 300 extra police in terms of hours than they spend on the beat. There are more police officers in New Zealand and more of them working on the beat.

David Seymour: Were any of those new police on the beat immigrants per chance?

Rt Hon JOHN KEY: Yes. We like to draw from all sorts of New Zealanders, from different backgrounds, to be part of the police force. In fact, in the Diplomatic Protection Squad I noted the other day, just to the group who were with me, that all three of them had come from the United Kingdom and were there, providing great service to New Zealand. I am sure that they would be police officers whom Winston Peters would support in his open policy on migration into New Zealand.

Rt Hon Winston Peters: Enough of that boring crap! Supplementary question, Mr Speaker.

Mr SPEAKER: Well, if the member wants one, just lead into it.

Rt Hon Winston Peters: Does he think that his Government is providing Northland police with the resources, when the total number of burglaries in 2008 to 2015 was 17,319, with an arrest rate of 3 percent?

Rt Hon JOHN KEY: If one looks at the crime rate in New Zealand overall, it has been fraught. This is a Government that committed to having more police officers. There are 600 more. There has been greater technology available to police officers to allow them to do their jobs more easily. As I said this morning, over time, as the population grows, the Government is committed to increasing police numbers.

Rt Hon Winston Peters: Why has his Government not given the Northland police the resources to deal with the crime rate increase of over 66 percent, from these police figures given to us, since he has been the Prime Minister?

Rt Hon JOHN KEY: My understanding, although the member might want to ask the Minister of Police directly, is that extra police have been earmarked for Northland. We have added extra resources already this year, and a further six will be added soon.

Rt Hon Winston Peters: I seek leave to table a letter dated 2 August from the police themselves with background information verifying the questions today. [Interruption]

Mr SPEAKER: Order! Can the member just describe it again, for the benefit of the House, and then I will put the leave.

Rt Hon Winston Peters: It is a letter dated 2 August from the police—events selected by type code, closure result code, and year, for Northland; pages of that, including—well, there are so many crimes up there, but they are all in this list.

Mr SPEAKER: I will put the leave and if it is tabled, the House will then be able to decide what it is about exactly. Leave is sought to table that particular letter, dated 2 August. Is there any objection? There is objection.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! This is a point of order, and I wish to hear it in silence.

Rt Hon Winston Peters: Apparently Mr Brownlee demurs, on the basis that he could not hear what I was saying—not known for diction himself, of course.

Mr SPEAKER: Order! Nobody has to give a reason for denying leave. Leave is put, and any member has a right to deny it. It has been denied.

• Broadband, Ultra-fast and Rural—Progress

7. TODD BARCLAY (National—Clutha-Southland) to the Minister for Communications: What recent announcements has she made on the progress of the Government's broadband initiatives?

Hon AMY ADAMS (Minister for Communications): Yesterday I was pleased to announce that more than one million households, businesses, schools, and hospitals are now able to connect to the ultra-fast broadband (UFB) services. This means 2.4 million New Zealanders can now connect to UFB, which is an outstanding achievement at this stage of the build. There are now more than 830 new households and businesses connected every working day—more than one every minute. And, we have completed more than 19 towns across regional New Zealand, the latest being Queenstown in that member's electorate.

Todd Barclay: How has the Rural Broadband Initiative (RBI) contributed to faster broadband for rural New Zealand?

Hon AMY ADAMS: Our objective for the RBI build was to deliver faster broadband to rural communities, and the programme has been incredibly successful in achieving this. Prior to the RBI, only 20 percent of rural lines were capable of speeds of around 5 megabits a second. Rural Broadband Initiative 1 (RBI1)—phase 1—increases to 90 percent of rural New Zealand households and businesses, and speeds are, in fact, well in excess of that, and in many cases around a hundred times faster than in 2008. Now that RBI1 is complete, I look forward to continuing to improve connectivity in our rural communities with the second phase of the RBI.

• Fishing Industry—Dolphins

8. EUGENIE SAGE (Green) to the Minister for Primary Industries: Is it acceptable that an estimated 530 dolphins have been killed by fishing trawlers in the last 6 years on his Government's watch?

Hon NATHAN GUY (Minister for Primary Industries): I think everyone would agree that even one death of a dolphin is unacceptable; however, estimated captures have decreased significantly since the early 2000s. The Government wants to protect these unique marine mammals, and the fishing industry realises that its social licence is just as important as its fishing licence. That is why we have doubled the number of observers over the last decade, prosecuted fishers when presented with reliable evidence, and are fast-tracking cameras and GPS on every vessel, but there will always be more work to do.

Eugenie Sage: Does he agree with George Clement of Seafood New Zealand that dolphins, seals, and seabirds are "putting themselves at risk near fishing boats and causing themselves harm"; if not, why not?

Hon NATHAN GUY: I think the wording of Mr Clement's statement is regrettable, but the point is that fishermen do not actually want to catch dolphins, seals, or other protected species, and they do what they can to avoid this accidental bycatch.

Eugenie Sage: Will he introduce sustainability measures under the Fisheries Act to prevent dolphins being caught and killed in commercial trawl nets; if not, why not?

Hon NATHAN GUY: There is a lot of work that has been ongoing, to do with research and development and new technologies and methods. The fishing industry is very aware that it should not put out or haul its nets in in the early hours of the morning, between 2.30 and 4.30 a.m.. They are already looking at using—and some are—the dolphin dissuasive devices commonly called "pingers", where some fisheries overlap with where dolphins may be. These are common-sense measures that the fishing industry is choosing to implement as we speak.

Eugenie Sage: When an estimated 81 dolphins were caught in the 2013-14 year, how many dolphins have to be killed in the jack mackerel fishery before he considers closing that fishery, or parts of it, to prevent further dolphin deaths?

Hon NATHAN GUY: I do not think there is a clear number. What I would say is that the Environment Aotearoa 2015 report shows that significant progress is being made in reducing seabird capture, which is estimated to have fallen by around 40 percent since 2002. I understand that there is still more work that needs to be done.

Eugenie Sage: I raise a point of order, Mr Speaker. My question was about dolphin deaths in the jack mackerel fishery; the Minister answered in relation to seabird deaths.

Mr SPEAKER: As I listened to the question, the member said "What is the specific number?", and the Minister answered immediately by saying that there was no specific number he could give. The question was addressed.

• Health Services—Doctors' Fees

9. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by his statement that changes to doctors' fees is "a problem actually that can't be solved without more money"; if so, why did he not put a Budget bid in as "pushed" to by Treasury?

Hon Peseta SAM LOTU-IIGA (Acting Minister of Health): I did put in a Budget bid for increased subsidies for doctors visits, and with the strong support of the Minister of Finance and the Prime Minister we received an extra $25 million for primary care. This means that under this Government, subsidies for doctors visits have gone up over $230 million to $900 million in this year's Budget. That is an increase of 24 percent.

Hon Annette King: So is the Minister saying that additional funding was put in for primary health care that will address the 434,000 high-needs New Zealanders who miss out on affordable primary health care; if not, why not?

Hon Peseta SAM LOTU-IIGA: No. What I am saying is that the Government subsidies for doctors visits have gone up $230 million over the last 8 years—that is what I am saying.

Hon Annette King: What would move him to seek additional funding for the 501,000 adult New Zealanders who, according to the 2014-15 New Zealand Health Survey, are not accessing a doctor due to the cost, with fees going up from $29 a visit to $40 a visit and some paying $70 a visit under this Government?

Hon Peseta SAM LOTU-IIGA: What I can say about that health survey is that the unmet need due to GP costs for adults is unchanged for the last 3 years, and I can also say for Māori—particularly for Māori—the unmet need due to GP costs actually decreased from 22.5 percent to 19.7 percent, and that is where the funding is going.

Hon Annette King: Why would Dr Andrew Miller, chair of the Manaia Health primary health organisation, be wrong when he said recently that looking after high-needs patients is not worth as much as non - high-needs patients, and that it is an appalling inequity, entirely unethical, and illogical?

Hon Peseta SAM LOTU-IIGA: I cannot speak for that doctor, but what I can say is that for very low-cost access practices there has been an increase in the last year of $1.5 million, and over the last 8 years, in terms of those high-needs patients, there has been an increase of over $20 million.

Hon Annette King: Why did he not make a bid for additional funding for high-needs patients in this Budget, when people like Dr Tim Malloy, president of the Royal New Zealand College of General Practitioners, said on Sunday: "Having to decide between whether you eat or go to the doctor is actually a reality."?

Hon Peseta SAM LOTU-IIGA: I want to reiterate what I said in terms of the primary question: there was a Budget bid put in and that resulted in $25 million being received for primary care over and above the amount that was paid last year.

• Student Achievement—Reports

10. SARAH DOWIE (National—Invercargill) to the Minister of Education: What reports has she released recently highlighting national and regional educational achievement?

Hon HEKIA PARATA (Minister of Education): Tēnā koe e Te Mana Whakawā, otirā, ki a tātou e Te Whare kua hoki mai nei.

[Acknowledgments to you, Mr Speaker, but at the same time to us in the House who have returned here.]

I was pleased to release today the 2015 Public Achievement Information (PAI). I would like to pay tribute to the students, their parents, and teachers for the excellent rise in National Certificate of Educational Achievement (NCEA) level 2 achievement rates among 18-year-olds. The latest data shows that 51,299 18-year-olds achieved NCEA level 2 in 2015. That means that since 2008 around 38,000 more young people have achieved the minimum qualification for success than if the achievement rate had remained at the level it was at under the previous administration. For the first time, Public Achievement Information data also includes information on school-leavers. This information tells us that in 2015 more school-leavers undertook tertiary study than those who did not, and 19,270 of those were enrolled in degrees. This is exciting news because it means that more young people are getting better qualifications and much brighter prospects.

Sarah Dowie: How does this information assist young New Zealanders in achieving educational success?

Hon HEKIA PARATA: Public information about how the education system is serving our young people is vital for students, their parents, educators, and employers. Under our Government, student achievement continues to rise. However, we can always do better, and we strive to ensure that all our students are given the best opportunity to do so. Parents can use PAI to ask their children's school what it is doing to raise achievement. It also helps teachers to give the right support to the right child at the right time, and it assists schools, employers, and training providers to work out what skills are needed to boost local economic performance. We are endeavouring to provide this information in many different formats so that it can be useful to communities to celebrate their success and identify their learning challenges.

Chris Hipkins: What confidence can New Zealanders have that increasing rates of NCEA attainment reflect a genuine lift in student achievement, given that participation in core subjects like English, maths, and science has decreased, with schools reporting students taking easier subjects to accumulate the necessary credits for an NCEA qualification?

Hon HEKIA PARATA: They can have absolute confidence that these numbers are real, that young people are achieving, because we provide this data in a very transparent way. There are anecdotal stories that some of the things the member is talking about are occurring, but more and more we are targeting actual information to actual young people and ensuring that they are getting meaningful qualifications. So I am confident—[Interruption] Yes, I use "actual", because, of course, the member is not familiar with that term.

• Wages Rates—Growth and Inequality

11. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he think that the economy is delivering a fair share to working New Zealanders when the latest Labour Cost Index shows wage growth is at a six-year low?

Hon BILL ENGLISH (Minister of Finance): The Labour Cost Index (LCI) is a very limited measure of wage changes. Another measure is the chain of changes, the quarterly employment survey, which measures the incomes people actually get paid. That is why it is used as the basis for calculating national superannuation—legislation requires it to be related to wages and not to the Labour Cost Index. In any case, if the member looks at the Labour Cost Index, what is striking in the last few periods is the way in which it has now become well ahead of the inflation rate, when usually it is pretty close to the inflation rate.

Grant Robertson: If the economy is growing at between 2 and 3 percent as he claims, why are working people not receiving the benefits of that growth in wage increases?

Hon BILL ENGLISH: The LCI is not evidence of that statement, even if it was correct, because the Labour Cost Index just measures changes in constant prices. What people actually get paid—that is, taking into account changes in productivity, promotions, responsibilities, shifting to a new job—is actually going up, at a rate not dissimilar to the rate of growth.

Grant Robertson: Is it correct that the number of workers who got a pay rise of less than 2 percent in the last year has increased by 6 percent to 67 percent of workers getting a pay rise of less than 2 percent, and does he think that is fair in current economic conditions?

Hon BILL ENGLISH: When we have the lowest inflation in decades—which is reflected in the lowest interest rates in, I think, over 50 years—then the nominal wage increases are likely to be lower. And New Zealand is, fortunately, one of not many economies where there are consistent but moderate real wage increases occurring. In the current worldwide episode of potential, of actual, and of some deflation, that is actually not bad going.

Grant Robertson: What comfort is it to working New Zealanders for him to invoke Consumers Price Index inflation when that does not take into account the full housing costs, which New Zealanders have experienced, meaning that in Auckland housing costs have risen at four times the rate of wages over the last 8 years?

Hon BILL ENGLISH: The Consumers Price Index does take into account housing costs.

Hon Members: No, it doesn't.

Hon BILL ENGLISH: It does. And as my colleague has mentioned earlier, the fact that interest rates are at record lows is one of the reasons that New Zealanders are showing stronger demand for housing. But there is no doubt that in the long run poor planning, such as has occurred in Auckland, does have an impact on housing costs as a proportion of income, and the Auckland Council has the opportunity to put that right.

Grant Robertson: Does he think that working New Zealanders are getting a fair share of economic growth?

Hon BILL ENGLISH: By and large, yes. By and large, whatever indicators you use—whether they are income inequality, real wage increases, or measures of employment—they are actually doing reasonably well. It does not do us any harm to compare that situation to many other developed countries where the working population in some parts is not doing so well.

• Pest Control—Predator Free New Zealand 2050

12. MAUREEN PUGH (National) to the Minister of Conservation: What recent announcements has she made about making New Zealand predator-free by 2050?

Hon MAGGIE BARRY (Minister of Conservation): Last month the Prime Minister, Minister Joyce, Minister Guy, Minister Smith, and I announced that we have committed to the most ambitious predator-control project ever before seen in the world, and that is to rid New Zealand of the top three predators by 2050. This is a very ambitious aim. Rats, stoats, and possums kill around 25 million of our native birds every year. They cost this country, in terms of lost productivity, around $3.3 billion, and it has to stop. This Government will invest an initial $28 million over 4 years, and we are looking for support from other partners to contribute $2 for each dollar we do. This is a very ambitious scheme, but we are confident we can achieve it in collaboration.

David Seymour: Can the Minister confirm that the new Government funding attached to this announcement amounts to $1.56 per New Zealander per year?

Hon MAGGIE BARRY: The cost to the taxpayer of New Zealand in terms of what we have given—for $28 million over 4 years—is minimal. But when we grow this—and we have already had very strong indications that we have millions of dollars coming in from philanthropists and others—and when we set up the Crown-owned company Predator Free New Zealand, that will enable and allow philanthropists and businesses to put a great deal of money in. So in terms of the calculations that that member is asking me about, the sky is the limit. I would aim to keep the cost of money that the taxpayer pays to a minimum amount. Thank you.

David Seymour: I raise a point of order, Mr Speaker. She just needed to say: "Yes."

Mr SPEAKER: Order! That may be the member's opinion, but it is not a point of order.

Maureen Pugh: What opportunities will a predator-free New Zealand present?

Hon MAGGIE BARRY: A predator-free New Zealand would create a vast safe habitat for our native animals. It will also boost regional economies. It will help with tourism. It will provide jobs. It will have a lot of positive impacts for our primary sector. It will eradicate possums, which, of course, are one of the main carriers of bovine TB; that is a terrible disease for both cattle and deer. It is a game-changer, it is ambitious, and it has been heralded worldwide, if not by the rabble in the Opposition benches, who just do not get a vision like this because they are so unimaginative. [Interruption]

Mr SPEAKER: Order! Can I have a little less interjection now from both sides of the House.

Richard Prosser: Is it rational to believe that New Zealand can be predator-free for just $28 million of Government funding over 34 years, when that total would provide less than 50c each for the rats and possums present this year alone?

Hon MAGGIE BARRY: I address my answer to one of the less rational people in this House.

Mr SPEAKER: Order! The Minister will stand, withdraw, and apologise, and then just answer the question.

Hon MAGGIE BARRY: I withdraw and apologise. When it comes to rational thinking, this predator-free New Zealand goal is a tremendous one. The amount of money that it will cost us is negligible compared with the amount of gains this country will have as a result of this predator-free goal. The amount of money that it is costing—$28 million over 4 years—is an initial investment. It will be matched by imaginative, visionary people who have already indicated to us that this is where they also would like to assist and where New Zealand needs to go. So I have every confidence that it is achievable.

Maureen Pugh: What projects and technologies will serve as a template for a predator-free New Zealand?

Hon MAGGIE BARRY: Project Taranaki Mounga and Cape to City in Hawke's Bay are both great examples of what great things can happen when people work together and join forces towards a goal. Department of Conservation staff are very good at clearing predators out of offshore islands—Campbell Island and Zealandia prove that—so our inventors, our conservationists, and our scientists have also developed a self-resetting trap, which will reset 24 times. These are the kinds of things, along with the Biological Heritage National Science Challenge, that will be integral to developing newer, more effective and efficient forms of control. Now is the time to do it.

© Scoop Media