ORAL QUESTIONS

QUESTIONS TO MINISTERS

Question No. 1—Housing and Urban Development

1. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: For which KiwiBuild developments were all dwellings already under construction at the time an underwrite was signed, and for which KiwiBuild developments were some of the dwellings already under construction at the time an underwrite was signed?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. I'm advised that it takes approximately three to nine months between when a developer approaches KiwiBuild and when a contract is signed. To avoid delays, developers often continue their work while the ministry undertakes the appropriate due diligence when negotiations take place. I'm advised that no developments had all their homes under construction at the time the underwrite was signed. I'm also advised that when the Northlake, Dignity Street, and Mike Greer Homes underwrites were signed, there were some homes under construction.

Hon Judith Collins: Why is he not aware that 10 houses he underwrote in Whangarei's Kotātā Heights were also under construction before he underwrote them?

SPEAKER: Underwritten, I think, but carry on.

Hon PHIL TWYFORD: I didn't include those in the answer to my primary question, because they are not part of the underwrite.

Hon Judith Collins: Why did he underwrite 10 apartments in Ōtāhuhu when Auckland Council documents show all 10 of the apartments were under construction before the 2017 election?

Hon PHIL TWYFORD: Because those are not covered by the underwrite.

Hon Judith Collins: Is he telling the House that he has just bought them?

Hon PHIL TWYFORD: They were purchased off the plans as part of the KiwiBuild scheme.

Hon Judith Collins: How can they be purchased off the plans if they were already built?

Hon PHIL TWYFORD: Because they were included in the plans at the time that they were built. The KiwiBuild buying off the plans scheme is working with developers to build affordable housing that was never built, let alone planned, or considered under the last Government. We are working with the private sector to provide affordable homes to first-home buyers, and it's working.

Hon Judith Collins: Is he aware that six months—

SPEAKER: Order! I'll remind members in the back corner that my hearing is better than it used to be, and I could generally hear Mr Bishop anyway.

Hon Judith Collins: Thank you, Mr Speaker. Is he aware that six months before the last election, 16 of the Otāhuhu apartments were already presold for less than $440,000, while the cheapest KiwiBuild price in the same apartment development is now $550,000?

Hon PHIL TWYFORD: Now, that is an example of just how fast house prices were going up under the former National Government.

Hon Judith Collins: Does he have Cabinet authority to underwrite houses that are already built?

Hon PHIL TWYFORD: I have Cabinet authority to underwrite homes that produce hundreds of new affordable homes that are available to first-home buyers. The underwrite reduces the financing costs and risk. It reduces the profit margins of builders and developers, and it makes more affordable homes available to first-home buyers. The policy's working.

SPEAKER: Order! The member will answer the question.

Hon PHIL TWYFORD: Yes, I have Cabinet authority to do what the member asked. I included that in the first answer, Mr Speaker.

SPEAKER: No, no the member didn't, actually.

Hon Judith Collins: How can it be that he says he is adding to the housing stock, when some of these houses were built before the last election?

Hon PHIL TWYFORD: Because the totality of the deal with each developer includes a large number of affordable homes that otherwise would not have been built.

Hon Judith Collins: Does he stand by his answers to written questions where he states that of the 74 KiwiBuild homes reported as completed, more than half were already under construction before he signed an underwrite agreement in order to get construction started on them?

Hon PHIL TWYFORD: Yes, I stand by my answers.

• Question No. 2—Social Development

2. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Why were unauthorised payments made to 25,000 people by the Ministry of Social Development?

SPEAKER: I have been warned, and I'll warn the House, that the answer to this question is slightly longer than generally desirable.

Hon CARMEL SEPULONI (Minister for Social Development): Thank you, Mr Speaker. All winter energy payments were made in accordance with the policy intent of the winter energy payment. The error sits with the drafting of the legislation. The policy intent was that the following two groups of people should receive the winter energy payment: people receiving Government funding for their long-term residential care or residential care services but who are not eligible for residential care subsidy or residential support subsidy, or people who travel overseas for more than four weeks during the winter period who should receive the winter energy payment for the first four weeks of their absence. The legislation does not reflect that, hence why we have introduced the Social Security (Winter Energy Payment) Amendment Bill. It is also important to note that the 25,000 referred to in the question is 3.3 percent of the 774,200 New Zealanders who, on average, per month, receive the winter energy payment. After including those of partners, close to one million New Zealanders have benefited from the winter energy payment.

Hon Louise Upston: Does the Minister accept that this has been unlawful spending, and what actions has the Minister taken to ensure this mistake isn't repeated under her watch?

Hon CARMEL SEPULONI: As I said earlier, the policy intent was clear but the legislation doesn't match that. It's not the first time in this House, in this Parliament, that there has been a drafting error and a correction has had to be made. I think it's important to put it into context. If we look at an example that's similar, that would be one where a change was made accidentally in 1998 with regard to stand-down periods through the Social Security Act. That mistake didn't get picked up and changed and rectified until 2015. So I'm glad that this took 16 months as opposed to 17 years.

Hon Louise Upston: Does the Minister take full responsibility for this unlawful spending?

Hon CARMEL SEPULONI: I'm the Minister; so, although I might not draft the legislation, I take responsibility.

Hon Louise Upston: Why will taxpayers pay the energy costs twice for those in full-time residential care?

SPEAKER: Order! I suppose it's a rebuttable statement, but the member has got to be very careful when she's asking questions starting with a fact which is at least debatable if not wrong.

Hon CARMEL SEPULONI: I have recently been made aware of an issue, and I have it in my notes, and now I just can't find it—

Hon Gerry Brownlee: So not that aware?

Hon CARMEL SEPULONI: Hang on a second. With regard to those in residential care, there are about 460 patients who are in residential care where it is very difficult to determine whether or not they are getting the subsidy or they are not getting the subsidy. In fact, the cost of trying to work that out would cost more than trying to rectify that situation for those 460 people. So the ministry has decided that they will continue to allow that to happen.

Hon Louise Upston: So is the Minister saying there is still a large group of people for whom taxpayers will fund their energy costs twice, instead of fixing the problem that's already been identified?

Hon CARMEL SEPULONI: This is an issue that has been brought to my attention, and it is something that we're discussing. It is not a large group of people—it is 460—keeping in mind that close to one million New Zealanders have benefited from the winter energy payment.

Hon Louise Upston: Why did the Minister wait so long to bring legislation to the House when she was alerted in June 2018, and why does she think it's right this time when clearly there are issues that she's just mentioned?

Hon CARMEL SEPULONI: As I said earlier, mistakes are made in the drafting of legislation that take a long time to pick up. This is 16 months. It will be rectified before the winter energy payment is paid out in May, and that is the main thing: that we will be acting lawfully before it is paid out this year.

• Question No. 3—Finance

3. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Yesterday, ANZ released its Commodity Price Index, showing that this year's upward trend in prices has continued through March. The ANZ world commodity price index pushed up by 1.4 percent in the month on the back of strong prices across sectors. Dairy prices gained 2.5 percent; meat and fibre prices, 1.1 percent; and forestry prices lifted 0.4 percent. The stable exchange rate meant that the New Zealand dollar index also rose by 1.4 percent. ANZ said it expects further price rises for the major export sectors in the coming months. This is indeed encouraging news for Kiwi exporters and growth in our regions.

Tamati Coffey: What reports has he seen on the impact of commodity prices on economic confidence?

Hon GRANT ROBERTSON: Yesterday, Rabobank released its Rural Confidence Survey for quarter one 2019 which showed that confidence among Kiwi farmers lifted on the back of rising commodity prices. The number of farmers expecting agricultural economic conditions to improve in the coming 12 months rose to 16 percent. The survey also found farmers' expectations for their own farm's performance was also up this quarter, lifting to a net plus 11 percent expecting business to improve over the next 12 months. It is important to acknowledge that for some farmers their confidence is lower than the historical average. Sheep and beef farmers, for instance, have said that this is due to factors such as Brexit and a slowing Chinese economy. The Government is working hard to ensure stability and certainty for exporters, and has signed regulatory agreements with the UK, and is continuing to negotiate further free-trade agreements to diversify export opportunities.

Tamati Coffey: What other reports has he seen on New Zealand's economic performance?

Hon GRANT ROBERTSON: According to the Business New Zealand (BNZ) Performance of Manufacturing Index (PMI), the manufacturing sector expanded at a faster rate in February than in January. The seasonally adjusted PMI for February was 53.7 percent; a PMI reading above 50 indicates that manufacturing is generally expanding. This was up 0.7 points from January and the second highest expansion level for the last nine months. BNZ senior economist Doug Steel said that "The positive messages around production in the PMI gave confidence that the industry retains impetus". It is pleasing to see yet more real data showing the solid fundamentals underpinning the New Zealand economy.

• Question No. 4—Small Business

4. Hon JACQUI DEAN (National—Waitaki) to the Minister for Small Business: What is his response to the recent MYOB report showing 67 percent of the small businesses surveyed were against the Tax Working Group's proposed capital gains tax?

Hon STUART NASH (Minister for Small Business): Mind Your Own Business (MYOB) has confirmed that the survey was finalised before the Tax Working Group report was even released. There was no information given to those who took part in the survey about the 19 recommendations in the Tax Working Group report that were there to help with small and medium-sized enterprises' (SMEs) compliance costs. I would also note the Horizon survey that came out last week, which said that more people support a capital gains tax than oppose one, and I tend to place more credibility on this survey.

Hon Jacqui Dean: What's the new information the Minister just noted that they should be aware of?

Hon STUART NASH: New information? The fact that the Horizon survey came out last week and said that more people supported a capital gains tax than were against one.

Hon Jacqui Dean: So what reassurances can he give to the 81 percent of small businesses who are opposed to the capital gains tax that are directly involved in agriculture, forestry, and fisheries?

Hon STUART NASH: I would say to those businesses to read the report, but I would also say that this Government is considering all options. We are listening very closely to the feedback given and no decisions, at this point, have been made.

Hon Jacqui Dean: Does he think that uncertainty around the potential costs of the implementation and compliance of a capital gains tax on small business is conducive to business confidence?

Hon STUART NASH: I will say, once again, that we are considering all options, we are listening to all voices, and at this point in time no decisions have been made.

Hon Jacqui Dean: I raise a point of order, Mr Speaker. The Minister didn't answer the question.

SPEAKER: I think he did. I think he's certainly addressed it and I think he probably answered it as well.

Hon Jacqui Dean: Does he agree that, according to the MYOB Business Monitor's latest economic data, small business operators are concerned about the direction of the economy, or are they just wrong?

Hon STUART NASH: Mr Speaker—

SPEAKER: No—the member will resume his seat—it doesn't relate to the original question. It's a very specific question about capital gains tax. Just because there was a survey with other questions in it doesn't mean that the member can move off on to those. Further supplementary?

Hon Jacqui Dean: I raise a point of order, Mr Speaker. Is it an extra supplementary or can I replace it?

SPEAKER: You've lost your supplementary.

Hon Jacqui Dean: Thank you. How does the Government plan to reverse the dissatisfaction that nearly half of SME business operators have expressed in the MYOB survey in this Government's year of delivery, and will he take responsibility for that?

Hon STUART NASH: It's a question I'm delighted to answer. What I will say is: 1 April R & D tax credits. I'll talk about the drop in ACC levies. I'll talk about e-invoicing between New Zealand and Australia, which is expected to save both countries about $30 billion. I would also say that Minister Faafoi and I are doing a review of unfair trade practices. I would also say that the Small Business Council is looking—

SPEAKER: OK. That's enough, thank you.

Hon Gerry Brownlee: Well, it's not enough to change the position, but anyway.

SPEAKER: Mr Brownlee, no commentary on my rulings, please.

Hon Gerry Brownlee: Was that a ruling?

SPEAKER: Do I have to order you to, or will you anyway?

Hon Gerry Brownlee: No, no, of course, not. I withdraw and apologise.

SPEAKER: Thank you.

• Question No. 5—Agriculture

5. Hon NATHAN GUY (National—Ōtaki) to the Minister of Agriculture: Does he stand by all his statements?

Hon ANDREW LITTLE (Minister of Justice) on behalf of the Minister of Agriculture: Yes, in the context in which they were made.

Hon Nathan Guy: What advice has he received that justifies his statement on Rural Exchange recently in reference to the Tax Working Group report, and I quote, "It probably won't affect the vast majority of farmers."?

Hon ANDREW LITTLE: That was a surmise on my part, but I reiterate for the benefit of the member that the Government has no new tax policy. It has commissioned an independent working group to look at matters in relation to the tax system, and decisions have yet to be made on that independent working group's recommendations.

Hon Nathan Guy: When he said on Radio New Zealand, and I quote, "Farming for capital gains is flawed and is something that needs to be looked at.", does he therefore support a capital gains tax?

Hon ANDREW LITTLE: On behalf of the Minister, no. I stand by the statement that was made because there's been ample research and commentary recording that many New Zealand farmers have farmed on the basis of the rising value of their land, as opposed to necessarily running their farming business as a business. And, in fact, many and successive Governments have been working very hard with the rural communities to make sure that farming is run as a business.

Hon Nathan Guy: What advice has the Ministry for Primary Industries provided to him regarding the impact on rural communities of a capital gains tax and environmental taxes proposed in the Tax Working Group report?

Hon ANDREW LITTLE: On behalf of the Minister, none, because, as I said before, the Government has no new tax policy. It has received the report of an independent Tax Working Group, which has made some recommendations. Those recommendations are under consideration, and when and until such time as a decision is made, nothing has changed.

Hon Nathan Guy: Is he therefore saying that he or his officials haven't been consulted regarding an imminent Cabinet paper to do with the Tax Working Group report and recommendations?

Hon ANDREW LITTLE: On behalf of the Minister, no. I'm saying what I said before, which is that the Government has not changed its tax policy. It has received the recommendations of an independent Tax Working Group. It is considering those recommendations, and when and until such time as a decision is made, nothing has changed.

• Question No. 6—Education

6. JAN TINETTI (Labour) to the Minister of Education: What feedback has he seen on the proposals for the Reform of Vocational Education?

Hon CHRIS HIPKINS (Minister of Education): We've received a wide range of feedback on the proposals for the reform of vocational education, including some very positive feedback from some of our institutes of technology and polytechnics. For example, the Western Institute of Technology at Taranaki, or WITT, have acknowledged that there is a consensus around a need for change and that the pitfalls of the present competitive landscape for polytechnics and the bad incentives it had created do need to be addressed. The majority—the vast majority—of New Zealand's 16 institutes of technology and polytechnics recognise that there is a need for change, and they are positively backing the process.

Jan Tinetti: What other feedback has he seen on the opportunities that the proposals create for industry and providers?

Hon CHRIS HIPKINS: To name two from the primary sector industry, where we've had a lot of feedback, Horticulture New Zealand has said that the reforms link what training is required directly to industry needs and that there should be no cliff-face at the end of secondary school where students are left wondering what to do, how to train for it, and who will employ them. Dairy New Zealand have said that the current model has not been working efficiently for dairy and that off-the-job training and on-the-job training should be provided in a complementary rather than a competitive way. That is something the Government is committed to.

Jan Tinetti: What other feedback has he seen from business and employers on the proposals?

Hon CHRIS HIPKINS: I've received a lot of feedback from employers, including from the New Zealand Aged Care Association, who have announced their support for the Government's approach to the reforms of vocational education and training in saying that there is a clear and urgent need for the Government's planned reforms, which are a step in the right direction. We've had a lot of feedback from small businesses around the country, who, in particular, have said that they would like to see more consistency and training in a much more streamlined and integrated training system. This, of course, is the last week for industry, employers, providers, and the public to get their submissions in on the proposals, and I encourage people to have their say on them so that the Government can take all of the feedback into consideration as we make further decisions.

Dr Shane Reti: What feedback has the Minister had from Skills Active industry training organisation?

Hon CHRIS HIPKINS: I don't believe their submission has yet been lodged with those who are conducting it. I have met with them personally. They have pointed out that there are significant aspects of the proposals that they strongly support, and they have also pointed out that there are some parts of the proposals that they do not support.

• Question No. 7—Revenue

7. ANDREW BAYLY (National—Hunua) to the Minister of Revenue: Has he requested or undertaken any assessment of the business valuation and compliance costs that would result from the capital gains tax proposed by the Tax Working Group?

Hon STUART NASH (Minister of Revenue): Yes.

Andrew Bayly: What does he believe it would cost to value a business, given independent appraisal reports of the value of companies subject to takeover offers normally cost in excess of $100,000?

Hon STUART NASH: I'm not a business valuer.

Andrew Bayly: Does he think it's reasonable that small-business owners should have to bear the cost of valuing their businesses, costing thousands of dollars each, if the Government introduces a capital gains tax?

Hon STUART NASH: Purely and highly hypothetical question.

Andrew Bayly: Why does he believe that it's purely hypothetical, given that the Tax Working Group recommendations would require the 500,000-plus business in New Zealand to be valued and the consequential, significant uncertainty that has already been created for the thousands of owners of those businesses?

Hon STUART NASH: It's hypothetical because the Government has made absolutely no decisions on any of the recommendations from the Tax Working Group's report.

Andrew Bayly: How would he ensure the integrity of the tax system, given there are three valuation methodologies commonly used to value businesses and any one of them could be used to justify a value of a business?

Hon STUART NASH: No decisions have been made whatsoever, but I take the integrity of the tax system as one of my major roles as the Minister of Revenue, and I will absolutely ensure the integrity of the tax system, but I would say, once again, no decisions have been made on any of the recommendations in the Tax Working Group's report.

• Question No. 8—Police

8. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Police: What reports has he seen in relation to police's response to the 15 March terror attack?

Hon STUART NASH (Minister of Police): I'm sure I speak on behalf of most of this House and our country when I say that we are extremely proud and indebted to the women and men of the New Zealand Police service, who have served our country with the utmost integrity and kindness since 15 March. I have seen many reports and letters and hundreds of social media comments that pay tribute to these brave, compassionate, and dedicated women and men of our police service. Under the firm and unwavering leadership of Commissioner Mike Bush, 1,072 additional police personnel have been employed to assist with the response. This includes, for example, 137 staff from the Wellington region and 71 from the eastern district. Police are also taking a holistic approach to reassurance activities at places of worship across New Zealand, with mosques a priority location. Police have, so far, made 953 visits to places of worship, with 19 sites having 24/7 scene guards, and we thank the police for their service.

Dr Duncan Webb: What other reports has he seen around the support New Zealand Police has received from other agencies and first responders?

Hon STUART NASH: The aftermath of the 15 March terror attacks has seen a highly coordinated, all-of-Government response to ensure police efforts are optimised and victims are supported. This includes agencies that have set up offices on the ground specifically to address victims and their families' immediate needs, and these include ACC, Immigration New Zealand, the Office of Ethnic Communities, and others. In terms of first responders, almost 40 firefighters and personnel from Fire and Emergency New Zealand helped in the communication centre. St John deployed 50 staff to triage, treat, and transport dozens of patients whose injuries ranged from minor through to those with critical gunshot wounds. And a special mention must go to the Defence Force, who deployed 553 personnel, 13 aircraft, and armoured mobility assets to assist in the response.

Dr Duncan Webb: What reports has he seen around the international assistance police have received in response to the 15 March terror attacks?

Hon STUART NASH: New Zealand Police are extremely grateful for the offers of support they have received from their international partners. The FBI and the Australian Federal Police have been on the ground supporting polices' investigations and response. The national remembrance service in Christchurch and other national services held around New Zealand required significant New Zealand Police security support. Approximately 900 police staff were involved in the operation alongside New Zealand Defence Force personnel. In response to a request from Commissioner Bush, the Australian Federal Police also provided a significant contingent that assisted with specialist tactical support. We thank the international policing community for their support.

• Question No. 9—Climate Change

9. TODD MULLER (National—Bay of Plenty) to the Minister for Climate Change: Does he stand by all his statements and actions?

Hon JAMES SHAW (Minister for Climate Change): Yes.

Todd Muller: Does he stand by his statement made on 4 March during an interview on Q+A that when it comes to the application of GE technology in New Zealand, he—and I quote—"will be led by the science on it."?

Hon JAMES SHAW: Yes.

Todd Muller: Does he agree with the former Prime Minister's chief scientist, Sir Peter Gluckman, who said—and I quote—"I'll go as far as to say that I cannot see a way that agriculture in New Zealand will be sustainable over the long run in the face of environmental change and consumer preferences without using gene editing."?

Hon JAMES SHAW: No.

Todd Muller: Does he agree with the then Prime Minister's chief scientist, Sir Peter Gluckman, who also said at the time—and I quote—"There is no way that we will get a reduction in methane production, and I can see no way that we will see an economic advantage for farmers as we shift to more plant-based foods, without using gene editing."?

Hon JAMES SHAW: No.

Todd Muller: When he said he would be—and I quote—"led by the science", did he mean all science or just the science that fits his political narrative?

Hon JAMES SHAW: If the member looks at the previous supplementary questions, he'll see that what Sir Peter Gluckman was saying is that he didn't see any other ways than GE to achieve those outcomes. I do see other ways.

Todd Muller: What are the other ways of addressing agriculture emission reduction that he thinks the chief scientist has not captured in his assessment?

Hon JAMES SHAW: I can't comment on what the former Chief Science Advisor included in his assessment, but if the member's interested, I would advise him to read the report of the Biological Emissions Reference Group that the previous Government set up. It took a number of years looking at a range of options for how agricultural emissions could be reduced and found that, actually, with a high degree of confidence, agriculture would be able to reduce emissions by at least 10 percent by 2030, and found with a similarly high degree of confidence that it would be able to reduce it by at least 30 percent by 2050.

Todd Muller: A final supplementary: does he consider climate change to be a sufficiently serious global issue that all science and innovations, including GE, need to be considered, or does he just think it is a pick and choose menu?

Hon JAMES SHAW: Well, I think that policy makers always have options in front of them about what choices to make, but I certainly do believe that climate change is not just the greatest challenge of our time but, potentially, the greatest challenge of all time.

• Question No. 10—Research, Science, and Innovation

10. Dr PARMJEET PARMAR (National) to the Minister of Research, Science and Innovation: What advice, if any, has she sought or received on the impact of a capital gains tax on research and development in New Zealand?

Hon CHRIS HIPKINS (Leader of the House) on behalf of the Minister of Research, Science and Innovation: I've not received any advice on the impact of a specific capital gains tax as a proposal on R & D in New Zealand, because the Government's not made any decisions in response to the Tax Working Group report. However, I have received general advice provided by the Inland Revenue Department and Treasury to the Minister of Finance and the Minister of Revenue that concluded officials do not consider there is a conflict between the R & D tax incentive and expanding the capital income tax base.

Dr Parmjeet Parmar: Does she, then, agree with advice from the Inland Revenue Department in 2017 that not having a capital gains tax incentivises New Zealand businesses to undertake research and development?

Hon CHRIS HIPKINS: I think the Minister of Revenue has already answered that question by pointing out that that advice was provided long before the debate around the capital gains tax was even introduced and before the Tax Working Group had even considered the matter.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. My question was about if the Minister agrees with that advice.

SPEAKER: And the question was addressed.

Dr Parmjeet Parmar: Does she, then, agree with advice from Treasury and the Inland Revenue Department in 2018 that a capital gains tax would allow the Government to claw back some of the benefits of the R & D tax credit?

Hon CHRIS HIPKINS: The R & D tax credit was introduced in last year's Budget. The idea that there's any link between the consideration around a capital gains tax and the R & D tax credit is preposterous.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. Again, my question was if the Minister agrees to this advice that was provided.

SPEAKER: Well, he said that the member's assertion was preposterous. I think that's a pretty clear answer.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. This is in the documents, in the advice, that was provided to the Tax Working Group.

SPEAKER: And the member's had a response. The member mightn't agree with it, but it was pretty clear.

Dr Parmjeet Parmar: Does she agree with Peter Beck, the founder of Rocket Lab, who, in relation to the impact of a capital gains tax on technology companies, said, "NZ already has big problems around creating large valuable technology companies and this will not help."?

Hon CHRIS HIPKINS: On behalf of the Minister, I have huge respect for his work, but we respectfully disagree on this matter.

Dr Parmjeet Parmar: Does she agree with advice from the Inland Revenue Department in 2017 that not having a capital gains tax advantages start-ups?

Hon CHRIS HIPKINS: As I indicated earlier, that advice pre-dated any consideration of capital gains tax and it pre-dated the deliberations, considerations, and consultations of the Tax Working Group.

• Question No. 11—Regional Economic Development

11. JENNY MARCROFT (NZ First) to the Minister for Regional Economic Development: What recent announcements have been made regarding the Provincial Growth Fund?

FLETCHER TABUTEAU (Parliamentary Under-Secretary to the Minister for Regional Economic Development) on behalf of the Minister for Regional Economic Development: The announcement from the under-secretary on Tuesday was hugely positive for our regions. Up to $200,000 a year for up to two years will be made available to the country's regional economic development agencies. It will help bolster their capacity to progress key regional and national economic goals such as job creation.

SPEAKER: Well, I think it's fair to say that that was said in the voice of the Minister!

Jenny Marcroft: How will this Provincial Growth Fund (PGF) investment bolster capacity in the regions?

FLETCHER TABUTEAU: On behalf of the Minister, capacity funding is about ensuring that these independent economic development agencies are working optimally for their region in a time when regional economic development is foremost in this Government's thoughts and actions. This funding will ensure regional organisations already at full capacity with their business as usual—having worked long and hard in this space, completely unsupported by the members opposite—are now able to accelerate key projects through the PGF that would otherwise not see the light of day, while, just as importantly, they will at the same time improve their long-term capabilities and expertise in driving regional economic growth.

Hon Grant Robertson: How would the Minister assess the performance of the under-secretary in making this announcement?

FLETCHER TABUTEAU: On behalf of the Minister, I think, at the time, he was modest and reserved.

• Question No. 12—ACC

12. JO LUXTON (Labour) to the Minister for ACC: What changes were made to ACC levies on 1 April, and why were they made?

Hon IAIN LEES-GALLOWAY (Minister for ACC): The average work account levy paid by employers and self-employed people has decreased from 72c per $100 of liable earnings to 67c. The Government was able to do this because ACC has done a good job in managing its investments and claims liability, and it's great to be able to pass these savings on to levy payers.

Jo Luxton: What does this mean for business?

Hon IAIN LEES-GALLOWAY: The reduction in work account levies will save businesses $100 million over the next two years, and I'm sure that those businesses will put that money to good, productive use.

Jo Luxton: What other decisions has the Government made regarding levy rates?

Hon IAIN LEES-GALLOWAY: The earners levy remains at the current level of $1.21 per $100 of liable earnings, and the motor vehicle levy at its current level of $113.94, on average, per annum. Like all investors, ACC does face global headwinds, but I have confidence in their ability to navigate those. New Zealand can be reassured that ACC is in excellent hands.

Hon Tim Macindoe: If significant levy reductions are possible, what is the Minister's justification for increasing ACC levies payable by a clear majority of New Zealand's motor vehicle owners?

Hon IAIN LEES-GALLOWAY: Well, as we have traversed a number of times in this House, there is no evidence that variable levies based on vehicle risk ratings promotes injury prevention or encourages the purchase of safer cars. What it did do, though, is put a disproportionate impact on low-income vehicle owners. Removing it is estimated to transfer around $4 million from high and medium income people to low-income vehicle owners, and that is about getting the right balance in the ACC system.

Hon Tim Macindoe: I raise a point of order, Mr Speaker. That was all very interesting, but I didn't ask about the vehicle risk rating mechanism or most of the other things the Minister has just mentioned. I simply asked him to explain to New Zealanders why, for the vast majority of them—

SPEAKER: Yeah. I heard the question and I heard the Minister respond. Is there a further supplementary? No.

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