Questions And Answers Oct 27 2010

by Desk Editor on Wednesday, October 27, 2010 — 5:46 PM

Press Release –

DAVID BENNETT (National—Hamilton East) to the Minister of Finance : What trends are evident in the Government’s latest financial statements? WEDNESDAY, 27 OCTOBER 2010

Questions For Oral Answer


Financial Statements, Crown—Trends

DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What trends are evident in the Government’s latest financial statements?

Hon BILL ENGLISH (Minister of Finance): The financial statements for the year ended 30 June 2010 show that the Government is generally on track with its fiscal management. The fact that core Crown expenses were flat at $64 billion from one year to the next indicates we are getting on top of expenditure control. The residual cash deficit increased slightly, from $8.6 billion to $9 billion for the year ended in June. This deficit is forecast to rise to $13.3 billion for the 2010-11 financial year.

David Bennett: What trends in net Crown debt were highlighted in the Government’s latest annual accounts?

Hon BILL ENGLISH: Net Crown debt is increasing as the Government absorbs the shock of the recent recession on its own books, helping to protect New Zealanders from the sharp edges of that recession. Core Crown debt is now around $27 billion, or just over 14 percent of GDP. That debt will continue to rise, because this year the Government expects there will be a cash deficit of around $13 billion. However, we cannot keep running deficits or increasing debt forever, and that is why the Government has a 5 or 6-year track towards a surplus, involving tight control of Government spending.

Hon David Cunliffe: Can he tell hard-working Kiwis why he has borrowed an extra threequarters of a billion dollars in the last 2 months to pay for his economic mismanagement?

Hon BILL ENGLISH: No. Fortunately, a lot of hard-working Kiwis understand just how much this Government needs to do to correct the economic mismanagement of the previous Government and to deal with the recession. That is why the Government’s economic policies are broadly supported.

David Bennett: What do the latest forecasts show about the likely path for the economy and the Government’s finances?

Hon BILL ENGLISH: Treasury is currently working on forecasts, which will be published at the half-year update on 14 December. As I told the Finance and Expenditure Committee today, tax receipts for July and August were lower than forecast. I am told that the September tax receipts are up a bit, clawing back some of the difference. It is difficult to draw detailed conclusions from just 2 or 3 months’ worth of data, but I would expect that in the half-year update tax revenue will be a bit softer, and that may flow through to the rest of the Government accounts.

David Bennett: What positive signs is he seeing from the nature of the current economic recovery?

Hon BILL ENGLISH: Well, many—many positive signs. As we have talked about in the House, this economy needs to be rebalanced away from excessive property speculation, excessive Government spending, and excessive personal consumption. The early signs of the recovery are promising. Private consumption is pretty much flat, because New Zealanders are saving a good deal more than they were. Although that has meant a more muted economic recovery in the short term, it is laying a stronger platform for sustainable economic recovery in the long term.

Hon David Cunliffe: Why did he tell the Finance and Expenditure Committee today that there was “no V-shaped recovery”, when the Prime Minister said it would be aggressive; and who is right: he and the Governor of the Reserve Bank, who think the recovery is slow and fragile, or his boss, whom he describes as floating from cloud to cloud?

Hon BILL ENGLISH: As we have gone over this issue about 10 times in the House and the select committee, I will explain it again. The Prime Minister made his comments in early 2009, and he was correct; the economy turned round from a 2.5 percent contraction to about a 2 percent growth rate. Like other developed economies, as New Zealand households have increased their savings dramatically, it has meant that they have less to spend. That is why retailers and the construction industry are finding it tough.

Economic Policies—Contribution to Medium-term Fiscal Consolidation

2. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Is he satisfied that all the Government’s economic policies contribute to the goal of “clear, credible, ambitious and growth-friendly, medium-term fiscal consolidation”?

Hon BILL ENGLISH (Minister of Finance): The answer to that is yes. The goal the member is referring to is one that was set out either by the OECD or the G-20 finance Ministers in their recent communiqué.

Metiria Turei: How does it help to meet this goal by paying over $1 billion a year in accommodation supplement subsidies to landlords, especially as the total Government housing subsidy is expected to rise to nearly $3 billion by 2016?

Hon BILL ENGLISH: The member will be aware there has been debate for some time about what drives the cost of housing. We will continue to pay the accommodation supplement to tenants. I know some believe that that is just passed on to landlords, but they should try taking it off the tenants and see what happens. Of course, it would leave them in an unacceptable situation. The member will know that the Government has done a review of State housing, and a number of our Resource Management Act changes are designed to increase the supply of affordable housing.

Metiria Turei: Does he agree, then, that it is an inadequate supply of housing to meet the current deficit of 70,000 homes that is fuelling the projected blowout of the Government’s housing subsidy?

Hon BILL ENGLISH: I think the member is probably at least in part right that constraints on the supply of housing drive up the cost of housing, including for those tenants that the Government is subsidising. I look forward to the Green Party’s support of the Government’s making changes to our regulatory structures to improve the supply of affordable housing.

Metiria Turei: Will the Minister, then, consider a State house building programme like that proposed in the Green Party’s Mind the Gap package of 6,000 homes over 3 to 5 years, which will help to address the housing shortage, constrain the growth in the housing subsidy, and create 28,000 jobs in the process?

Hon BILL ENGLISH: The Government’s obvious preference would be that the private sector was able to expand the supply of affordable houses. We have just done a review of State housing, where a pretty broad-based group with a lot of experience in housing made the point that the simple growth in the number of State houses often does not help those who are most in need. They are the Government’s priority.

Metiria Turei: Why, then, is the Government prepared to borrow ever-increasing sums of money to fund a housing subsidy for landlords, yet is not prepared to borrow to invest in building homes for New Zealand families?

Hon BILL ENGLISH: I am not sure whether we are disagreeing here. The Government would like to see a greater supply of affordable housing. It is somewhat ironic, though, that the Green Party is among those who most vociferously object to new subdivisions and to the expansion of housing. If we could get those rules changed in local bodies so as to encourage more affordable housing, then that might drop the cost of the rental subsidy, as well as increase the opportunities for first-home buyers.

Parity with Australia—Progress

3. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: What recent progress has he made on catching up with Australia?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: In terms of catching up with Australia, the biggest step we have taken is to return the economy to growth after five quarters of economic contraction, which started under the previous Labour Government. The second-biggest step we have taken is to start undoing the damage done by the wrong-headed economic policy of the previous Labour Government. As the member will know, the Australian economy did not go into recession at all, so we have been starting from some way behind.

Hon Phil Goff: How many net additional jobs does he expect to see created in New Zealand this year compared with the quarter of a million new, net additional jobs that Australia has, so far, created this year?

Hon BILL ENGLISH: I cannot give the member that number, but I can say that as Australia has had its terms of trade double in 5 years because of the value of its resource base, up against our commodities, whose terms of trade have increased by about 50 percent, then of course there will be a challenge. Equally, we had a recession and Australia did not. That member’s party might be able to explain why New Zealand went into recession under his Government, before the global financial crisis, and Australia did not.

Hon Phil Goff: Will the first decline in the median income in New Zealand to take place in more than a decade, which Statistics New Zealand recorded over the last year, help close the income gap with Australia?

Hon BILL ENGLISH: When the member was away we discussed in the House how useless the median income measure is, because it does not measure what happens to household incomes. That member ought to explain how the Labour Government managed to drive New Zealand into recession when the Australian economy did not go into recession. He was in the Government at the time.

Chris Tremain: How have wages in New Zealand fallen behind those in Australia?

Hon BILL ENGLISH: The history of this is quite interesting. Between September 1999 and September 2008 real after-tax wages in New Zealand rose only 3 percent. In contrast, in the same period in Australia, real after-tax wages rose 19 percent. So over the last decade wages in New Zealand fell a long way behind wages in Australia. Since that time, I am happy to say, we have made progress towards reducing the wage gap, but it is early days yet.

Hon Phil Goff: When will the unemployment rate in New Zealand, which has reached nearly one in two for Māori and Pasifika teenage girls and over one in three for Māori and Pasifika teenage boys, persuade him that he needs to give the same priority and focus to skill training and education to our young people at risk instead of cutting, as he did last week, $55 million out of skill training?

Hon BILL ENGLISH: The member may not be aware that about 100,000 people who are participating in the industry training system were getting no credits whatsoever. With the agreement of the industry training sector, the Government has taken the unutilised and wasted money and shifted it to where it can be more usefully employed.

Hon Phil Goff: When putting together his tax package, what consideration did he give to ensuring that most of the benefit went to those on modest incomes, as they did in Australia, rather than the lion’s share of the benefit going to those on the top incomes, as it does in New Zealand?

Hon BILL ENGLISH: The member is simply wrong, and the fact that he repeats that description and includes Australia does not mean that he is right. The Government published all the analysis in respect of the equity of the tax cuts after the Budget, and it showed that when we take into account the impact of the increased taxes on property and on foreign owners of New Zealand assets, the major income groups all got about the same positive increase in income. That is the analysis and in fact no one has challenged it.

Hon Phil Goff: Which of the policies introduced by his Government has done the most to widen the income gap with Australia?

Hon BILL ENGLISH: As we pointed out, the real after-tax wage gap has actually closed. That is the measure that is used, and it was legislated by the previous Government as the wage measure that is relative to national superannuation. We believe that our whole raft of policies, including our investment in infrastructure, microeconomic reform, our tax switch, our reform of the public sector, our focus on education and skills, and our extension of innovation and business support are all adding up to a policy that will close the gap with Australia.

Hon Phil Goff: Has he passed the test that he set for himself to close the gap with Australia; or was that promise about as credible as his promise not to increase GST?

Hon BILL ENGLISH: Yes. Our policies do pass the test. We have put together a six-point economic programme, which we are executing. Ours is a programme that his new friend Mrs Gillard would recognise, because she gave a speech a lot like ours, and his policies are heading in the opposite direction from where his new friend Mrs Gillard is going.

Gambling—Intervention Services

Mr SPEAKER: I call Te Ururoa Flavell. [Interruption] I have called Te Ururoa Flavell. [Interruption] There has been enough of that exchange. I have called Te Ururoa Flavell and I expect the House to show him some courtesy.

4. TE URUROA FLAVELL (Māori Party—Waiariki) to the Associate Minister of Health: He aha ngā rautaki ka kōkuhua ki te whakautu i te pikinga mā te 25 ōrau o ngā kiritaki hei whakararu nei i ngā ratonga aukati peti moni, otirā, tērā pikihanga e 5,325 i te tau 2008 ki te e 6,673 i te tau 2009; ā, ka whakaae a ia ki tā Barbara Phillips, kaiwhakahaere nō te Manatū Hauora i kī rā “those seeking help are only a small proportion of overall gambling prevalence”? [What strategies have been introduced to respond to the 25 percent increase in numbers of clients presenting to problem gambling intervention services which rose from 5,325 in 2008 to 6,673 in 2009; and does he agree with Ministry of Health manager Barbara Phillips that “those seeking help are only a small proportion of overall gambling prevalence”?]

Hon PETER DUNNE (Associate Minister of Health): The Government recently approved a new 6-year strategy for the period 2010-16, and a funding plan for the period 2010-30, including a comprehensive needs analysis based on client user statistics such as the ones that the member has quoted, prevalence data, and models of best practice. The 3-year service plan continues to provide for a range of services from public health activity through to brief and comprehensive interventions. For communities that do not have access to face-to-face services, the toll-free gambling helpline service is now available 24 hours a day, 7 days a week. Typically, clients present to services in crisis, which is a smaller percentage of those affected by problem gambling. The Government has therefore strengthened its focus on early interventions in order to reach people before they reach that crisis point.

Te Ururoa Flavell: Kua hōparangia e te Minita o te Hauora ngā painga o te tuitui i te kāri whaipūtea me te kāri whakatū-whakapaunga-pūtea ki te rautaki whakakore petipeti; ki te kore, he aha?

[Has the Minister of Health investigated the promotion of player tracking cards and pre-commit cards as part of the integrated problem-gambling strategy; if not, why not?]

Hon PETER DUNNE: I think a more logical comparison would be to look at data from the same quarters of previous years. An analysis of Department of Internal Affairs data shows that there continues to be a decline in spend in the non-casino gaming-machine sector. For example, in September 2008 the sector spend was $232.3 million; that fell to $220.7 million for the September 2009 quarter, and to $215.2 million for the September 2010 quarter. I think that data provides the answers to the member’s question.

Te Ururoa Flavell: He āwangawanga ōna e pā ana ki ngā tatauranga e kī nei, ahakoa kua mimiti te tokomaha o ngā raihana, ngā mihini petipeti me ngā whare petipeti i te tau kua hipa, kua piki tonu te pūtea kua whakapauria i te hauwhā tau kua taha ake nei mai i te $209m i te Pīpiri ki te $215m i te Here-turi-kōkā; ā, he aha ngā ara kei mua i te tangata ki te whawhai i tēnei ngārara, te petipeti? [Has he concerns that despite a decline in numbers of licence holders, gambling venues, and gaming machines in the past year, spending in the last quarter still rose from $209 million in June to $215 million in September; and what measures are in place for a person to combat this addition to gambling?]

Hon PETER DUNNE: The issue that the member raises falls within the responsibility of the Department of Internal Affairs, but I am aware that we already have systems that interrupt play on pokie machines that are known as pop-ups or player information displays. I gather that some Australian states are proposing to implement technology such as pre-commit cards, and I imagine that the Minister of Internal Affairs would want to see the outcome of that move before determining whether to further regulate the sector in New Zealand.

Child Poverty—Government Action

5. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social

Development and Employment: What action, if any, has the Government taken to reduce child poverty in New Zealand?

Hon JUDITH COLLINS (Acting Minister of Social Development and Employment): Apart from the great economic work being achieved by this Government’s robust fiscal policies, the Ministry of Social Development has done a great deal to help children and families in these tough economic conditions, including the Job Support Scheme, ReStart payments, Job Ops, Community Max, Break Away programmes, and the highly successful Community Response Fund. In addition, we have increased the abatement rate for the domestic purposes benefit and the invalids benefit so people can earn more while still receiving the benefit.

Hon Annette King: Has the Government made a commitment to end child poverty in New Zealand; if so, what timetable has been set to achieve it?

Hon JUDITH COLLINS: It would be great to be able to say that we could end child poverty in New Zealand. Certainly, the previous Government had 9 years to do it, and the best economic times to do it, but never achieved it.

Hon Annette King: Will she support the Every Child Counts call to establish a cross-party group to address child poverty, and will she seek to convince the Prime Minister that it should be established, given that he dismissed the idea when I raised it with him in November last year?


Hon Annette King: Has she seen the report from the Child Poverty Action Group, which states that before the election National made political capital out of a so-called underclass in New Zealand, but since the election child poverty has become invisible; and has she argued in Cabinet for priority to be given to end child poverty in this country—a country that can afford millions for a building to have a party in, yet children have to wait?

Hon JUDITH COLLINS: I have not seen the report from the Child Poverty Action Group. I can, however, say that under the very best economic times that the previous Labour Government inherited it was not able to end child poverty. We have inherited a recession and we are doing a fantastic job.

Hon Annette King: Does she agree with the Prime Minister’s Chief Science Adviser, Professor Peter Gluckman, who said that the Government is putting the money in the wrong end, that investing in troubled teens is often too late, and that the first 6 years of life are critical; will she ensure that funding is provided to reduce child poverty, even if she will not commit to ending it— reduce it as happened under the previous Government—and will she commit to reducing it in the next Budget?

Hon JUDITH COLLINS: The best way out of poverty for families is work—[Interruption] Well, I know that that might be a four-letter word for Labour members, but it is not for this side. I agree with the Children’s Commissioner, who said that work is a road to salvation.

Prisons—Safety of Staff

6. SANDRA GOUDIE (National—Coromandel) to the Minister of Corrections: What reports has she received on initiatives to improve the safety of prison staff?

Hon JUDITH COLLINS (Minister of Corrections): The safety of Department of Corrections officers is one of our top priorities, and I am very pleased to report that the department has delivered an intensive 3-day training course in advanced tactical communication and de-escalation techniques to its entire front-line staff of 4,000. This was delivered via an impressive 12,500 training days across the country. The training allows officers to effectively talk down an escalating or potentially dangerous situation. I expect that this will result in fewer officers being hurt in the line of duty. I have been told that the training has already led to many tense situations being resolved without the prisoner involved resorting to violence.

Sandra Goudie: What other steps have been taken to protect front-line corrections staff?

Hon JUDITH COLLINS: Prison staff have already been provided with new protective equipment for use in dangerous situations. This includes stab-proof vests, spit hoods, and batons. The department is now starting a 12-month trial of pepper spray, with a view to adding this tool to the range of safety equipment available to front-line staff. I am also delighted that our Government is introducing legislation to make offending against a Department of Corrections officer or a police officer an aggravating factor in sentencing.

Government Accounts, Cash Deficit—Tax Cuts

7. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Why did he continue with his 2010 tax cuts when the Government has a cash deficit of $9 billion?

Hon BILL ENGLISH (Minister of Finance): Because the package of tax cuts will lift New Zealand’s rate of growth by improving the incentives to work, to save, to invest, to export, and to help a much-needed rebalancing of this economy. The tax changes have little bearing on the Government’s cash deficit, as they are broadly fiscally neutral, and are revenue-positive by the end of the forecast period and in future years. Of course, they will leave the vast majority of New Zealanders a bit better off.

Hon Shane Jones: Can he confirm why his old-fashioned recipe of borrow and hope is going to generate jobs and lead to the creations of new firms, in the face of tax revenue declining and the Government borrowing over a billion dollars a month, as he confirmed this morning at the Finance and Expenditure Committee?

Hon BILL ENGLISH: No, I cannot confirm any of that, because it is all wrong. It is a bit rich being lectured by Labour on borrow and hope. It is a bit like being lectured by a gambling addict on going to the pokies.

Craig Foss: Did the Government at any stage borrow in order to give tax cuts?

Hon BILL ENGLISH: The answer to that, of course, is no. The income tax cuts of April 2009 were fully funded by the accompanying changes to KiwiSaver and the research and development tax credit. The 2010 income tax cuts are funded by an increase in GST, and by a tightening of the tax regime on foreign investors, smokers, and people who own investment property. Once this policy is fully in place, it will produce an annual revenue gain of $175 million a year in 2013, 2014, and beyond then. Our tax cuts have been good for economic growth and fair for New Zealanders.

Hon David Cunliffe: I seek leave to table a copy of Budget 2010, showing—[Interruption]

Mr SPEAKER: It is a shame that the Minister of Finance interjected then; otherwise Mr Cunliffe might have been taking an early shower. When I get to my feet, he will sit immediately. The member knows that we do not table copies of the Budget or waste time during question time on that sort of thing.

Stuart Nash: Given that he admitted to the Finance and Expenditure Committee today that his tax cuts were not stimulatory, can he explain to the House why, according to Budget 2010 documents, he is borrowing ever-increasing amounts of money to pay for them?

Hon BILL ENGLISH: No, the member is wrong. The Budget documents do not show that.

Hon David Cunliffe: Oh yes, they do.

Hon BILL ENGLISH: Well, no, they do not show that. They show that over 4 years they are broadly fiscally neutral, and that beyond year 4 there is actually a gain of about $175 million a year. I do not know which Budget the member is reading.

Craig Foss: What impact did the 2010 tax package have on income distribution?

Hon BILL ENGLISH: As demonstrated in Budget 2010 and the background documents, the Government spent some time focusing on the distributional impacts of the tax package. It shows that the gain to the lowest one-third of households by income was about the same as the gain to the highest one-third of earners. Both groups had their real after-tax incomes lifted by 0.7 percent. If Labour really thought the tax cuts were unfair, it would campaign to repeal them. Of course, they are not.

Brendon Burns: Can the Minister tell New Zealand’s hard-working families why they are paying more GST on everything they buy, when he gets $200 a week in tax cuts and is borrowing nearly $300 million a week to pay for such cuts?

Hon BILL ENGLISH: The Government is not borrowing anything for tax cuts; it has been a broadly fiscally neutral package. In fact, the Opposition has been complaining that we put GST up in order to pay for the tax cuts, so it cannot have it both ways. These are fair tax cuts, but, more important, they help to rebalance this economy after a decade of mismanagement in which New Zealanders were misled into believing that borrowing, spending, and speculating on houses were the path to wealth, when they are not.

Hon David Cunliffe: Given that he admitted to the Finance and Expenditure Committee today that it cost $450 million in year 1 and $1.045 billion over 4 years to fund his tax cuts, and that the reason that he continued with the tax cuts in April 2009, which he knew the country could not afford, was that it was a National Party election promise, why did he raise GST when his Government had promised not to?

Hon BILL ENGLISH: All the member’s assertions are wrong. As I explained to the member, the tax cuts in April 2009 were actually offset by the changes in KiwiSaver and the research and development tax credit, which the Opposition often refers to, and the tax cuts in April 2010 were fiscally neutral. We are very proud that we have implemented tax cuts that favour saving, exporting, investing, and creating jobs, whereas the Labour Party favours consumption, borrowing, and excessive Government spending.

Regulation—Government Protection from Cost Increases

8. Dr CAM CALDER (National) to the Minister for the Environment: What actions has the Government taken to avoid unnecessary cost increases for New Zealand householders from excessive regulation?

Hon Dr NICK SMITH (Minister for the Environment): Regulations passed by the previous Government would prohibit the sale from 1 January of over 1,000 common household products sold in cardboard or refill packs, even though the toxicity of those is little more than table salt or lemon juice. These excessive regulations would have added over $20 million to family grocery bills and over 30 million plastic containers to the waste stream. This Government campaigned on removing such unnecessary red tape, and today it has repealed them.

Dr Cam Calder: What products would have been banned from sale, and does any other country require such regulation for similar household products?

Hon Dr NICK SMITH: Products that would have been banned from our supermarket shelves include Surf and Persil; Spray n’ Wipe would not be allowed on our supermarket shelves, let alone the deadly Palmolive dishwashing liquid. We also would have had to get rid of—oh, here is the man who is responsible.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I can remember some time, it might have been last year, but certainly during your reign on the throne, you prevented the Greens—I think Sue Kedgley—from doing exactly this by using props. [Interruption]

Mr SPEAKER: The Speaker is considering a genuine point of order. I certainly did not allow a member to table such things and I did not allow other members to produce such things, other than the speaking member. But I do not recollect having ruled that a member with the call could not use props to support what he or she was saying. If I have, I will apologise for that. I will check back on my record to avoid inconsistency, and I apologise if I got that wrong. The member has answered considerably; he should not go on much further.

Hon Dr NICK SMITH: I think it is very appropriate. The other product that has been banned is the good old Toilet Duck. These regulations exist in no other developed country, and are particularly significant for relations with Australia, in that prohibiting these products makes New Zealand uncompetitive with Australia.

Hon Rodney Hide: How has the ACT Party and the regulatory reform work led by me helped identify and reverse these nanny State regulations inherited from the previous Labour Government?

Hon Dr NICK SMITH: The Minister who asked the question has initiated a comprehensive programme of regulatory reform, and when the Grocery Marketers Association raised these issues with the Minister of Regulatory Reform he insisted on a review. That review found that these regulations were totally unnecessary and were the sorts of nanny State regulations that caused the previous Government to be thrown out.

Dr Cam Calder: Has the Government reversed all the regulations designed to better protect children against harmful substances?

Hon Dr NICK SMITH: No. There are some stronger cleaning products like some bleaches and concentrated dishwashing powders that do pose a threat that justifies child-resistant packaging, such as Janola. I hear members opposite arguing that that is somehow nanny State. I will tell members the difference. The difference is that we are practical on this side of the House. We apply some common sense rather than banning these assorted products that would not have been allowed on New Zealand supermarket shelves if Labour had stayed in Government.

Hon Rodney Hide: Has the Minister received any advice on the job impacts of these regulations, given that we would be the only country in the world requiring child-resistant packaging for products like Surf and Persil?

Hon Dr NICK SMITH: Yes, I have. It would put New Zealand out on a limb and at serious disadvantage. I am advised that the Unilever factory in Petone would be put out of business by these regulations, including the 330 staff who are in the previous Minister for the Environment’s own

electorate. This is a classic example of poor regulations costing New Zealand householders and costing jobs, and it is one of the reasons why this Government has a comprehensive programme of regulatory reform.

Mr SPEAKER: Before I call the honourable member for the next question, I ask the Minister to please remove the props, now that he has completed that answer.

Climate Change, Cancun Conference—Legally Binding Agreement

9. Dr KENNEDY GRAHAM (Green) to the Minister responsible for International Climate

Change Negotiations: Will New Zealand support a legally binding agreement to cut global greenhouse gas emissions at the Cancun climate change conference this December; if not, why not?

Hon Dr NICK SMITH (Acting Minister responsible for International Climate Change

Negotiations): Yes, that is this Government’s ambition. This was the position at Bali, at Copenhagen, and it will also be so at Cancun. However, all indications are that this is unlikely to be achieved at Cancun, but New Zealand is ready and willing to make as much progress as is possible.

Dr Kennedy Graham: If such an agreement is not likely and we are then obliged to rely on the Copenhagen Accord instead, does he believe that the combined voluntary emission cuts promised under the Copenhagen Accord will be sufficient to meet the agreed safe threshold of 2 degrees Celsius, which requires a 28 percent reduction in global emissions by 2020?

Hon Dr NICK SMITH: The climate change negotiations are very much the art of the possible because they require the agreement of over 190 countries on such a complex issue. It is the Government’s view that the Copenhagen Accord was a second-best outcome from Copenhagen, but it is better than nothing. Our hope is that we will be able to translate some of the good work that is included in the Copenhagen Accord into a more robust international agreement.

Dr Kennedy Graham: If climate change negotiations are the art of the possible, is it possible for him to reconcile his plan to cut national emissions by 10 to 20 percent with a global reduction target of 28 percent, given that as a developed country we are obliged to take a larger share of the 28 percent, notwithstanding our special situation on agriculture?

Hon Dr NICK SMITH: I think it is very important that Parliament understands that the 10 to 20 percent reduction target range for New Zealand is, of course, based on 1990 emissions, and 1990 emissions grew between then and 2008 by 25 percent, which is a very substantial increase. The second point that is unique to New Zealand is that, of course, 50 percent of our emissions come from agriculture, where the technologies are a lot more challenging. My view is that a 10 to 20 percent reduction from 1990 levels by 2020 is a hugely challenging target for New Zealand.

Louise Upston: What progress has New Zealand made in climate change and will this enable New Zealand to meet its Kyoto obligations?

Hon Dr NICK SMITH: We have made good progress with the emissions trading scheme coming into effect on 1 July. I am encouraged that the future forecast projections of emissions show the first years of decline in New Zealand’s net emissions in any time since 1990—that is, during every year of the previous Labour administration emissions went up—

Hon Trevor Mallard: And we had growth and you’ve got a recession!

Hon Dr NICK SMITH: The member interjects. It is interesting to note that the big gains have been firstly in the area of forestry. Under his Government New Zealand deforested; under our Government we are planting trees. The second big gains have been in the area of renewable energy, where rather than building thermal power stations, which occurred under the previous Government, we currently have a record level of investment in renewable energy, and that should be welcomed.

Hon John Boscawen: Does he agree with the Greenhouse Policy Coalition that when comparing New Zealand’s emissions trading scheme with the European Union emissions trading scheme, from 2015 only 50 percent of emissions in the EU are covered compared with 100 percent in New Zealand; if so, does he accept that New Zealand’s emissions trading scheme is more comprehensive than the European emissions trading scheme and may also render us “uncompetitive with Australia”

as the Minister for the Environment has just explained to the House with reference to his props of Persil and Surf?

Hon Dr NICK SMITH: Firstly, in respect of the issue of the comparison with Australia, it is interesting to note that electricity prices in Australia have gone up by more than 30 percent over the last 5 years in response to a whole lot of regulatory measures that Australian Governments have tried—in an inefficient way, in my view—in order to deal with the challenge of climate change. So I think we are well placed, in competitive terms, with Australia. In respect of the comparison with Europe, it is very important that we compare like with like. If we compare our emissions trading scheme today with that of the European Union, we see that our scheme covers less and is less aggressive, and we will have a review of the scheme next year. The commitment of this Government is to ensure that New Zealand does its fair share on climate change, not that we should try to be a world leader, because we have to carefully balance those economic and environmental responsibilities.

Education, National Standards—Schools’ Comprehension of System

10. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: What evidence does she have as to the level of understanding of the Government’s national standards system in schools?

Hon ANNE TOLLEY (Minister of Education): A range of evidence is available to me as to the level of understanding of national standards. This includes Education Review Office data, and results from the Ministry of Education’s monitoring and evaluation programme, as well as anecdotal evidence from schools I have visited and people I have met.

Hon Trevor Mallard: Are her standards designed to provide detailed information to inform the quality of teaching on a daily basis?

Hon ANNE TOLLEY: The national standards are designed to provide signposts—expectations of what children should have learnt and by when—to ensure that children make good progress towards the goal of National Certificate of Educational Achievement (NCEA) level 2.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very specific question about whether the national standards are designed to provide information that would help teaching on a daily basis. The fact that they are designed to do something else might be taken as a no, but I deliberately asked a very direct question in an attempt to have it addressed.

Mr SPEAKER: I hear what the member is saying—it was a very direct question. I think the Minister should try to answer that. I accept that she almost did in indicating what the standards are designed for, but the question actually asked whether they were designed for that specific issue. It was a very direct question; I think it would be helpful if the Minister were to answer that.

Hon ANNE TOLLEY: As I said, the standards are designed as a set of expectations of what a child should have learnt in reading, writing, and maths, and by when. Teachers can use those to guide their teaching, as they do currently, and they can also use those during the teaching year as they assess—using either assessment tools or their own teacher judgment—the progress that a student is making.

Allan Peachey: What evidence has the Minister seen of the level of understanding in the community about national standards?

Hon ANNE TOLLEY: I have had numerous emails about national standards from members of the community that show that they understand the standards, including one from a board chair, who said: “Since we have implemented the national standards, our school community has been very happy with the new level of reporting, and we have had overwhelming positive feedback. Please keep up the good work.”, and this one from a parent: “We are thrilled with the new national standards, and there are thousands of parents like us who fully support you and think you and the National-led Government are on the right track.”

Hon Trevor Mallard: Is it the Minister’s hope or expectation that the quality of teaching will improve on a daily basis, based on the information teachers get from national standards?

Hon ANNE TOLLEY: The national standards are a set of expectations by which teachers can measure the progress of their students in reading, writing, and maths. Quality teaching methods will be used to lift achievement and to accelerate progress where it is needed, but the standards do not provide that quality teaching.

Hon Trevor Mallard: Can a year 5 student achieve a year 6 standard in reading comprehension?

Hon ANNE TOLLEY: I do not have the data in front of me. If the member cares to put that question in writing, I am happy to provide him with an answer.

Hon Trevor Mallard: Was a backward-mapping exercise carried out to ensure that progress according to the standards leads to level 2 NCEA in year 12?

Hon ANNE TOLLEY: It is my understanding that the technical experts who designed the standards, which were based on the existing literacy progressions that were introduced under Minister Maharey as Minister of Education, and the numeracy project, which was introduced when the member who asked the question was Minister of Education, used those and back-mapped from NCEA level 2, but that is just my advice. I did not design them. We used technical experts to design them.

Housing, Social—Challenges

11. HEKIA PARATA (National) to the Minister of Housing: What are the current challenges the Government is facing with social housing?

Hon PHIL HEATLEY (Minister of Housing): One of the challenges is that a State house is currently the only benefit in New Zealand where once someone is in, that person’s need is never reassessed. As a result, we have over 5,000 Housing New Zealand Corporation tenants paying market rents who could afford to rent from the landlord next door, all the while 4,000 families are classified on the waiting list as high priority for a State house. We also, interestingly, have over 2,700 tenants in homes that are underutilised, with two or three spare bedrooms. A similar number of tenants, 2,700, are in houses that are deemed to be overcrowded, and really need to be transferred to a larger property.

Hekia Parata: Is the Minister able to provide any real life examples of those situations?

Hon PHIL HEATLEY: I do have in hand a couple of examples. In Henderson, for example, we have a tenant in a four-bedroom home who originally lived with her husband, two adult children, and one dependent child. She is now the only tenant, and she has three spare bedrooms. If that tenant could have been moved into a smaller property, the house could have been a match for a single mother and her seven young children who have been living in a garage since her marriage broke up. Four bedrooms would still be a squeeze, but I think that family of eight would have found it better than the garage they were often put in, under the previous Government.

Hekia Parata: What cost does underutilisation have for the New Zealand taxpayer?

Hon PHIL HEATLEY: Firstly, for every home that is underutilised by two or more bedrooms, there is a family that is living in overcrowded accommodation. Secondly, many taxpayers do not realise that they pay Housing New Zealand Corporation the difference between an income-related rent that tenants pay and the market rent for the property. The larger the property, generally the larger the subsidy. For example, in Ōtara we have a single tenant who is living in a four-bedroom house and paying a rent of $47. There are three spare bedrooms, and the tenant is paying $47 in rent. Other tenants, of course, are languishing on the waiting list while that person with three spare bedrooms gets a $21,000 subsidy per year.

Moana Mackey: Does he agree with Housing New Zealand Corporation staff who say that the biggest impediment to moving people on from their Housing New Zealand Corporation home, which the staff try to do now, is not that they refuse to move, but that they have nowhere to move

to, and does he stand by his statement that no tenants will be made to leave their Housing New Zealand Corporation properties if they do not have anywhere to go?

Hon PHIL HEATLEY: The biggest impediment to Housing New Zealand Corporation staff moving tenants on, and asking them to be moved on, is that the staff have not been allowed to ask them to move on in the last decade.

Moana Mackey: Which parts of the country will see a reduction in the number Housing New Zealand Corporation properties because they are deemed to have an oversupply of State housing?

Hon PHIL HEATLEY: The areas of the country that will see an increase in the amount of social housing will be the areas that have high needs. The areas of New Zealand that will see a decrease in the amount of social housing will be the areas of low needs. It is not exactly rocket science! I suppose we could be like Labour and build State houses just in Labour seats, but we are the National Government and we would rather put houses where the needs are.

Mr SPEAKER: Order.

Hon Annette King: He’s just a show off.

Hon PHIL HEATLEY: Well, I am.

Mr SPEAKER: On this occasion, the Minister himself is lucky that the honourable deputy leader of the Labour Party interjected or he would have been leaving the House, because when I get to my feet, even Ministers will sit down. The Minister had said quite enough, and the question did not justify the last part of that answer. The important thing is that when I get to my feet, Ministers will sit down. He is just darn lucky that there was an interjection from the other side of the House or he would be leaving the House. I insist that that rule will be obeyed.

Pacific Language Resources—Decision to Stop Publishing

12. SU’A WILLIAM SIO (Labour—Māngere) to the Minister of Education: Does she stand by her ministry’s decision to stop publishing the five Pacific language resource Tupu series and the Samoan language Folauga journals that are used by 33 Pacific bilingual units to provide bilingual education to about 1,300 primary students throughout New Zealand?

Hon ANNE TOLLEY (Minister of Education): The Ministry of Education has not decided to stop publishing the Tupu and the Folauga series. However, it is reviewing whether these are the most effective resources to support Pasifika education. This is in light of the fact that Pasifika students’ literacy levels are consistently and significantly lower than those for other groups. Schools will continue to receive new titles from the Tupu and Folauga series in 2010. In addition, a new series of Pasifika language learning story books have been developed to support the five Pasifika languages curriculum. These will be distributed to schools starting in November and going through to 2011.

Su’a William Sio: What evidence does the Minister rely on, when in her own words: “It has been decided to pause Tupu as it does not align with the ministry priority outcomes of every child achieving literacy and numeracy levels that enable their success.”?

Hon ANNE TOLLEY: As I said in answer to the primary question, in fact the evidence that the ministry is relying on to review these series is the fact that Pasifika students’ literacy levels are consistently and significantly lower than those of other groups.

Su’a William Sio: If the Minister has rejected research recommendations that New Zealand use Pacific bilingual education to raise Pacific students’ academic achievements in schools, how does she intend to meet the related objectives of strong identity, self-confidence, and parental aspirations, or is she not concerned that Pacific people in New Zealand are on a course to lose their first languages for ever?

Hon ANNE TOLLEY: I totally reject the assertions made in that question. I say to that member that the ministry will continue to provide language guidelines, resources, and professional development for teachers to support the teaching of five Pasifika languages as part of the action from the Pasifika Education Plan 2009-2012. The Pasifika languages are an integral part of the

learning of languages area of the New Zealand curriculum. These resources also support the preservation and maintenance of Pasifika languages. In addition, there are a significant number of Tupu and Folauga books available online.

Su’a William Sio: I seek leave to table a letter signed by the Minister, dated 7 October, and addressed to Joanne Okesene, in which she states that the Tupu series, which supports language learning, is to be paused.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.


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