Press Release – Office of the Clerk
1. Dr CAM CALDER (National) to the Minister for Social Development and Employment : What reports has she received on the latest benefit numbers?
(uncorrected transcript—subject to correction and further editing)
THURSDAY, 7 APRIL 2011
QUESTIONS FOR ORAL ANSWER
QUESTIONS TO MINISTERS
Beneficiaries—Numbers
1. Dr CAM CALDER (National) to the Minister for Social Development and Employment: What reports has she received on the latest benefit numbers?
Hon PAULA BENNETT (Minister for Social Development and Employment): The March numbers have been released today; there are now 331,529 people receiving a benefit. The number fell by 12,531 during March, and was down 3.6 percent on the February figure. Most of that decrease was because of students going back, but the number on the general unemployment benefit dropped by 4,368, as well. Although it is encouraging to see another drop in benefit numbers, I caution against getting too optimistic on the basis of these figures.
Dr Cam Calder: Do reports show any improvement for young people?
Hon PAULA BENNETT: Yes. Reports indicate that young people are beginning to move off the unemployment benefit faster than the overall reduction in the number of people on the unemployment benefit. The number of young people on it decreased by 4 percent in the year ended March, and is now 8,398, a fall of nearly 2,000. Although 4 percent may not seem like much after increases of 66 percent and 187 percent in the previous 2 years, it is positive to see that fall.
Dr Cam Calder: What reports has she seen on the availability of hardship assistance?
Hon PAULA BENNETT: The Government is paying twice as many special needs grants as it did in 2008. In March 2008, $3.7 million was spent on special needs grants; in March 2011, $7.2 million was spent. The amount of benefit advances in March was up by about 30 percent. In March 2008, $7.9 million was spent on advances and forwarded, and in March 2011 it was $12.2 million. Although some might think that number is too high and we should not be giving those grants, I think it proves that the help is there when people need it.
Hon Annette King: Can she confirm that unemployment benefit numbers showed almost the same drop at this period last year as the latest figures show, but then continued to climb throughout 2010, and can she guarantee that will not be the pattern in 2011?
Hon PAULA BENNETT: As indicated, the March fall was expected, as we are seeing students go back and we are also seeing the usual decrease due to seasonal work. What I have indicated is that in previous years we have seen a dramatic increase, but in the last 12 months we have seen the figures actually go down slightly. I am hoping we have slowed the flow.
Rugby World Cup—Minister’s Statement
2. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Finance: Does he stand by his reported statement that the Government is not prepared to penny-pinch when providing money for the Rugby World Cup?
Hon BILL ENGLISH (Minister of Finance): Yes.
Hon Annette King: Will he also not penny-pinch for the children of low-income New Zealanders, like the three children of a woman who has longstanding physical and mental health problems, as reported in the New Zealand Herald today, but who was refused a food grant by Work and Income because of this Government’s tough new hardship rules?
Hon BILL ENGLISH: I understand that some of the facts as represented in the story are incorrect. In fact, the woman was not refused a hardship grant. She has received a large number of hardship payments in the past; she is welcome to sit and discuss her issues with Work and Income if she chooses to do so; she has not done so.
Hon Annette King: If the Government can loosen the money and the rules on tendering for a $2 million plastic waka for party central, then why can the Government not loosen the rules for poor families when they face unexpected costs at a time when their food, their power, their rent, and their petrol have all gone up at a rapid rate?
Hon BILL ENGLISH: The Government has on 1 April just increased payments to families on a benefit. The rules that are now in place provide for hardship, and tens, if not hundreds, of millions of dollars are spent on hardship payments over and above benefit payments. The rules are there to ensure that corrective action is taken for families who are struggling to live on the benefit. Of course there are many of them, and Work and Income works with them consistently and usually successfully.
Hon Annette King: Can he tell us what rigorous assessment and evaluation was undertaken by the Government to ensure that the plastic waka, which is costing taxpayers almost $2 million, met his requirement that expenditure must be on necessities and not “nice to have” projects, in light of his admission yesterday that he did not know the project had not been tendered?
Hon BILL ENGLISH: The proposal went through the usual kind of officials and Cabinet process and is paid for largely by the cancellation of other spending.
Hon Annette King: Is the Minister confirming that this project went through the full Cabinet procedures, with evaluation and a business case presented before a decision was made?
Hon BILL ENGLISH: I repeat my answer to the original question. It went through the Cabinet process.
Hon John Boscawen: Further to his correction in the House last night, who recommended and approved the decision to transfer the contracting responsibility for the plastic waka to Ngāti Whātua, removing the need for a competitive tender?
Hon BILL ENGLISH: I do not actually know the answer to that question, but I can tell the member that my advice is that arrangements are in place to oversee value for money. The project is being overseen by Beca, which is also overseeing the Cloud and fan zone construction in the same part of the Auckland waterfront.
Hon Annette King: Was John Armstrong of the New Zealand Herald correct when he wrote today that funding of the waka is nothing short of abdication of fiscal responsibility on National’s part; if not, why not?
Mr SPEAKER: Before I call the Minister to answer the question I point out that he is not responsible for anything that John Armstrong might say. I do not want to deprive the Minister of the chance to answer the question.
Hon Annette King: Is he correct?
Mr SPEAKER: The Minister is not responsible for whether John Armstrong is correct, but I am happy for the Minister to answer the question; I am just pointing out that he is not responsible for that.
Hon BILL ENGLISH: Mr Armstrong is sometimes right and sometimes wrong. On this occasion he is wrong.
Hon John Boscawen: How does he avoid the perception that this is a sweetheart deal to Ngāti Whātua, reinforcing the conclusion that there are two rules in New Zealand with a National-led
Government, which is happy to hand out hard-earned taxpayers’ cash to hopeless projects just to keep the Māori Party on side?
Hon BILL ENGLISH: That is not correct. The worth of this project will, in the end, be measured in the same way as the worth of many other Rugby World Cup projects, and that is according to whether they excite tourists and fans and whether they take part in the events that go on in that venue.
Television New Zealand—Mandate
3. SUE KEDGLEY (Green) to the Minister of Broadcasting: Does TVNZ have any other mandate other than returning a profit under the National Government?
Hon Dr JONATHAN COLEMAN (Minister of Broadcasting): The mandate of Television New Zealand (TVNZ) is described in the Television New Zealand Amendment Bill. New section 12 in clause 6 of Part 1 states: “(1) The functions of TVNZ are to be a successful national television and digital media company providing a range of content and services on a choice of delivery platforms and maintaining its commercial performance. (2) In carrying out its functions, TVNZ must provide high-quality content that—(a) is relevant to, and enjoyed and valued by, New Zealand audiences; and (b) encompasses both New Zealand and international content and reflects Māori perspectives.”
Sue Kedgley: Did he attend a TVNZ board meeting last month and instruct the board that from now on TVNZ is to be run as a strictly commercial organisation?
Hon Dr JONATHAN COLEMAN: I did attend a meeting with the board, and I made the Government’s expectations very clear. They are that there is a large amount of public equity tied up in that organisation and the public deserves to get a dividend from it.
Sue Kedgley: When the TVNZ board presented a business case to the Government to allow it to continue funding TVNZ 7, did he personally advocate for continued funding, and is it true that Steven Joyce squashed the idea?
Hon Dr JONATHAN COLEMAN: The member has got quite confused about this. TVNZ has never brought a case to the Government to allow it to continue funding TVNZ 7. It brought a case that wanted us, the Government and the taxpayer, to continue funding it, which was just not tenable.
Sue Kedgley: Why does the Government consider it to be good practice to allow a private sector media company, founded by Mr Joyce, to have a preferential loan deferral scheme, while at the same time killing off the State broadcaster’s sole remaining public service channel?
Hon Dr JONATHAN COLEMAN: Once again, the member has got confused. I think what she is referring to is a scheme that was made open to all radio companies to defer their licence payments, as opposed to what we are talking about here, which is continuing to meet the unfunded promise that the last Government made regarding TVNZ 7.
Sue Kedgley: Can he confirm that as result of the Government’s decision to make TVNZ a solely commercial broadcaster, New Zealand will be the only country in the Western World without a public service television channel other than Māori Television?
Hon Dr JONATHAN COLEMAN: Well, the first point to make is that TVNZ has been predominantly commercially funded for a very long time. The second point that I would make is that one would struggle to find another OECD country that has suffered the economic shocks that we have had in the last year, and that still has a very firm plan to return to surplus by 2015.
Sue Kedgley: What about Ireland? Will Radio New Zealand National be the next State broadcaster to face funding cut-backs and the pressure to commercialise; if not why not?
Hon Dr JONATHAN COLEMAN: If the member had read the New Zealand Herald this morning, she would know what the position is. Basically, Radio New Zealand National has a very good plan for living within its means, which we are very happy with.
Sue Kedgley: Can he promise New Zealanders in this House that the Government has no plans to sell off TVNZ in this or the next term of Government?
Hon Dr JONATHAN COLEMAN: I can confirm that there has been absolutely no discussion about selling off TVNZ at any time.
South Canterbury Finance—August 2010 Recapitalisation Bid
4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: What was the maximum estimated Crown liability under the recapitalisation bid proposed by Permanent Investments Ltd in August 2010, as assessed by KordaMentha in its report to Treasury of 26 August 2010?
Hon BILL ENGLISH (Minister of Finance): There was no maximum estimated Crown liability, and certainly no terms of contract that would limit the Crown’s liability. The member should read the advice of the receiver, who scrutinised the contract documents in detail; he will find that the assertions he is making in public are simply wrong. That is reflecting on his competence, not on the deal.
Hon David Cunliffe: Can the Minister confirm that the KordaMentha report estimated that the Crown’s exposure to placing South Canterbury Finance into receivership was “approximately 500 million dollars”, and that its exposure to the leading recapitalisation proposal was “between $400 and $500 million”; if so, can he explain why he chose the more expensive option?
Hon BILL ENGLISH: The nature of the deal that the member is referring to is similar to any number of other approaches that Treasury and the receiver had about South Canterbury Finance. First, the people making the offer expected the Government to lend them the money to buy the company, and, secondly, there was no limit on the Crown liability. Any loans that the buyers found that they did not like were going to be handed back to the Government. So the assertion that there was some limit on the Crown’s liability is simply wrong.
Hon David Cunliffe: Noting the email from Treasury dated 25 August 2010 that states “The Minister has developed an appetite for receivership, so it might pay to clear the table of other options.”—
Hon Member: Oh dear!
Hon David Cunliffe: —oh dear—can he confirm that the Treasury email in fact reflected his instructions or preferences?
Hon BILL ENGLISH: No, I cannot confirm that, but what I can confirm is that there was no deal put to officials that limited the Crown’s liability. The deals that were considered involved—
Hon David Cunliffe: I raise a point of order, Mr Speaker. The question was very straight and very specific. It referred to an explicit email—
Mr SPEAKER: We established yesterday that when I get to my feet, all members resume their seats. The member’s question was answered quite explicitly. The Minister said he could not confirm that. But he was going on further than the question asked, and I think we had heard sufficient, because the question was a very limited one.
Hon David Cunliffe: Given that KordaMentha’s estimate of Crown exposure under the recapitalisation proposal of $400 million to $500 million was similar to the Opposition’s estimate of “around $500 million”, why did the Prime Minister state the Opposition’s estimates were “nonsense” when they were nearly identical to those made by his own leading specialist adviser?
Hon BILL ENGLISH: Probably because most of the things the Opposition has said about this have been nonsense. No such deal exists as the member has been talking about. The real problem with South Canterbury Finance was the large number of bad loans, and it took a couple of years to get to the bottom of that heap. The member is talking nonsense.
Hon David Cunliffe: Given that the final cost to the Crown of the bail-out of South Canterbury Finance will be around three times the Crown’s original estimated cost, how can New Zealanders have confidence that the cost of supporting AMI Insurance will be limited to the $500 million equity injection he has so far disclosed; and if it is not the full estimated cost of supporting AMI Insurance, can he please advise the House now what the total cost is estimated to be?
Hon Dr Nick Smith: What were you doing for 9 years?
Hon BILL ENGLISH: A very good question: what was Labour doing for the 9 years it was in Government about regulating the insurance industry?
Hon David Cunliffe: I raise a point of order, Mr Speaker. A straight question was asked: what was the final estimated cost of supporting AMI Insurance? It is a serious matter. The Minister is not at liberty to answer—
Mr SPEAKER: The member has made his point of order. We do not need to go on any further. I think the Minister could have made a better attempt to answer the question. The question was not quite as simple as the member portrayed at the end; it was a much longer question than that. But the Minister should make some attempt to answer it.
Hon BILL ENGLISH: The public can expect the Government will manage the arrangement with AMI Insurance in order to minimise the taxpayers’ losses. I might say we will be relying on the same kind of advice we relied on with regard to South Canterbury Finance. The member should listen to what KordaMentha, which he is quoting, said about the offer he is promoting: “[South Canterbury Finance] promote the offer as crystallising the Crown’s loss; that is not correct.” And the member promotes the offer as crystallising the Crown’s loss. This is not correct. So he knows that it is not correct but continues to say so, trying to trade on what credibility he might still have.
Hon David Cunliffe: I seek leave to table the report to Treasury of 26 August 2010 by KordaMentha on South Canterbury Finance, which quantifies the Crown’s estimated loss on this receivership proposal as around $500 million. [Interruption]
Mr SPEAKER: There is a query. Is this document on the Treasury website?
Hon David Cunliffe: It is.
Mr SPEAKER: It is on the website. Well, I do not think we should be tabling documents on the website that are readily available to all members.
Treaty of Waitangi Settlements—Progress
5. SIMON BRIDGES (National—Tauranga) to the Minister for Treaty of Waitangi
Negotiations: What recent progress has the Government made towards its aspirational goal of settling historical Treaty of Waitangi claims by 2014?
Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations): On Saturday the Government signed a deed of settlement with Ngāti Mākino. The deed sets out commercial redress, the return of culturally significant sites, marae restoration and revitalisation, and social service development. Ngāti Mākino’s claims relate to the New Zealand Wars and the Bay of Plenty confiscation, the operation and impact of native land laws, and the Crown’s land purchasing techniques, as well as 20th century issues relating to public works and scenic reserve takings.
Simon Bridges: What other progress has the Government made towards its aspirational goal of settling historical Treaty of Waitangi claims by 2014?
Hon CHRISTOPHER FINLAYSON: On 12 March the Crown signed a deed of settlement with Ngāti Rereahu in respect of the Maraeroa A and B blocks. Also in March the Crown signed a deed of settlement with Ngāi Tamanuhiri in Tūranga, and initialled a deed of settlement with Ngāti Manuhiri in Tāmaki. Since the last election, and with the support of the Māori Party, the Government has reached almost 100 significant settlement milestones, including 21 agreements in principle and 16 deeds of settlement. That represents great progress, especially compared with the previous administration’s average of less than 1.5 settlements a year. [Interruption] Because of the noise, I will repeat that important figure. I think it is important that the House know that that figure was less than 1.5 settlements a year.
Television, Public Service Channels—Closure of TVNZ 7
6. Hon DAVID PARKER (Labour) to the Minister of Broadcasting: Does he agree with the New Zealand Herald headline “Axe falls on last public service channel”?
Hon Dr JONATHAN COLEMAN (Minister of Broadcasting): No. The subeditor might have done better justice to an otherwise excellent article by using the headline “Labour promised channel would be self-sustaining but had no plan for how that would happen”.
Hon David Parker: How can that denial have any credibility, given that the Television New Zealand chief executive at the Commerce Committee this morning conceded the New Zealand Herald headline was correct?
Hon Dr JONATHAN COLEMAN: Just as I am not responsible for the headline, I am not responsible for what the chief executive says.
Hon David Parker: Can the Minister confirm that he declined the request that TVNZ had made, disclosed today at the select committee, to get at least some direct funding to keep TVNZ 7 running, and will he agree to release all of those proposals and all of the related correspondence?
Hon Dr JONATHAN COLEMAN: I would be very happy to release the proposals, because they ask for more Government funding, which we just do not have.
Hon David Parker: Is not the reason that those reports have not been released publicly until now, that they embarrass the Government, which has been widely criticised for privately subsidising TVNZ’s competitors through preferential deals on tens of millions of dollars’ worth of frequency licence fees but it will not support Television New Zealand?
Hon Dr JONATHAN COLEMAN: That member might say that the Government is being criticised, but we have also had a lot of support for our broadcasting policy. This quote: “we need a strong, modern public media that crosses platforms, is agile and does not require a bottomless pit of funding to prop it up.” came from Clare Curran, the Opposition spokesperson on broadcasting. This quote: “For twenty years TVNZ has done what successive Governments told it to do; make money.” came from Brendon Burns. And I found this very good quote from very 2 days ago on Red Alert: “Let TVNZ—
Mr SPEAKER: The member will sit down. How many times do I have to tell senior members— this applies to senior members—that when I get to my feet, they sit down immediately. Those final parts of that answer were not required to answer the question.
Hon David Parker: Is the Minister irked that his colleague Minister Joyce is subsiding TVNZ’s private competitors while he is having to cut public service TV?
Hon Dr JONATHAN COLEMAN: I totally disagree with the premise of that question.
Hon David Parker: Is not the other reason the Government is subsiding Television New Zealand’s overseas-owned competitors but withdrawing support for TVNZ’s public service functions that it makes TVNZ drop public services, which is patently clear, become more commercial, and therefore easier to sell in the future?
Hon Dr JONATHAN COLEMAN: That just sounds like a wild conspiracy theory to me.
Roading, Auckland—Victoria Park Tunnel Road
Hon TAU HENARE (National): My question is to the Minister of Transport—
Hon Shane Jones: “Tupperwaka”—
Hon Tau Henare: How is Linda Lovelace these days?
Mr SPEAKER: The House had better come to order.
Hon TAU HENARE (National) to the Minister of Transport: What progress has been made on the Victoria Park Tunnel road of national significance?
Hon Trevor Mallard: I raise a point of order, Mr Speaker. There is an amount of giggling here. We did not all hear Tau Henare’s interjection; I wonder whether you would like to repeat it.
Mr SPEAKER: I am sure the House does not want me to repeat it.
Hon STEVEN JOYCE (Minister of Transport): Good news! I visited the Victoria’s Secret— sorry; Victoria Park construction site this morning, and I am pleased to report to the House that Aucklanders will being to benefit from the Victoria Park Tunnel in November this year, well ahead of schedule. The $340 million Victoria Park Tunnel project will increase the capacity of State Highway 1 between the Auckland Harbour Bridge and Newmarket, one of the country’s most important freight and commercial routes, and the last major bottleneck of the central motorway junction. It is great to see that the whole programme will be completed in February, 3 months earlier than planned.
Hon Tau Henare: How has the Government’s commitment to infrastructure spending boosted confidence in the construction sector?
Hon STEVEN JOYCE: The Government’s funding pipeline of $10.7 billion of State highway funding over 10 years has provided a secure funding pipeline, which has given contractors the confidence to continue investing in their people and machinery, and to complete projects more quickly. This has sped up the construction of a project that may in fact never have happened if the previous Government had cut back on its State highway funding, as it had planned to do. I am pleased that this confidence is flowing through to a number of projects, which are now being delivered even earlier than scheduled. Last week I announced that the Hobsonville motorway will be completed 6 months ahead of schedule. Last year the southbound part of the Newmarket Viaduct opened early, and the Manukau Harbour crossing also opened early.
Development Assistance—Shift in Primary Focus
8. Hon MARYAN STREET (Labour) to the Minister of Foreign Affairs: Why has the primary focus of overseas development assistance shifted from poverty elimination to sustainable economic development, and can he assure New Zealanders that overseas aid is being delivered in accordance with the highest ethical standards?
Hon MURRAY McCULLY (Minister of Foreign Affairs): I have said on many occasions that there is no debate about whether we want to alleviate poverty; the question is, how do we alleviate poverty? With the finite resources available to us, we need to make choices about the sort of assistance that is most likely to change the lives of aid recipients in a sustainable way. The Government’s approach to overseas aid should always be administered in a way that meets high ethical standards.
Hon Maryan Street: Why is the New Zealand Government contributing to the building of a ski field in war-torn Afghanistan, which is largely inaccessible to tourists, and how many people are estimated to be lifted out of poverty as a result of this project?
Hon MURRAY McCULLY: The New Zealand Government spends approximately $10 million a year on development assistance in Afghanistan. Most of that is centred on education and health, but I am trying to ensure that we shift more of it into agricultural capacity-building and energy support.
Hon David Parker: A ski field—a ski field!
Hon MURRAY McCULLY: There is a small component that has been in the programme for the last couple of years that relates to tourism development around the Bamian area. It is part of an overall programme.
Hon Maryan Street: How many jobs have been created in Niue as a result of the $78,000 tourism development contract given without a tender process to former National MP Mark Blumsky, and how many people in Niue have been lifted out of poverty through that initiative?
Hon MURRAY McCULLY: The contract that Mr Blumsky has is as our high commissioner. It is a normal arrangement that is at the behest of the Minister. Before Mr Blumsky took up that contract as high commissioner, he spent a period doing lead-up work on the development programme.
Hon Member: Oh, rubbish!
Hon MURRAY McCULLY: But that is what the member is talking about.
Phil Twyford: Did you tender it?
Hon MURRAY McCULLY: I tell the member that the former Prime Minister, Helen Clark, took me aside when I was appointed to this role, to discuss one issue that concerned her above all others. It was the state of the relationship with Niue. As a consequence, this Government has put a good deal of effort into making sure we put in place a programme that will develop a tourism sector in that country. I report to the member that Mr Blumsky, as our high commissioner, is coordinating that programme in a most effective fashion.
Hon Maryan Street: What reassurance can the Minister give that the appointment of sitting National MP John Hayes to the panel that disperses the contestable Sustainable Development Fund will not result in those funds being allocated to National Party cronies?
Hon MURRAY McCULLY: I assure the member that the funds will be tendered for by nongovernmental organisations, not by cronies of either the Labour Party or the National Party. As far as the chairman of the Foreign Affairs, Defence and Trade Committee is concerned, I have revived a practice that was initiated by Sir Donald McKinnon, my august predecessor in the 1990s. I am informed that a range of senior members of the Foreign Affairs, Defence and Trade Committee have sat on the panel that administers the funds, including, I am told, the current Minister of Defence in his capacity as a former member of the select committee. I think it is good practice to have a senior person on such a panel. In Mr Hayes’ case we have a former diplomat. He was in charge of the Pacific division of the ministry and of the overall aid programme, and is a former ambassador to Tehran and a former High Commissioner in Papua New Guinea, in which capacity he brokered the Bougainville accords. I cannot think of anyone who is better qualified to judge these matters than Mr Hayes.
Trade, New Zealand – United States—Mutual Recognition Arrangement and Secure Exports
Scheme
9. MELISSA LEE (National) to the Minister of Customs: What progress has been made to facilitate trade between New Zealand and the United States?
Hon MAURICE WILLIAMSON (Minister of Customs): I have very good news for the House. Just recently an exchange of letters was signed between our ambassador in America, Mike Moore, and the head of United States Customs and Border Protection, Alan Bersin. The extension of the mutual recognition means that New Zealand exporters who are involved in what we call the Secure Exports Scheme will be exempt from a whole range of America’s import inspections. It means that those companies will be about three and a half times less likely to be inspected. The real benefit is that New Zealand is the only country in the world to have this special arrangement. It means we will not only be able to keep our communities safe but also allow our exporters to go about secure and efficient trade between the two countries.
Melissa Lee: What benefits does the agreement give to New Zealand Secure Exports Scheme exporters to the United States?
Hon MAURICE WILLIAMSON: As I said, New Zealand is the only country in the world to have the arrangement with the United States, which is a first. I am really pleased. The arrangement is that if our companies—and there are a lot of New Zealand companies; they export about $1,350 million to the United States—have joined the Secure Exports Scheme, prove they have secure channels, and make sure the containers leaving their base have been properly packed, inspected, and sealed, then they will be given very special treatment. The agreement means they will be able to enter the United States rapidly and be way less subject to inspection than companies from any other country.
State-owned Enterprises—Risk to Crown in Holding Shares
10. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Finance: What are the risks to the Crown in holding State-owned enterprise shares that he was referring to when he gave evidence to the Finance and Expenditure Committee in February 2011?
Hon BILL ENGLISH (Minister of Finance): I recall raising the issue of risks in the context of a discussion about the Government bond rate and the return on State-owned enterprises. The Crown faces the same range of risks as any owner of any commercial company: the need to change prices; fluctuating demand for their product; changes in costs, such as the changes in the oil price at the moment; changes in the exchange rate; competing against better technology; and changes in the supply and demand of the products they buy and the products they sell. They are all risk of owning a commercial company.
Hon Trevor Mallard: When he referred to the risk both then and today, does he regard the risk profile of the assets as positive or negative?
Hon BILL ENGLISH: It is not a matter of whether it is positive or negative; it is whether it is, in a technical sense, properly priced. The benchmark is what the Government borrows money at, which is 6 percent. When we own companies we expect to make a return of higher than 6 percent to reflect the fact that there are more risks in running a company than in lending to the Government.
Hon Trevor Mallard: Does he therefore think an average 17.5 percent total return over the last 5 years is a reasonable return for this type of asset?
Hon BILL ENGLISH: I will make a couple of comments about that. The first is that those returns are based, in some of those years, on dubious valuation methods. Secondly, if the returns were actually 17 percent, based on sound commercial valuations those returns would look excessive. But the previous Government allowing electricity prices to rise by over 70 percent in 8 years might explain why they made such big returns.
Hon Trevor Mallard: Pursuant to that supplementary answer, is it therefore his view that the energy company assets are overvalued in the Crown accounts?
Hon BILL ENGLISH: Those are matters of some contention; different people have different views about the valuations. What we do know is that the Government is proposing a mixedownership model where a lot of those issues would be determined by the market rather than by politicians.
Student Services Levies—Legislative Reform
11. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister for Tertiary
Education: What changes is the Government making to ensure student services levies are fairer to students?
Hon STEVEN JOYCE (Minister for Tertiary Education): I announced last week that the Government intends to seek to pass legislation shortly to ensure that large, unjustified increases in compulsory, non-academic student levies become a thing of the past. The legislation will give power to the Minister for Tertiary Education to require institutions to consult students on the charges and the range of services provided. Over the past few years we have seen a trend emerge where levies have increased in some institutions by as much as 400 percent in a single year. I cannot accept that these exorbitant increases reflect a commensurate increase in services offered.
Mr SPEAKER: I call David Shearer. Oh, I beg the member’s pardon. I have called David Shearer, not Peseta Sam Lotu-Inga, for the first supplementary question. That is most unusual, and I apologise to the member for my mistake.
David Shearer: Does the Minister agree with the University of Canterbury vice-chancellor, Rod Carr, that the reason student levies have increased so dramatically in recent years is that students are getting “a crap deal” from the Government, which is refusing to fund higher education at the levels it should?
Hon STEVEN JOYCE: No, I do not agree with that comment, at all. In fact, New Zealand has one of the most generous student support systems in the world. In New Zealand we pay 75 percent of the tuition fees for students; we subsidise a student loan scheme, which writes off about 45c in the dollar for every student; and we pay student allowances to many students as well. It is the most generous system in the world.
Peseta Sam Lotu-Iiga: What plans does the Government have to ensure accountability by tertiary institutions in the setting of the types of student services provided?
Hon STEVEN JOYCE: Institutions will be required to consult students on the range of services provided and report on how they have spent the levies. They must state what services the levies provide, account transparently about their expenditure, consult students on the expenditure, and publish clear expectations in their annual reports. I am concerned that the cost of what can only be described as poor services has sometimes been passed on to students when the costs of these services should have been included in the tuition fees paid by the students. The Government, as I said earlier, funds 75 percent of the cost of tuition, on average, for students and I intend to ensure that students and taxpayers get the benefit from that funding.
David Shearer: How will “ensure greater involvement of students in decision-making”, as the bill says, be achieved when students associations, which the providers will be dealing with, will be degraded and possibly destroyed by the Education (Freedom of Association) Amendment Bill, which his Government is supporting?
Hon STEVEN JOYCE: They can be degraded or destroyed only if students do not value the services they provide. That is the challenge with that particular assertion. But the universities and other institutions will have the responsibility to consult their student bodies, and I imagine that will include the students associations.
Food and Nutrition Guidelines for Healthy Children and Young People—Minister’s Support
12. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Health: Does he support the Food and Nutrition Guidelines for Healthy Children and Young People, produced by the Ministry of Health?
Hon Dr JONATHAN COLEMAN (Associate Minister of Health) on behalf of the Minister
of Health: The Food and Nutrition Guidelines for Healthy Children and Young People is in draft and has been out for public consultation, which closed on 13 December. The ministry is considering the 44 submissions to the consultation document, and the Minister expects to receive advice from the ministry later this year. The new guidelines will be published once they have been finalised.
Grant Robertson: What is his response to Lisa Williams from Timaru, who has to spend $180 a week for her family to meet the guideline of eating five servings of fruit and vegetables a day, which she says is out of reach for her family?
Hon Dr JONATHAN COLEMAN: The Minister’s response would be that if the member wants to look at the history of food prices, in Labour’s last year in Government inflation hit 5.1 percent yet food prices went up by 11 percent. Over the tenure of the Labour Government food inflation overall was 36 percent. That person has to look back at the history to really understand the problem.
Grant Robertson: Does he agree with the findings of the study by the Wellington Regional Public Health Service that shows that a family supported by a minimum-wage earner would need to spend more than 50 percent of their income after rent to give their family a healthy diet—a figure that puts them into the globally recognised category of being in food stress?
Hon Dr JONATHAN COLEMAN: I would have to read the study because, frankly, I do not have any faith that the member has reported those findings in context. I would be happy to be sent a copy of it.
Grant Robertson: Does he accept that the cost of healthy food is putting it out of the reach of many New Zealanders as the cost of living soars; if so, what specific actions will his Government undertake to ease pressure on New Zealand families?
Hon Dr JONATHAN COLEMAN: Look, this is a long-term issue. We know that many New Zealand families are having difficulties, but a lot of this problem started under that member’s Government, and we have been left with the task of clearing up the mess.
Grant Robertson: What is the point of issuing guidelines for healthy eating for young people if his Government is not prepared to step up and take specific actions to reduce the cost of living?
Hon Dr JONATHAN COLEMAN: That member needs to pay attention to the detail. The guidelines have not been issued; they have been put out for consultation. We will be responding when we have considered the advice and submissions.
Te Ururoa Flavell: Does he agree with the statement on page 114 of the guidelines that “Access to safe and healthy food will influence nutrient intakes.” of Māori tamariki, rangatahi, and their whānau, and does he agree that supporting the Māori Party’s policy to remove GST from healthy foods would make healthy foods more accessible for young Māori; if not, why?
Hon Dr JONATHAN COLEMAN: The Minister has made the Government’s position on the guidelines very clear, and, of course, the member will know the Government’s position on GST.
Grant Robertson: I seek leave of the House to table the report from the Wellington Regional Public Health Service entitled Food Costs for Families, which shows that a family with a minimum-wage earner will need to spend 50 percent of their income to get a healthy diet, after paying rent.
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.
ENDS
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