Questions And Answers May 11

by Desk Editor on Wednesday, May 11, 2011 — 7:26 PM

Press Release –

1. AMY ADAMS (National—Selwyn) to the Minister of Finance : How will the Budget next week help lift national savings?
(uncorrected transcript—subject to correction and further editing)




Budget 2011—National Savings

1. AMY ADAMS (National—Selwyn) to the Minister of Finance: How will the Budget next week help lift national savings?

Hon BILL ENGLISH (Minister of Finance): Primarily by showing a credible path back to surplus so the Government can reduce the amount of borrowing it is doing. However, we will be able to do this at the same time as boosting front-line health and education services and helping pay for the rebuilding of Christchurch.

Amy Adams: What are some of the Budget changes that will help the Government return to surplus and contribute to higher national savings?

Hon BILL ENGLISH: The Budget will include changes to KiwiSaver, Working for Families, and student loans, which are large programmes that collectively cost the taxpayer about $5 billion this year. These programmes were introduced at a time when the economy appeared to be growing but in fact was in the midst of a bubble of consumption, debt, and housing speculation, and the Government has had to borrow heavily to maintain these programmes through the recession.

Amy Adams: What changes does the Government intend making to KiwiSaver, and why?

Hon BILL ENGLISH: The Government intends to reduce the amount of money it has to borrow from overseas to put into KiwiSaver accounts, and increase the amount of genuine savings from the private sector. As the Prime Minister has outlined, the $1,000 kick-start for new KiwiSaver members will remain as it is now. Changes will maintain total contributions into KiwiSaver funds, which are expected to grow rapidly from about $8 billion now to almost $60 billion in 10 years’ time. These changes will not happen immediately and will not affect people until after the election.

Hon David Cunliffe: Why did his Government cut the KiwiSaver default contribution rate for members and employers in 2008, given that the Prime Minister’s big announcement today is that he will seek to reverse his own change?

Hon BILL ENGLISH: The member may recall that KiwiSaver was at the time costing the Government somewhere around $1.5 billion. We made a number of changes to it that made it affordable, particularly in the light of the significant global recession affecting New Zealand, and as part of the tax package we brought in in December 2008.

Hon David Cunliffe: If KiwiSaver needs to be durable and sustainable, as he used to say, how is his Government promoting that durability by flip-flopping on member and employer contributions and breaking his party’s promise not to cut member tax credits, when the average Kiwi now thinks they cannot rely on this scheme under this Government?

Hon BILL ENGLISH: The Government is committed to the durability and affordability of KiwiSaver and we have managed to maintain the scheme through the most difficult economic times

the country has had in a long time. We are simply not willing to keep borrowing to put money into people’s savings accounts and calling it savings.

Amy Adams: Has he seen any conflicting reports about the suspension of New Zealand Superannuation Fund contributions by the Government during this time of large budget deficits?

Hon BILL ENGLISH: Yes, I have. In fact, just yesterday the Opposition finance spokesman maintained his consistent line, which is to attack the Government for suspending payments to the Superannuation Fund. However, on 21 March Phil Goff said that when one is in a position of low economic growth one slows the payments down; when one gets into a position of high economic growth, one speeds the payment up. That is pretty much a summary of the Government’s policy. I wish the finance spokesman and the Leader of the Opposition could agree on Labour’s position.

Amy Adams: Has the Minister seen any other reports about superannuation that might concern older New Zealanders?

Hon BILL ENGLISH: I have. Although the Government has set out to protect national superannuation rates and eligibility, the Leader of the Opposition now seems to be floating a proposal for a two-tier national superannuation system where those who retire early get less than those who delay their retirement.

Hon Trevor Mallard: That’s Don Brash’s plan.

Hon BILL ENGLISH: It is Don Brash’s plan; that is why I am surprised that Labour has adopted it.

Financial Position and Savings—Prime Minister’s Statements

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “All savings that the Government makes helps in the current financial position we are in.”?

Rt Hon JOHN KEY (Prime Minister): Yes. The savings we will make in the Budget will be sensible, responsible, and balanced. We are making those savings so that we can redirect funding into front-line health and education services, invest in much-needed infrastructure, fund our share of the reconstruction of Christchurch, and reduce what otherwise would be very large deficits.

Hon Phil Goff: If he wants to reduce the deficit, why is he cutting tax credits to low and middle income earners in KiwiSaver but not cutting back any of the windfall tax gains he gave to the highest income earners at a cost of $2.5 billion each year?

Rt Hon JOHN KEY: Because this Government introduced a balanced package of tax cuts, which were fiscally neutral. Actually, they are fiscally in surplus; they give the Crown about a billion dollars by 2013-14. The Opposition is welcome to go and campaign on a higher top personal rate and make New Zealand less competitive with other countries. It is more than welcome to go ahead with that. In fact, it should go ahead and do it. But when it comes to tax, as we always know with Labour, it campaigns on one thing and does another, just like it did with the bus last— [Interruption]

Mr SPEAKER: I do not blame the Opposition for the reaction, but I was on my feet. The answer was fine until that last bit. The last bit was not acceptable.

Hon Phil Goff: Why is he cutting home care for the frail elderly in order to reduce the deficit but asking for nothing back from New Zealand’s highest income earners, some of whom got more than $1,000 a week in tax cuts, like him?

Rt Hon JOHN KEY: I am advised by the Minister of Health that we are putting more money into home care. That is consistent with this Government, which, despite finding itself in a position where we have to run a balanced Budget, is putting hundreds of millions of dollars more into health care, as the member will see on 19 May.

Hon Phil Goff: If he wants to cut the deficit, why is he cutting tax credits for low and middle income earners in Working for Families but not taking back any of the windfall gains received by the highest income earners in New Zealand, costing this country $2.5 billion a year?

Rt Hon JOHN KEY: Because we ran a balanced programme. In fact as a result of our tax changes, we delivered a position where more money was coming to the Crown. But, as I said earlier, if the member wants to go and campaign on raising the top personal rate, he should go and do it, and we will see him on 26 November.

Hon Phil Goff: Does he agree with this quote from Bill English that “Taking higher-income families out of WFF saves very little money,” and is he therefore just tinkering with the scheme, or does he intend to cut deeper into lower and middle income families and the tax credits they get under Working for Families?

Rt Hon JOHN KEY: I agree with Bill English, and that is why we are not taking higher-income families out of the scheme.

Hon Phil Goff: Why is his Government focusing on cuts that hurt people but do not solve the real problem, which is the stagnation of the New Zealand economy all through last year, even before the earthquakes?

Rt Hon JOHN KEY: I will tell the member what hurts people. It is when a party is in Government for 9 years and real wages do not go ahead; when it runs inflation rates that are so high that New Zealanders pay an enormous amount for their interest rates; when it goes out and fails to address the issue that one in five young New Zealanders leaves school without being able to read or write properly; and when it is more interested in hiring bureaucrats for the health system than in hiring nurses and teachers. That is what hurts people, I say to Mr Goff, not sensible economic management like this side of the House is delivering.

Hon Phil Goff: What responsibility does he take as Prime Minister for turning the forecast deficit for 2011, which was, at the point when his party became the Government, $2.4 billion, into a $16 billion deficit?

Rt Hon JOHN KEY: I take full responsibility, and I take full responsibility because I am proud to stand up as Prime Minister and say to the people of Christchurch that in their moment of need, we are helping them and we will fund them. If the member wants to campaign on getting rid of the money for Christchurch, he should go ahead, and I will see him later, but I bet that Brendon Burns, Lianne Dalziel, and the other members from Christchurch such as Clayton Cosgrove will not be saying that in Christchurch. I am proud to take responsibility for keeping programmes that have helped New Zealand in difficult times, and I am proud to be the Prime Minister who takes responsibility for the fact that unemployment capped at 7 percent in this country, not 11 percent. I am proud to take responsibility for that, and if the member does not like it, that is probably why he will never be Prime Minister.

Hon Trevor Mallard: In light of his comment about the global financial crisis, when did he first become aware of it?

Rt Hon JOHN KEY: I think we all started seeing the global financial crisis in the early part of 2008. We were very surprised that the Labour Government did not respond, but we all know that all Labour knows how to do is spend. Frankly, I am not surprised that the member is asking a question—

Mr SPEAKER: Order!

Hon Trevor Mallard: Did the collapse of Lehman Brothers and the collapse and takeover of Merrill Lynch by the Bank of America, with which he was quite familiar, pre-date his commitment to the KiwiSaver tax credits?

Rt Hon JOHN KEY: Firstly, I was not aware of the takeover by the Bank of America of Merrill Lynch. That happened long after I left the company. I think we could all see that the global financial crisis was looming. It was deeper than we all thought, and in fact I remember in 2009 being a member of this House when hearing those from the Opposition saying that the Government should be doing more, spending more, and indebting New Zealand more. In fact, we took a very responsible view, indeed, and I am proud to take responsibility for that.

Hon Trevor Mallard: In light of the Prime Minister’s comment that he was not aware of the timing of the collapse of Merrill Lynch, I seek leave of the House to table—

Mr SPEAKER: Before I go any further—[Interruption] The member did not need to sit down; I do apologise for that. I just want to know what the document is that he is seeking leave to table.

Hon Trevor Mallard: It is a clipping from the New York Times of 15 September 2008.

Mr SPEAKER: Leave is sought to table an article from the New York Times of September 2008. Is there any objection? There is objection.

Hon Trevor Mallard: Does he accept that someone whose wealth increased by $100,000 a week on average through last year and who received $1,000 a week in tax cuts is more able to save than someone on the median wage with two children?

Rt Hon JOHN KEY: I do not know such a person. [Interruption]

Mr SPEAKER: Both sides will come to order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. In light of the Prime Minister’s interjections across the House, I want to apologise for understating—

Mr SPEAKER: That was totally unnecessary.


3. HILARY CALVERT (ACT) to the Prime Minister: Does he have confidence in all his Ministers; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes; because they are talented people who are working hard for New Zealand. I might add, we were disappointed to lose one of our Ministers recently but that is the nature of confidence and supply agreements.

Hilary Calvert: Why does he support the position of his Minister for Social Development and Employment of opposing youth rates, when since their abolition by the last Labour Government youth unemployment has nearly doubled, putting an extra 12,000 young people out of jobs?

Rt Hon JOHN KEY: I think we all admit that, and accept that one of the factors for youth is the rates they are paid. I remember at the time, though, when youth rates were being phased out, long before the law changed, quite a number of big employers at that time thought it was a good idea to get rid of them and in fact led the charge on that.

Hilary Calvert: Does he think the statement that youth rates give “employers a reason to hire younger people and give them a chance to get experience.”, which was made in December 2007 by National leader John Key, is extreme; if not, why not?

Rt Hon JOHN KEY: No, because nothing I say is extreme.

Hilary Calvert: Does he consider it extreme to allow a 16-year-old trainee chef to earn $350 a week, or does he think it is more caring to force them to sit at home for $150 a week?

Rt Hon JOHN KEY: I think it is more caring to make sure that they are in work, and that is one of the reasons why last week the Government put $55 million into allowing youngsters to be employed, with a subsidy of $5,000 going into those employers who take on a young person aged 16 to 24, who may have been on a benefit, to have training applied to that employee either in the workplace or for a New Zealand Qualifications Authority qualification.

Budget 2011—Strategic Changes Addressed

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: What does he consider to be the main strategic changes required to the economy that Budget 2011 will address?

Hon BILL ENGLISH (Minister of Finance): I am pleased to see that the member is back from his parachute-packing class.

Mr SPEAKER: I am on my feet, and the House will be silent. That was an unacceptable way to commence the answer to a perfectly fair question. The question was absolutely fair.

Hon Clayton Cosgrove: Extra supp!

Mr SPEAKER: What a good idea. The Opposition has just gained an extra supplementary question; I will make the record 225.

Hon BILL ENGLISH: The main strategic choice for this economy in this Budget is the same as it has been for the previous two Budgets, which is to rebalance the economy away from debt, finance, consumption, and housing speculation to savings, exports, and investment.

Hon David Cunliffe: If the main challenge is the same as it was in the previous two Budgets, will the prescription be the same—namely, further cuts to superannuation pre-funding, and unaffordable tax cuts overwhelmingly directed to people who do not need them?

Hon BILL ENGLISH: The prescription in the first Budget was to get hold of public finances, which were at the time out of control because of the stewardship of the previous Government combined with the effects of the global recession. Last year the focus was on changing our tax mix to get right the incentives in the economy, and favouring savings and investment over consumption. This time the focus will be on building savings, and getting the Government in particular to control its own borrowing and spending so it can contribute to national savings.

Hon David Cunliffe: Does the Minister stand by his recent earlier statement that the centrepiece of Budget 2011 will be to promote savings; if so, does he agree with the member sitting next to him that the best idea the Government can come up with is reversing the cut to the default contribution that they themselves made not a year ago?

Hon BILL ENGLISH: Yes, I do agree with what the Prime Minister said. This Budget has to focus on getting the basics of the Government’s finances in order. I think the New Zealand public understand that. They are concerned, for instance, that over the last 12 months we will have ended up averaging borrowings of, I think, $380 million a week. That is far too high and must change.

Chris Tremain: What other strategic changes are required for the economy that will be addressed in Budget 2011?

Hon BILL ENGLISH: There are a number of benefits that we hope will flow, not just from this Budget but from the accumulation of the last two: lifting growth back on to a stable path; reversing the decline in productivity, which is a critical component of economic growth and higher incomes, to help to provide the export sector—which actually shrank through the latter part of the last decade—and redirecting Government resources in a way that is much more effective.

Hon David Cunliffe: Does the Minister agree with Steven Joyce that KiwiSaver is a pyramid scheme, and will he be offering Mr Joyce lessons in the basics of finance so that Mr Joyce can learn the difference, or has that job already been done by Dr Brash?

Hon BILL ENGLISH: Mr Joyce, in his usual very insightful way, was referring to the phenomenon whereby the Government borrows money off Asian central banks and pension funds in Europe and puts that money into individual KiwiSaver accounts, and we call it savings. Borrowing is not saving.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister, with the best of intentions, may have misheard the question. I was referring to KiwiSaver—

Mr SPEAKER: No, no. The member’s question was a pretty provocative sort of a question, and the nature of that question will never get a precise answer.

Hon David Parker: I raise a point of order, Mr Speaker. With respect, the member’s question was putting a quote from Mr Joyce about KiwiSaver. The Minister did not address KiwiSaver, at all; that is not provocative.

Mr SPEAKER: I will check the Hansard, but I am fairly certain that there was more than just the quote from the Hon Steven Joyce in that question.

Dairying—Effect of Intensification on Water Quality

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his comments in the House yesterday that “intensification of dairy operations will have had some impact on our river quality … But in reality, the impact is not great …”; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes; as I said yesterday the impacts need to be kept in context, as our water quality is ranked second only behind Iceland, with a score of 99.2.

Dr Russel Norman: Therefore, was Dr Mike Joy, a senior lecturer in environmental science at Massey University, wrong when he said, as quoted by the BBC: “Nearly half of our lakes and around 90 percent of our lowland rivers are classed as polluted.”?

Rt Hon JOHN KEY: It may depend on the definition of “polluted”. I will give an example of where sometimes people play with numbers. Yesterday in the House the member claimed that 43 percent of sites in New Zealand are unsuitable for swimming.

Dr Russel Norman: I raise a point of order, Mr Speaker. The Prime Minister was alleging that I was playing with numbers. One might argue I made a mistake or I had got it wrong, but to suggest I played with numbers suggests I manipulated them in a conscious way. That is suggesting I was acting in a misleading way.

Mr SPEAKER: The member cannot litigate the Prime Minister’s answer by way of a point of order. I apologise to the member; I was distracted while the Prime Minister was answering, because I did not perceive that the question was likely to lead to difficulty. I apologise for that. I invite the Prime Minister to answer the question again and I will listen very carefully. I think everyone remembers exactly what the question was.

Rt Hon JOHN KEY: I certainly was not trying to be disrespectful to the member in any way, shape, or form; I was simply making the point that yesterday people gave interpretations of numbers. Yesterday the member said that 43 percent of sites are unsuitable for swimming most of the time. I have gone away and had a look at that number and in fact it is incorrect; 57 percent of the 206 monitored freshwater swimming spots meet the guidelines all the time, but 32 percent meet the guidelines except in certain conditions—for example, after rainfall. Even the remaining 11 percent meet the guidelines 75 percent of the time.

Hon David Parker: 57 minus 100 is 43.

Rt Hon JOHN KEY: Yes, I know, but the member said most of the sites are unsuitable all of the time. That is the point; people play with numbers, my friend.

Dr Russel Norman: Therefore, was his Minister for the Environment, Nick Smith, wrong when he said in 2008 that “The facts are that water quality, particularly in lowland streams, is deteriorating … with water in many iconic lakes and rivers unfit to … swim in.”?

Rt Hon JOHN KEY: No, Nick Smith was not wrong, which is why on Monday he was at the forefront of leading the National Policy Statement for Freshwater Management. That is why in the 2009-14 period this Government will spend five times what the previous Government spent. We care more about the environment than Labour does.

Dr Russel Norman: Was Professor David Hamilton, Chair in Lakes Management and Restoration at Waikato University, wrong when he said yesterday: “Over the past decade or so New Zealanders have witnessed accelerated degradation of many waterbodies in response to diffuse nutrients derived from mostly agricultural sources”?

Rt Hon JOHN KEY: Not necessarily. I have not seen the full context of the quote, but I think we all accept that there needs to be a balance between intensification and dairying and environmental concerns. That is why the national policy statement and national environmental standards are there, and why the Government is working hard to get that balance right.

Dr Russel Norman: Given the overwhelming weight of scientific evidence that intensification causes water pollution, is there not a contradiction between the Government’s goal to increase intensive agriculture by 300,000 hectares and the Government’s goal to clean up our rivers?

Rt Hon JOHN KEY: No, because I think it depends on how that is done. I refer the member to what has happened in Opuha. The Opuha Dam Water Management Project, which has been in place for some time now, was the supreme winner of the 2008 Environment Canterbury Resource Management Award. The scheme is supported by Fish and Game New Zealand, local iwi, and the community. It clearly demonstrates that there can be increased economic performance and

environmental benefits. So often I hear from the Greens a call for this Government to spend more money. Where do they think that money comes from? We have to have a vibrant economy, and I think we can balance economic growth with good environmental protection. This Government is doing that.

Dr Russel Norman: With reference to the Opuha Dam, was Environment Canterbury wrong in January when it accepted that the Opuha Dam was linked to an increase in toxic algae blooms in the Opihi River, as was reported by their principal surface water quality officer, Adrian Meredith?

Rt Hon JOHN KEY: I simply have not seen the statement. If the member wants very detailed answers like that he should refer them to the member.

Dr Russel Norman: If the Prime Minister thinks we should trade off increased water pollution for more economic growth in the dairy industry, why does he not just come out and say that rather than pretend that we can have a million more cows and cleaner rivers?

Rt Hon JOHN KEY: I have not said that. What I have said is I think it is possible for New Zealand to increase its economic performance and to improve its environmental outcomes. That is why we are doing all the things we have proposed through the National Policy Statement for Freshwater Management and the like.

Dr Russel Norman: I seek leave to table a report from NIWA, dated July 2010, that shows the link between intensification and water pollution.

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.

Dr Russel Norman: I seek leave to table an article from the Timaru Herald. I know it is a newspaper but it is not necessarily that easy to access.

Mr SPEAKER: How recent is the article?

Dr Russel Norman: The article is from 26 January 2011.

Mr SPEAKER: No, we are not going to do that. We are not going to worry about newspaper articles from this year.

Dental Health-care—Access

6. Hon JIM ANDERTON (Leader—Progressive) to the Associate Minister of Health: Is he satisfied that New Zealanders have adequate access to affordable dental health care?

Hon PETER DUNNE (Associate Minister of Health): Yes, particularly in respect of children and adolescents. I do acknowledge, though, that some adults struggle to afford dental treatment, but there are mechanisms in place to support low-income adults to access care when they need it.

Hon Jim Anderton: Does the Minister believe that dental care is more, or less, affordable under current economic conditions for New Zealanders on average or below-average incomes?

Hon PETER DUNNE: I can tell the member that in terms of the affordability issue, the Government currently spends around $40 million a year providing hospital-level dental services, and a further $56 million a year assisting people to access the care they need. And in the year ended January some 73,000-odd people sought access through the Ministry of Social Development to the various services they required. So I would suspect that, overall, dental care is affordable.

Hon Jim Anderton: Has the Minister seen the results of the New Zealand Oral Health Survey, published in December 2010, which shows that 44 percent of all New Zealanders are not receiving any form of dental care; if so, does he think that number is acceptable?

Hon PETER DUNNE: I actually launched the survey results, so I have certainly seen them and am aware of their content. What they show is a number of steps that could be taken by people to improve their oral health care. For example, about a third of New Zealanders do not brush their teeth twice a day. If they were to do so using a fluoride-based toothpaste, that would have a significant positive impact on their dental and oral health status.

Hon Jim Anderton: Has the Minister got any comment on the dental health status of New Zealanders and whether it has improved or worsened over the last 20 years?

Hon PETER DUNNE: The Oral Health Survey shows significant improvement in a number of areas since the previous survey in the late 1980s. But it also raises some areas for concern, such as those I have mentioned already, and these are matters that will be worked on. I might say also that one of the things I think it does raise is the relevance of having a survey every 20 years. In such an important area as oral health we may need to look to having more frequent surveys to assess what is happening.

Hon Jim Anderton: Can the Minister tell the House why dental health treatment is excluded from the public health system of New Zealand, when reputable surveys show that the number of New Zealanders not receiving any form of dental care has increased from 33 percent to 44 percent in the last 20 years?

Hon PETER DUNNE: I said in one of my earlier answers that we currently spend approximately $40 million on the provision of hospital-level dental services, with the majority being targeted to people with complex medical problems or disabilities and those who need treatment for conditions such as cleft palate and cancer. So I do not accept the proposition that dental care is excluded. I also made the point that about $56 million a year is spent by way of social welfare provision to assist people who are in need to get the dental care that they need. That is about $100 million a year. It is a pretty substantial commitment.

Irrigation and Water Storage—Development

7. JO GOODHEW (National—Rangitata) to the Minister of Agriculture: What steps has the Government recently taken to support the development of water storage and irrigation?

Hon DAVID CARTER (Minister of Agriculture): On Monday the Prime Minister announced a major package aimed at accelerating the development of sustainable water storage and irrigation infrastructure. The package has two parts: the first is a $35 million irrigation acceleration fund to support the development of irrigation proposals to an investment-ready stage; the second stage will see the Government from 2013-14 potentially investing up to $400 million of equity in the construction of regional-scale schemes on commercial terms, to encourage third-party investment. This is a very significant package. It sends a strong message that this Government is serious about progressing water storage because it makes good economic and environmental sense.

Jo Goodhew: What benefits does the Government expect to see from this increased support for irrigation?

Hon DAVID CARTER: Developing irrigation has huge potential to unlock economic growth and to get our tradable sector growing strongly again, while at the same time reducing the environmental pressures on our aquifers. The New Zealand Institute of Economic Research’s research suggests that the package could support 340,000 hectares of new irrigation, boosting New Zealand’s exports by $1.4 billion over the next 7 years and by $4 billion by 2026. This is not about irrigation at any cost, but it is about taking a balanced view to deliver economic growth and environmental sustainability.

Jo Goodhew: What feedback has he seen on the Government’s recently announced water storage package?

Hon DAVID CARTER: The package has received a number of endorsements. Horticulture New Zealand, for instance, has said it is good news for horticulture’s long-term productivity. Hawke’s Bay Regional Council has described it as “welcome news” for the region and “a valuable step” towards future economic development in the bay. The Central Otago mayor said it was “exciting” for Central Otago and “a step in the right direction”. One comment I have just noted was from Bob Engelbrecht, a respected farm management consultant in south mid-Canterbury. He said: “It’s a good sign of Government support for agriculture in New Zealand. It’s just a pity for the

whole of the East Coast of the South Island that this sort of project wasn’t considered 20 or 30 years ago.”

Te Ururoa Flavell: How will iwi co-management arrangements, such as those to do with the Waikato River, be impacted by the steps taken by the Government to support the development of water storage and irrigation?

Hon DAVID CARTER: Existing commitments will not be affected. Any irrigation schemes will of course respect and recognise the vital role of Māori. In addition, the Government’s support for water storage offers an exciting economic development opportunity for iwi, both as major holders of agricultural land and as investors in the schemes.

Diplomatic Protection Squad—Prime Minister’s Statements

8. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Prime Minister: Does he stand by his statement in relation to the Diplomatic Protection Squad that “I can’t say I do or don’t want it”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Hon Clayton Cosgrove: Why was the Prime Minister unable to—[Interruption]

Mr SPEAKER: I want to hear the question.

Hon Clayton Cosgrove: The cuckoo’s nest is—

Mr SPEAKER: It is up to the Speaker to deal with excessive noise, not to the questioner to make those kinds of comments.

Hon Clayton Cosgrove: Why was the Prime Minister unable to decline Diplomatic Protection Squad protection on his holiday in Hawaii at a cost to the taxpayer of $30,000, when his predecessor and other Prime Ministers declined such protection and had that instruction complied with?

Rt Hon JOHN KEY: What I can say is that I am not a security expert. I take advice from the experts, who are the police. I can also say that that is a sensible thing, I think, to do. I stand by, I might say, all the statements I have made in relation to whether I have the ability to take them. One of the reasons I know that is that I have sought the views of a much higher power, as members will know. That member, of course, was Phil Goff. When he was asked why he takes—

Mr SPEAKER: The Prime Minister will resume his seat immediately. The question did not warrant an attack on the Leader of the Opposition.

Rt Hon JOHN KEY: It did, actually.

Mr SPEAKER: Order!

Rt Hon JOHN KEY: Point of order.

Hon Clayton Cosgrove: Point of order.

Mr SPEAKER: We now have two points of order. I must have done something equally wrong.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. It was not an attack on the Leader of the Opposition; it was quite relevant to the question.

Mr SPEAKER: The member is not going to litigate the issue. I will hear the point of order from the Hon Clayton Cosgrove.

Hon Clayton Cosgrove: Supplementary question.

Mr SPEAKER: Supplementary question from the Hon Clayton Cosgrove.

Hon Clayton Cosgrove: Why does he require extensive Diplomatic Protection Squad protection with him in the parliamentary complex, including while he is on the treadmill in the parliamentary gym, given the extensive security that already exists in the form of up to 50 professionally trained security officers who already guard the parliamentary complex and the gym?

Rt Hon JOHN KEY: I assume for the same reasons that Helen Clark had them in the facilities. [Interruption]

Mr SPEAKER: I say to both sides of the House that we will not have any more of those kinds of interjections.

Hon Clayton Cosgrove: Was the $800,000 budget blowout on the Diplomatic Protection Squad the highest priority spend for the police in 2009-10, given that the police have already been forced by his Government to cut 340 cars out of their vehicle fleet as part of a $20 million budget cut, as confirmed in writing by the Office of the Auditor-General?

Rt Hon JOHN KEY: No, I think the budget blowout was unfortunate, and therefore I apportion the blame fully back to the previous Labour Government, which signed the employment agreement that made $600,000 of the $800,000 blowout necessary.

Hon Trevor Mallard: Was the Prime Minister aware when he decided not to direct the police not to come on holiday with him that for each day they had surfing in Hawaii, they would get 3 days’ leave when they came home?

Rt Hon JOHN KEY: I take advice from the police and, as I said, I take it in the same way that Phil Goff does when he is asked why he has security at Waitangi. He said it was because the police insisted on it.

Hon Simon Power: I raise a point of order, Mr Speaker. I am just looking for a point of clarification here; I must say I am a little confused. We have had some to-ing and fro-ing in the last day or two about the nature of what you described as “gratuitous comments” that were being made on this side of the House yesterday. I think it is fair to say that we have had a bit of an interchange on that point today, and I think we are starting to settle in that area. There is an issue, though, that comes to mind with the Prime Minister’s responses to some of those questions. Initially the quote used from Mr Goff was considered inappropriate because it was attacking a member. It was used again and was appropriate presumably because you did not rule that it was not. The use of other members’ quotes over a period of time by both sides of the House has been, frankly, as long as I have been here, a useful tool for question time. I just want to be sure that we are not venturing into new territory here without a bit of a further think about it.

Mr SPEAKER: I invite the honourable member to check the Hansard and look at the question asked by the Hon Clayton Cosgrove and the question asked by the Hon Trevor Mallard, and he will see why I treated the two questions differently. I listened very carefully to the questions asked. In the first case today where I was concerned about an answer given, the primary question was a very straight question, and the first part of the answer was a somewhat gratuitous comment about the questioner, and I stamped on that. But I listened to both, and the two questions that I treated differently were different. I listened very carefully to the questions asked, and when members insert into their questions political innuendo or connotations, I give much more latitude in answers. Where members ask straight questions, I will not tolerate their being attacked for asking straight, fair questions. I am acutely aware that some questions that may seem to be reasonably straight can be quite strongly not so. I am not that stupid; I have been around the place a fair while, and I listen very carefully. That is why I treated those two questions differently.

Hon Simon Power: If I could just respond briefly, Mr Speaker, nobody is saying for one moment that your experience leads to any degree of stupidity. Are we saying now that the way in which the question is worded determines whether the answer can be used appropriately or inappropriately in the way that you described? Am I clear about that?

Mr SPEAKER: That is correct. Where questions contain political content, political content can be expected in the answer. Where a question is a straight question, I believe that it deserves the respect of a straight answer.

Hon Simon Power: So that I am absolutely clear for members on this side of the House, you are in no way ruling out the use of members’ quotes from previous engagement in this House?

Mr SPEAKER: Not at all.

Hon Simon Power: Thank you, Mr Speaker.

Rt Hon JOHN KEY: I seek leave to table a transcript from Radio Live on 6 May when Phil Goff was asked—

Mr SPEAKER: No, we are not going to do that. I have just tried to settle the House a bit and deal with an issue and I get that dumped on me. We do not table recent transcripts from radio programmes or newspapers, and the right honourable Prime Minister knows that.

Warm Up New Zealand: Heat Smart—Milestones

KATRINA SHANKS (National): My question is to—[Interruption]—the Acting Minister of Energy and—

Mr SPEAKER: On this occasion I ask the Labour front bench to show some courtesy to a member at the back of the House who has a right to ask her primary question.

Hon Trevor Mallard: Point of order—

Mr SPEAKER: I am not going to hear a point of order on this. The member will resume his seat. I have been very tolerant and I am not going to stand any more nonsense.

9. KATRINA SHANKS (National) to the Acting Minister of Energy and Resources: What recent milestones have been celebrated under the Government’s Warm Up New Zealand: Heat Smart scheme?

Hon HEKIA PARATA (Acting Minister of Energy and Resources): Tēnā koe, Mr Speaker. This morning the Prime Minister cut the ribbon to the 100,000th house to have benefited from the Government’s home insulation and clean-heating scheme. [Interruption] I am sorry but I do not know what the fun is on that side of the House, because the fun is all on this side for the achievement. The Government has allocated $347 million to retrofit at least 188,000 homes over 4 years before June 2013. I also want to acknowledge the cooperation of the Green Party with this policy.

Katrina Shanks: What other benefits is the Minister aware of that have come from the Warm Up New Zealand: Heat Smart scheme?

Hon HEKIA PARATA: The Warm Up New Zealand: Heat Smart scheme improves the energy efficiency of homes while making homes warmer, drier, and healthier. This means lower power bills, fewer doctors’ visits, and fewer days off work and school. It is very pleasing to see that approximately 55 percent of the retrofitted houses enjoying these benefits are occupied by people on low incomes. In addition to creating energy-efficient, healthier homes for New Zealanders, the Energy Efficiency and Conservation Authority estimates that about 2,000 people will be directly employed under the scheme over its 4-year duration.

Dr Kennedy Graham: Given the huge success of the Warm Up New Zealand: Heat Smart programme, a “smart Green” initiative that is good for the economy, the environment, and the people, will her Government commit today to continue funding beyond 2013?

Hon HEKIA PARATA: We are focused on the current programme. We are just over half-way through. We have another 88,500 houses yet to be retrofitted for which there is funding.

Broadband, Ultra-fast—Cost of Regulatory Arrangement

10. CLARE CURRAN (Labour—Dunedin South) to the Minister for Communications and

Information Technology: Has he been advised that the regulatory arrangement around the ultrafast broadband network will be worth up to $600 million, and who will pay for it?

Hon STEVEN JOYCE (Minister for Communications and Information Technology): The premise of the member’s question is incorrect. The regulatory package reduces the regulatory risk for bidders so they are able to accept lower margins and, therefore, offer lower build prices and lower wholesale prices to the benefit of all users. The member has in fact got it exactly the wrong way around. Without regulatory stability and certainty for investors during the crucial build period, taxpayers and/or consumers would end up paying significantly more for ultra-fast broadband. As to the amount she mentions, a number of figures have been suggested as to what these savings will be, and that number is one of them.

Clare Curran: Can he guarantee that retail prices for existing broadband on the copper network will not rise as a result of the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill?

Hon STEVEN JOYCE: Nobody can guarantee that the retail price of copper will not rise at any time in the future, but the pressure will all be downwards because of the competition from the fibre network, and because, as part of the regulatory changes proposed, the unbundled bitstream access product will move from being retail-minus to cost-plus. Many people believe the commission—that it will lead to lower prices.

Clare Curran: Does he accept that the $400 million to $600 million figure to increase broadband coverage will come from the users who are not receiving ultra-fast broadband now?

Hon STEVEN JOYCE: No, not at all. I really worry about the member’s understanding of the regulatory package’s purpose. It is there to reduce the regulatory risk for bidders so they are able to accept lower margins and, therefore, lower build prices and lower wholesale prices for the benefit of all users. It is not a case of taking from one set of users and giving to the other. It is about reducing the risk premium so that the margins can come down. The member needs to understand that.

Clare Curran: Has he read his ministry’s report to the select committee on this issue?

Hon STEVEN JOYCE: I am not aware to which report the member is referring. I have read lots of advice from the officials, and what I have just told the member is exactly consistent with that advice.

Methamphetamine Precursor—Seizure Operations

11. NIKKI KAYE (National—Auckland Central) to the Minister of Customs: What interceptions of Contac NT has the Customs Service achieved in the last month at our border?

Hon MAURICE WILLIAMSON (Minister of Customs): Very good news—

Hon Member: Oh! More good news.

Hon MAURICE WILLIAMSON: It just keeps coming, I know. Customs officers recently intercepted at the border over 112 kilogram of pseudoephedrine-based Contac NT. This was made up of a number of different intercepts, with the largest individual one being 67.6 kilograms. This one interception resulted in a number of search warrants being executed at several addresses in Auckland last week by the Customs Service in co-operation with the New Zealand police. The month-long operation, coded named Adrift, led to the arrest of three Chinese nationals, one of whom was a resident. The other two were in New Zealand on student visas. All three have been charged with participation in an organised criminal group, importing a class C controlled drug, and possession of a class C drug.

Nikki Kaye: What is the significance of this large individual seizure and the total seizures for the month in the fight against P?

Hon MAURICE WILLIAMSON: It is very significant. At nearly 70 kilograms this is the largest amount of precursor drug used for the manufacture of methamphetamine to be seized this year. It was sufficient to make between 13 and 20 kilograms of methamphetamine, which would have had a street value of somewhere between $13 million and $20 million. The interceptions for the month have effectively reduced the amount of manufactured methamphetamine on the streets of New Zealand by somewhere between 22 and 33 kilograms.

Ministerial Vehicles—Replacement

12. CHRIS HIPKINS (Labour—Rimutaka) to the Minister responsible for Ministerial

Services: Has he now been fully briefed on all of the details regarding the replacement of VIP transport’s BMW fleet; if not, why not?

Rt Hon JOHN KEY (Minister responsible for Ministerial Services): I have received details on the replacement of the fleet where and when appropriate.

Chris Hipkins: Is he aware that 2 days after his chief of staff met with the VIP Transport Service to discuss the upgrade of the VIP fleet, the owner of an exclusive new and used BMW dealership in Auckland gave a $50,000 donation to the New Zealand National Party?

Rt Hon JOHN KEY: I have no responsibility for that.

Chris Hipkins: How can he claim that, when only a few weeks earlier he had attended, as Prime Minister, a client function hosted by the Team McMillan BMW dealership in Auckland, which led to the donation?

Rt Hon JOHN KEY: Because that is the very reason why contracts subject to the Cabinet Manual are made by Ministerial Services—to avoid accusations that would otherwise be levelled of inappropriate conduct.

Chris Hipkins: Would he say that the meeting his chief of staff had with Ministerial Services to talk through the BMW purchase on 28 July last year—just 2 days before the $50,000 donation to the National Party—was just a coincidence or more sloppy management of perceived conflicts of interest by his Government?

Rt Hon JOHN KEY: I would say that the meeting was very difficult to remember, because the chief of staff could not remember it.

Chris Hipkins: Which statement is true: his statement during question time yesterday that he had aggressively reviewed Ministerial Services’ spending line by line to identify all potential savings, or his statement during question time on 12 April that he did not know about the BMW upgrade because it had been just one line in a “very large document” that he happened to have signed?

Rt Hon JOHN KEY: Both. The member needs to take a lesson from some of the former Ministers in Labour about how ministerial responsibility works and when officials have responsibility. I know that the member is probably very unlikely to become a Minister, from what I hear from his colleagues, but he should take some advice.


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