Questions And Answers June 7

by Desk Editor on Tuesday, June 7, 2011 — 9:20 PM

Press Release – Office of the Clerk

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister : Does he stand by his comments that there is nothing wrong with Ministers accepting hospitality from the Government’s banker, Westpac?TUESDAY, 7 JUNE 2011



Ministers—Westpac Hospitality

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his comments that there is nothing wrong with Ministers accepting hospitality from the Government’s banker, Westpac?

Rt Hon JOHN KEY (Prime Minister): Yes.

Dr Russel Norman: Does he have any concerns about ministerial staff accepting the corporate hospitality of Westpac; if not, why not?

Rt Hon JOHN KEY: I expect them to act carefully, in a considered manner, and, even though they are not bound by the Cabinet Manual, in the same way as is laid out in the Cabinet Manual.

Dr Russel Norman: Does he consider that public servants, such as staff from Treasury, should be able to enjoy the corporate hospitality of Westpac?

Rt Hon JOHN KEY: That is a matter for the State Services Commissioner.

Dr Russel Norman: Can he guarantee that no ministerial staff seconded from Treasury have enjoyed the corporate hospitality of Westpac?

Rt Hon JOHN KEY: No.

Dr Russel Norman: Will he, then, follow up with the Minister of Finance as to whether any of his ministerial staff seconded from Treasury have been enjoying Westpac’s corporate boxes given that public servants are not supposed to accept such gifts?

Rt Hon JOHN KEY: No; I think the edict was over the Rugby World Cup, not prior to that—in the same way that I will not be delving into that member’s mind to see whether he changed it on his views to America when he accepted free travel from the US State Department.

Dr Russel Norman: Would the Prime Minister have any concerns about Treasury staff receiving corporate gifts in the form of access to Westpac’s corporate boxes given that Treasury is the decision maker for the Government’s multimillion-dollar banking contract?

Rt Hon JOHN KEY: No. I do not think the member is right. I think the process is being run by the Ministry of Economic Development. It will make a recommendation and that recommendation will go to Ministers, who are likely to base their decision on the recommendation. What I am fairly sure of is that we will not be following the suggestion at the Green Party conference that it goes to Kiwibank. That is because Kiwibank itself has come out and said that although it has the ambition it does not have the capability.

Dr Russel Norman: If the final decision on the master banking contract is therefore in the hands of Ministers under the influence of ministerial advisers, does he have any concerns that both Ministers and ministerial advisers have been in receipt of corporate hospitality from Westpac?

Rt Hon JOHN KEY: Mr Speaker, I—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I know it is unusual to come to the defence of the Government at this time, but I think it is important that the question of undue influence of people on members of Parliament, even, in my suggestion, in their ministerial roles, is a suggestion that should not be made in this House.

Dr Russel Norman: If I have inadvertently made an inference of undue influence, that was certainly not my intent. I am questioning the process of awarding the contract—

Mr SPEAKER: I will allow the member to repeat his question and to make sure that there is no implication of undue influence.

Dr Russel Norman: Does the Prime Minister accept that if, as he has just said, it is up to Ministers to make the decision about the allocation of the master banking contract, the public may rightly have concerns when they see Ministers receiving corporate hospitality from Westpac?

Rt Hon JOHN KEY: No more than they would have concerns about Russel Norman going off to America, paid for by the US State Department. I do not really like the inference from the member, because it is without foundation. There are well set out guidelines in the Cabinet guidelines. There is also a pecuniary interests list. The member is simply making accusations to get on the front page of the paper, and I think the member can do better than that.

Dr Russel Norman: I seek leave to table to my pecuniary interests statement, where I made it transparent about the State Department gift, unlike—

Mr SPEAKER: Order!

Dr Russel Norman: —corporate gifts from Westpac.

Mr SPEAKER: Dr Russel Norman is very lucky that I do not take more serious action, because he knows I was on my feet. He kept speaking when there not a matter of a point of order. It started out as a point of order, and I fully accept that, but then he went on to matters beyond a point of order, and we do not table publications that are as readily available to all members, as pecuniary interests are.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I would ask you to reflect when you have a moment on the comments made by Dr Norman. What he has said in the House this afternoon is that members are in breach—

Mr SPEAKER: Forgive me, but it was not a point of order that the Prime Minister was seeking to raise there. The questions, I accept, may have had implications, but because of that I allowed the answers to somewhat reflect on the questioner, which I may not have done under other circumstances. So I think the situation has balanced itself out. I think the questioner, in the answers received, had some of his actions questioned, and I think that is where the matter should rest at the moment. But I do urge members to be careful in asking questions to make sure they do not imply improper practice. I apologise, because I should have come down more heavily on the last supplementary question. I did err there in not making sure more quickly than I did that question was rephrased.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I do not wish to prolong things, but it is against the Standing Orders for a member to deliberately mislead the House. The point I was going to make is that the member has actually made an accusation that people have deliberately misled the House.

Mr SPEAKER: I apologise, but members cannot use the Standing Orders procedure to accuse other members of deliberately misleading the House. There is a proper procedure for doing that. If the member has offended any individual members, they can make a personal explanation. There are other procedures, though, to be followed if it is believed that a member has deliberately and wilfully misled the House. There are other procedures to be followed on that; we do not use the Standing Orders procedure for that purpose.

Hon Simon Power: I raise a point of order, Mr Speaker. As somebody who has declared in the pecuniary interests register that I received hospitality from Westpac, I do take offence at the comments made by the member that all members on this side of the House did not.

Mr SPEAKER: If the member wishes to make a personal explanation he can seek leave to do that, but he cannot use the point of order process to make a political statement in the way he just has. The Standing Orders do not provide for members to do that—there is a procedure. If the member has been offended, he can seek leave to make a personal explanation.

Hon Simon Power: Which I just did.

Mr SPEAKER: If the member is seeking—

Hon Simon Power: No, no, I am not seeking—

Mr SPEAKER: The member cannot get to his feet on a point of order and claim someone has misled the House or claim he has been offended. He can seek leave to make a personal explanation if he believes that an unparliamentary statement was made; I have already dealt with that matter. I accept that I perhaps erred in not coming down rapidly enough on the questioner when he appeared to imply, in a question, possible inappropriate behaviour. If a member believes some other member has deliberately and wilfully misled the House, there is a procedure to go through for that; it is not the point of order process.

Dr Russel Norman: I raise a point of order, Mr Speaker.

Mr SPEAKER: I have dealt with that point of order. Does the member have a new point of order?

Dr Russel Norman: I do, Mr Speaker. Just to clarify, at no point was I suggesting that—

Mr SPEAKER: The member will resume his seat immediately. This is just abusing the Standing Orders of the House. We do not carry on a debate under a point of order. Members should be careful to not abuse the Standing Orders in the first place. I have already apologised to the House; I blame myself for letting things get to the point they did. I will watch more closely in the future.

Chief Science Advisor—Advice

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Is he satisfied with the advice he has received from his Chief Science Advisor, Professor Sir Peter Gluckman?

Rt Hon JOHN KEY (Prime Minister): Yes. I created the role of Chief Science Advisor to provide me with an independent channel of scientific advice. I am pleased with the contribution Professor Sir Peter has made to the broad suite of information that the Government considers as it develops its policies.

Hon Annette King: Does he agree with Sir Peter and the report of his task force that failure to use social science evidence properly is a core failing of policies, and that evidence and scientific advice is a good base for policy development?

Rt Hon JOHN KEY: As a general rule, yes, but of course one will always acknowledge that there is often quite a range of views from the science community.

Hon Annette King: What evidence and scientific advice did he seek before agreeing to allocate $2.4 million to Parents Inc. for a parenting programme that even the Minister for Social Development and Employment said she had neither sought nor received advice on, or was she carrying out his promise that he made before the election that he would make sure that Parents Inc. got money?

Rt Hon JOHN KEY: Members will accept that, as Prime Minister, I am not responsible for the allocation of that contract; that actually goes through the Ministry of Social Development. But I would say I have seen that Toolbox; I have seen the programme. In my opinion it is a very, very successful programme that is helping New Zealand parents, and we do need to help parents in New Zealand.

Hon Annette King: As the contract with Parents Inc. is yet to be signed, is he prepared to require a tender for the $2.4 million for a parenting programme now that other organisations have come forward to say they have a similar programme but they had no chance to bid for that money; if not, why not?

Rt Hon JOHN KEY: I think that was pretty wide of the primary question. Anyway, my advice is—I will not say that, actually. My advice to the member is to take the matter up, if she wants to, with the Minister for Social Development and Employment. I can say my understanding is that no one else provides a similar programme off the shelf like that that is so successful.

Hon Annette King: If evidence and scientific advice should be the basis for policy development, why is he ignoring the task force report and insisting on putting even more money into boot camps, which it said were doing very little to help teenagers and needed a thorough assessment?

Rt Hon JOHN KEY: I do not agree with the member’s proposition. For a start, the military activity camps, which the member talks of, have had the first cohort go through. There will be an evaluation; it is a little too early to evaluate them, because those people are still in the middle of their participation. I draw the member’s attention to a letter I received on 26 May from the Principal Youth Court Judge, Andrew Becroft, in which Judge Becroft wrote: “Is military activity camps a success? Cautiously, they could be expanded into two of the remaining three residences, Wiri and Palmerston North, which are located close to military training facilities.” He also wrote about the smaller number of people going before the Youth Court. I tend to take the view of Andrew Becroft, who knows what he is talking about, as opposed to that of the member, who has not a clue what she is talking about.

Hon Annette King: I seek leave to table the comments of Sir Peter Gluckman. They were not my comments—[Interruption]

Mr SPEAKER: I ask the Hon Parekura Horomia what it was about that seeking of leave by his colleague just two seats along from him that he did not understand. There was no need for that interjection. What we need to sort out, though—[Interruption]—no, no. The last part of the member’s seeking of leave was out of order. She was seeking leave and did not need to make the other comments. What we did need to know, though, was the source of the comments that she is seeking leave to table.

Hon Annette King: It is a press release—

Mr SPEAKER: Then we do not table it. That is the end of the—

Hon Annette King: I raise a point of order, Mr Speaker. I have just heard you make a ruling for the Prime Minister, when he rose to accuse the Green member of misleading this House. You said there was a proper place to bring that up.

Mr SPEAKER: The member is now getting into the same patch as everyone else. We do not table press statements. If the member is concerned that someone has misled the House, then there are other means of dealing with that. We do not debate it by way of a point of order. I know we have had a 2-week adjournment, but we should not forget the Standing Orders of the House. We do not debate those matters by way of points of order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I note what you have just said, sir, but you have in your written rulings to us indicated that you will not proceed with breach of privilege applications. You said you will not refer them to the Privileges Committee when they relate to supplementary questions, as opposed to prepared answers. The Prime Minister accused Annette King of drafting something in a supplementary question—

Mr SPEAKER: There is a Standing Orders Committee, and the member is a member of it. If he believes there is a need to amend the Standing Orders of the House, then we can do that. It is not beyond our ability to do that. The issue raised earlier on today was about deliberately and wilfully misleading the House. Supplementary questions, it is considered traditionally in this House, are not of such a formal situation to normally be considered to have been intended to deliberately mislead the House. They can at times, I accept, accidentally mislead the House. If there is a gap in our Standing Orders, there is the chance to deal with that. But we will certainly not debate these matters by way of points of order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. In the past there have been occasions where something has been so egregious in a supplementary question that, in my understanding,

cases were raised with the Privileges Committee. In this particular case it was just a straight matter of fact—

Mr SPEAKER: The member is now seeking to debate the matter—[Interruption] I am on my feet, and we will not have any more of this. I am certainly prepared to look back over the record to see how many times a supplementary question has been the subject of a matter referred to the Privileges Committee. I think it would go back a fair way, if that were to be the case, but I will certainly check the record for the member.

Jacinda Ardern: What was the reoffending rate of participants involved in the Government’s boot camp concept trials completed in 2009 and 2010?

Mr SPEAKER: Before I invite the right honourable Prime Minister to reply, I just alert members that where there is such a broad primary question, to expect the Prime Minister to have at his fingertips the details of boot camp outcomes is—[Interruption] I will allow the question, because the Prime Minister certainly mentioned these in his answer. I will allow the question, but to expect him to have the details is not easy. The right honourable Prime Minister, in so far as he can answer the question.

Rt Hon JOHN KEY: I do not have those details to hand, but what I do have to hand is a letter from Judge Andrew Becroft, the Principal Youth Court Judge, in which he actually says: “Subject to an inquiry I made when I was at a military activity camp about how things were going, in appreciation of his assessment—

Hon Annette King: Table it.

Rt Hon JOHN KEY: I am more than happy to table it. What he goes on to talk about, though, is very interesting. He says: “not only have youth apprehension rates dropped slightly in the last 2 years … court numbers have dropped by 31 percent in the last 2 years.” He goes on to talk about Fresh Start and the impact of those military-type programmes, and says they are working. He goes on to say they are broader than the basis on which the member is trying to comment. He then goes on to say, cautiously, that he wants to expand the programme.

Hon David Parker: I raise a point of order, Mr Speaker. I ask that the Minister table the official document from which he was quoting.

Mr SPEAKER: The member knows that a letter is not an official document. It is up to the Prime Minister whether he wishes to seek leave.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I want to make it clear that the Prime Minister can table it, without leave. He indicated that he would table it, and I wonder why he has not yet done so.

Mr SPEAKER: The member knows there is no Standing Order to provide for another member of the House to try to encourage someone else to table a document. If the Prime Minister was quoting from an official document, there is no question. But the Prime Minister was not quoting from an official document, and it is up to the Prime Minister whether he wishes—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think that one of our hearings may have been slightly wrong. I thought that, in response to an interjection, the Prime Minister said he was happy to table the document.

Mr SPEAKER: That is a matter for the Prime Minister; it is not a matter for other members.

Rt Hon JOHN KEY: I seek leave to table a letter from Judge Becroft in relation to, amongst other things, youth justice, in which he goes on to personally thank me for my clear—[Interruption]

Mr SPEAKER: I say to the right honourable Prime Minister that I am on my feet and that that nonsense will stop, because that was also an abuse of the Standing Order procedure. I have allowed abuses on both sides now, and my patience will run out shortly. But leave has been sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This is just a request that you look at the tapes, later, of the way that you intervened on Russel Norman and the way that you intervened on the leader of the National Party.

Mr SPEAKER: I will look at the tapes, and I have made it very clear that I was not happy with the right honourable Prime Minister’s behaviour then, and he knows that I will be watching him for the rest of question time.

Budget 2011—Future Growth and Jobs

3. AMY ADAMS (National—Selwyn) to the Minister of Finance: How is Budget 2011 supporting future growth and jobs?

Hon BILL ENGLISH (Minister of Finance): The Budget sets out the next steps in the Government’s plan to build faster growth and more jobs. Most New Zealanders now understand that sustainable growth and jobs cannot be based on spending and borrowing more but need to be built around saving, investing, and exporting. New Zealanders are reducing their own demand for debt. As a result, credit growth is now close to zero for the first time in 20 years. New Zealanders also expect that their Government will behave responsibly. That is why the Government has plotted a path back to surplus in 2014-15, turning round the forecasts of ever-rising debt and permanent deficits that this Government inherited.

Amy Adams: Why is lifting national savings a prerequisite for faster growth?

Hon BILL ENGLISH: Higher national savings should contribute to sustainable growth. As the Budget pointed out, between 1990 and 2005 we grew our export volumes by over 5 percent a year. Had this trend continued, exports would today be $14 billion higher. If we want to get back to that sort of growth, then we need higher national savings so that we have the capacity to invest in faster growth.

Amy Adams: What benefits for growth and jobs did the Budget deliver?

Hon BILL ENGLISH: Over the Government’s first three Budgets we worked to take the sharp edges off the impact of the global financial crisis, protected the most vulnerable, improved the tax system, invested in infrastructure, and set a course back to surplus. There are an increasing number of positive factors for growth: growing trade links with Asia, the lowest interest rates in 40 years, the highest terms of trade in several decades, two-thirds of the population with a marginal tax rate of 17.5 cents, and higher private savings rates. We hope these factors will underpin a growing lift in business confidence that will flow through into more jobs and higher incomes.

Budget 2011—Fiscal and Economic Forecasts

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by the fiscal and economic forecasts in his Budget?

Hon BILL ENGLISH (Minister of Finance): The member will be well aware that under the Public Finance Act the projections are prepared independently by Treasury. A statement of responsibility that best professional judgment has been used is signed off by the Secretary to the Treasury, who accepts overall responsibility for their integrity. This has been a longstanding practice and ensures that the projections are objective and independent. Normal forecast uncertainty, of course, applies to these forecasts as much as to any others.

Hon David Cunliffe: Does he agree with the acting Secretary to the Treasury, Gabriel Makhlouf, that the economic outlook has worsened since the Budget forecasts were finalised, and that “the risks are weighted to the downside for the forecast period as a whole.”, and can he think of another occasion upon which Budget forecasts have lasted only 2 weeks before being talked down by his own officials?

Hon BILL ENGLISH: The member would have to ask the Treasury officials who served under the 9 years of the previous Government to see whether there was one of those occasions then. It is my understanding that Mr Makhlouf is referring to the unease and uncertainty, particularly in

financial markets, as the European debt crisis gains momentum. The good news is that over the next 12 months New Zealand will be borrowing only about $5 billion net in international markets, instead of $20 billion. That means we are less exposed to those risks. So I do not agree completely with Mr Makhlouf.

Chris Tremain: How have the Budget projections been generally received?

Hon BILL ENGLISH: Most forecasters regard the Treasury forecast as pretty much middle of the pack—that is, reasonable. They show the economy picking up steam with pretty moderate growth rates, actually: 2 percent over the next 12 months, and then 4 percent in the 12 months beyond that. Those are boosted by factors such as continuing low interest rates—the lowest in 40 years—and increasing focus of our exports towards Asia, where fast-growing markets are willing to pay more, for more of our products.

Hon David Cunliffe: Given that the Minister is busily distancing himself from Treasury forecasts, does he stand by the Treasury figures released to media that confirm that Government borrowing this year exceeds requirements by approximately $5 billion; if so, can he explain to the House why he told New Zealanders—why he told New Zealanders—that the “borrowing requirement” had increased from $300 million to $380 million per week?

Hon BILL ENGLISH: Because that is what the New Zealand Government has been borrowing, on average, over the last 12 months. The original borrowing programme was for about $300 million a week, because two things happened together. One was the Christchurch earthquake, and the second was favourable conditions for borrowing at cheaper rates. New Zealand’s Debt Management Office took advantage of that. It borrowed about $5 billion more than was strictly necessary, and that means that over the next 12 months it will borrow about $5 billion less because it already has the money in the bank. Given the state of world financial markets, I think that that has turned out, in hindsight, to be a very smart move.

Hon David Cunliffe: Given that answer, who is running the economy—Mr Key, who said today that this additional borrowing would have no impact on the exchange rate; or the Minister himself, who said that it would, and who thus provided a further reason for reducing debt?

Hon BILL ENGLISH: The member is not quoting correctly what was actually said. But I think that everyone, including him, agrees that if the Government is borrowing large amounts of money in offshore markets, such as $300 million, or $380 million, a week, to meet the deficit requirements of running our national superannuation scheme, paying for Working for Families, building schools, investing in infrastructure, and repairing Christchurch, then that could put some pressure on the exchange rate. The good news is that this Government is getting on top of that debt. We are turning it round over the next 4 years, and that will reduce the pressure on interest rates and the exchange rate.

John Boscawen: Given that Treasury forecasts have consistently overestimated annual GDP growth by 1.8 percent per annum, on average, since 2005, does the Government have a strategy, if growth is once again lower than its rosy forecast, other than a strategy of borrow and hope; if so, what is it?

Hon BILL ENGLISH: The Government puts its Budget together in the full knowledge of the risks for economic growth—that is, that in any given Budget, growth could be higher or lower than the forecasts on which the Budget is based. If the circumstances changed significantly, then of course the Government might have to shift some of its policy settings—if they changed significantly. However, I think we have a pretty conservative, moderate base for the Budget. We have made some moderate but far-reaching decisions in the changes in Government expenditure, and it would take some quite significant external event to knock us off track.

Hon David Cunliffe: Given that the Minister is on top of the debt problem in the Budget, can he explain why Standard and Poor’s has kept New Zealand on a negative credit outlook?

Hon BILL ENGLISH: The member would have to address the agency directly about that, but I would imagine—

Hon Gerry Brownlee: Probably gone double negative.

Hon BILL ENGLISH: Actually, the member might be better off if he did not show up. The Government has put in place a number of decisions to reduce expenditure and to support economic growth. Like the ratings agencies, we would want to be sure that those things turned out 100 percent the way we wanted them to before we would get too excited about progress. This is a Government that consistently under-promises and over-delivers.

John Boscawen: Given the Minister’s answer to my previous question, how conservative does he think is Treasury’s downside scenario or estimate, found on page 106 of the Budget Economic and Fiscal Update, of growth of 4 percent to the year ending 2013, and 3 percent to the year ending 2014?

Hon BILL ENGLISH: Well, it depends a bit on the context. Generally, when New Zealand is coming out of recession we reach growth rates of from 5 percent to 7 percent per annum. That has been common after the last two or three recessions. So compared with those, these forecasts are moderate. I think the favourable factors are high export prices and the rebuild of Christchurch. The less favourable factors are the caution that New Zealanders have about spending in the shops, and their spending more on housing, which are usually big drivers of growth. So we think, on balance, these forecasts are reasonably moderate.

John Boscawen: I seek leave to table a chart showing that Treasury’s—

Mr SPEAKER: What is the source of the table?

John Boscawen: It is a chart prepared by ACT researchers showing that GDP growth in New Zealand has been 1.8 percent less than Treasury forecasts over the last 5 years.

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

Broadband, Ultra-fast—Roll-out Progress

5. DAVID BENNETT (National—Hamilton East) to the Minister for Communications and

Information Technology: What progress has the Government made on its election policy to roll out ultra-fast broadband to 75 percent of New Zealanders?

Hon STEVEN JOYCE (Minister for Communications and Information Technology): Last month the Government reached agreements with Telecom New Zealand and Enable Networks, through Crown Fibre Holdings, to complete the roll-out of ultra-fast broadband, complementing the existing partnerships with WEL Networks and Northpower. The Government will partner with Enable Networks to build an ultra-fast broadband network for Christchurch and Rangiora. The Telecom agreement will see a fibre-optic access network built in Auckland, the eastern and lower North Island, and most of the South Island. In addition, Telecom must split off its network arm, Chorus, into a completely separate company, so that all broadband retailers can compete fairly on a level playing field. These arrangements will be truly transformational for New Zealand.

David Bennett: How will the roll-out benefit New Zealand communities?

Hon STEVEN JOYCE: These four agreements with Northpower, WEL Networks, Chorus, and Enable Networks mean the Government will reach its goal of bringing ultra-fast broadband to 75 percent of New Zealanders by 2019. The roll-out will start immediately, with schools, hospitals, and 90 percent of businesses to be covered by 2015. Ultra-fast broadband is a key part of the Government’s economic growth agenda. These new networks will provide an economic step change for our country as we leapfrog many of our competitors to become one of the most fibred countries in the world. The competitive access prices that Crown Fibre Holdings has negotiated will ensure that the benefits of fibre are within easy reach of businesses as well as everyday New Zealanders.

Clare Curran: Will funding for broadband for the 303 schools—[Interruption]

Mr SPEAKER: I want to be able to hear the question.

Clare Curran: Will funding for broadband for the 303 schools that he mistakenly excluded from both the urban and rural broadband schemes come from the $285 million already awarded to Telecom and Vodafone for the Rural Broadband Initiative; if not, where will it come from, and how much will it cost?

Hon STEVEN JOYCE: The member continues to be incorrect in her premise, as she is about a number of things to do with broadband initiatives. The $300 million was set aside for the Rural Broadband Initiative. The contract was $285 million, which leaves $15 million set aside for the remote coverage areas and for the Rural Broadband Initiative to connect zone 3 schools. That will more than adequately cover the cost of linking the schools to their local cabinets with fibre, especially given that the drop costs are funded separately through the Ministry of Education. We had to wait to see the ultra-fast broadband footprint before we could tender to connect these schools, and the tender, I can tell the member, will be going out very shortly. Conspiracy over.

Clare Curran: I seek leave to table two documents. The first is a letter from the Minister to InternetNZ, Federated Farmers, and the Telecommunications Users Association, dated 27 May, setting out that 303 schools will be part of a planned procurement activity next year, and only—

Mr SPEAKER: We have heard sufficient on that. Leave is sought to table that document. Is there any objection? There is objection.

Clare Curran: I seek leave to table a document titled Rural Broadband Initiative: Final Proposal, which spells out that there are no changes proposed—

Mr SPEAKER: What is the source of this document?

Clare Curran: The Ministry of Economic Development website.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Chris Tremain: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will deal with the point of order myself. I apologise to members for taking up this matter, but the House does have a dress code. If the member Clare Curran is wearing the top of a sports team—and I can imagine an occasion when the Speaker’s permission might be sought to do that—I would ask her to leave the Chamber and come back dressed consistently with the Standing Orders of the House. [Interruption] Does the member wish to raise a point of order? I am happy to hear it.

Clare Curran: I raise a point of order, Mr Speaker. Could the Speaker please alert me to the relevant Standing Order on the dress code for women?

Mr SPEAKER: The Speaker has decided that it is not appropriate, unless the Speaker’s permission is sought, to advertise sports teams in this Chamber. Nothing is allowed to be advertised in this Chamber. If a male member of this House came into the Chamber wearing a soccer top or a rugby top, he would be asked to leave. [Interruption] I am on my feet. In the interests of fairness across all members of the House, the rules should be consistent on either side. What is expected in this House is normal business attire. I am asking the member to leave the Chamber and come back dressed appropriately, should she wish. That is all I am asking. It is not a big call.

Metiria Turei: Speaking to the point of order.

Mr SPEAKER: I am on my feet, and I am waiting for the member to leave the Chamber. I am waiting for the member to leave. This House does have certain dress standards. It would not be acceptable for a male member to be dressed in that way, and it is totally unreasonable, therefore, to discriminate. Clare Curran withdrew from the Chamber.

Mr SPEAKER: I let the member ask her questions, I did not interfere with her right to ask questions, but I do insist that the standards of this House be upheld.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I thank you for the ruling you have just made, because I think it is the first step towards having some equality in this House. It is, I

think it is fair to say, important to get on the record that it is the first step in having standards for women. We have had in the past Ruth Richardson regularly appear in this House in a tracksuit, and that was allowed because I think when the original rules were developed it was not contemplated that there would be women members of Parliament. Mr Speaker, I ask you to look very carefully at your ruling on sports attire and advertisements for sporting events and for sports teams. I happen to be wearing at the moment the tie that was used when there was a bipartisan approach to New Zealand becoming the Rugby World Cup host. Are you suggesting that it is inappropriate to advertise that event; if not, is it inappropriate to support a rugby team by wearing its tie or, as a number of members do, wearing the badges of those teams?

Mr SPEAKER: I hear the honourable member. It is not an unreasonable point he has raised. I fully accept that there are times when members wear ties and pins of sports teams, and I have no objection to that whatsoever. Members, I think, need to exercise some discretion. I draw members’ attention to Speaker’s ruling 16/8, which states: “The Speaker will take issue with any member who is not dressed in appropriate business attire, whether the member is male or female.” Members will note that I did not interfere in the member’s asking of questions. I think that would have been totally unreasonable. I am very happy for the member to come back into the House. It is not that the member has been asked to leave the House for any period of time at all. It is just that I believe that the Speaker needs to be even-handed in the way he treats men and women in respect of their attire.

Sue Kedgley: I raise a point of order, Mr Speaker. I wonder, given today’s incident, whether you could spell out for us what business attire is that we women are expected to comply with. Could we have it elaborated for us?

Hon Trevor Mallard: Very briefly, I had not caught up with Speaker’s ruling 16/8, which, of course, was well after the time that Ruth Richardson and a number of other women used to wear tracksuits in the House.

Mr SPEAKER: All I can say is I was not the Speaker then. I do not think women need a lot of assistance on what is reasonable. All I am asking is for members to be reasonable. I will not be pedantic about this sort of thing, at all. There is no doubt that were a male member to come into the House wearing a rugby top or soccer top, issue would be taken with that. I am just being evenhanded across the House.

Sue Kedgley: I raise a point of order, Mr Speaker. I did ask whether you would please make a commitment to spell out for women what business attire for women is, because I, for one, am completely confused as to what constitutes—

Mr SPEAKER: I have just made it clear to the House that I trust members’ own judgment on that, within reason. I do not wish to be pedantic. It does not need me to indicate to women what reasonable business attire is.

State-owned Assets, Sales—Ownership of Shares

6. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Prime Minister: Does he stand by his statement, in relation to the partial sale of SOEs, that “New Zealand investors would have to be at the front of the queue for shareholdings”?

Rt Hon JOHN KEY (Prime Minister): Yes. That was one of the tests I set out for the mixedownership model: that “New Zealand investors would have to be at the front of the queue for shareholdings”, and that we would have to be confident of widespread and substantial New Zealand share ownership. Treasury’s advice is that these tests can be met. In particular, there is likely to be significant demand from the likes of KiwiSaver funds, other institutional fund managers, Crown financial institutions like the Superannuation Fund and ACC, iwi, and mums and dads who are looking for good, solid investments.

Hon Clayton Cosgrove: Given that the then Minister for State Owned Enterprises, Tony Ryall, said in 1999 that the sale of Contact Energy had been “a great success” after claiming that 225,000 mums and dads had invested in the company, can we now conclude that that float was actually a

great failure, given that the number of mum and dad investors has fallen by two-thirds to around 70,000?

Rt Hon JOHN KEY: No. The first thing I would point out is that it was a very different model back in 1999. The Government is proposing—if it continues to be the Government post – 26 November—to have a 51 percent minimum shareholding held by the Government, then for New Zealanders to be at the front of the queue for the other 49 percent of shares. I refer the member to a story written by Pattrick Smellie in relation to Contact Energy’s Kiwi shareholders. He called them a loyal bunch, and said: “One of the least defensible criticisms of the Key Government’s partial privatisation plans have been regular references to Contact Energy as an example of a privatised company which lost control to foreigners. Yet nothing could be further from the truth.” I could go on, but I think I have made reference to the article before in the House.

Hon Clayton Cosgrove: Given Treasury’s advice that “significant participation by foreign investors will be essential to achieve the Government’s overall objectives”, can he provide the House with an estimate of the proportion of State-owned enterprise shares that foreign investors will end up owning?

Rt Hon JOHN KEY: My estimate is that that proportion will be quite low, for a number of reasons. Firstly, as I have said, we will be putting New Zealand investors at the front of the queue, and it is very likely, as Treasury’s advice has said, that huge demand will come from these areas. Treasury is working on ensuring that those tests can be met, and I am confident that we will meet them.

Rahui Katene: What assurances does the Prime Minister have that hapū and iwi will be at the front of the queue for shareholdings in State-owned enterprises, and what progress has been made to this effect?

Rt Hon JOHN KEY: I cannot give them an assurance that they will be at the front of the queue, but I can give them an assurance that they will be treated like all other New Zealanders.

Hon Clayton Cosgrove: How does he propose to prevent mum and dad investors from onselling their shares in State-owned enterprises to foreign investors, which is something Treasury has said will happen, and is something that clearly happened in the case of Contact Energy?

Rt Hon JOHN KEY: I go back to what I said earlier: in the case of Contact Energy the model was very different. Treasury is looking at that model, and there could well be a lot of examples—I think in Australia, for instance—of sales where loyalty bonuses and the likes were used.

Hon Clayton Cosgrove: Is the projection accurate that $300 million in fees will be paid to lawyers, investment bankers, and other advisers?

Rt Hon JOHN KEY: I have not seen that projection. I can say the Minister of Finance is working closely with Treasury to ensure that the fee structure is low. I know that the Leader of the Opposition asked for some information from my office just this week in relation to what the fee structure was for Contact Energy. I am sure the member has seen that. From the top of my head, the fee structure was 1.9 percent. That is very low, relative to what we have seen in the private sector, where it runs at anything up to 7, 8, or 9 percent. These are billions and millions of dollars’ worth of assets, so my expectation is that the fee structure would be low, relative to what we have seen in the private sector.

Accident Compensation—Improvements

7. MICHAEL WOODHOUSE (National) to the Minister for ACC: What action is the Government proposing to reduce workplace accidents, improve rehabilitation rates for employees, and make ACC more efficient?

Hon Dr NICK SMITH (Minister for ACC): The Government last week released a discussion paper on extending the Accredited Employers Programme and allowing workplaces a choice of insurer. The paper sets out the detail of the prudential requirements for insurers, a clearing house to minimise compliance costs for health providers, and the independent disputes process, and it

reinforces that, regardless of insurer, employees will have the same cover and entitlements for care, rehabilitation, and compensation.

Michael Woodhouse: What evidence is there that these reforms will deliver safer workplaces and better rehabilitation?

Hon Dr NICK SMITH: The stocktake report did a comprehensive study covering the last 10 years of accident and rehabilitation rates, comparing like with like, and found 12 percent fewer accidents and 15 percent lower costs under the Accredited Employers Programme. The study attributed these gains to employers being far more engaged in workplace safety and the rehabilitation of their workers. Translated over the New Zealand workforce, this means 10 fewer fatalities, 22,000 fewer injuries, and cost savings of $85 million each year. This is the main reason the Government wants to expand choice to beyond just a few large employers.

Michael Woodhouse: What were the results of the 1998 reforms, and how does the Government’s approach this time vary from them?

Hon Dr NICK SMITH: It is interesting to note, in terms of the number of workplace fatalities, that in 1999 and 2000—the period when there was choice—fewer workers were killed in the New Zealand workplace than in any other year in New Zealand history, albeit I do accept that we are not able to draw comprehensive conclusions from just that short period. The first change we are making from that approach is leaving ACC in the marketplace. That is, companies are given the choice of an alternative insurer, but they are not compelled to choose an insurer other than ACC. There were some problems with health providers seeking payment for care from multiple insurers, so—and this is the second change—we are proposing a single clearing house for all claims. We have learnt from that record, and we are sure there will be even more gains for New Zealand from these reforms.

Chris Hipkins: How will privatising the ACC work account make the system more efficient given that an independent PricewaterhouseCoopers report found that ACC was already among the cheapest in the world, that New Zealand employers already pay half what Australian employers pay, on average, and that the private insurance industry has already said it cannot do accident cover as cheaply as ACC can?

Hon Dr NICK SMITH: Firstly, I must correct the member’s use of the tired old word “privatisation”. This reform is no more privatisation than the decision in the 1970s to provide, for instance, alternative radio providers, or the decision in the 1980s to allow TV3 to operate alongside Television New Zealand (TVNZ). Anybody who said today that the fact that choice was provided in the 1970s and 1980s meant that TVNZ and Radio New Zealand were privatised would be seen as ridiculous. In respect of the 2008 PricewaterhouseCoopers report, the part that is most interesting is that at the very time when PricewaterhouseCoopers was delivering a report for the Government to say how good ACC’s monopoly was, ACC was simultaneously having talks with the Government about a multibillion-dollar bailout because it had huge losses over that 2-year period.

Development Aid—Advice on Shift of Focus

8. Hon MARYAN STREET (Labour) to the Minister of Foreign Affairs: What advice, if any, did he receive about shifting the focus of development aid from poverty alleviation to sustainable economic development and from whom did he get that advice?

Hon MURRAY McCULLY (Minister of Foreign Affairs): I consulted a wide range of individuals, including heads of mission, former heads of mission, officials, non-governmental organisation leaders, and representatives of the Governments that receive New Zealand’s development assistance. I also consulted the New Zealand public, who considered National’s policy of changing the previous focus of the aid programme and elected a National-led Government.

Hon Maryan Street: Would he agree with Dr Ganesh Wignaraja, a leading Asian Development Bank economist, who said at a recent World Trade Organization seminar in Singapore that the best bang for the aid buck was still found in educating girls; if not, why not?

Hon MURRAY McCULLY: I have not seen the specific point, but I would agree that education should be one of the cornerstones of the development programme for both girls and boys. It is a matter that the Government is giving some considerable priority to at the moment, and, indeed, it is one of the reasons why I have invited my colleague Mr Allan Peachey, who used to be the principal of New Zealand’s largest secondary school, to lend some special assistance to us in refining our education programmes around the Pacific.

Hon Maryan Street: Why, when an Asian Development Bank report released in April this year found that only 62 percent of primary-age girls in Papua New Guinea were attending school, does the Minister consider gender issues “not a preoccupation” in the long-term efficient application of aid?

Hon MURRAY McCULLY: As I made clear in my earlier answer, I think education is one of the cornerstones for the future of the region, particularly if it is going to lead to sustainable economic development. I do not believe that it is excusable to ensure that either boys or girls miss out on those opportunities.

Hon Maryan Street: Does he consider gifting an unwanted tourism project in Niue to former National MP Mark Blumsky to be a model of the success of sustainable economic development over poverty alleviation?

Hon MURRAY McCULLY: Yes, I do. In the year in which I inherited the portfolio New Zealand spent $21 million in development assistance in Niue. Niue, for the information of members, has a population of 1,000 people. I took the view that we needed to do somewhat better than that, and it is fair to say that relations were sour with the administration of Niue at the same time. We have in the last 18 months made very substantial progress to convert the aid dollars that we are investing in Niue into a sustainable economic future, particularly in relation to the tourism sector. I invite the member sometime to go and look at the specifics of that project, and she will see for herself.

Budget 2011—Changes to Public Service

9. NIKKI KAYE (National—Auckland Central) to the Minister of State Services: What is the Government doing to ensure New Zealand’s Public Service provides better value for money?

Hon TONY RYALL (Minister of State Services): Last week the Government announced that it is looking at reducing a number of Government agencies to improve efficiency and responsiveness. These proposals include disestablishing five Crown entities and three tribunals, merging two Government agencies, and establishing shared-service corporate arrangements across the three central agencies. Such analysis of how services are provided will become a part of how the Government does its work into the future, as we move resources from the back office to the front line.

Nikki Kaye: What reports has he received about public sector reforms?

Hon TONY RYALL: I have seen a number of reports that show that Governments around the world are looking at substantial savings in their public services to help deal with their billion-dollar debts. In the United Kingdom, 490,000 public sector jobs are expected to be cut by 2014-15; in Ireland, public servants’ pay has been reduced by up to 15 percent; in Portugal, only 50 percent of vacated positions are being replaced; in Spain, public sector pay has been reduced by 5 percent and recruitment frozen; and France is reducing 100,000 public service jobs by 2013. However, in New Zealand we continue to boost front-line services, and under our watch there are more police officers, more teachers, more nurses, and more doctors.

Question No. 8 to Minister

Hon MARYAN STREET (Labour): I seek leave to table the Asian Development Bank report The Millennium Development Goals in Pacific Island Countries, issued in April 2011, which shows the stark gaps that appear in health, education, and poverty alleviation.

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.

Budget 2011—Papers relating to Department of Prime Minister and Cabinet

10. GRANT ROBERTSON (Labour—Wellington Central) to the Prime Minister: Did he read all this year’s Budget papers relating to the Department of Prime Minister and Cabinet?

Rt Hon JOHN KEY (Prime Minister): Yes.

Grant Robertson: Under which appropriation within Vote Prime Minister and Cabinet does the $300,000 contribution to the running costs for the waka on the Auckland waterfront sit?

Rt Hon JOHN KEY: The answer given by my spokesperson to the New Zealand Herald reporter who ran that story was incorrect, as the advice received by my office from officials was actually incorrect. The money was in fact new money, which was drawn from a 2010 between- Budgets contingency. It was not from the Vote Prime Minister and Cabinet, nor was it appropriated via Vote Prime Minister and Cabinet. The money was appropriated to Vote Māori Affairs as part of Te Puni Kōkiri’s March baseline update. The reporter who received the incorrect information has since been informed of the error.

Grant Robertson: Why did the Prime Minister not correct the error any earlier than today?

Rt Hon JOHN KEY: Actually, the error was corrected the day after the story was run. As soon as the story was run, our office noticed that that would have been likely to be incorrect. We went back and rechecked with the officials, they apologised for the mistake they made, and we went back to the New Zealand Herald.

Grant Robertson: Can the Prime Minister confirm that this money has in no way come from the Department of Prime Minister and Cabinet’s budget at any point in the past?

Rt Hon JOHN KEY: Yes.

Mr SPEAKER: Question No. 11, Katrina Shanks. [Interruption] I have called Katrina Shanks. I do not like the interjections I am hearing here. I have called Katrina Shanks.

Welfare Reforms—Reports

11. KATRINA SHANKS (National) to the Minister for Social Development and

Employment: Has she received any reports about the Government’s proposals to make significant changes to the welfare system?

Hon PAULA BENNETT (Minister for Social Development and Employment): Last week the Prime Minister announced the formation of a special ministerial group to lead further work on the Welfare Working Group’s recommendations. This group will be concentrating on supporting those on welfare with training, education, health, and intensive case management to see positive changes for those who need us most.

Katrina Shanks: What other reports has she been made aware of regarding the Government’s proposed changes?

Hon PAULA BENNETT: Yes, I have seen a report, which I will quote from. It said: “Our reforms are founded on high expectations, that everyone who can work should work. I will fight the prejudice that says some people’s lot is drawing a fortnightly cheque, that we shouldn’t expect anything more of them and it doesn’t matter if they are forgotten by our policy makers and the society around them.” That statement was made by Labor Prime Minister Julia Gillard earlier this year.

Jacinda Ardern: Does she agree that the best means of reducing benefit numbers is to provide employment opportunities; if so, does she still believe the Government does not have a role in job creation, as she stated in this House in February of this year?

Hon PAULA BENNETT: Yes, and that is why I was so surprised during the years 2000 to 2008 that the number on the sickness benefit doubled, that we saw the number on the invalids benefit go up by 50 percent, and that we saw those people just left on the scrap heap and not making the most of the supposed great economic times there were then.

Mr SPEAKER: Question No. 12, Jacinda Ardern. [Interruption] I say to both sides’ front benches, please, I have called Jacinda Ardern.

Budget 2011—Job Creation

12. JACINDA ARDERN (Labour) to the Prime Minister: Does he stand by his statement “the Budget will create in the order of 170,000 jobs”?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement, which was: “The Treasury forecasts are that the Budget will create in the order of 170,000 jobs.”, and that is true.

Jacinda Ardern: What specific initiatives did Budget 2011 contain that he predicts will create in the order of 170,000 jobs?

Rt Hon JOHN KEY: I thank the member for asking that question. It will create an environment where interest rates will certainly stay lower than they would have under a Labour Government. We know that, because Labour members cannot even work out what a research and development tax credit costs. They are out there telling the country it costs $800 million when it costs $1.55 billion. It creates an environment through education, where young New Zealanders will get a chance to be sure that we can be tracking their progress through national standards. It allocates $550 million to early childhood education over the next 4 years, and we are sure that that will make a significant difference. I could go on, but, given that it is Question No. 12 and we want to get out of here before 5 o’clock, I will sit down at this point.

Jacinda Ardern: Is he aware that the Budget additional information estimate of 155,000 new jobs from now until 2015 is actually 10,000 fewer jobs than the estimate in last year’s Budget; if so, is this Budget a step backwards in terms of job creation, albeit an ambitious one?

Rt Hon JOHN KEY: Let me just alert the member to a couple of facts. Firstly, just to give her an idea, if we go to Budget 2010 and the forecast that 26,000 new jobs would be created over the year to March 2011; in fact, 39,000 new jobs were created. If one looks at the 170,000 job number, it is basically a little over the trend of the last 20 years, at 35,000 new jobs a year. In fact, as I say, we are ahead through creating those 39,000 new jobs against that forecast. I think it is fully achievable.

Carol Beaumont: How will the $19 million cut to industry training made in this year’s Budget help the 77,000 young New Zealanders who are not in school, not in training, and not in work, to get the skills they need to get a good job?

Rt Hon JOHN KEY: All I would say is that overall, if one looks at the amount of money going into education, one will have noticed that in a zero Budget that increased by about $1.3 billion, I think, over the forecast period.


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