Questions And Answers July 13

by Desk Editor on Wednesday, July 13, 2011 — 8:17 PM

Press Release –

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister : Does he stand by all of his statements on the privatisation of New Zealand State-owned power companies?
(uncorrected transcript—subject to correction and further editing)




Energy Companies, State-owned—Privatisation

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by all of his statements on the privatisation of New Zealand State-owned power companies?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: In respect of the Government’s plans to sell a minority stake in four State-controlled energy companies, yes.

Hon Phil Goff: Is Contact Energy, privatised by National in 1999, an example of a company in which control has now been lost to foreigners; if not, why did he say in answer to that question yesterday that “nothing could be further from the truth”, when the majority of shares are foreignowned and the majority of directors are foreigners?

Hon BILL ENGLISH: Contact Energy is not the model the Government is following. That model was wholly privatised and a big chunk of it was sold initially, I think, to Edison Mission Energy, which was onsold to Origin Energy, which ended up now owning 50 percent. The Government is pursuing a different model: 51 percent Crown ownership, and Kiwi mums and dads at the front of the queue.

Hon Phil Goff: I raise a point of order, Mr Speaker. You will recall that I asked the Prime Minister why he said yesterday that “nothing could be further from the truth” in answer to the question of whether control of Contact had passed to foreigners. I received no answer to that; I had a very interesting history, but no answer to the question.


Hon Members: It was on notice.

Mr SPEAKER: Well, actually, that was a supplementary question. With respect to the members, I say that the question on notice was not that question. The member asked why, and the Minister gave, in his opinion, the answer why. It may not have been a very satisfactory answer, but that is why there are further supplementary questions—to test that “why” answer out, because it clearly was not satisfactory to the member.

Hon Phil Goff: Why did the Prime Minister say yesterday that “nothing could be further from the truth” when asked whether the control of Contact Energy had passed to foreign owners, when the majority of shareholders are foreigners and the majority of directors are also foreigners?

Hon BILL ENGLISH: Again, the member is describing a sale quite different from what the Government is proposing. In that case, the reason that the majority of shareholders are foreigners is that the Government sold about 50 percent of it, ultimately, to a foreign owner, a cornerstone shareholder. This time no sale of a cornerstone shareholding is being proposed. The Government is putting forward a model much more like Air New Zealand’s—51 percent Government ownership.

Mr SPEAKER: What I will do, if it will assist the member, is invite him to repeat his question exactly as he put it. It would appear that the Minister may not have heard it.

Hon Phil Goff: It appears so, Mr Speaker. From memory: why did he say yesterday that “nothing was further from the truth” when Contact Energy, when privatised, was passed over into foreign control, when, in fact, the majority of shares are foreign-owned and the overwhelming majority of directors are foreigners?

Hon BILL ENGLISH: Because the Prime Minister was talking about the question the member actually asked yesterday, which related to all those shares—50 percent of Contact Energy—that were floated in the retail market to mums and dads. As it happens, the biggest single owner of those shares is the New Zealand Government.

Hon Phil Goff: Why does the Prime Minister keep on saying that it is about mums and dads when the fact is that 80 percent of the shares in Contact Energy are owned by fewer than 1 percent of shareholders, who are certainly not average mums and dads but wealthy investors and foreign companies?

Hon BILL ENGLISH: Because as the Prime Minister pointed out—and I think the Minister of Finance might have pointed it out—in Contact Energy’s case, the Government set out to sell the whole of the company, including a cornerstone shareholding. That is not the model the Government is now proposing. The reason, as I said, that a majority of shares in Contact Energy may be owned by foreigners—and they probably are—is that half of it was sold to foreigners in the first place. That is precisely the difference. The model the Government is now proposing is 51 percent Government ownership, with Kiwi mums and dads at the front of the queue to buy the rest of it.

Hon Phil Goff: Does the Prime Minister understand that at the time of privatisation there were 225,000 shareholders, which has now dropped to 80,000 shareholders as of August, and what does that represent if not the sale of shares from the mums and dads to the wealthy investors and the big corporates?

Hon BILL ENGLISH: In the first place, the member does not know who those shares might have been sold to. Secondly, this does come down to a matter of trusting New Zealanders. We believe that New Zealanders want to invest in New Zealand. Labour members believe that New Zealanders want to sell out at the first chance they get. We are with the New Zealanders.

Hon Phil Goff: I seek leave of the House to table a number of documents. The first one is from the Contact Energy Ltd annual report 2010, which shows that nearly 80 percent of its shares are owned by fewer than 1 percent of shareholders.

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

Hon Phil Goff: I seek leave of the House to table a document that is a company extract from Contact Energy Ltd, which shows that at least five out of seven directors are not New Zealanders.

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.

Hon Phil Goff: I seek leave of the House to table a document from the Parliamentary Library that shows that the original number of shareholders—225,000—has now dropped to 80,911, which is presumably mum and dad investors selling out—

Mr SPEAKER: The last bit the member knows is totally out of order—totally out of order— because that was not a necessary description of the document. Leave is sought to table that document. Is there any objection? There is objection to the tabling of that last document.

Hon Phil Goff: Does the Prime Minister agree with Pattrick Smellie, who says—in the same article that he has quoted Pattrick Smellie from time and again—that partial privatisation will lead

to “higher power prices sooner than might otherwise be the case,” or does he still contend that privatisation will not lead to faster rises in power prices?

Hon BILL ENGLISH: No, I do not agree with Pattrick Smellie. In fact, Labour should be apologising for what happened while all these companies were in 100 percent State ownership. Power prices went up 70 percent in 8 years. The future of power prices will be determined by the competitiveness of the market, and this Government has moved to improve the competitiveness of the market and protect consumers from rapacious State-owned companies.

Hon Phil Goff: Does the Prime Minister accept the figures set out in the business section of the Dominion Post this morning that show that the privatised company Contact Energy is charging a typical four-person household in Wellington $500 a year more in power prices than any of the State-owned enterprise power company alternatives?

Hon BILL ENGLISH: I have not seen those figures, so I cannot comment on them. It would be a bit bizarre if Labour believes that one power company can consistently charge a lot more than the rest of them and retain all its customers. In the long run that simply cannot be the case, and, in fact, my understanding is that Contact Energy is losing customers, probably because its prices are too high.

Tax System Changes—Fairness

2. MICHAEL WOODHOUSE (National) to the Minister of Finance: What progress has the Government made in making the tax system fairer?

Hon BILL ENGLISH (Minister of Finance): In Budget 2010 we recognised there were parts of the community who, over the past decade, have simply not paid their fair share of tax. The Government raised the effective tax rate on property with a number of different measures, including denying depreciation on long-life assets, tightened the eligibility for Working for Families so that those with high economic incomes could not use paper losses to qualify, and allocated $120 million to the Inland Revenue Department to better enforce the rules. These measures have been successful, and we have achieved a more balanced and fair tax system that supports growth and provides good incentives in the economy.

Michael Woodhouse: How does the tax system interact with income support, which the Government provides?

Hon BILL ENGLISH: Income support and the tax system need to be seen together. We tax those who earn income at progressive rates, although 75 percent of taxpayers pay no more than 17.5c in the dollar now. We also support those on low and median incomes with dependent children. A single-income family with two children pays no net tax until their income reaches $50,000 a year. This year Treasury projects we will collect $26 billion of income tax. Net of tax we will pay about $12 billion in income support and another $8 billion for superannuation.

Michael Woodhouse: Which groups now pay most of the tax collected by the Government?

Hon BILL ENGLISH: Our tax and transfer system is highly redistributive, and the number of people paying income tax is surprisingly small. The lowest-income 43 percent of households currently receive more in income support than they pay in income tax. The 1.3 million households with incomes under $110,000 a year collectively pay no net tax—that is, their total income support payments match their combined income tax. The top 10 percent of households contribute over 70 percent of income tax, net of transfers—over 70 percent of income tax, net of transfers. This system is highly redistributive and we believe it is fair.

Michael Woodhouse: What steps has the Government taken to prevent the erosion of the tax base?

Hon BILL ENGLISH: When we became the Government we found a pretty chaotic tax system, where a lot of wealthier people were simply not paying their fair share of tax, so we set out to tighten the taxation of property, beef up enforcement by the Inland Revenue Department, and reduce widespread income-sheltering through trusts. The Inland Revenue Department did an

exercise where it tabulated New Zealand’s 100 richest people, and found that over half of them were not paying the top personal tax rate. That is how badly the tax system was operating.

State-owned Assets, Sales—Meetings with Grey Power

3. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: At recent meetings he has had with Grey Power, have they raised with him their concerns about the sell-off of state assets?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes; equally, when the Prime Minister raises concerns about their investments in failed finance companies, they see the mixed-ownership model from a different perspective. Many share his view that it makes no sense for New Zealanders to be prevented from investing in good, solid New Zealand assets, which the mixed-ownership model would allow, and which is currently allowed through the Air New Zealand model put in place by the previous Labour Government.

Hon Annette King: Is he aware that, according to Statistics New Zealand, 81 percent of senior citizens live on New Zealand superannuation, with little or no other income; if he is aware of that, where does he suggest older people get money from to invest in assets they already own, and have paid for?

Hon BILL ENGLISH: The comments the member is referring to relate to the Prime Minister’s discussing with Grey Power members whether they want the choice of investing in finance companies—where, under the previous Labour Government, investors lost $8 billion in those finance companies; the legacy of Labour’s economic management—or the opportunity to invest in a utility company providing reasonable returns consistently over time. Most of them indicate the obvious choice.

Hon Annette King: What is his answer to Grey Power members who are quoted as saying in the Grey Power Magazine: “Why are we buying back what we have already paid for in taxes? They belong to New Zealanders now; why buy them back?”

Hon BILL ENGLISH: Grey Power members will not have to buy them back. Many of them will be quite happy with their 51 percent ownership retained by the Government. They will also be happy to see 1.7 million KiwiSavers buying into our State-owned enterprises. They will be happy to see ACC, in which they have all invested, being able to buy shares, along with Kiwi mums and dads looking for ways to invest their hard-won savings.

Hon Annette King: Can he remember advertising in the Grey Power Magazine recently, stating: “We are working for you. Security, well-being, and respect.”; if so, does that respect include listening to and acting on the advice of those older people who are saying selling the State assets they paid for is totally unacceptable?

Hon BILL ENGLISH: I do recall some ads in the Grey Power Magazine, including one on asset sales, which did not carry an authorisation statement. I think that will be among the material referred to the police, with the Labour Party yet again in trouble for breaking the electoral law.

Hon Annette King: I seek leave to table an advertisement from the National Party in the Grey Power Magazine that solicits votes and is unauthorised.

Mr SPEAKER: Leave is sought to table an advertisement from the Grey Power Magazine. Is there any objection? [Interruption] Someone wants to know what date it was published.

Hon Annette King: It is the March issue of 2011.

Mr SPEAKER: I thank the member. Is there any objection to that document being tabled? There is no objection. Document, by leave, laid on the Table of the House.

Peseta Sam Lotu-Iiga: What other economic messages has he communicated to superannuitants?

Hon BILL ENGLISH: There is more good news, which is why the Prime Minister is so popular at Grey Power meetings. In the last 3 years prices have gone up 10 percent in total, but superannuation rates have gone up 19 percent. That means, for example, that a married couple on superannuation is getting $166 more per fortnight than 3 years ago—$166 more per fortnight. This is a result of tax cuts and real after-tax average wage increases, and those people are happy about that.

Hon Annette King: In light of his claim that he shows respect to older New Zealanders, will he undertake a thorough and independent analysis of the impact on power prices of his privatisation plans before the election, and make it available before people go to the polls so they can be fully aware of what they are voting for; if not, why not?

Hon BILL ENGLISH: An independent analysis of power prices shows that older people were right to feel they were victims of rapacious State-owned companies over the decade that Labour was in power: power prices went up 70 percent in 8 years. An independent analysis of the electricity market shows that Government decisions are likely to lead to power price increases lower than that in the future.

Hon Annette King: I raise a point of order, Mr Speaker. I asked whether he would undertake a thorough and independent analysis of power prices before the election and release it so people could know what they were voting for. I did not ask about what had happened in the past. I asked whether he would do that and he went nowhere near that question.

Mr SPEAKER: Towards the end of his answer—I accept it did not start as a direct answer to the question—the Minister claimed an analysis had been done, if I heard him correctly. I cannot judge the accuracy or otherwise of that, but that is what I believe that the Minister told the House. So he did answer the question. He said an analysis has already been done.

Hon Annette King: Could the Minister tell the House which document he is using to say that the independent analysis has been done on privatisation and power prices under National’s policy?

Hon BILL ENGLISH: The Government has done an electricity market review that showed that regardless of ownership the structure of the market was not as competitive as it should have been— something the Labour Government said it was going to fix but did not. The Government has made a number of changes as a result of that review. The second point is that if Labour thinks that private ownership automatically means that businesses can put up prices, would it not go out to buy back supermarkets and clothing stores so people can have lower prices?

Peseta Sam Lotu-Iiga: What other reports on asset sales has the Minister seen in relation to Grey Power?

Hon BILL ENGLISH: I have seen reports that back up the material we have already covered today, which is that a lot of older New Zealanders are bitterly disappointed they lost their lifesavings, $8.5 billion worth, in the crash of the finance companies. They are looking for better opportunities for them and particularly for their families to invest their savings safely in New Zealand. A re-elected National Government will provide those opportunities.


4. Dr CAM CALDER (National) to the Minister of Corrections: Has she received any reports on the rate of escape from New Zealand prisons?

Hon JUDITH COLLINS (Minister of Corrections): I am pleased to advise the House that the number of escapes from New Zealand prisons has fallen to an all-time low. In the last financial year there were four escapes from corrections custody, but only two from jails. This compares with nine escapes in the previous financial year and 23 in 2007-08. This great result is due to more sophisticated perimeter fencing, new detection and surveillance systems, improved intelligence, and single points of entry into our prisons. The Department of Corrections is firmly focused on public safety and it is doing a great job.

Dr Cam Calder: What other information has she received in relation to escapes over the past year?

Hon JUDITH COLLINS: I am pleased to report that for the first time there have been no walkaway escapes at all. Instances in which low-security prisoners walk away from work parties or other areas of supervision have been the most common method of escape from New Zealand prisons. This is a fantastic achievement, and is testament to the new security classification system implemented by the Department of Corrections in 2010. The new system focuses much more heavily on escape prevention, and tightens the criteria that a prisoner must meet to be considered for employment in a work party outside the perimeter. This is more excellent work from the Department of Corrections.

Budget 2011—Sales of State-owned Assets

5. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Why doesn’t his Budget’s net debt track take into account lost dividends from SOEs and sales costs arising from his policy of privatising state assets?

Hon BILL ENGLISH (Minister of Finance): Because final decisions have not been made about the mixed-ownership model. In fact, the National Government has been very clear that it would proceed with that model only after it had laid out its plans to the New Zealand voter and it had managed to get re-elected.

Mr SPEAKER: Question number—does the member have a supplementary question? We cannot wait all day.

Hon David Cunliffe: Given that the Minister has banked in Budget 2011—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although some of us do not mind some jovial encouragement from you in the Chair, that is not the sort of comment you use to Ministers when they miss their opportunity to get questions. I think—

Mr SPEAKER: The member is quibbling with what I have just done. That is not a matter of order. I was about to call Kevin Hague, and I was surprised that the member had a further question. Members cannot expect the House to wait for them; that is not unreasonable. Some members take too long to get to their feet, and being occasionally reminded that they should take their call is no bad thing in itself. It is not the end of the world.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think we need to look at this carefully. I think your role is as a referee, not a commentator.

Mr SPEAKER: I do not think I need such lectures.

Hon David Cunliffe: Given that the Minister’s 2011 Budget has already booked the proceeds of those asset sales, for which he has just confirmed that he lacks a mandate, did his Government’s Budget 2011 Fiscal Strategy Report set the upper net debt ceiling at 35 percent, and what guarantee can he offer that his policies will not break this limit when his Budget does not properly account for the costs of his Government’s plan to sell public assets?

Hon BILL ENGLISH: The 35 percent ceiling is well above where we expect net debt to peak, which will be just under 30 percent. I think this will be more of an issue for the member. If he says he will use a capital gains tax to offset sales of assets, he cannot count the dividends, because they are still in the Budget now. He cannot add dividends from retaining State assets. They are still in the Budget.

Aaron Gilmore: Assuming that 49 percent of the State-owned energy companies were sold, what impact would this have on the operating balance, and what would the size of the Crown’s future commercial assets be?

Hon BILL ENGLISH: It would depend a bit on the price. If we use last year’s valuations, our annual interest costs would fall by $400 million, and annual dividends would fall by about $185 million, leaving the operating balance about $215 million better than it would otherwise be.

Hon David Cunliffe: If these State-owned enterprise assets yield low returns as he claims, and given that Treasury says that efficiency gains from privatisation are likely to be moderate at most,

would not power prices have to rise to make these new companies attractive to investors, or will he now admit that these assets are already highly profitable, which is why foreign buyers he has met, like China Investment Corporation, want to buy them and why it does not make sense to sell them?

Hon BILL ENGLISH: No, that is not the case. The measure of poor performance of the last Labour Government is that despite the fact that power prices went up 70 percent in 8 years, these companies actually paid very poor dividends.

Hon David Cunliffe: Why does the Minister not just admit what all New Zealanders already know, which is that he has booked the proceeds of selling State assets in his Budget before he has a mandate to sell them, and that he has done so without booking the lost dividends that he must take down if he goes to 51 percent?

Hon BILL ENGLISH: No, that is not the Government’s position. The fact is that the Government needs to keep investing in its core information technology systems, in ultra-fast broadband, and in rebuilding KiwiRail. We have arranged the Budget so that we will be able to use the proceeds of a partial sell-down of electricity companies for the very real capital needs of the core State sector, which will continue to grow.

Mining, Underground—Safety

6. KEVIN HAGUE (Green) to the Minister of Labour: Is underground mining safe in New Zealand?

Hon KATE WILKINSON (Minister of Labour): As I have previously answered, of course we have concerns about mine safety, which is why we have taken the matter of Pike River and the tragedy that happened there very seriously. It is why we have established a royal commission of inquiry in relation to that. In addition, in order to get immediate assurance, a safety audit of all operating underground coalmines in New Zealand was recently completed by two independent Australian mining specialists. The audit did not reveal that a dangerous situation was imminent in operating underground coalmines in New Zealand.

Kevin Hague: Does she think it is good enough that of the four recent ignitions in the Spring Creek underground coalmine, the mines inspectorate had the resources to follow up only two?

Hon KATE WILKINSON: Those issues have been raised as evidence at the royal commission. Therefore, that is the appropriate place for them to be considered and I am reluctant to comment further on that.

Kevin Hague: I raise a point of order, Mr Speaker. The Minister does, of course, have the opportunity to say that it is not in the public interest for her to answer a question, but if that is the case, she should say that. The proceedings before the royal commission are not sub judice in any way.

Mr SPEAKER: I hear what the member is saying but I think the Minister was implying, in the way she answered, that she did not consider it to be in the public interest to second-guess the royal commission. That is not an unreasonable position for a Minister to take.

Kevin Hague: Does she agree with international mine safety expert Dave Feickert, who said in the New Zealand Herald yesterday: “Pike River represents a spectacular failure of self-regulating companies in a high-risk industry. Why we allowed an economic theory of business competition to persuade us that competing companies would co-operate on mine safety is something else I will never fathom.”?

Hon KATE WILKINSON: Again, I am reluctant to comment on evidence that is before the royal commission. Whilst those matters are before the royal commission—and some matters will be before the royal commission—I think it is inappropriate to make comments that may be seen as compromising or influencing its determination.

Kevin Hague: Is the Minister aware that as a result of the Kaye and Party mine disaster in 1940, in which five people were killed, all underground mines need to be connected by phone to emergency assistance on the surface?

Hon KATE WILKINSON: Those suggestions are also under the ambit of the royal commission of inquiry. It is a wide-ranging inquiry and I am reluctant to make further comments until those determinations have been made by the inquiry.

Kevin Hague: I raise a point of order, Mr Speaker. The question simply asked whether she was aware of a particular rule about the requirement for a phone connection between underground mines and emergency assistance on the surface. That does not seem to me to be a matter that is currently before the royal commission in the manner that the Minister suggests.

Hon Christopher Finlayson: I refer you, Mr Speaker, to Speaker’s ruling 31/6. It is acknowledged in a very old ruling of Speaker Statham that “The House is not debarred from discussing a matter that is before a Royal commission as would be the case if the matter were before a court.” So questions are not necessarily out of order, but they are questions of propriety, as “members should avoid embarrassing the commission by any statements they make.” We have two royal commissions and I believe it is extremely important that we avoid any suggestion of embarrassing the members of the commission in doing their work, or crossing those bounds of propriety from general questions on a particular subject and moving into an area that may have been, for example, a couple of days ago the subject of evidence and cross-examination and is a live issue before the commission. In my submission, the Minister has taken exactly the right approach.

Kevin Hague: I cannot see how it could possibly be an embarrassment to the royal commission to say whether the Minister is aware of a requirement for such a phone link between underground and emergency assistance on the surface.

Hon David Parker: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear briefly from the Hon David Parker.

Hon David Parker: I think there is another point of principle here too, and that is that Governments, of course, cause the creation of royal commissions of inquiry. If by doing that the Government could effectively oust the right of parliamentarians to discuss issues of public interest, that would pervert the course of this Parliament. So long as the question is not embarrassing to the royal commission in the way in which the Speaker’s ruling states, it should be perfectly in order.

Hon Member: Further to the point of order—

Mr SPEAKER: No, I do not want to go on with this indefinitely. I propose to invite the member to repeat his question, because I have some sympathy with the point he makes. Whether a Minister is aware of an alleged rule—I do not know whether such a rule exists—cannot, in my view, compromise the royal commission. But we must trust the Minister’s judgment in respect of issues that may not be in the public interest because of implications for the royal commission. I invite the member to repeat his question. As members have alluded to under the serious points of order raised, it is not out of order to ask questions. There must be some questions that it is OK and in the public interest to answer. I invite the member to repeat his question.

Kevin Hague: Is she aware that as a result of the Kaye and Party mine disaster in 1940, in which five people were killed, all underground mines need to be connected by phone to emergency assistance on the surface?

Hon KATE WILKINSON: I concede that I am not aware of all the technical specifications or requirements of mining standards, mining regulations, or mining practices. I am not a miner.

Kevin Hague: Does the Minister think it is good enough that when the two Pike River survivors struggled to the phone in the Pike River mine and called the Pike River surface controller, their call went to an answerphone?

Hon Christopher Finlayson: I raise a point of order, Mr Speaker. That question crosses the line into something that is potentially very embarrassing to the commission. The commission is dealing with these very factual issues at this time. It is quite improper.

Mr SPEAKER: I appreciate the lecture from the Attorney-General, but the judgment as to whether a matter is not in the public interest—[Interruption] I am on feet, if it has escaped the Attorney-General’s notice. This is a matter for the Minister. The Minister must be the sole judge as

to whether answering a question is in the public interest. That is a matter for the Minister. The Minister can certainly seek the advice of the Attorney-General around these issues prior to question time or at any stage during question time, but it is up to the Minister to make that determination.

Hon KATE WILKINSON: Once again, I am reluctant to make any comment on evidence that may or may not be before the royal commission of inquiry, because I do not want to be seen to compromise or influence its determination.

Kevin Hague: Does the Minister think it is good enough that when the two—[Interruption]

Mr SPEAKER: I apologise to the member. I say to colleagues in the House that these are obviously serious questions, and I must be able to hear them if I am to make a serious attempt to referee—to use the term my learned colleague has suggested should guide me. On a serious issue like this, it is not helpful to have unnecessary interjections.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Just to make it clear, I am not legally qualified and I have not been called to the Bar. Therefore, I am not learned.

Mr SPEAKER: I apologise to the honourable member. The same would apply to me, I am sure.

Kevin Hague: Does the Minister think it is good enough that when the two Pike River survivors finally got through to the control room and were instructed to keep making their way out of the mine, there was nobody and no supplies—not even a drink of water or first aid—there to meet them, leaving them to make their own way to find help?

Hon KATE WILKINSON: The issue is not what I think is good enough; the issue is what the commission of inquiry thinks is good enough, and how it makes its determination accordingly.

Kevin Hague: Does the Minister still agree with John Key’s comment on 22 November 2010: “I have no reason to believe that New Zealand’s safety standards are any less than Australia’s, and in fact our safety record for the most part has been very good.”?

Hon KATE WILKINSON: I agree with that comment.

Kevin Hague: Given the clear and mounting evidence that changes made in the 1990s to both the mines inspection system and mine safety regulations have significantly reduced safety standards, what possible reason is there now to wait until the royal commission reports before making urgent moves to improve the safety of workers going underground every day right now?

Hon KATE WILKINSON: Those kinds of assertions and assumptions, whether true or false, will be tested by the royal commission. We await its determination.

Kevin Hague: Will the Minister resign if the royal commission finds that her department failed in its duty to protect the Pike River miners, as the then Minister of Conservation the Hon Denis Marshall did over Cave Creek?

Hon KATE WILKINSON: I will await the determination from the royal commission of inquiry. I will be very interested in seeing what it finds out.

Darien Fenton: How will restricting the access of union representatives to workplaces, even where health and safety issues arise, make underground mining in New Zealand safer?

Hon KATE WILKINSON: The access of unions to workplaces is still available. It is just subject to the employer’s consent, which cannot be unreasonably withheld.

Hon Rick Barker: Why is the Government so resistant to miners with practical experience working underground having the power to act and, if necessary, stop work where health and safety issues put lives at risk, preferring instead to leave all health and safety issues to management alone, for whom production and profits are a priority?

Hon KATE WILKINSON: The adequacy of the mining inspectorate, the importance or otherwise of check inspectors, and the effectiveness of laws and regulations are all matters that will be properly considered by the commission of inquiry. Until it makes that determination I am reluctant to make further comment for fear of compromising, jeopardising, or influencing its determination.

Hon Rick Barker: Is it correct to interpret from the Minister’s answers to Labour and the Greens that she will simply wait for the royal commission to report until she does anything about mine safety?

Hon KATE WILKINSON: Until the royal commission of inquiry makes its findings, we will wait accordingly. That is the proper course.

Hon Trevor Mallard: If evidence before the royal commission shows a clear path for improving safety in mines, will she take that course before the commission reports?

Hon KATE WILKINSON: If there is such evidence we will look at it very carefully at the time.

Roading, Christchurch—Christchurch Southern Motorway

7. COLIN KING (National—Kaikōura) to the Minister of Transport: What progress has been made on the Christchurch Southern Motorway Road of National Significance following the earthquakes in the city?

Hon STEVEN JOYCE (Minister of Transport): Good news! Very good news, in fact. I was visiting Christchurch yesterday and saw firsthand the very good progress being made despite the earthquakes resulting in workers being temporarily transferred to other sites for emergency repairs, and the design also requiring tweaks to reflect changes to the land. The Christchurch Southern Motorway extension is still on track for its original completion date of early 2013. I take this opportunity to congratulate the workers and contractors on keeping going in what are really quite exceptional circumstances as they work to complete this very important project for Christchurch’s economic and social future.

Colin King: Have the earthquakes changed the need for the Christchurch Southern Motorway project?

Hon STEVEN JOYCE: The earthquakes have probably made the project more important now than before. Traffic patterns have changed in Christchurch following the earthquakes, and the main southern arterials in the city are congested at peak times. This has caused frustrating delays for motorists travelling to the city, to the port of Lyttelton, and to the industrial areas in the south and east of the city. In addition, it is likely that growth in the western areas of the city will accelerate as people and businesses relocate out of harder-hit areas. The Government is determined to continue with the $600 million Christchurch road of national significance programme, which will create hundreds of jobs and help move goods and services as the city’s economy recovers.

Earthquakes, Canterbury—Red Zone Properties

8. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister for Canterbury

Earthquake Recovery: How many of the 5,100 properties in the red zone have been deemed to be uneconomic to repair by the insurer and how many of those, approximately, had unimproved land valuations of less than $150,000?

Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake

Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: Those numbers and assessments are still being finalised. The full extent of the damage to houses beyond the Earthquake Commission cap of $100,000 plus GST is confidential to the homeowner and their individual insurer, and is for insurers to assess. For that reason, the Government is offering to purchase properties in the most damaged areas at capital value to enable homeowners to move on quickly, rather than wait years for their claims to be resolved. This offer to purchase properties at their 2007 rating valuation is a fair and balanced one, which the New Zealand Institute of Valuers agrees with. The land rating valuations for all these properties in Christchurch are available on the Christchurch City Council website.

Hon Clayton Cosgrove: Given that answer, what advice enabled him to claim, in answer to oral question No. 9 last Wednesday regarding preserving the equity of earthquake victims, that the

Government believes that “in the vast bulk of cases” the financial offer will achieve that, when he says he does not have those figures?

Hon MAURICE WILLIAMSON: There is a very big difference between “the vast bulk of” and having the absolute detail. I still believe, and the Government still believes, that the offer we have made is fair and balanced. The vast bulk of properties that we know of at this point show that, in fact, the 2007 rating valuation is a fair and balanced offer.

Hon Clayton Cosgrove: How is it fair and reasonable to base the land-only offer on a value that has no relationship to market value, given that it is what remains when the improvements are subtracted from the capital value of the property?

Hon MAURICE WILLIAMSON: I am sorry, but the member does not seem to get the answer every time I reply. The Government has worked its way carefully through this. We think the most open figure that everyone knows about, a figure that everyone has a copy of and knows what it is, is their 2007 rating valuation. There is lots of evidence to show that since that date, property prices were going down in terms of the transactions and sales. One thing I think the member is missing is that the offer the Government has made is voluntary. People do not have to take the offer.

Hon Ruth Dyson: How is it fair, balanced, and reasonable that his red zone package will leave many elderly people—not outliers, as he intimated last week—with a significant shortfall between the rateable value of their property and the purchase price of anything comparable, and will leave that couple unable to borrow money?

Hon MAURICE WILLIAMSON: One of the factors I think members need to take into account is what the interest rates on mortgages would be. If we go back to 2007, I can tell the member that the mortgage interest rate at that time was 10.1 percent. Right now banks are offering a 4-year fixed mortgage at 6.45 percent, but in Canterbury I am told that at least one bank is offering one at about 3.6 percent. If those people take that rate on a $200,000 mortgage, they will be substantially better off than they would have been when holding a mortgage back in 2007.

Hon Ruth Dyson: I raise a point of order, Mr Speaker. My question asked specifically about a couple who were in the situation where they had a significant shortfall between their red zone rateable value and a comparable purchase price, and who were unable to borrow money. For the Minister to then recall what the 2007 interest rates were and what this year’s interest rates are is irrelevant. The question was not addressed.

Mr SPEAKER: Well, I listened very carefully, and for a start I was somewhat of the member’s view. But it seemed to me that the Minister was pointing out that he cannot assess whether a person can or cannot borrow money. He was pointing out that today, compared with 2007 when the valuations were based, it is cheaper for people to borrow money, and therefore people on limited incomes may be able to borrow money. Certainly, I accept that that was not the answer the member would have expected, but I have to be careful not to prevent Ministers from answering a question in the way that they see fit. The member has a further supplementary question in which to dig into that issue. I am reluctant, sometimes, to ask a Minister to give a particular answer on a member’s first attempt to get an answer out of that Minister. I accept, though, that the member has some grounds for being aggrieved, but there is a further supplementary question there, obviously.

Hon Ruth Dyson: I just reiterate the point that my question was specifically about people who were unable to borrow money, but I will take your advice and go on to my second supplementary question if you did not hear that part of my question.

Mr SPEAKER: I did actually hear that part of the question, but when it is alleged in a question that people are unable to borrow money, who says so? The Minister was interpreting it, I think, in that way—who says a person cannot borrow money? Banks may determine that someone who could not borrow money at 10 percent can borrow it at 6 percent. I cannot insist that a Minister answer in a particular way on that kind of assertion in a question.

Hon Ruth Dyson: How is it fair, balanced, and reasonable for many people in a brand new home with minor earthquake damage who live in the red zone—and so are required to move, not repair

it—and who are not outliers, as he said in answers to questions last week, to be told by their insurance companies that they will be paid only the price of repairing their homes, not of replacing them? How is that fair, balanced, and reasonable?

Hon MAURICE WILLIAMSON: There are two answers to that. The first is that that is why the Government has put on the table the offer it has, and the second part of the answer is that that member herself said in the Christchurch Press the day after the Government offered the package that this offer was fair.

Amy Adams: What reports has he seen on the public reaction to the Government’s package for affected residents in the greater Christchurch residential red zone?

Hon MAURICE WILLIAMSON: In addition to the large volume of positive letters and emails received by the Minister for Canterbury Earthquake Recovery and the Canterbury Earthquake Recovery Authority, and by other Government MPs, on 3 News on Monday night the results of a Reid Research Services poll were reported. This poll found that 72 percent of New Zealanders nationally, and 76 percent of people in Christchurch, agreed with the Government’s earthquake package.

Brendon Burns: Given that the average new section price around Christchurch usually starts at about $150,000, how would having to pay that price preserve equity for constituents of mine whose red zone land is valued below—well below—$150,000?

Hon MAURICE WILLIAMSON: I repeat again: the key words in the member’s question were “average” and “usually”. Therefore, some land will be more than the average price; some will be less. The compensation package that we are offering to people in the red zone is to pay them what their capital or rateable valuations were at the time of the 2007 rating valuation. I think that everybody believes that is a fair and balanced package.

Brendon Burns: What does the Minister say to my elderly constituent living on River Road in Richmond, whose large section, as measured by the 2007 rating valuation, is worth half, per square metre, the value of the land of her neighbour; and how would that preserve her equity, as repeatedly pledged?

Hon MAURICE WILLIAMSON: I would say to that person the same thing that I would say to every one of the other 5,100 property owners: that they should sit down, get some advice, look at the Government’s package in great detail, and, if they think it is a fair and balanced package— which we do—they should accept it and get out of there as quickly as they can.

Māori Affairs, Minister—Statements

9. JOHN BOSCAWEN (Leader—ACT) to the Minister of Māori Affairs: Does he stand by all of his recent statements?

Hon Dr PITA SHARPLES (Minister of Māori Affairs): Āe.

John Boscawen: Does he stand by his statement on Monday of this week, made during his TV debate with ACT leader Don Brash, that “We want to change the situation where one lot is underachieving within a system where we have plenty for all in this country.”, and that is why we have special measures; if so, what concrete examples can he give of special measures addressing Māori underachievement?


John Boscawen: What concrete examples, if any, can he give of special measures reducing the number of Māori youth who leave school functionally illiterate, reducing the rate of obesity, diabetes, and other obesity-related diseases among Māori, or reducing the rate of Māori youth unemployment?

Hon Dr PITA SHARPLES: I do not have any responsibility for obesity amongst people. I think that the questions the member asks should be asked of the community—of society and its organisations.

John Boscawen: I will go with that. Can he explain how, despite having separate representation on the Auckland Māori Statutory Board, separate electorates, separate seats on district health boards, separate consultation rights on the Resource Management Act, Māori are still tragically overrepresented in adverse unemployment, welfare, crime, health, and education statistics, and is it not time to realise that the special measures he supports have failed his Māori constituents that he claims to represent?

Hon Dr PITA SHARPLES: The special measures are very small compared with the battle ahead to get Māori achievement to the level of everybody else. I think that that is the sort of question the member should be asking himself.

State-owned Assets, Sales—Ownership of Contact Shares

10. Hon TREVOR MALLARD (Labour—Hutt South) to the Prime Minister: Further to his answers to Oral Question No 1 yesterday on the purchase of state assets by foreigners, what percentage of Contact shares are currently held by foreigners or corporations?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: The Prime Minister stands by his answers to questions, but he is not responsible for the Contact Energy share register.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Yesterday there were some very specific questions where the Prime Minister said he did not know. This question was allowed; if it was into an area that was not answerable by the Prime Minister, you would have ruled it out.

Mr SPEAKER: I think the member makes a fair point. The question would not have been accepted had it not been seen to be in order. It is capable of answer, and I think the House does deserve an answer.

Hon BILL ENGLISH: I raise a point of order, Mr Speaker. I did answer the question. I stood by the answers to the questions asked yesterday. The Prime Minister is not responsible for the Contact Energy share register. That is an answer to the question.

Mr SPEAKER: I clearly remember the questions relating to the proportion of shares held by various groupings of people, and this question has been accepted as being in order. The meaning of the question is very clear. It is a question that is perfectly capable of answer. It should not be any big deal. It is not a matter that is a huge State secret, I would have thought. If it is not possible to obtain the information, that would be totally acceptable, but I would be surprised because the information should be reasonably readily available. Although I accept that the Minister could argue that he is not responsible for the share register, this question relates to answers to oral question No. 1 yesterday where these matters were canvassed by the Prime Minister.

Hon Dr Nick Smith: Point of order.

Mr SPEAKER: I happen to be on my feet. It is a very simple thing. If the facts of a matter are not to be divulged, we have a serious problem. This is a very simple question. It does not imply anything. The question asks, in relation to the answers given yesterday, for the percentage of Contact Energy shares that are held by foreigners or corporations. It may not be possible to give exact figures on that. I am not sure whether the register would break down share ownership into foreigners or corporations. But some guidance to this House on a question asked in this House, on notice for a couple of hours, should be possible.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. If you are to say that if a Minister makes any comment on any issue, then he is responsible for questions that go well outside his mandate—and surely the share register of a private company is not within the responsibility of any Minister in this House or the Prime Minister—then Ministers may make the habit of simply taking a very narrow perspective of questions and refusing to answer anything. Otherwise you will have Ministers responsible for every single little bit of New Zealand society.

Hon Trevor Mallard: Point of order.

Mr SPEAKER: I do not need any further help on this. The Speaker would probably be fairly grateful if Ministers took a fairly narrow view of some questions asked. It would be a step forward on many occasions. This is not some passing comment made by a Minister. This was a central issue in a question for oral answer yesterday, and it has been accepted as being in order. It is a primary question; it is not as if it is a supplementary question. I would not have thought it is a huge issue. It ought to be a matter of being possible to ascertain from the public record the proportion of shares that are held by foreigners or corporations, so making a big deal out of is in no one’s particular interest, I would have thought.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It does appear that your ruling has come as somewhat of a surprise to the Minister. Although we have started on the question, I would be happy to seek leave to have it deferred until tomorrow so that he can be briefed.

Mr SPEAKER: Leave is sought to have this question deferred. Is there any objection to that course of action? There is objection. Therefore, I invite the Minister to please answer the question.

Hon BILL ENGLISH: It is not possible to establish with accuracy whether New Zealanders or corporations or foreigners own the shares in Contact Energy—for instance, Tea Custodians Ltd— who would that be? Custodial Services Ltd—who would that be? ASB Nominees Ltd—who would that be? Custodial Services Ltd again—who would that be? What we do know is that Origin Energy owns 51 percent of the shares, because the shares were sold to it originally. Shareholding is very widespread. Other than Origin Energy, no institution, foreign or domestic, owns more than 5 percent of shares. The biggest non – Origin Energy shareholder is the Government, through the Superannuation Fund and ACC, which owns 5 percent of all shares in Contact Energy and 10 percent of the available non – Origin Energy shares.

Mr SPEAKER: I thank the Minister.

Hon Trevor Mallard: Further to the answer to yesterday’s oral question No. 1, does the document that was being referred to extending the mixed-ownership model—which uses the same term for privatisation as the Government uses, which talks about selling the same companies as the Government plans to, which lists the Government’s objectives, and which was released by his Minister of Finance as part of Budget 2011—not represent Government policy on asset sales when it says: “significant participation by foreign investors will be essential to achieve the Government’s overall objectives.”?

Hon BILL ENGLISH: The member is correct. It does not represent Government policy. The Government has—

Hon Annette King: How can that be?

Hon BILL ENGLISH: Well, it is just advice from officials. We often disagree with advice from officials. The Government has decided that the proposition it is putting to the electorate is 51 percent Government ownership, and Kiwi mums and dads at the front of the queue. Treasury has a different view of how it should be done, and we disagree with that view.

Hon Trevor Mallard: Does his Government intend to prevent the on-sale of privatised Stateowned enterprise shares to foreigners?

Hon BILL ENGLISH: The Government will be getting advice between now and the election about what the rules should be about a float, but our general disposition would be to trust New Zealanders. We believe New Zealanders want to—

Hon Members: Ha, ha!

Hon BILL ENGLISH: Well, if Labour’s only reason for owning these companies is that it does not trust New Zealanders not to sell out New Zealand, then why does it not tell New Zealanders that? The only reason Labour wants to own these companies is that New Zealanders personally will sell out to foreigners.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Other than saying that he would get advice on it, I invite you to ask the Minister to address the question.

Mr SPEAKER: I believe the Minister did answer the question. He indicated details on the float having not yet been finalised, but he shared with the House his view of the matter at this stage. I think it was a perfectly reasonable answer to the question asked.

Environmental Decision-making—Involvement of Māori

11. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Minister for the Environment: Does he agree with the statement in Ko Aotearoa Tēnei, that “direct infusion of indigenous values into mainstream environmental regulation may well be unique in the world”; if so, how will he advance the opportunities for Māori to take more positive and proactive roles in environmental decision-making?

Hon Dr NICK SMITH (Minister for the Environment): The Government has not yet considered this Waitangi Tribunal report, so it is premature to give a definitive answer. A group of Ministers led by the Attorney-General, with advice from officials, has been convened to give careful consideration to this 1,000-page report. Current Government policy does recognise that Māori and local iwi do have—

Hon Shane Jones: Don’t be lazy. Read it.

Hon Dr NICK SMITH: —“lazy”, from the guy who was late for his TV programme on work— a special perspective on environmental issues. We support specific mechanisms to ensure that the Māori voice is heard, consistent with the Treaty of Waitangi, on environmental decision-making, but we do not support a veto.

Rahui Katene: Does the Minister agree with the Waitangi Tribunal that “Nearly 20 years after the RMA was enacted, it is fair to say that the legislation has delivered Māori scarcely a shadow of its original promise.”, and what current initiatives does he have in train to ensure central government plays a key leadership role in encouraging local authorities to have particular regard to both the Treaty and the concept of kaitiakitanga?

Hon Dr NICK SMITH: My initial view is that the report is overstated. The performance of the councils in meeting their responsibilities to consult and engage with local iwi is a mixed bag. Some councils are doing very well; some are not. This issue has been strongly advocated by the Minister of Māori Affairs, Dr Pita Sharples. We are exploring policy options to improve the performance of the councils, and officials are due to report back to Cabinet by May 2012.

Rahui Katene: What explanation can the Minister suggest for why, between 1991 and 2010, not a single section 33 delegation of powers and functions to iwi has occurred—a measure that was introduced into the Resource Management Act to enable local iwi to participate in environmental decision-making and management?

Hon Dr NICK SMITH: I think the reason is that there is real nervousness about delegating decision making completely to an iwi authority. There is a big difference between iwi participating in decision making and iwi actually making the decisions. As I said in answer to the primary question, it is the Government’s view that Māori and iwi have an important voice in environmental decision-making, but this does not amount to a veto.

Unemployment, Canterbury—Reports

12. NICKY WAGNER (National) to the Minister for Social Development and Employment: What reports has she seen on the Canterbury unemployment figures?

Hon PAULA BENNETT (Minister for Social Development and Employment): There are currently 6,342 people on unemployment benefits in Canterbury. I can advise that although there are 962 more people on the unemployment benefit than the week before February’s earthquake, I am encouraged that businesses are open and hiring. It is likely that we are yet to see the full impact of all the earthquakes; however, it is a positive sign that there are more than 500 job vacancies in Canterbury through Work and Income.

Nicky Wagner: What other reports has she seen on the increase of people on benefits as a result of the Canterbury earthquakes?

Hon PAULA BENNETT: I heard reports of 24,000 extra people going on to benefits. Those figures were put forward by Clayton Cosgrove via the media, and I think it was scaremongering. It made people very uneasy and upset. We quite simply have not reached that sort of level of unemployment, with 20,000 people unemployed, as was quite often said. In fact, since the February earthquake the total number of people on benefits has decreased by 670, as we have seen people going off the invalids benefit and the domestic purposes benefit.


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