Questions And Answers Feb 8

by Desk Editor on Thursday, February 9, 2012 — 10:09 AM




State-owned Assets, Sales—Prime Minister’s Statements

1. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in the House yesterday, in answer to Oral Question No 2, that his Government is selling assets because “New Zealanders want less debt, more productive assets, and an economy that is going to function, not a load more debt”?

Rt Hon JOHN KEY (Prime Minister): What I actually said was that one of the reasons National has 59 MPs and the Labour Party has very few is “because New Zealanders want less debt, more productive assets, and an economy that is going to function, not a load more debt, as Phil Goff was promising, and, I have no doubt, David Shearer is, as well.” I certainly stand by that statement.

David Shearer: Does he believe that his asset sale policy is not about paying off debt; it is just about not borrowing more?

Rt Hon JOHN KEY: I think there are a range of reasons why the mixed-ownership model makes so much sense. It is because I think the companies will perform better, it is because New Zealand will have less debt, and it is because we will have $5 billion to $7 billion to put into the Future Fund. So there are a variety of reasons to build out the capital markets, and, of course, there are now approximately 1.8 million KiwiSaver accounts—mums and dads who want to invest in real New Zealand assets. Those New Zealanders are dying to invest in New Zealand.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That was a very precise question about the repayment of debt. You might want to ask my colleague to ask it again. It was a specific question and very narrow, and it was not even addressed.

Mr SPEAKER: Order. I will hear briefly the honourable Leader of the House.

Hon Gerry Brownlee: I think it is pretty clear that the order of the day is a bit of disruption around this particular series of questions—

Mr SPEAKER: Order! That is a not a point of order.

Hon Gerry Brownlee: No, it is an observation. I apologise and I will withdraw as well. But to the point of order what I would say is simply that the Prime Minister’s answer in Hansard will bear it out when, I am sure, you read some of that later, as I know you do, that he gave a range of responses to the question that Mr Shearer asked. There is no reason why an assumption should be made that the strict one prescription inside the question was what had to be agreed to—not at all. He asked did he believe something.

Mr SPEAKER: I accept the point that the honourable Leader of the House has made. The question asked whether a certain reason was the reason for certain actions taking place and the Prime Minister pointed out actually there were other reasons as well. I think that is a perfectly reasonable answer.

David Shearer: Has the Prime Minister read comments by economic commentator Brian Fallow, that the asset sales are certainly not the solution to fiscal problems—in relation to his last answer?

Rt Hon JOHN KEY: No.

Dr Russel Norman: How is it fiscally rational to sell assets that Treasury tells us are earning 15 percent, in order to substitute for debt, which would cost us 4 percent?

Rt Hon JOHN KEY: All of that will be clear when the Budget Policy Statement is released on 16 February. But in broad terms the cost of funding of debt that would otherwise have to be incurred by the country if there was not the resources coming from the mixed-ownership model is actually slightly more expensive than the dividend return overall. Some years there have been super-profits earned by State-owned enterprises, but, in fact, they are embedded in the future price likely to be paid by investors.

David Shearer: Could he square his answer to supplementary question No. 1 with the latest Crown assets portfolio report, which found that 2011 dividends were a record for the last 5 years, and that the energy companies, quote: “have wider benefits to New Zealand” including “securing New Zealand’s future electricity supply”?

Rt Hon JOHN KEY: I have not seen that report but I do recall the year where there probably were the most super-profits, and that was the year when Meridian Energy sold Southern Hydro—so a bit like selling 49 percent in an exceptional time.

Rt Hon Winston Peters: Would the Prime Minister tell the country what more “productive assets”, to use his words, he has in mind than those four power companies he intends to sell to mum and dad investors who own them already, as do the KiwiSaver account holders own those companies already—what are the more productive assets he is talking about?

Rt Hon JOHN KEY: Well, firstly, I think it is an interesting point to recognise what the Crown balance sheet actually looks like, because at the moment it sits at $245 billion and over the next 4 years it will net increase by a further $22 billion. So New Zealand mums and dads, as he put it, in 4 years’ time under the leadership of this Government will have $267 billion.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My question was very precise. It asked the Prime Minister to tell the country what the more productive assets are —in his words—he has in mind for the people who already own those power companies he intends to flog off.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear the honourable Leader of the House.

Hon Gerry Brownlee: This is every question getting challenged, which is not a good circumstance for the House to get itself into, but I would have thought that if he was asking the question about what productive assets—

Rt Hon Winston Peters: No—more productive.

Hon Gerry Brownlee: —mum and dad New Zealanders are going to have—more productive; whichever way you want to put it—the Prime Minister was outlining quite considerable increases in the assets they are going to have. Perfectly reasonable.

Mr SPEAKER: Order! The member should not be adding that kind of opinion into a point of order. But the member asked about matters to do with assets. The Prime Minister was actually answering in a very rational way about the balance sheet and he had not finished yet. I think the Prime Minister should be given the opportunity to finish.

Rt Hon JOHN KEY: So firstly, the proposition that the member makes is factually incorrect and he should know that. It is $267 billion in assets, not $245 as today. Secondly, if you want my view, $1 billion being taken out of some of these assets and put into 21st century schools to educate the future of our young kids is actually more important than owning 100 percent of Meridian.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Now look, I did not enumerate any figure as to the assets; he made it up himself. The second thing, I asked for the more productive

assets. That means, in a commercial scale of things, what would be more productive than the 15- plus percent assets of the four power companies—

Mr SPEAKER: Order! The member is now seeking to debate the matter.

Rt Hon Winston Peters: No.

Mr SPEAKER: I apologise to the member; I am obviously stupid, but if talking about returns on assets is not debating the matter, then forgive me. But the member asked a question about the more productive assets, the Prime Minister answered in relation to the whole balance sheets and actually talked about the assets that are important to the Government, and he talked about school assets. That was the Prime Minister’s answer to the question. It is not for me to judge that answer. It is definitely an answer to the question.

Rt Hon Winston Peters: Would the Prime Minister tell us what the commercial rate of return is for the school assets he proposes for this country?

Rt Hon JOHN KEY: There is a number of dividends that come from having schoolchildren educated in 21st century schools, and if the member does not know that—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I asked him what was the commercial rate of return—not a whole lot of social valuations, but the commercial rate of return— and I am asking you to make him answer the question.

Mr SPEAKER: The member cannot expect an answer to be exactly what he would like the answer to be. If a member asks a question like that, the Minister in answering it will give what the Minister sees as being a rational answer. I believe the Prime Minister was giving a rational answer to the question asked. Question time is not about members being able to elicit from Ministers exactly the answer they want. They ask questions, and the better the question, the better the answer. That is the way it works. Members need to think about their questions.

David Shearer: Given his answer to supplementary question No. 1, has the Prime Minister read the Treasury report that found “little evidence to suggest privatisation would significantly improve the financial performance of many of the SOE companies”?

Rt Hon JOHN KEY: Yes, and where I would draw some difference of opinion would be in the potential opportunity of many of these companies. If we go and take a look at Mighty River Power as a good example, here is a company with world-class geothermal technology looking to take that to the world.

Hon Trevor Mallard: Why can’t they do that if they’re in Crown ownership?

Rt Hon JOHN KEY: We are a capital-strapped Government, so we are not going to invest in that way, but others might. Interestingly enough, when that monkey over there making all that noise was in Government, he was actually proposing they do exactly that, because he wanted to float the offshoot subsidiaries on the stock exchange. He promoted it, but now he is in Opposition, he just goes like this.

David Shearer: Is it his intention for the Crown to indemnify the privatised companies and shareholders for their losses resulting from Treaty issues?

Rt Hon JOHN KEY: I think the member clearly demonstrated yesterday he does not have an answer to who owns water, and today he does not understand the Treaty, which is a compact between the Crown and Māori.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think it was a very clear question about whether it is the Government’s intention to indemnify those companies for any losses that they suffer. That was not addressed. In fact, the answer was offensive.

Hon Gerry Brownlee: The question carried an inference which, under strict Standing Orders, would make the question out of order. The Prime Minister’s response was appropriate, and because he was inferring there would be losses because of the Treaty of Waitangi, that is not a factual position at all.

Mr SPEAKER: I think we have had enough on this issue. I accept the concern that the answer was perhaps unnecessarily unhelpful, but it did actually answer the question in that the Prime

Minister’s answer was arguing that in fact because the Treaty of Waitangi is a matter between the Crown and Māori, the Prime Minister would seem to be arguing that there would not be therefore losses to private companies as a consequence. If members think that is not a very good answer, ask the Prime Minister in even more detail about it; that is what question time is about. The answer may not have been the greatest answer, but I am sure the Leader of the Opposition is capable of asking further pointed questions to dig into it further.

Te Ururoa Flavell: If the Government has the duty of active protection and upholding Te Tiriti o Waitangi, why would it propose the removal of section 9 of the State-Owned Enterprises Act, which in effect lets not just investors, but the Government, off the hook.

Rt Hon JOHN KEY: The Government has absolutely no intention of removing section 9 from the State-Owned Enterprises Act.

Dr Russel Norman: Is the Prime Minister telling this House that Treasury are wrong, when in their 2011 Crown Ownership Monitoring Unit report, they report that these companies are earning a total return for the Government of 15 percent per annum on average over the last 5 years?

Rt Hon JOHN KEY: No, what I am telling the country is that the dividend flow is broadly in terms of the forgone interest payments that would be required if debt was secured, remembering that the Government will always retain 51 percent or more of those dividends because of its investment, and that there may be some other super-profits earned, but they are captured in the value of the company and will be in the valuations.

Dr Russel Norman: What would the Prime Minister’s advice be to someone who received financial advice from an adviser who told them they should sell assets returning 15 percent in order to pay down debt that cost them 4 percent?

Mr SPEAKER: I am not sure about the Prime Minister’s ministerial responsibility; however—

Dr Russel Norman: I’m seeking an opinion.

Mr SPEAKER: I do not want to prevent the Prime Minister from being able to answer the question where he is asked an opinion.

Rt Hon JOHN KEY: If it was like that I might tell them not to do it, but that is not the case, because in this case, the value difference the person is talking about is off some pretty ropey numbers I might say to start off. Just to give you an idea, that same valuation unit he is talking about moves Solid Energy’s valuation from $475 million in 2007 to $2,954 million in 2008. I know they had a good year but it was not quite that good; and secondly, any other kind of change is implied in the value that would be paid by shareholders.

Economic Growth—Progress

2. PAUL GOLDSMITH (National) to the Minister for Economic Development: What progress is the Government making in implementing its economic growth agenda?

Hon STEVEN JOYCE (Minister for Economic Development):The Government is making very good progress in addressing the barriers that prevent businesses from getting ahead. Prior to the election we released our 120-point economic development action plan that detailed key steps the Government is taking to build modern, productive infrastructure, cut red tape, build industries, innovation, and trade, and build a skilled workforce. A number of these steps are already complete, and 2012 will be about further progressing them across all sectors. The agenda is built around the straightforward premise that if we want more and better jobs for New Zealanders, we need to encourage more businesses to be based here.

Paul Goldsmith: What are the key determinants of business success, and what can the Government do about them?

Hon STEVEN JOYCE: As I see it, businesses depend on a combination of six key things: ideas and innovation to create the business; capital to build the business; access to raw materials; skilled people; public infrastructure, such as power, broadband, and transport; and, most importantly, access to markets and customers who want to buy their products. The Government can help by

making access to the ingredients in any business plan simple and easier, and that is what our 120- point action plan is aiming to deliver, so that our businesses have a better platform to compete in the wider world.

Paul Goldsmith: What barriers to success does the Minister see?

Hon STEVEN JOYCE: Unfortunately, there are a number of people who lack understanding and realism about economic growth, and who say: “We want jobs, we want jobs.”, but in the next breath say: “But you can’t do that. You can’t build that here. You can’t expand that, you can’t explore for that, you can’t invest in property here, and you can’t do that.” That is the attitude that made it much harder to pay our way in the world during the 2000s, and as a result we went into recession before the rest of the world, in early 2008. We should not offer carte blanche for any development, but we need to acknowledge that every time we say no, that has direct consequences in terms of jobs and growth.

Hon David Parker: Is the Minister aware that despite National’s 2008 election promise, the wage gap with Australia has grown substantially since his Government was elected, whether measured on wages or purchase price parity—[Interruption]—yes, it has, Mr Key; and does the absence of reference to closing the wage gap with Australia in the Speech from the Throne, in the Prime Minister’s speech in the Address in Reply debate, or by National during the recent election mean that his Government has admitted failure and given up on this promise?

Hon STEVEN JOYCE: In regard to the first part of the question, I understand that the member is incorrect on an after-tax basis. But, actually, the member makes an interesting point. [Interruption] You either want to hear it, David, or you do not. The member makes an interesting point when talking about growth in Australia, because what drive a lot of that growth are many of the things that have been turned down here by the Opposition, right across that side of the House. I think that inadvertently makes the point that if you want economic growth, you have to be prepared to let businesses grow and expand.

Transport Funding—Cost-effectiveness and Return on Investment

3. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Transport: Does the Government consider it important for its transport spending to be cost-effective and provide a good return on investment?

Hon GERRY BROWNLEE (Minister of Transport): Yes.

Phil Twyford: Has the Minister read his incoming briefing, which shows in figure 10 on page 22 the trend for cost-benefit ratios of approved State highway projects over the past few years, and is he concerned with the trend that graph shows of increasingly poor quality investment?

Hon GERRY BROWNLEE: Yes, and no.

Phil Twyford: Can the Minister confirm that in the 2007-08 year, before the current Government came to power, over 75 percent of State highway expenditure was on projects with high cost-benefit ratios, but by 2009-10 less than 10 percent of State highway expenditure was on projects with high cost-benefit ratios, and is he concerned by this trend?

Hon GERRY BROWNLEE: In answer to the back part, no. What I do know is that if this country had people like Mr Twyford around in earlier times, perhaps even in the Vogel times, this country would still be walking around on dirt tracks.

Phil Twyford: At a time when the Government is cutting back spending left, right, and centre, can the Minister explain why ever-increasing amounts of money are being spent on State highway projects with ever-lower returns on investment, or will he take a more sensible and balanced approach than his predecessor, Steven Joyce?

Hon GERRY BROWNLEE: I will agree with him that my predecessor, Steven Joyce, was an excellent transport Minister, and I am happy that the standards he set inside the Ministry of Transport will be continued under my watch. Might I just say that if benefit-cost ratios were all08 Feb 2012 Questions for Oral Answer Page 6 of 15 important, then you would have to ask why David Shearer does not support the western ring route in Auckland, because that has a very good benefit-cost ratio.

State-owned Energy Companies—Financial Returns

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for State Owned

Enterprises: What, according to the Crown Ownership Monitoring Unit, was the average total shareholder return of Genesis, Meridian, Mighty River Power and Solid Energy over the last five years and how does that compare to the average cost of borrowing to the Government right now?

Hon TONY RYALL (Minister for State Owned Enterprises): The Crown Ownership Monitoring Unit (COMU) estimates that the weighted average total shareholder return of the four energy companies over the last 5 years is 18.5 percent. This does include major non-cash items, one-off items, revaluations, and changes in accounting methodology. It includes, for example, the 521 percent revaluation of Solid Energy, which the Prime Minister spoke about earlier, and also the $600 million one-off sale of Southern Hydro. So that figure is unusable. A better summary is the weighted average dividend yield of the 2000-2011 years, which is 4.1 percent. COMU advises that the average cost of Crown borrowing over the last year is 4.5 percent.

Dr Russel Norman: How is it fiscally rational for the Government to sell assets that earn 18.5 percent in order to avoid taking on debt that costs around 4 percent?

Hon TONY RYALL: I think what the member needs to be clear on is that that is not a valid comparison. The 18.5 percent includes a whole lot of one-off items, significant changes in accounting policy in the way that these valuations are determined, and includes also a number of non-cash items. So these are strictly not comparable in the way that he is seeking to present it.

Hon Clayton Cosgrove: Why did the Government’s Pre-election Economic and Fiscal Update book the revenue from the asset sales while not taking into account the forgone dividends?

Hon TONY RYALL: My advice to the member would be that I think the best response to that would be when the Budget Policy Statement is released. I think the Prime Minister said that would be on 16 February.

Dr Russel Norman: Is he saying that he disagrees with COMU when it stated that it is moving to the use of total shareholder value as the key measure of company and portfolio performance? Is the Government accepting that assessment or is it rejecting it?

Hon TONY RYALL: Well the Government accepts it in the sense that it is moving towards total shareholder funds, but the number of these years, over 5 years, do not use methodology that are exactly comparable. It is inconceivable that the value of Solid Energy could go from sort of $475 million one year to nearly $3 billion the next, and not be attributed to accounting changes. So over time the measurement of total shareholders’ funds will become a more comparable figure, but currently the changes in methodology, the frequent non-cash items, and the number of one-off items mean that that figure is not comparable in the way that the member seeks to use it.

Local Authorities—Rates Increases over Last Two Decades

5. NICKY WAGNER (National—Christchurch Central) to the Minister of Local

Government: What reports has he received on how much rates increased nationally in the decade since the Local Government Act 2002 and how does this compare to the previous decade?

Hon Dr NICK SMITH (Minister of Local Government): Average rates increased by 6.8 percent per annum since the big changes were made in a whole series of local government laws in 2002. In the previous decade, rates increased by an average of 3.9 percent per annum. It is noteworthy that if rates had gone up at the pre-2002 rate, householders would today be paying $500 a year less in rates and the economy as a whole would be spending a billion dollars a year less in rates.

Nicky Wagner: How does the 6.8 percent national average rates increase compare with other components of the consumer price index over the last decade?

Hon Dr NICK SMITH: Rates have gone up by more than any other component of the consumer price index. The 6.8 percent annual increase in rates compares with a CPI overall increase of 3 percent, food of 3.8 percent, transport of 2.6 percent, clothing of 0.1 percent, furniture and appliances of 0.1 percent, and housing costs of 5 percent. The only cost increase that is nearly as great over the past decade is energy costs, which have increased by 6.5 percent per annum, although I note that in the last 3 years that energy price increase, with the reforms made by my colleague Gerry Brownlee, has dropped to just 3.3 percent per year. The Government is working on a package of reforms for local government to ensure that those ongoing large increases do not continue.

Environmental Clean-up—Prosecution over Rena Grounding

6. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister for the Environment: Does he stand by his statement made in the House yesterday in relation to the grounding of the Rena that “the statute sets down very clearly that I as Minister for the Environment should not be encouraging or discouraging a proper, independent decision by Environment Bay of Plenty as to whether they should or should not take a prosecution”?

Hon Dr NICK SMITH (Minister for the Environment): Yes, although it would be useful to clarify that the prosecutions over the Rena grounding involve both the Maritime Transport Act as well as the Resource Management Act, and involve both Maritime New Zealand and the Bay of Plenty Regional Council. Charges have been laid before the courts under both the Maritime Transport Act and the Resource Management Act, and also under the Crimes Act.

Grant Robertson: Why, then, did the Minister tell the New Zealand Herald on 2 November in relation to the Resource Management Act: “In fact, it would be remiss given that it is New Zealand’s worst maritime environmental disaster if there was not a prosecution under the RMA.”, which is clearly an encouragement for a decision from Environment Bay of Plenty and is a breach of the statute?

Hon Dr NICK SMITH: The member completely misses the point that the decision to prosecute under the Resource Management Act had already been made.

Grant Robertson: No, no, it hadn’t.

Hon Dr NICK SMITH: Yes, it had. In fact, if the member checks the record on 2 November, when I made that comment, he will see it was in response to a question by a journalist in response to the fact that charges had been laid under the Resource Management Act, and was perfectly proper—perfectly proper—for me to say as Minister. As—[Interruption] Yes, that is entirely appropriate. In fact, I think every member of this House would say it would be remiss if charges were not laid under the Resource Management Act, given that this is New Zealand’s worst maritime environmental disaster.

Grant Robertson: Does the Minister recall, on 2 November 2011— [Interruption]

Mr SPEAKER: I apologise to the member. I say to the National Party backbenchers that the noise is unreasonable there.

Grant Robertson: Does the Minister recall, on 2 November 2011, making the statement contained in the primary question after being asked about a prosecution against the company that had not been laid?

Hon Dr NICK SMITH: On 2 November the captain and navigation officer appeared before the Tauranga District Court under charges under the Resource Management Act. The comments I made were, I think, made in an interview at the press conference at the control centre on that afternoon. The idea that I made those comments, and then very quickly the agencies whipped around the back door and suddenly put the documents together—I was advised the night before that charges were being lodged under the Resource Management Act, and my comments were in respect of that and were entirely appropriate.

Grant Robertson: Does the Minister accept that the comments he made directly encouraging Environment Bay of Plenty to lay charges were in relation to laying charges against the company—

not against the skipper, but against the company—which is an encouragement to Environment Bay of Plenty, and which is a breach of the statute?

Hon Dr NICK SMITH: I point out that the very day—2 November—that I made those comments was the day on which the ship’s captain and navigation officer were facing charges under the Resource Management Act. To somehow pretend that there is some other story, which the member is now trying to make up, is entirely inconsistent.

Television, Switch-over to Digital—Targeted Assistance Package

7. KANWALJIT SINGH BAKSHI (National) to the Minister of Broadcasting: What recent announcements has the Government made on progress towards digital switchover?

Hon CRAIG FOSS (Minister of Broadcasting): Last month I announced details of the Government’s Going Digital Targeted Assistance Package. To keep watching TV, all New Zealanders need to go digital by getting FreeView, Sky, or TelstraClear, or similar, by the end of 2013. Over 80 percent of Kiwis have already done so and are already enjoying more channels, better pictures, and new services. However, the Government recognises that a small group of people need financial, physical, or technical help to switch over. Our targeted assistance package is focused on those most likely to be in genuine need, and will directly help elderly people on fixed incomes and people with disabilities to make the transition to digital television.

Kanwaljit Singh Bakshi: What are the benefits of the switch to digital television for New Zealand?

Hon CRAIG FOSS: As we move further into the digital age, the digital switch-over will deliver more enhanced reception, better picture quality, as well as freeing up radio spectrum. The total economic benefits from this are estimated to be around $2 billion over 20 years.


8. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he still have confidence in all his Ministers?

Rt Hon JOHN KEY (Prime Minister): Yes.

Rt Hon Winston Peters: In respect of the $1 billion proposed for Whānau Ora, does the Prime Minister think it appropriate that Whānau Ora funding and services are not allocated by a Government department but brokered by private individuals known as, quote, “navigators”, who are also agents for providers? Is that not a massive invitation for conflict of interest?

Rt Hon JOHN KEY: Firstly, I think it is worth pointing out that the Whānau Ora funding is not $1 billion. If the member wants to refer to the Budget, he will see it is in the order of just over $100 million over 4 years. Secondly, whenever Government expenditure is used, it is absolutely appropriate that it is done in a way which is rigidly and clearly accountable to the public, and, in all cases, whether Whānau Ora or others, that process is followed.

Rt Hon Winston Peters: Could the Prime Minister outline what that process could possibly be, if the money is to be paid into trusts? Where is the audit trail once it gets there?

Rt Hon JOHN KEY: The member is asking me a hypothetical question. He can either present it to the Minister for Whānau Ora, or actually present the facts. Do not ask me a hypothetical question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am not asking him a hypothetical question. This is a statement under his name, on 11 December 2011, where he articulates—

Mr SPEAKER: Quoting press statements is certainly not a matter of order. The member asked a very general question to the Prime Minister—“Does he still have confidence in all his Ministers?”—and now wants the Prime Minister to answer a very detailed supplementary question about payments into trust funds. That is simply not going to work. There is no way that a Minister can be expected to have the detailed information to answer that kind of detailed question. If the member wants to pursue the issue, which is absolutely his right during question time, the question

should be lodged to the Minister responsible, and the primary question should make it clear what the issue is about, so that the Minister can have the information necessary to answer the question in the House; otherwise we just waste the time of the House.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, this is not detailed information at all. Any competent Minister knows that when public money is given out—

Mr SPEAKER: Order!

Rt Hon Winston Peters: I want to finish my analogy here.

Mr SPEAKER: Well, I am sorry, I have heard enough. [Interruption] Order! The member does not argue about the detail of whether or not certain information is detailed information by way of point of order. The Speaker has already ruled that, and there is no further point of order to be dealt with on the matter. It is simple sense that where a primary question is as broad as this one, there is no way a Minister can be expected to have detailed information about payments into trust funds. The remedy is in the member’s own hands. If he wants to pursue the matter, there is a way of doing it, and that is by making a primary question clear and asking all the detail he likes of the appropriate Minister.

Rt Hon Winston Peters: Does the Prime Minister remember a press statement under his name, on 11 December 2011, where all the details are set out in page after page after page about an “evolving focus and ongoing implementation of Whānau Ora”, and a whole lot of projects as well, and is it too complicated for him to get up and confirm that although it has been the public practice now for decades that, where money is dispersed from public funds, there is an audit trail, he is not aware of one in the case of Whānau Ora? Yes or no?

Rt Hon JOHN KEY: In answer to the first part of the question, yes.

Mr SPEAKER: Question No. 9, the Hon Lianne Dalziel.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: We will have some order in the House. The member will resume his seat for the moment. I say to Ministers on my right that the member has every right to call a point of order, and it will be heard in silence.

Rt Hon Winston Peters: I just want an answer to my question, which you know was not too detailed, and I expect that you will ask the Prime Minister to give it to me. I have been told there has been progress in question time in this House; I want to see it.

Mr SPEAKER: I invite the member to reflect back on his—I am on my feet and I invite the member to reflect back on his question. He asked the Prime Minister whether he remembers, I think, a press statement in his name, and the Prime Minister said he did. He is required to answer only one part of a supplementary question, which he did, very clearly.

Earthquakes, Canterbury and Christchurch—Feedback on Draft Recovery Plan

9. Hon LIANNE DALZIEL (Labour—Christchurch East) to the Minister for Canterbury

Earthquake Recovery: How many written comments were received on the draft Recovery Plan for the Christchurch CBD and is it his intention to consider them all before making a decision on the draft Recovery Plan for the CBD, in accordance with the process set out on the Canterbury Earthquake Recovery Authority’s website?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): I am advised that there were 79, and the answer is yes.

Hon Lianne Dalziel: Will his consideration include the written comments from engineer John Scarry, who has raised serious concerns about the need for seismic-resistant design, including seismic separation between buildings, area-wide deep soil improvement, and the impact that deep alluvial deposits have on surface seismic acceleration; if so, how will these be addressed in a draft plan that has failed to even mention them?

Hon GERRY BROWNLEE: Consideration will be given to all submissions.

Hon Lianne Dalziel: Does he agree that the draft central city plan, seismic-resistant design for the rebuild, and the founding soils of the central business district are within his remit as Minister for Canterbury Earthquake Recovery; if so, why did he refer the 30 January letter from John Scarry, sent to him about these matters, to the Minister for Building and Construction, saying that the issue fell within his portfolio?

Hon GERRY BROWNLEE: If the member would for a moment recall the Canterbury Earthquake Response and Recovery Act, it makes it clear that Ministers still retain primary portfolio responsibility in their particular portfolio areas. It is within the remit of the Minister for Building and Construction to deal with the matters raised by this particular engineer, and that work is being done.

Hon Lianne Dalziel: What confidence can the people of Christchurch have in the recovery process, when a design of a draft city plan can completely ignore the submission, it can be referred to the Minister for Canterbury Earthquake Recovery, and he refers it to the Minister for the Department of Building and Housing, when it is indeed his responsibility, as the Minister for Canterbury Earthquake Recovery, to sign off on the central city plan?

Hon GERRY BROWNLEE: The draft plan was prepared by the Christchurch City Council. My job, once again, is to ask for submissions. I have done that. We have received them; this is one of those submissions. It is quite appropriate that that submission would be forwarded to the Department of Building and Housing for its advice before any further consideration is given to making the draft plan a plan.

Hon Lianne Dalziel: I seek leave to table the letter from John Scarry Engineering addressed to the Hon Gerry Brownlee, His Worship the Mayor of Christchurch, and Mr Roger Sutton, the Chief Executive of the Canterbury Earthquake Recovery Authority, together with the submission that they made on the central city plan, and, finally, the third item: the letter from the Minister’s office simply referring this to the Minister for Building and Construction.

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

Citizenship—Promotion to Migrants

10. MELISSA LEE (National) to the Minister of Internal Affairs: What recent steps have there been to promote New Zealand citizenship as a successful settlement pathway for migrants?

Hon AMY ADAMS (Minister of Internal Affairs): I am pleased to advise that on Monday His Excellency the Governor-General, as part of his first Waitangi Day programme, hosted a citizenship ceremony at Government House in Wellington. I was delighted to play a part in the event as 24 people from 19 countries became New Zealand citizens. Having the opportunity to welcome new New Zealanders who have chosen to make Aotearoa their home was a fitting way to mark our national day.

Melissa Lee: Why do people apply for citizenship rather than remain on permanent residency?

Hon AMY ADAMS: Becoming a citizen—[Interruption] When they are ready! Becoming a citizen shows that a person has made an indelible commitment to making New Zealand their home, and it shows the rest of the world that they are proud to call themselves a Kiwi. For one 9-year-old boy at Monday’s ceremony, becoming a citizen means the chance to one day become an All Black. New Zealanders as a group are intensely proud of our distinct identity, traditions, values, and culture, which are reflected and bound in the notion of our citizenship and the rights and responsibilities it brings with it.

Boards, Government Appointments—NZ On Air

11. CLARE CURRAN (Labour—Dunedin South) to the Minister of Broadcasting: Does he stand by the Prime Minister’s statement in relation to the appointment of the Prime Minister’s electorate chairman Stephen McElrea to the NZ On Air board that “if you look at the vast array of appointments we make, I think the balance is about right”?

Hon CRAIG FOSS (Minister of Broadcasting): Yes.

Clare Curran: Did Mr McElrea, when making a complaint to the New Zealand On Air chief executive officer and the board chair about the child poverty documentary screened on TV3, give a perception of political interference, and if not, why?

Hon CRAIG FOSS: Decisions of the board are of the board. I deal with the chair of the board, and that is a matter for the board.

Clare Curran: Is he aware that Mr McElrea is part of an operational working group within New Zealand On Air, which includes staff and a representative of MediaWorks, and which is determining the content of four documentaries funded by more than $1 million by New Zealand On Air?

Hon CRAIG FOSS: I have full confidence in the chair of the board and the six members of the board, three of whom have been appointed under the National Government and three were appointed under the previous Labour Government.

Grant Robertson: I raise a point of order, Mr Speaker. That question began with the words “Is he aware…”. He may be, or he may not be, but he did not actually address the question of his awareness of that matter.

Mr SPEAKER: The member has some reasonable grievance in the point of order raised, I think, because the question did indeed start that way and there was no indication whether the Minister was aware or not. I invite the member to repeat her question.

Clare Curran: Is he aware that Mr McElrea is part of an operational working group within New Zealand On Air, which includes staff and a representative of MediaWorks, and which is determining the content of four documentaries funded by more than $1 million by New Zealand On Air?

Hon CRAIG FOSS: The decisions and processes and structures set up by the board under the Crown Entities Act 2004 therefore are of the board and it is not appropriate for me to comment on those matters of the board’s internal structures.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is the same point of order. It is a very simple question. It might not be appropriate for him to interfere. All he was asked was whether he is aware. Most Ministers would read reports of board minutes of that sort, and—

Mr SPEAKER: The member is now debating the issue. I mean, the question was a very simple question. It asked whether the Minister was aware. The Minister’s answer was that he does not get involved in matters to do with the board. Now, that could be interpreted that he is not aware. My suggestion in solving this sort of dilemma is to sharpen the question down even more. The question went on to contain a whole lot of information about what this board member may or may not be involved in. It contained detail and gives the Minister more out. If the question is sharpened down to whether he is aware that a certain board member is involved in a certain group, full stop, it is very difficult then for the Minister. But the more detail that is built into the question about what might be going on within the organisation that the board is responsible for, the more opportunity for the Minister to give the kind of answer the Minister did, because Ministers are not responsible for what goes on in there. So I feel there are still further supplementary questions. I have given a fair hint where I might be even more supportive.

Hon David Parker: I raise a point of order, Mr Speaker. The more specificity in the question, the easier it is for the Minister to deny that he is aware. The extra specificity is already in the question, and all the Minister has to do is say whether he is aware or not aware, in order to address the question.

Mr SPEAKER: The dilemma though with the rules around answering questions is that the more material that is in a question, the more opportunity there is for the Minister to focus on that material rather than the bit that the member wanted answered. Now, I believe there is a way. The Minister has given an answer. I accept the dissatisfaction; I understand the dissatisfaction with the answer. But there are more supplementary questions available and rather than having me try to decide whether or not the Minister has given an adequate answer, I would rather give the member the chance to dig even more precisely into the matter.

Clare Curran: I raise a point of order, Mr Speaker. I am happy to rephrase the question with more specificity.

Mr SPEAKER: The member has more supplementary questions, so she is perfectly at liberty—

Chris Hipkins: Why should she have to use her supplementary question because he is not answering his questions?

Mr SPEAKER: The member certainly has one more supplementary question. It is not my fault if the member’s party has given away some supplementary questions.

Clare Curran: Why is it appropriate for Mr McElrea, the Prime Minister’s electorate chair, to be part of a working group within NZ On Air that is making decisions on the content, programming, and other operational decisions of a taxpayer-funded documentary entitled Whānau Ora, which is described as a “behind-the-scenes look at the implementation of this new initiative that seeks to deliver positive social outcomes for Māori.”?

Hon CRAIG FOSS: Again, I do not think it is appropriate for me to comment on individual members of the board. The board operates under the Crown Entities Act 2004, and it follows due process and due diligence on its appointments and the monitoring and management thereof.

Rt Hon Winston Peters: Could the Minister please tell the country as to whether anybody over there knows anything about this very expensive brown elephant in the name of the Māori Party, and has he discussed it with the Prime Minister? After all, this man is his electorate chairman and presumably has the odd discussion with his now sometime visitor to Helensville.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! A point of order has been called.

Hon Gerry Brownlee: At very best, a little bit of that question might be in order, but, most certainly, the first part was not, nor was the last.

Mr SPEAKER: I think, in fairness, the point of order is reasonably well made. I am not going to take a supplementary question away from the member, but I invite him to repeat the supplementary question in a way that makes it possible for a Minister to answer.

Rt Hon Winston Peters: Given the Minister’s last answer, which was that he did not want to answer, could he please tell me who over there—

Mr SPEAKER: Order! Now the member will lose a supplementary question if he is not careful. That is not how supplementary questions are asked. The member will now ask his supplementary question in an intelligible way.

Rt Hon Winston Peters: Could the Minister tell us whether he or any of his colleagues is prepared to tell the country as to what is happening with Whānau Ora funding, and why it justifies a documentary on it at this point in time, involving someone who is so close to the Prime Minister as to be his electorate chairperson?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The first part of that question remains completely out of order. The next bit may just sneak in, but by your previous rulings I would doubt it.

Rt Hon Winston Peters: With great respect, I think parliamentary question time is when Ministers are required to answer. This idea—

Mr SPEAKER: Order! The member will resume his seat. I absolutely agree with the member that Ministers should answer questions, and, in fact, I have been trying to insist on that. Maybe I have let a few get away a little bit too much in that regard, but the member knows he has to ask a

Minister a question on a subject for which the Minister is responsible. This Minister is not responsible for Whānau Ora, if I understand what is going on. The primary part of that supplementary question asked the Minister if he could tell the House what is going on with this programme called Whānau Ora. That is not—

Rt Hon Winston Peters: I did not ask that at all. I said what justified it being a documentary? What justified it being a documentary was the question. Please listen.

Mr SPEAKER: Order! I accept it is the second day back and sometimes changed procedures take a little while, but we do not behave that way. I am going to invite the member to phrase his question in a way that makes it clearly the responsibility of this Minister—now I am still on my feet. Ask a question that is in order.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise to the member. There are two points that I want to make and I want to be careful about relitigating the decision you have just made. But asking what is special about a programme that justifies a documentary, I think, is something that is the responsibility of the Minister of Broadcasting. The second point I would make is you are narrowing matters down when, in fact, if this question had been allowed to go through by the Government and the Prime Minister had not ducked it, it would be clearly within his responsibility.

Mr SPEAKER: The member may have noticed that I did not rule out any of the supplementary questions of his colleague. I felt they were perfectly within the responsibility of the Minister. All I am asking the right honourable member to do is ask a question that is clearly within the responsibility of the Minister.

Rt Hon Winston Peters: Again to the Minister, what in his portfolio gives him to believe that a documentary, which is part of the portfolio that he is administering, should be allocated to a social or economic programme in respect of Māori affairs and be of such importance as to engage the chairman of the Prime Minister’s electorate, and whether that in any way is appropriate?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker.

Rt Hon Winston Peters: He knows nothing about the subject matter or the wording.

Hon Gerry Brownlee: Mr Peters, I know an awful lot—

Mr SPEAKER: Order! [Interruption] Both members will be leaving this House very shortly. That will cease immediately. I will not tolerate that kind of nonsense and the honourable Leader of the House should know better, even if other members do not. I have ruled that the question is in order. How intelligible it is is another matter, but it is in order.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With respect, that is totally out of order and it is in line with—

Mr SPEAKER: Order! The member will resume his seat [Interruption] Order! The Speaker decides whether a matter is in order or not and the member has tested my patience quite sufficiently. The member only needs to reflect; I suggest he reads the Hansard. I have ruled the question is in order, I have overruled the objections of the Leader of the House, and I am inviting the Minister to answer it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I wish to support the right honourable gentleman. Your rulings were absolutely right. As an umpire you perform superbly. The problem was you added a role as a commentator, which put a member down.

Hon Gerry Brownlee: Point of order.

Mr SPEAKER: The honourable Leader of the House—and we will not take this much further.

Hon Gerry Brownlee: No, but quite clearly you were suggesting that I was unable to make an intelligent assessment of the question and I do not have any grudge against you at all for that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I recall asking you for a considered ruling, I think in the last term, on the matter and I am going to ask the same thing. Are you now saying, as Speaker, quite rightly that you judge what is in order or not and now that it is in order for you to abuse a member of Parliament?

Mr SPEAKER: Order! I think members—[Interruption] Order! The whole House just should take a deep breath and not be so childish, for goodness’ sake. I listen carefully to every question. I have to assess whether or not a Minister answers it. If I find it difficult to understand what the question is—and I am not exactly that stupid—then sometimes it is difficult to assess whether or not the Minister has answered it. I have accepted the question is in order. I am not going to take any further points of order on this. I have warned the member. I have asked the member to answer it and I want him to give his best effort to answer it.

Hon CRAIG FOSS: As far as I remember, Ministers do not make decisions about what programmes NZ On Air funds or shows. It is a contestable funding model at arm’s length from the Government.

Clare Curran: I seek leave to table four documents from NZ On Air released under the Official Information Act. The first is dated 26 May 2011 and is titled “A record of decisions made at working group meeting”. The second is dated 22 September 2011 and is titled “Agreement between MediaWorks and NZ On Air”. The third is dated 10 November 2011 and is “A record of decision of working group meeting”, and the fourth is dated 18 November 2011 and is a record of an email conversation between Stephen McElrea and members of the working group.

Mr SPEAKER: Leave is sought to table those four documents. Is there any objection? There is no objection. Documents, by leave, laid on the Table of the House.

Schools—Class Sizes

12. CATHERINE DELAHUNTY (Green) to the Minister of Education: Will she rule out implementing Treasury’s advice to increase class sizes in schools?

Hon HEKIA PARATA (Minister of Education): Tēnā koe. No, because Treasury’s independent observation was actually, quote, that “Student achievement can be raised by improving the quality of teaching, … Increasing student/teacher ratios, and consolidation of the school network, can free up funding that could be used to support initiatives to enhance the quality of teaching, …”.

Catherine Delahunty: Have any parents asked for an increase in class sizes?

Hon HEKIA PARATA: Not of me.

Catherine Delahunty: Does she agree with Massey University professor of education John O’Neill that class size matters most for socioeconomically disadvantaged children—the very group the Government said it is most concerned about?

Hon HEKIA PARATA: I would refer him and the member to Professor John Hattie, who said we need to direct attention at higher-quality teaching—exactly what we are considering.

Catherine Delahunty: Will charter schools have a defined class size determined by the Ministry of Education?

Hon HEKIA PARATA: We are waiting on the establishment of a working group, which will consider that and all other features.

Catherine Delahunty: Does the Minister’s answer mean that the private sector, led by Catherine Isaac, will decide critical educational issues such as class size for charter schools?

Hon HEKIA PARATA: My answer means exactly what it said, which is that a working group will canvass that range of features.

Chris Hipkins: In light of her answer to the substantive question, in which she quoted Treasury’s report, is she confirming that school rationalisation is back on the agenda and that the National Government intends to close more schools?

Hon HEKIA PARATA: In the years 2003-08 over 200 schools were closed. In the years 2009- 12, 49 schools have been closed. Really, what that reflects is that the education sector is a dynamic

one and its responsiveness should be to the needs of the learner, the best evidence, and the parameters of the Budget.

Chris Hipkins: I raise a point of order, Mr Speaker. Those were very interesting numbers. However, they do not actually address the question that I asked as to whether the Government intended to adopt Treasury’s advice and close more schools.

Mr SPEAKER: I am not sure that is exactly the question the member asked.

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

Mr SPEAKER: I will hear the honourable member further.

Chris Hipkins: I referred to the Minister’s answer to the substantive question, in which she quoted the Treasury advice, which was to close more schools. I asked her in my original question whether, in fact, that was the Government’s intention—whether school rationalisation was back on the agenda and the National Government intended to close more schools. She gave me some numbers for what has—

Mr SPEAKER: The Minister actually gave some numbers, indeed, and went on to say that education is a dynamic matter and that these things change. Although that may not have been exactly the answer the member wanted, I think it was a reasonable answer to the question, because clearly the closure of schools is not being ruled out. The Minister pointed out that schools have closed during the last 12 years. A number of schools have closed, and she did not rule out that happening in the future. Although that may not have been exactly the answer the member wanted, I think it was an answer to the question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Having criticised you for giving a commentary earlier, I want to thank you for that one. It means that our understanding is enhanced.

Catherine Delahunty: I seek leave to table an academic paper from the University of London website titled Do low attaining and younger students benefit most from small classes?, by Blatchford, Bassett, and Brown.

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


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