Questions and Answers – April 5

by Desk Editor on Thursday, April 5, 2012 — 5:05 PM


Prime Minister—Statements

1. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Does he stand by all his answers to questions in the House this year?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes. The Prime Minister has answered 36 primary questions covering a large range of topics, and if the member wants specific answers, then he will have to ask a more specific primary question.

Grant Robertson: Does he still stand by his answers that Ministers involved in the ACC saga showed only a lapse of judgment and “not a terribly significant one”, given that there are now five separate inquiries under way into the ACC saga, and why does he just simply not appoint a judge or a QC to do a proper inquiry?

Hon BILL ENGLISH: Well, of course, the member has taken the partial view of what the Prime Minister said. The quote the member used was in respect of the first letter, I think, that the Minister for ACC at the time had written. Of course, in that case further evidence came to light and the Minister decided to stand down. We also need to bear in mind that the focus of a number of those inquiries is actually the privacy processes of ACC, which, of course, are of great interest to all those who are claimants, and might be claimants in the future. We believe that those matters are being adequately inquired into.

Grant Robertson: Does he still stand by his answers around the appropriateness of chairing the committee and appointing his electorate chair, Stephen McElrea, to the board of New Zealand On Air, given Mr McElrea’s attempt to intervene in the broadcast of a programme?

Hon BILL ENGLISH: In answer to the question about appropriateness, I did chuckle when I saw Mike Williams on TV going on about getting rid of cronyism, when he was appointed by the last Prime Minister to, I think, five large public boards, in which he interfered in every decision any of those entities made.

Grant Robertson: How can he express confidence in all of his Ministers when his Ministers have stuffed up the reform of the Ministry of Foreign Affairs and Trade, stuffed up the Crafar farm decision, and when his finance Minister can give only a guess as to the real value of the assets that are his only economic plan?

Hon BILL ENGLISH: All I can say is that the Prime Minister has more confidence in his Ministers than the deputy leader of the Labour Party has in his leader.

Grant Robertson: In reference to the Prime Minister’s answers in question time on 7 March on the provision of unconditional love by his pet, and in light of what his own pollster has described as a “quartus horribilis” for his Government, will he now reconsider his apparent decision to appoint his cat Moonbeam as the Government’s strategist?

Hon BILL ENGLISH: No. I do not believe the Prime Minister would do that. The Prime Minister has great affection for Moonbeam, and being the Government strategist is somewhat challenging, and Moonbeam might not be up to it. [Interruption] But he is available for the Labour Party.

Mr SPEAKER: Order!

Grant Robertson: Does he still stand by his answer that he has confidence that he has confidence in all his Ministers, given that the Hon John Banks failed to declare a $15,000 donation from Skycity in his electoral return for the Auckland mayoralty?

Hon BILL ENGLISH: The Prime Minister is not aware of those issues, and the inquiry should be directed to the relevant Minister. The Prime Minister would expect that all Ministers comply with the requirements of the Registrar of Pecuniary Interests of Members of Parliament and the Cabinet Manual.

Grant Robertson: Would he still have confidence in the Hon John Banks as a Minister if he was aware that Skycity publicly stated that it had given $15,000 to both main mayoral candidates in Auckland, and that it has a policy of asking those who get donations to declare them, and that that donation to Mr Banks does not appear in his return for the Auckland mayoralty expenses?

Hon BILL ENGLISH: The Prime Minister’s concern is that members comply with the Register of Pecuniary Interests of Members of Parliament and with the requirements of the Cabinet Manual, and any inquiries related to that should be directed to the relevant Minister.

Grant Robertson: Would the Prime Minister continue to have confidence in a Minister who has not declared a $15,000 donation from Skycity when running for the Auckland mayoralty, given that the penalty for failure to properly declare a donation, under the Local Electoral Act, is up to 2 years in prison—enough to force a resignation from Parliament?

Hon BILL ENGLISH: I can only repeat the answer I gave before, and in that respect the Prime Minister is more demanding than the previous Prime Minister, who tolerated a Minister who did not declare a $100,000 donation that was arranged by the Labour Party from one of the Labour Party’s principal donors.

Rt Hon Winston Peters: Does the Prime Minister recall the Hon Nick Smith telling this House, at the same time, that he made a declaration of his legal fund—identical to mine—to Dame Margaret Bazley, only to have her tell this House that he lied; that he made no such declaration? Does he recall that?

Hon BILL ENGLISH: I am not familiar with the details of that. What I am pointing out is that the Prime Minister has a standard he expects Ministers to reach, and that standard is higher than what was applied by the previous Labour Government to its Ministers.

Rt Hon Winston Peters: If the Prime Minister is so keen on certain standards being upheld, why is he not concerned as to what Nick Smith did when, for an egregious reason being sued for defamation, he had such a fund to his pecuniary advantage whereas the fund we had was for an electoral democratic purpose?

Hon BILL ENGLISH: Well, the purpose of the significant donation to New Zealand First by Labour’s principal donor was, I think, discussed at the time. Nick Smith was involved in a defamation action. The matters around his legal fees were all canvassed, in detail, at the time.

Tax System Changes—Impact on Government Financial Position Since 2008

2. TODD McCLAY (National—Rotorua) to the Minister of Finance: What is the impact on the Crown’s finances of the Government’s tax changes since the 2008 election?

Hon BILL ENGLISH (Minister of Finance): The Government has taken a number of steps to improve the incentives in our economy in order to encourage investment and savings, and create jobs. As well as that, in 2009 the Government cancelled tax cuts scheduled for 2010-11 that had already been booked in the Crown’s books. The 2008 election tax package and the 2010 Budget tax package both encouraged work and saving, and discouraged spending, borrowing, and property

speculation. We made further savings in Budget 2011 through changes to KiwiSaver and the Working for Families tax credits. Overall, these changes will substantially reduce deficits and Government debt compared with the situation the Government inherited in 2008.

Todd McClay: By how much will the Government’s tax changes reduce deficits and debt?

Hon BILL ENGLISH: As we have explained many times, the total revenue effect of the Government’s tax changes was negative in the first 2 years—that is, 2008-09 and 2009-10. This provided appropriate support for the economy while New Zealand was in recession. However, these changes now collect more revenue, from 2010-11 onwards. In fact, taking into account all the tax changes made by the Government, it will collect $270 million more revenue in 2010-11, $1.5 billion more in 2011-12, $1.8 billion extra in 2012-13, and $2 billion more in 2013-14 compared with what was forecast when we became the Government.

Todd McClay: What are the reasons for tax revenue falling as a percentage of GDP since 2008, as noted by the Inland Revenue Department in its briefing to incoming Ministers?

Hon BILL ENGLISH: A good portion of that is due to the impact of the global recession. This reduced tax from banks, financial institutions, and investment funds, as well as PAYE and GST. To the extent that tax policy changes have reduced this percentage, they were, overwhelmingly, changes introduced by the previous Government, including a fiscally negative cut in the company tax rate, which it did not pay for until April 2008, and fiscally negative personal taxes under Labour in October 2008.

Dr Russel Norman: With regard to Budget 2010 and the tax changes in Budget 2010, was Treasury wrong when it projected that the fiscal impact of those tax changes would be negative $1.1 billion over 4 years?

Hon BILL ENGLISH: The Treasury forecasts were published at the time, and, as we said, the tax package was roughly fiscally neutral, with some cost in the first year, and turning to a positive impact by about year 3 or 4. Of course, the reason for those tax changes was fundamentally to bring an end to the bonanza of debt and spending that had driven the economy after change—

Mr SPEAKER: Order! The member just asked whether Treasury was wrong, not what the reasons behind the tax changes were.

Dr Russel Norman: I raise a point of order, Mr Speaker. You have very helpfully assisted members in understanding Ministers’ answers. Did the Minister say they were right or wrong, because I could not tell from the answer?

Mr SPEAKER: It appeared to the Speaker that the Minister said those were projections at the time. The Minister appears to have given the House updated figures today. But I may be wrong in that matter, and the Minister should correct me if I am wrong in that interpretation. It appears that I am not.

Dr Russel Norman: Was Treasury wrong when it produced the Financial Statements of the Government of New Zealand for the financial year ended 30 June 2011 in which it gave figures for the updated impact of the 2010 tax changes, and the updated impact appeared to be twice as bad as the projections in the Budget, which would appear to be about $1 billion negative in the first 9 months of the operation of those tax cuts?

Hon BILL ENGLISH: The member continues to mix up the effect of collecting less tax from lower growth in the economy, or lower inflation in the economy—and sometimes both together— with the impact of tax rate changes. I might just point out to the House that the tax package has only just completed the first full tax year, on 31 March. It has actually been wholly in place for only 1 year, and it is a bit hard to tell from this close up just exactly what effects flow from the changes in rates and what effects flow from a slower economy or lower inflation.

Dr Russel Norman: I raise a point of order, Mr Speaker. I am sorry, but the member may well have an opinion about my views on things and so forth, but I am interested in whether he agrees with Treasury’s figures or not. That was the essence of the question and I did not really hear whether he did or he did not.

Mr SPEAKER: If the Minister could give an answer in relation to those Treasury figures it would be helpful for the House.

Hon BILL ENGLISH: Of course we agree with the figures. They are a record of the Government’s accounts, and in that sense they are factual information. What we disagree with is the member’s analysis of them, although I would have to say that he is much more astute and persistent about these issues than the four economic spokesmen of the Labour Party.

Todd McClay: What other benefits are the Government’s tax changes delivering to the economy?

Hon BILL ENGLISH: The tax changes were one part of a wider programme to tilt the economy towards savings, exports, and productive investment, and away from the excessive borrowing, spending, and property speculation that had driven our growth through the previous 10 years. We need to tilt the economy so that in the next 10 years we build our capacity to earn a living from the rest of the world, rather than borrow it as the previous Labour Government did and thereby damage the economy.

Overseas Investment Rules—Prime Minister’s Statements

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by his statement of 5 July 2010 that “I’d hate to see New Zealanders as tenants in their own country”; if not, why not?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes, and the way the Government ensures that is to apply the Overseas Investment Act 2005. The Act sets out that foreign investment in land is permitted if a range of criteria are met, including that it has economic benefits for New Zealand, the prospective purchasers are of good character, and arrangements will be in place to protect or enhance native bush, birdlife, historic heritage, and walking access.

Rt Hon Winston Peters: Why would the Prime Minister put up that as an example of compliance in respect of the 2005 legislation, when in its major outing Mr Williamson and Mr Coleman were found to be dramatically, sadly, and appallingly wanting in understanding the law?

Hon BILL ENGLISH: I just do not agree with the member’s statements there. The fact was that decisions made by Ministers of both the previous Government and this Government were based on a widely shared assumption, backed up by legal advice, that the appropriate test was the “before and after” test for investment. The judge has made a decision that says that is not what the legislation means; it actually means a “with or without” test. That is a change in the legal advice, and the Government is responding appropriately, by applying the test the court has directed the Ministers to apply.

Rt Hon Winston Peters: Why is the Prime Minister in vain trying to defend two “rubber-stamp Ministers”, when he knows that 71 percent of New Zealanders, who feel betrayed by the way he has handled the Crafar farms issue, appeared in a recent poll, and when is he going to put New Zealand’s interest before that of China’s?

Hon BILL ENGLISH: The member usually just goes a wee bit too far on these things. The fact is that New Zealand has an interest in lifting incomes and creating jobs, and foreign investment has always been part of that process in New Zealand. Overseas investment in industries: it used to be in the meat industry, at different times was in our infrastructure industries, and now there is some foreign investment in our farming industry. It is part of the success of this economy. We would all be poorer without the foreign investment, because we do not save enough to invest enough to create enough of our own jobs.

Rt Hon Winston Peters: Does the Prime Minister not understand the difference between a corporate raid from overseas and true foreign investment in the case of Crafar farms, when the Chinese company knows nothing about dairy farming, and is seeking to use a New Zealand – owned

corporation—[Interruption] I beg your pardon? You know something about milking cows, do you? [Interruption] Oh, we know who Michael Fay’s mate is.

Mr SPEAKER: Order! When I am on my feet, the right honourable gentleman will resume his seat, or get off his feet. We do not need that kind of exchange. I do not think the interjection warranted that. I will let the member, though, start his question again, so the members can hear it.

Rt Hon Winston Peters: Does the Prime Minister not understand the difference between a corporate raid and true foreign investment—because in this case the Chinese company knows nothing about dairy farming, is seeking to use a New Zealand State-owned enterprise to act as tenants in its own country, by paying at least $18 million a year in rental—and when will he start acting for the New Zealand interest, rather than kowtowing as the Manchurian candidate for China?

Hon BILL ENGLISH: I am pleased the member now knows the difference between an Asian language and a province in China. But, look, I do empathise with the member: it must have been a hard day when he got up and had to choose between the Chinese and Michael Fay.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. On a serious issue of the nature of true foreign investment, surely the Prime Minister or his lackey can do better than that. That cannot be an answer, surely.

Mr SPEAKER: Order! The member will resume his seat. He will not refer to other members, while raising a point of order, as lackeys—never. Because the member has done that, I will make it clear to him that if I could have understood the member’s question, I could have perhaps insisted on an answer, but it was quite beyond my comprehension.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Sir, that is an answer when he accuses me of being some sort of—

Mr SPEAKER: Order! The member will resume his seat right away. The question has been dealt with, as far as the Speaker is concerned. The nature of the question got the answer it deserved, and we are now going on to the next question.

Hon David Parker: Supplementary question, Mr Speaker.

Mr SPEAKER: I beg your pardon. Supplementary question, David Parker.

Hon David Parker: Did the Prime Minister tell New Zealanders nearly 2 years ago that his Government was tightening the rules to clamp down on farm sales to foreigners?

Hon BILL ENGLISH: Yes, because that is what the Government did.

Hon David Parker: Is he aware that since he told New Zealanders he was tightening the rules, his Ministers have approved the largest-ever sale of dairy land in Southland to German investors, followed by an even larger and more valuable sale of multiple dairy farms in Otago to American investors, and how can he deny that these approvals, together with his Government’s attempts to approve even larger sales of Crafar farms, show that his earlier statements that he was tightening rules were untrue?

Hon BILL ENGLISH: No. The Government introduced some new guidance to the Overseas Investment Office, which made it clear that in making decisions the Government would take into account undue aggregation on the one hand, and vertical integration on the other hand, which was dealing with some legitimate concerns about very large-scale overseas purchases or totally vertically integrated operations, which would not allow for participation of New Zealanders. Those criteria have been applied to the sales that the member mentions. We should keep this in proportion. Although the member can represent those as large sales, he approved some very large sales of land, and in both cases they are very small proportions of New Zealand’s land area.

Mental Health Services, Youth—Package

4. Dr JACKIE BLUE (National) to the Associate Minister of Health: What reports has he received about the Prime Minister’s Youth Mental Health Project, announced yesterday?

Hon PETER DUNNE (Associate Minister of Health): The addition of more nurses in schools has been welcomed by the Nurses Organisation as an ambulance at the top of the cliff initiative. The

Chief Families Commissioner, Carl Davidson, applauded the initiative, saying that $62 million spent wisely should go a long way to providing the support that vulnerable youth need to improve their overall well-being and make a difference in preventing youth suicide. The Prime Minister’s Chief Science Advisor, Sir Peter Gluckman, amongst other things said that the origin of these initiatives is an exemplar of how policy formation in complex areas can be based on informed scientific advice. Save the Children New Zealand has also enthusiastically welcomed yesterday’s announcement.

Dr Jackie Blue: What was the genesis of the Prime Minister’s Youth Mental Health Project, and how has it evolved?

Hon PETER DUNNE: In 2009 the Prime Minister asked Sir Peter Gluckman, as his Chief Science Advisor, to advise on issues that young people have, progressing through adolescence. The Improving the Transition report highlighted a number of concerns. The Department of the Prime Minister and Cabinet was then asked to lead a cross-Government project to improve existing services and introduce better and more effective initiatives. Officials from the Ministry of Health, the Ministry of Education, the Ministry of Social Development, Te Puni Kōkiri, and Treasury consulted with the front-line service providers, practitioners, youth mental health workers, principals, whānau ora providers, and others, and as a result the comprehensive package that was announced yesterday was developed.

Skycity—Convention Centre

5. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Economic

Development: Does he agree with South Australian Treasurer Paul Snelling in relation to SkyCity that “there cannot and will not be any connection between any change to their regulatory arrangements governing the casino and their investment”, and can he assure the House that a similar standard will be upheld by this Government?

Hon STEVEN JOYCE (Minister for Economic Development): As I have told the member before, the Ministry of Economic Development is negotiating with Skycity over the form of a potential commercial agreement. While these negotiations are ongoing it would be inappropriate for me to rule in or out what the Government might finally agree to. If there was to be any legislative or regulatory change required, it would go through the usual public and/or parliamentary process, in which that member, of course, is welcome to engage. The Government has, however, said that the overall economic benefit of any agreement would have to outweigh the potential negative impacts before the Government could proceed. In the case of the proposed International Convention Centre, we are talking about a $350 million investment that would bring in 1,000 new jobs during its construction and around 800 jobs once it was up and running.

Hon David Cunliffe: Notwithstanding the ongoing negotiations, does he stand by his statement on Sunday’s 60 Minutes programme that “If we get something which is appropriate, we are prepared to change the law.”?

Hon STEVEN JOYCE: As I said in answer to the primary question, if there was something that required a change of legislation, we would be prepared to do so. The member should note, of course, that this is a pretty unusual industry in that the size of the industry is dictated in primary legislation, so it is quite difficult to change the size of the industry without changing the primary legislation.

Hon David Cunliffe: Does he stand by his statement on 60 Minutes that he was “not familiar” with the same casino company’s attempts to trade a convention centre for gambling law changes in South Australia, and if he was unaware, then what competence does he possibly have to oversee a selective trade in our gambling laws?

Hon STEVEN JOYCE: I have some difficulty with the member discussing competence, but, anyway, the—

Hon Members: Oh!

Hon STEVEN JOYCE: Only repaying the favour, Mr Cunliffe.

Hon David Cunliffe: I raise a point of order, Mr Speaker. It is hard to be offended by that one, but it is certainly outside—

Mr SPEAKER: Order! The member could have raised a point of order—I had no problem with that—but he does not raise a point of order in that way. He knows that. There was an exchange there. In the member’s question he questioned the competence of the Minister, and the Minister responded. If in asking a question a member questions the competence of a Minister, I cannot stop Ministers from responding to that sort of thing.

Hon STEVEN JOYCE: As I said, in regard to the competence question, that is open to some interpretation. But the reality of it is that at the time I was not aware of that particular thing.

Hon David Cunliffe: Why did he tell 60 Minutes that he was, again, “not familiar” with the current gaming law that requires pubs and clubs to give 37 percent of their gaming profits to charity, whereas Skycity pays only 2.5 percent, and does he accept that since he is personally overseeing a shabby deal with Skycity, he should have been so aware?

Hon STEVEN JOYCE: The definition of “shabby” is quite interesting, but perhaps the member’s beard might be some reference for us. The reality, again, is that there is a range of—

Hon Trevor Mallard: I think that member’s jealous.

Hon STEVEN JOYCE: I would be jealous if it was on his head. There is a range, as we know, of percentages and levies applied to the commercial gaming industry that is applied differently to the private gaming-machine industry. In fact, probably the key point to point out is that the commercial industry pays company taxes whereas the private industry and the charities do not do so.

Hon David Cunliffe: Does he stand by his statement in relation to the trading and gambling laws that “Actually, different Governments in different countries have different priorities, and I think that it is entirely legitimate for that to happen.”, and how can he then explain what is legitimate about selling New Zealand’s laws when in the words of South Australia’s Treasurer, Skycity would be “dreaming” to think that it would sell its law in exchange for an investment?

Hon STEVEN JOYCE: Again, I think the member is in an interesting space here, for two reasons. One is that actually it is appropriate for different countries to have their own laws. If he is suggesting that somehow we should adopt all Australian law, well, that is an interesting point in itself. And, secondly, the so-called spokesman on economic development for the Labour Party is once again decrying something that would lead to growth in the New Zealand economy. On the one hand, the Labour Party is always talking about more jobs, more jobs, but it wants to stop every single initiative that would lead to more jobs in this economy.

Hon David Cunliffe: I seek leave to table a transcript of the 60 Minutes—

Mr SPEAKER: No, we do not seek leave to table transcripts from recent programmes.

Transport Funding—Value for Money

6. JULIE ANNE GENTER (Green) to the Minister of Transport: Did the Government compare the costs and benefits of the Roads of National Significance against those of other transport projects before announcing them to ensure that it is getting best value for public money; if not, why not?

Hon GERRY BROWNLEE (Minister of Transport): Yes. I think it is worth pointing out to the member that the roads of national significance were identified by the regions as being good for them. If the local roads, etc., were adequate, we would not have had to bring up this project.

Julie Anne Genter: How did the Government weigh up the costs and benefits of the roads of national significance programme before announcing it, when the benefit and cost analyses on many of the roads of national significance were not undertaken until 9 months after the programme was announced?

Hon GERRY BROWNLEE: I do not think the member should get too hung up on the benefitcost analysis on projects. Clearly, she does not, because the Green Party keeps pushing the Auckland central business district rail loop, which, of course, has an appalling benefit-cost ratio, but it does not stop the Green Party members saying it is a great thing. We have made our decisions and our determinations, and put the programme in place, by taking on board the requests of regions.

Julie Anne Genter: Is he saying that it is this Government’s policy to commit billions of dollars to projects before knowing whether they will be of benefit to the country?

Hon GERRY BROWNLEE: No, but I was pointing out that her party’s policy does exactly that.

Julie Anne Genter: I raise a point of order, Mr Speaker. I was trying to clarify his answer to find out whether it was Government policy to commit billions of dollars on projects before knowing whether they were of benefit to the country. I was not inviting comment—

Mr SPEAKER: Order! The Minister answered that very clearly; he said no.

Julie Anne Genter: Has he read the Ministry of Economic Development’s latest petrol price forecast, which has prices trending 20 percent to 30 percent higher than the prices assumed in the roads of national significance benefit-cost analyses, and will he be reassessing the prioritisation of the roads of national significance in light of the long-term upward trend in petrol prices?

Hon GERRY BROWNLEE: I have read those trends for a number of years. They do fluctuate, and if they were to be the determinant of roading projects then we would never have built any roads in this country at all.

Julie Anne Genter: So is the Minister saying that it is better to make a bad decision quickly and stick to it, rather than to review a decision in light of evidence?

Hon GERRY BROWNLEE: No. Let us be clear: there has not been a bad decision here, and the public has endorsed our programme.

Julie Anne Genter: What assurance can he give the public that the Government is making the best possible use of the taxes we pay for transport when his Government has decided to prioritise the roads of national significance without comparing them with other transport projects, when there are many other projects that are significantly more cost-effective than the roads of national significance, and when the business cases for the roads of national significance are now hopelessly out of date according to the Government’s own petrol price projections?

Hon GERRY BROWNLEE: None of that is correct.

Julie Anne Genter: I seek leave to table a document. It is from the New Zealand Transport Agency. It is the Pūhoi to Wellsford project summary statement, published in January 2010, which shows that the Pūhoi to Wellsford project has a benefit-cost ratio of 0.8.

Mr SPEAKER: Leave is sought to table that document.

Hon GERRY BROWNLEE: It is available online.

Mr SPEAKER: Well, members can refuse. I have put the leave. Leave is sought to table it. Is there any objection? There is objection because it is available online.

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. It is you who has set the rules for what can be tabled in this House. It is inappropriate to put members back on the spot, turning those sorts of things down. That document is available online to anyone who wants to get it. [Interruption]

Mr SPEAKER: Order! Some order will come back to the House. I will take the point of order first from Gareth Hughes.

Gareth Hughes: If you applied that rule as strictly as the Leader of the House is implying, 99 percent of documents, from the OECD to Government departments to university reports, would be ruled out of order for tabling in this House, to the detriment of members in this House.

Mr SPEAKER: Order! I think this matter can be dealt with, with a little sense. There are some documents for which I obviously do not put leave to the House, because I want to discourage the practice of members seeking leave for them. However, the Speaker does have to be careful not to

take that too far, because the decision on whether or not leave is granted is ultimately the members’. I am very conscious of that, and that is why I do not want to take my ruling too far, as Gareth Hughes pointed out. It might not have escaped the attention of some members that the Speaker once, perhaps, had a conflict of interest with respect to this document, and, therefore, did not want to be seen to be ruling it out from being tabled in the House. I wanted to make sure that the House had the chance to make a decision on that.

Julie Anne Genter: I seek leave to table the Ministry of Economic Development’s Energy Outlook 2011: Reference Scenario and Sensitivity Analysis, which was published in January 2012, and which shows petrol prices trending 20 to 30 percent higher than they were in 2009.

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

Mental Health Services, Youth—Package

7. MELISSA LEE (National) to the Minister for Social Development: What recent announcements have been made to improve the way the Government deals with young people who have mental health problems?

Hon PAULA BENNETT (Minister for Social Development): Yesterday the Prime Minister announced a number of initiatives to better support young people dealing with mental health issues. These are designed to provide significantly better, earlier, and more modern help for young people suffering from mental illness. The total contribution of the Prime Minister’s youth mental health package from Vote Social Development is $12.2 million over 4 years.

Melissa Lee: How will this initiative better support secondary students in schools and in their communities?

Hon PAULA BENNETT: Part of the package places specially trained youth workers into selected secondary schools and into youth one-stop shops as part of the youth mental health package. An extra 19 youth workers will be introduced. This will support an estimated 20,000 students in 27 schools at a cost of $8.6 million over 4 years.

Melissa Lee: How will these changes support parents, families, and friends to help young people suffering from mental health issues?

Hon PAULA BENNETT: We know it is not always easy to work teenagers out in any forms, actually, but particularly when they are showing signs of distress, and to know how to respond to that. Parents, families, and friends have an important part to play in identifying mental health issues in young people close to them, and for many of them they are not sure what is a real issue and what is actually normal teenage behaviour. So an extra $1 million over 4 years has been allocated for a new contestable fund for non-governmental organisations to help them get better information out to parents, families, and friends who need it.

Foreign Affairs and Trade, Ministry—Implications of Proposed Changes

8. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: What concerns, if any, have been expressed to him that proposed changes to the Ministry of Foreign Affairs will damage New Zealand’s promotion of its international trade and foreign policy interests?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) on behalf of the Minister of Foreign Affairs: Concerns have been expressed about aspects of the proposed changes by ministry staff and external parties. The Minister has emphasised the need for the ministry leadership to pay close attention to all feedback before decisions are made, and from the outset the Minister has made it clear that he will not permit changes that compromise New Zealand’s foreign affairs and trade interests.

Hon Phil Goff: What was his response to the head of mission who came back to Wellington this week and said that his most able and talented staff had sought references from him because they were looking for jobs outside the ministry, and to the collective statement by 46 heads of mission that said that the change proposals were botched and were undermining the ministry’s most important resource, its competent and committed workforce?

Hon CHRISTOPHER FINLAYSON: As I said in the answer to the primary question, the Minister is very concerned to make sure that no changes affect the foreign affairs and trade capabilities of this country. He has had very useful discussions with the heads of mission when they returned to Wellington and is confident that there will be a positive outcome.

Hon Phil Goff: If the Minister was so concerned, why did he not call in his front-line staff to ask them how he could improve value for money in the ministry’s spending before he wasted over $9 million on expensive consultants in a grossly inflated change office who have only come up with proposals that even he admits will not work and will damage the morale and commitment of his ministry staff?

Hon CHRISTOPHER FINLAYSON: Well, change can often be a difficult and fraught exercise, and this is a ministry that for some time, in the opinion of this Government, has required restructuring and modernisation. It is certainly not regarded as a bad use of money. It is a shame that Minister made no progress—

Mr SPEAKER: Order! Had the member answered the main thrust of the question somewhat I would have been less concerned about the last comment. But if I remember correctly the main thrust of the question asked why the Minister had not consulted with the front-line officials of the Ministry of Foreign Affairs and Trade before deciding on the changes, and I did not hear the Minister answer that main thrust of the question at all. Given the way the Minister departed at the end, I invite the Hon Phil Goff to repeat his question.

Hon Phil Goff: Why did he not call in his front-line staff to ask them how he could improve value for money in the ministry’s spending before he wasted $9.2 million on expensive consultants and a hugely inflated change office, which have simply come up with proposals that even he admits will not work and will damage the morale and the professionalism of his ministry?

Hon CHRISTOPHER FINLAYSON: As I said in the answer to the previous question I dispute that the sum is wasted money. As I said it was a fraught process, and change and modernisation can be difficult, but I dispute that it is a waste of money. I trust that answers the question.

Hon Phil Goff: Does he agree with the Ministry’s briefing to him as incoming Minister that Europe is the world’s largest economic entity; our third most important export market; a major source for us of migrants, capital, tourists, and innovation; and an important political and diplomatic partner; if so, why is he now suggesting that we close nearly half of our embassies in Europe?

Hon CHRISTOPHER FINLAYSON: It would be very difficult to disagree with those propositions in the briefing to incoming Ministers. The issue really is whether the resources are in the right place, and whether having an embassy in Stockholm to satisfy Helen Clark’s wishes is a good use of money remains to be seen. But I would say this: his Cabinet colleague the Attorney- General opened an embassy in Vienna some years ago because it was regarded that that was a very important place, and a jolly good time was had by all there.

Hon Phil Goff: God knows what that answer meant—

Mr SPEAKER: Order!

Hon Phil Goff: —but my supplementary question is how will his proposal to close Madrid, Stockholm, Rome, Warsaw, and The Hague—nearly half of our total number of embassies in Europe—assist his intention to have a comprehensive framework agreement with Europe including freer trade access; and how will it assist embassies in Europe to get that message across to those individual countries?

Hon CHRISTOPHER FINLAYSON: What the member seems to be saying is that once an embassy is opened it should never be shut; there should be absolutely no change. What has

happened, as illustrated by the Vienna example, is that circumstances and needs change, and embassies will be opened and embassies will be shut from time to time. That is all part of the business of running the Ministry of Foreign Affairs when one is a small country. There is nothing magical in that, but the proposition that once an embassy is opened it should never be changed is, with respect, ridiculous.

Hon Phil Goff: I raise a point of order, Mr Speaker. Of course, I never made the suggestion that once an embassy is open it should never be closed. What I asked him specifically was how the closure of those five embassies would assist in the negotiation of a comprehensive framework agreement. I have had no answer to that at all—no attempt. [Interruption]

Mr SPEAKER: Order! I realise that these sorts of questions have no precise answer, but the question is about a serious issue, and it lists some embassies. I do not know whether they are actually slated for closure or not, but it asked how that would assist the development of a comprehensive framework agreement with Europe, which one understands is on the Government’s agenda. In the answer the Minister said that just because embassies open does not mean to say they should stay open, and some open and close. But the question did ask specifically about the closure of particular embassies in relation to the development of a framework agreement with Europe. Some answer in relation to that would be helpful to the House.

Hon Christopher Finlayson: I said needs change depending on the particular circumstances, and just because there has been an embassy in Rome since shortly after the Second World War does not mean that those particular strategic goals need to be reflected in an embassy in Rome forevermore.

Hon Phil Goff: I seek leave to table a letter from the Minister of Foreign Affairs to the Secretary of Foreign Affairs suggesting that in addition to the proposed closure of Stockholm and Warsaw this would call for consideration of significant downsizing or closure of The Hague, Rome, and Madrid.

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.

Schools—Ultra-fast Broadband

9. SIMON O’CONNOR (National—Tāmaki) to the Associate Minister of Education: What recent announcements has the Government made on the school network upgrade project?

Hon CRAIG FOSS (Associate Minister of Education): This week I announced that an additional 90 schools will receive Government-subsidised internal network upgrades in readiness for ultra-fast broadband. This programme is a key part in ensuring that the Government’s significant investment in ultra-fast broadband delivers the expected benefits for schools and our young people. One-third of all eligible schools have now had their networks upgraded as we roll out our policy for 21st century schools.

Simon O’Connor: What are the benefits of upgrading our schools’ internal networks?

Hon CRAIG FOSS: These upgrades will allow our schools throughout New Zealand to realise the benefits of ultra-fast broadband. Having better access to ultra-fast broadband will contribute to our students achieving better educational outcomes. Making New Zealand’s schools some of the connected in the world is a crucial part of building a more competitive and productive economy, which is one of this National Government’s key priorities.

Transport Funding—Value for Money

10. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Finance: Have Treasury officials reviewed Ministry of Transport calculations including projected traffic volume growth, per

capita change in volumes over the last seven years and the alignment with GDP, and if so, is he satisfied that the currently planned transport spend is good value for money?

Hon BILL ENGLISH (Minister of Finance): I am advised that Treasury has discussed information of this sort with the Ministry of Transport in producing the National Infrastructure Plan. The Ministry of Transport and the New Zealand Transport Agency have the expertise to review the specific data in this area. As part of Treasury’s ongoing work with the Ministry of Transport and other agencies, it attempts to understand the economic case for all investment and, in fact, is working hard to set high standards for agencies to make the case for more investment. I do expect the transport spend to be good value for money, as we expect with spending on behalf of all taxpayers.

Phil Twyford: What is the projected growth in State highway traffic volumes used in calculations of benefit-cost ratios for the roads of national significance?

Hon BILL ENGLISH: I cannot answer the member’s question.

Phil Twyford: What has the per capita rate of change in vehicle volumes on State highways been for the last 7 years?

Hon BILL ENGLISH: I cannot answer that question either.

Phil Twyford: I seek leave of the House to table a table from the New Zealand Transport Agency that shows a 1.2 percent decrease in vehicle traffic in the last year, and that vehicle volumes have been stagnant since 2004.

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.

Phil Twyford: As Minister of Finance, does he endorse the Minister of Transport’s statement in the House today that the member should not get too caught up on the cost-benefit analysis, when his Government is spending billions of dollars on State highway projects, supposedly on the basis of benefit-cost ratios, and does this reflect his Government’s commitment to value for money?

Hon BILL ENGLISH: Of course the Government pays a good deal of attention to the costbenefit ratios. I suspect the member is somehow taking the long way to getting to talking about the central business district rail tunnel, and I must say the Greens do a much better job of that than Labour does.

Phil Twyford: I raise a point of order, Mr Speaker. I asked the Minister of Finance whether he endorses his colleague’s statement in the House today. He did not address it.

Mr SPEAKER: What he said in answer is that the Government is interested in cost-benefit ratios for transport initiatives, and I think that was a pretty clear answer for the member.

Phil Twyford: Does he agree that spending on this scale—$10 billion over 7 years on projects with such poor predicted economic return—puts it right up there with Muldoon’s Think Big scheme in the 1980s, and could this poor quality spending be the reason that this country continues to lag so far behind Australia?

Hon BILL ENGLISH: No, I do not agree with that. The roads of national significance projects do have significant economic benefit, and I invite the member to try to shut down some of the motorways that have been built if he thinks they are a bad idea. If the member is going to focus on evidence and cost-benefit ratios he needs to understand that quite a lot of the favourite public transport projects have extremely poor cost-benefit ratios and negligible or negative economic benefits.

Dr David Clark: What does he say to angry taxpayers in Dunedin and in all southern provinces who know that they are paying money hand over fist for the roads of national significance projects of dubious economic benefit, when not one of these projects is south of Christchurch?

Hon BILL ENGLISH: Taxpayers in Dunedin and regular visitors such as me are very pleased to see that—

Hon Members: Visitors! Ha, ha!

Hon BILL ENGLISH: Well, Dunedin is actually 150 miles from Dipton. They are very pleased to see the Caversham—[Interruption] The Labour Party would not have a clue about the geography of the South Island, because it has no members down there. They are very pleased to see the Caversham multi-lane project going ahead. It is the first significant roading project for a long time in Dunedin, and the member should be supporting it, not criticising it.

Christchurch, Recovery—Energy Efficiency and Conservation Authority Initiatives

11. NICKY WAGNER (National—Christchurch Central) to the Minister of Energy and

Resources: What initiatives has the Energy Efficiency and Conservation Authority implemented to help support Christchurch’s Recovery?

Hon PHIL HEATLEY (Minister of Energy and Resources): The Energy Efficiency and Conservation Authority has given a greater weighing to Christchurch applications for the authority’s business grant funding, managed the initial phase of the chimney replacement programme, and worked with the Canterbury sustainable homes working party to facilitate energyefficiency improvements during house repairs and construction.

Nicky Wagner: What is an example of an initiative to help improve the energy efficiency of homes as they are being repaired?

Hon PHIL HEATLEY: I am pleased to tell the House that the Energy Efficiency and Conservation Authority has contributed $150,000 to a joint project led by Beacon Pathways that will demonstrate opportunities to improve energy efficiency in homes at a marginal cost during the repair process. It is currently repairing 10 to 15 example quake-damaged homes to a better energyefficiency standard than the like-for-like repair provided by the Earthquake Commission or insurers. We are hoping people will follow that example.

Oil Spills—Economic Impacts

12. GARETH HUGHES (Green) to the Minister of Energy and Resources: Has he received advice on the economic impacts of a major oil spill off the coast of Kaikoura?

Hon PHIL HEATLEY (Minister of Energy and Resources): No, but I have received comparative advice on the economic impacts of the oil and gas industry off the Taranaki coast, where the total industry contributes $2 billion to the local economy and provides 5,000 jobs, all without a major oil spill since 1865.

Gareth Hughes: Has the Minister seen the letter from the Mayor of Kaikōura District, Winston Gray, who identifies all the environmental risks from the blocks right next to the marine mammal sanctuary, including the significant depth, 2.5 kilometres, the fact that fault lines go though the blocks, the fact that we are talking about the location of protected species such as Hector’s dolphin, and who says the mayor does not have confidence in the capacity of New Zealand’s authority to react to an oil spill, or does the Minister not think the environmental effects of an oil spill are important to look into?


Gareth Hughes: Given that the extent of the Government’s consultation with the Kaikōura community has simply been a teleconference between the Kaikōura District Council and the Ministry of Economic Development, and that the whole community has expressed significant opposition, including people in six out of 10 households in Kaikōura signing the petition, will the Minister commit to community consultation?

Hon PHIL HEATLEY: I am advised that my officials are engaged with the local Kaikōura community. Certainly, people—particularly those in leadership—have written to me. I have responded to them, and I am going to continue engaging with them.

Gareth Hughes: Does the Minister think a single teleconference is sufficient community consultation?

Hon PHIL HEATLEY: I was not involved in the teleconference. I could not possibly comment. What I can comment on is the community engagement that my department is involved in with the Kaikōura community and with wider New Zealand. I enjoy the community’s advice.

Gareth Hughes: I raise a point of order, Mr Speaker. Surely the Minister can have an opinion on whether it is sufficient to teleconference or not—

Mr SPEAKER: Order! It is difficult for me to ask a Minister to give a more comprehensive answer than the Minister did to that kind of question. I think we have to be reasonable.

Kevin Hague: I seek leave to table the letter from Kaikōura District Council mayor, Winston Gray, calling for a moratorium on the block tenders and full community consultation.

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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