Questions and Answers – May 8

by Desk Editor on Tuesday, May 8, 2012 — 5:03 PM

Budget 2012—Measures to Return to Surplus

1. Hon Dr NICK SMITH (National—Nelson) to the Minister of Finance: What steps has the Government taken to responsibly manage its finances and stop the increase in public debt?

Hon BILL ENGLISH (Minister of Finance): Of course, the Government is committed to attaining surpluses, because that will stop the rise in public debt, but alongside that we also want to achieve a competitive economy and better public services, because in the long run better public services will give us lower costs and a competitive economy will give us more revenue, more jobs, and more growth.

Hon Dr Nick Smith: Why is it so important for New Zealand to get back into surplus and to stop further rises in New Zealand’s level of public debt?

Hon BILL ENGLISH: There are a number of things this country needs to achieve. The most important is a competitive economy, because that will help us to lift incomes by selling more products to the rest of the world at higher value. Alongside that, we need to manage our risks and one of those risks is the very high level of national debt—that is, adding together public and private debt. It is important to get back to surplus so that the Government can make its contribution to reducing our vulnerabilities by preventing a further rise in Government debt.

Hon Dr Nick Smith: How has the Government’s decision in 2009 to suspend payments to the New Zealand Superannuation Fund helped New Zealand to get on top of its level of public debt?

Hon BILL ENGLISH: That decision in 2009 means that we do not have to borrow roughly $2 billion a year more from nervous overseas lenders to invest in volatile world sharemarkets. We made it clear at the time that we will resume contributions to the superannuation fund when we return to a sufficiently large surplus, and we no longer have to borrow money to add to our fast rising debt. I am pleased that the Opposition now agrees with this policy.

Hon David Parker: Is the best way to reduce the Government deficit and debt to grow the economy, and if so, why has National not grown the economy?

Hon BILL ENGLISH: The economy has grown in 10 of the last 11 quarters, and over the next 12 months is likely to grow faster than those of Europe, the UK, the US, and Canada, and at similar rates to Australia’s. But I just want to clear up one misconception for the member: Governments do not grow economies; it is people and businesses who grow economies, and we want to make sure they can make positive decisions about new investment and new jobs.

Hon Dr Nick Smith: What reports has the Minister seen setting out contrary views over Government contributions to the New Zealand Superannuation Fund?

Hon BILL ENGLISH: There have been a number of reports, and I will use some of these quotes: “deferrals were a big mistake that would leave Superannuitants much worse off in the future.”; and, secondly: “what is the logic behind cutting contributions? The answer is, there isn’t any.” Those came from Labour’s finance spokesman. And, as recently as last week, Trevor Mallard

was criticising the Government for not putting money into the Cullen fund. I am pleased his leader made a sensible decision; it would have been good if he had told his finance team that he had made it.

Mr SPEAKER: Order!

Rt Hon Winston Peters: Does the Minister think either he or the Prime Minister, or, for that matter, Cabinet, acted responsibly in allowing the massive blowout— hundreds of millions of dollars—of the underwriting costs of South Canterbury Finance?

Hon BILL ENGLISH: I do not agree with the member’s description, but I do believe that the Government acted responsibly.

Prime Minister—Statements

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all of his statements?

Rt Hon JOHN KEY (Prime Minister): Yes, I stand by the statements I make, but, of course, I do not stand by the statements David Farrar makes.

David Shearer: Did he say in 2009 that New Zealand would be coming out of recession—

Mr SPEAKER: Order! I apologise to the Leader of the Opposition. I could not hear the start of his question because of other noise around the House. I invite him to start again.

David Shearer: Thank you, Mr Speaker. Did he say in 2009 that New Zealand would be coming out of recession reasonably aggressively by early 2010, and, if so, has it come out of recession reasonably aggressively?

Rt Hon JOHN KEY: Yes, I remember making that statement. It was also part of the quote—if you look at the overall quote, which I do not have with me—that said it is subject to a lot of flux in Europe. And, yes, actually, we have grown in 10 of the last 11 quarters—better than most other countries around the world.

David Shearer: How can his Government continue to blame earthquakes and the financial crisis when just 6 months ago Treasury forecast revenue being one and a half billion dollars higher than today’s figures, and it notes that this result is largely due to employment, wage growth, and business profitability being weaker than expected?

Rt Hon JOHN KEY: The member just made an interesting comment: is the Government going to blame the global financial crisis? Well, I hate to tell the member, but New Zealand is not an island on its own. Actually, the rest of the world has been badly affected by the global financial crisis, and that is why the unemployment rate in Europe is around 11 percent, unemployment in Spain is around 24 percent, and the unemployment rate in the UK is over 8 percent. That is why the UK is back in recession; that is why Australia has most recently cut interest rates. I wish I could live in a world that could just ignore what is happening in the rest of the world, as David Shearer wants to, but that is not the real world.

David Shearer: If the 18,000 new people in the labour force are looking for jobs because, as he said “the economy is coming right”, then why was it that half of them could not find a job?

Rt Hon JOHN KEY: What that shows, in terms of the second-highest participation rate since the household labour force survey has been in action, is that people are increasingly confident they will get a job, and, under a National Government rightfully, so.

David Shearer: Does he stand by his statement “We can effect things like labour laws and if you look at the jobs creation that we have been promoting; the SkyCity convention centre, more mining and exploration, Australian companies coming back … they will create jobs.”?

Rt Hon JOHN KEY: Yes, and let us run through it. The Skycity convention centre would create about 900 jobs in construction and 800 jobs working your way through it. An extension of exploration and mining activities in New Zealand would certainly create jobs, as Bathurst and others have indicated recently. The Australian companies moving to New Zealand have quite clearly, in fact, demonstrated that they are wanting to invest in New Zealand to create jobs. In fact I

had a major Australian corporation in my office just last week telling me they are going to move a substantial amount of their operations to New Zealand. They are all things that the National Government is in favour of. Last night David Shearer told us what he was in favour of, and that is following Hollande and Greece and spending money we do not have.

David Shearer: When will he admit that his Government’s cuts to services, a zero Budget, and an economic plan based on pokies, mining, and low wages to attract foreign companies are, in fact, a sign of economic failure?

Rt Hon JOHN KEY: If you grow in 10 of the last 11 quarters at a time when the rest of the world is doing incredibly poorly, I do not describe that as economic failure. These are very difficult times for New Zealanders, and this Government—let us be honest—inherited an enormous mess from the previous Labour Government, which just left us with programmes that were spiralling out of control. Thank goodness we have had the economic leadership of Bill English to guide us through these very troubled times.

David Shearer: I seek leave to table more than 1,000 submissions from people who have written to the Labour website “Show us your cards, John” opposing the increase in pokies in the Skycity convention centre.

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.

Welfare System—Prime Minister’s Statements

3. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he still stand by his statement that “The welfare system will always be there to support those who genuinely need it”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: What advice has the Prime Minister received that having Work and Income officers “assist women to decide whether they want to have children” is in breach of the UN convention on the elimination of discrimination against women, which guarantees that women have the right to make their own decisions on the number and spacing of their children?

Rt Hon JOHN KEY: Women in New Zealand will continue to always have that right. The Government is giving about a million dollars so women who may wish to can go to get medical advice, and we are investing $55 million over the next 4 years for 155 dedicated Work and Income staff to support job seekers. But I think the Government is doing the right thing in assisting women in a programme that is totally voluntary and totally reversible.

Metiria Turei: How could this policy not be designed to discourage deprived women and their daughters from having children, when this contraception policy is in direct response to the Welfare Working Group, which said that the work-testing regime may provide an incentive for women to have children and therefore Work and Income should assist women on a benefit to decide whether they want to have children?

Rt Hon JOHN KEY: I think the Government assisting what can be very vulnerable young people to make sure they have both adequate access and advice when it comes to planning a family or potentially preventing unwanted pregnancies is the right thing to do. In fact, Governments of all different colours have a history of supporting both family planning and providing support, subsidised services, and all sorts of contraceptives, which have been very beneficial to a great many young New Zealand women and men.

Metiria Turei: If the Prime Minister is genuinely offering an option for vulnerable young women who would like contraception but cannot afford it, why is he providing this through Work and Income case officers, who can exert financial pressure over these vulnerable women, and not through the safer, proven, and private environment of health services that already do that work?

Rt Hon JOHN KEY: We are not. Doctors would provide that advice, but they will go to Work and Income for a reimbursement of their costs. I think that is actually a sensible and mature thing to do, and it is what historical Governments have done in the past.

Jacinda Ardern: Is he considering improving access to contraception for all low-income women, or just those on benefits; if so, why?

Rt Hon JOHN KEY: No. At his point we are not considering widening it out, because we already subsidise a number of contraceptive options for a wide range of people, including fully subsidising the emergency pill.

Metiria Turei: Does the Prime Minister believe that men and their sons should also be “assisted to decide whether they want to have children” and be given funding for contraception by their Work and Income case managers, or does he believe that sexual reproduction is solely a woman’s responsibility?

Rt Hon JOHN KEY: Far from it. I think New Zealand parents have an absolute responsibility to speak to their sons and daughters, and where possible give them the best advice that they possibly can. But I think that we are talking about a group of young women who are particularly vulnerable, and the statistics show us that a great many of them do fall pregnant and actually go on to the DPB.

Metiria Turei: Given that poverty data shows that a third of all children in poverty are living in homes where their parents work, why will he not offer fully funded contraception to all families who want it through the community services card, and if he will not do that, how is this policy not just a blatant discrimination against, and coercion of, vulnerable young women who find themselves on the benefit?

Rt Hon JOHN KEY: Because we already subsidise through the community services card certain contraceptives for low-income people. I think one thing that will make those women particularly vulnerable is if they have an unwanted pregnancy.

Mr SPEAKER: Just before I call the honourable member, Metiria Turei is asking questions, and I am finding it hard to hear the answers because of interjections from the Labour Party. I think it is only reasonable that Metiria Turei should be able to hear the answers more clearly.

Metiria Turei: Can the Prime Minister guarantee that not one single young mother will be told by her case worker in some form: “You should take up this offer of Depo-Provera, because if you have another child on the benefit you will have to go to work and be work tested when that baby is just 12 months old, and if you don’t your benefit is at risk.”?

Rt Hon JOHN KEY: I would expect Work and Income case managers to ensure that any client of Work and Income understands the Government’s policies, and the Government’s policy is that if you are on the DPB and have a further child on the DPB, then you will be work tested when that child is 1.

Metiria Turei: I seek leave to table a document, which is a letter from the Ministry of Social Development to my office, dated 11 April 2012, confirming that the contraception policy in the Budget is directly a response to the Welfare Working Group, which wants to disincentivise women from having children on the benefit by requiring Work and Income to assist women to make decisions about their number of children.

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

Budget 2012—Welfare Reforms

4. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister for Social

Development: What recent announcements has she made on the Government’s welfare reforms to support more people off welfare?

Hon PAULA BENNETT (Minister for Social Development): Under Budget 2012 we will provide $287.5 million over the next 4 years for the first phase of the Government’s welfare reforms to support more New Zealanders into work and education. This includes $81.5 million of new upfront funding, with the remainder reprioritised funding from within the Ministry of Social Development. The Government’s welfare changes require significant upfront financial support, and we have made that commitment to ensure fewer people remain trapped on welfare.

Peseta Sam Lotu-Iiga: Under these welfare reforms what support will be available for teen parents with children?

Hon PAULA BENNETT: Under Budget 2012 we have allocated $80 million over 4 years available to young parents receiving assistance under this youth package. Of this, $36.1 million will support a new guaranteed childcare assistance payment over the next 4 years, providing childcare for a child to attend an approved early childhood education service. It also includes nearly $44 million to Vote Education to ensure those extra early childhood education places are available.

Peseta Sam Lotu-Iiga: How will the new funding support disengaged 16 and 17-year-olds not in education, employment, or training, and how does this compare with what was previously available to support this at-risk group?

Hon PAULA BENNETT: Budget 2012 provides $134.7 million for youth service providers. This increases the funding that previously went into youth services by $75.9 million over 4 years. Youth providers will have unprecedented flexibility to work with these “neet” young people and teen parents to get them either into education, working towards National Certificate of Educational Achievement level 2, or in training. And for the first time, the Ministry of Education will share information with the Ministry of Social Development to stop these young people becoming “neet” long term.

Jacinda Ardern: What evidence does she have to show that $1 billion will be saved by her reforms, or is it what she calls “a best guess” and therefore as robust as the 170,000 new jobs we are still waiting to be created?

Hon PAULA BENNETT: That is modelling that was done by Treasury and the Ministry of Social Development. They came up with that figure and there are a whole lot of variables to it, so it is a best guess.

Skycity, Convention Centre—Consultation with Auckland City Council

5. DENIS O’ROURKE (NZ First) to the Prime Minister: Did he involve Auckland City Council in discussions he or his staff had with SkyCity about a national convention centre in Auckland during 2009 and 2010?

Rt Hon JOHN KEY (Prime Minister): No.

Denis O’Rourke: Has he read a press release dated 14 May 2010 from Auckland City Council that says: “The council … will work with the Government to establish a preferred site.”, and further states that a new convention centre would “compliment existing Auckland venues including Sky City …”?

Rt Hon JOHN KEY: I do not recall that press release, but, of course, in the case of Auckland City Council, it was part of the feasibility study that was undertaken by the Government. That was undertaken in the middle part of 2009. I met with Skycity in November of 2009 and had some preliminary discussions with it. Prior to that, I had also met with a number of other parties. What discussions the Auckland City Council might have had with Skycity is of its own volition, but I was not involved in those.

Denis O’Rourke: Did he or any of his representatives ask or encourage the then Auckland City Mayor, John Banks, to support the proposed pokies deal with Skycity, given that Mr Banks originally wanted a convention centre on the waterfront?

Rt Hon JOHN KEY: No, and you are correct about the latter point that the then Mayor of Auckland City, John Banks, wanted the convention centre to be down at the waterfront. My view of it—

Hon Trevor Mallard: That’s right, because he was anti-gambling then; it was before he got the cheque.

Rt Hon JOHN KEY: Well, it is a shame he did not build the stadium down there, but that was another failure of your Government. But like every other proposal other than Skycity’s, Mr Banks’ also required $350 million of taxpayers’ money.

Mr SPEAKER: Just before I call Denis O’Rourke, interjections today have been getting a bit unreasonable, and that kind of interjection the member made is totally unacceptable. The Hon Trevor Mallard will get to his feet and withdraw that interjection and apologise.

Hon Trevor Mallard: I withdraw and apologise.

Mr SPEAKER: I thank the member.

Denis O’Rourke: Was Auckland City Mayor John Banks’ later agreement to go along with the pokies deal brokered by Mr Banks’ personal friend Wayne Eagleson, who later travelled to Las Vegas with Skycity lobbyist Mark Unsworth?

Rt Hon JOHN KEY: No, and actually you are ahead of yourself, because—

Mr SPEAKER: Order! The Speaker is—

Rt Hon JOHN KEY: —Mr Banks has not actually given his support to the deal yet. He said he would look at it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. In the last two questions that the Prime Minister has answered, he has started them with the words “you” and “your”. You know full well that that is not correct, and he has been around long enough to have learnt a few rudimentary lessons—

Mr SPEAKER: Order! The member was doing perfectly well up to that point. I do remind the Prime Minister that when he says “you should know something”, he is referring to the Speaker, and that is not a great look.

Denis O’Rourke: Did Mr Eagleson, who as Mr Banks’ friend helped him defend a contempt of court charge in 1987 and is now a conduit between Mr Banks and the Prime Minister’s office on matters relating to donations to Mr Banks’ mayoral campaign, have any involvement in brokering the Skycity deal?

Rt Hon JOHN KEY: No.

New Zealand Defence Force—Training Exercises

6. JOHN HAYES (National—Wairarapa) to the Minister of Defence: What reports has he received regarding New Zealand Defence Force training exercises?

Hon Dr JONATHAN COLEMAN (Minister of Defence): I have received reports relating to Exercise Alam Halfa, currently taking place across the central North Island. This exercise involves approximately 1,500 New Zealand Defence Force personnel from all three services of the Defence Force. It is the largest military exercise to take place in New Zealand in the last 15 years.

John Hayes: How does this exercise assist in advancing the Government’s long-term strategy for the New Zealand Defence Force?

Hon Dr JONATHAN COLEMAN: The New Zealand Defence Force will have a joint amphibious task force at the core of its force structure by 2015. This task force will draw upon the strengths of all three services to enhance the ability to rapidly deploy people and capabilities. In line with this, Exercise Alam Halfa sees our army, navy, and air force working together under a joint command, and coordinating their activities appropriately. It is an example of how, in defence, this Government is focused on optimising the impact of the New Zealand Defence Force’s resources.

Budget 2012—Impact of Changes to Student Support

7. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister for Tertiary

Education, Skills and Employment: How many people will lose access to some or all of their student allowance as a result of the changes he announced last week?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I am advised that approximately 4,000 to 5,000 students would be affected by the policy change that removes student allowance eligibility for post-graduate master’s and PhD students. Those students will, of course, remain eligible to borrow from the interest-free student loan scheme. The change would not affect the vast majority of students undertaking undergraduate degrees, and, of course, the 200 weeks eligibility rule—roughly equivalent to 5 years of study—has been in place for decades. The member does have to remember the context that the Government’s expenditure on student allowances has blown out in recent years from $385 million in 2007-08 to $620 million in 2010-11, which is a 62 percent increase.

Grant Robertson: Has the Minister read the Ministry of Education’s advice that the increase in student allowance expenditure that he has just referred to is “largely due to high unemployment, particularly for younger age-groups, due to the economic recession.”?

Hon STEVEN JOYCE: That explains some of the increase. The other significant contributor to the increase was the very large increase in the parental income threshold made by the previous Government, back in the time when it thought that the golden world economic weather would go on for ever. The increasing parental income threshold was the very significant change made by the previous Government.

Grant Robertson: Will a student such as one who contacted me today, who has already used the 200 weeks of allowances allowed under his new system and is 1 year into a 2-year Master of Science programme, be able to get allowances for the final year of their study?

Hon STEVEN JOYCE: The exact details of the transition will be released in the Budget, but I can say that once somebody has had the 200 weeks of student allowances at an undergraduate level, just as happens currently they will have to move on to a student loan.

Grant Robertson: Does the Minister understand that the person whom I referenced in the last question, who is 1 year into a 2-year Master of Science programme, under the current rules would be able to get allowances next year, and will not be able to get them under the rules that he has now announced?

Hon STEVEN JOYCE: Indeed, if they are a postgraduate, yes, the member is right. The master’s and PhD degrees are no longer eligible. However, those students will be eligible to borrow from the student loan scheme, which, as we know, is interest-free. Of course, somebody who is getting a master’s degree or a PhD is actually highly likely to have a very significant income premium over somebody who has not completed such a degree. And, of course, given that their student loan repayments are income contingent, they will be paying off their loan only as their income rises.

Grant Robertson: Does the Minister realise that student allowances are available only to people from low and modest income backgrounds, and why does he think it is right that people from poor backgrounds should have to bear the brunt of his Government’s inability to grow the economy while his Government has given tax cuts to people who do not need them?

Hon STEVEN JOYCE: I appreciate that the member has not yet seen a student allowance he does not want to increase, but the reality of the situation is that student allowances should be focused on the early years of study and on low-income families—on that, I agree with the member. But once you get to postgraduate level, you are going to graduate; you are going to achieve your postgraduate degree and achieve the ability to earn a much higher income than somebody else. I would also—[Interruption] Do you want to listen, Mr Robertson? You might learn something. Also, it is important to point out that university graduates, on average, achieve an income premium, earning about 50 to 60 percent more than somebody who does not go to university, and I do not

think we should actually be saying we want more subsidy of university students by people who do not actually go to university.

Grant Robertson: When he made his announcement last week, why were there no papers released to back up the announcement, and why were there no final figures on the costs or savings for the announcement, yet when Paula Bennett made her announcement this week there was a full suite of background papers and costings? Could it be that there was a need to provide a diversion last week from Mr Banks and his failing memory?

Hon STEVEN JOYCE: I think the member has confirmed that as well as never seeing a student allowance he does not want to increase, he also wears a tinfoil hat on regular occasions.


8. MARK MITCHELL (National—Rodney) to the Minister of Justice: What steps is the Government taking to reduce unnecessary parole hearings?

Hon JUDITH COLLINS (Minister of Justice): In keeping with the Government’s postelection action plan and law and order policies, Cabinet has agreed to amend the Parole Act so that prisoners in future will be screened to postpone unnecessary parole hearings. The maximum interval between parole hearings will be increased from 1 year to 2 years for all offenders, and the maximum postponement of parole hearings for offenders serving long sentences will be increased to 5 years. The Parole Board will be able to direct that hearings be brought forward if an offender has engaged in rehabilitative programmes earlier than expected.

Mark Mitchell: What will be the benefits of reducing unnecessary parole hearings?

Hon JUDITH COLLINS: This Government is putting victims at the heart of the justice system. These changes will reduce the stress and anxiety on victims by cutting the number of times they need to attend unnecessary parole hearings. It will enable the Parole Board to better focus its time on those offenders who have a more genuine chance of getting parole, and it will help to incentivise offenders to take responsibility for their offending by completing rehabilitation programmes to help them gain earlier consideration for parole. Savings to Government of $700,000 per annum will also be available.

Welfare Reforms—Youth Not in Employment, Education, or Training

9. JACINDA ARDERN (Labour) to the Minister for Social Development: What proportion of the 87,000 young people not in employment, training or education will be assisted by her youth services package?

Hon PAULA BENNETT (Minister for Social Development): Yesterday’s announcement targets around 14,000 16 and 17-year-old “neets”, and around 3,000 sixteen to 18-year-olds on benefit. The package is targeted at those who are most at risk. Evidence tells us that the earlier we intervene, the better outcomes we will get. In addition to this, we spend on young people aged 18 years and over about $40 million a year through Work and Income on employment and training – focused assistance, $1.2 billion through the Tertiary Education Commission for tertiary and workplace training, and $43 million for industry training. This package is unapologetic in targeting support to those young people who need it most.

Jacinda Ardern: I raise a point of order, Mr Speaker. I hate to be picky, but I did put on notice this question—[Interruption]

Mr SPEAKER: Order! I am dealing with the noise that erupted in the House there. A point of order was called, and members are not at liberty to make that kind of noise when a point of order is called. I did hear the point of order the member was raising, and I accept what she is saying. The question did ask what proportion, and instead of giving a proportion the Minister gave exactly the figures. Seventeen over 87 is not beyond the member’s wit, and I do not think we need to get too picky.

Jacinda Ardern: Sixteen percent. Why is she cutting the number of young people eligible for assistance into work, training, or education through her youth services by up to half, in some cases, but spending more money on those services?

Hon PAULA BENNETT: That is a good question, and the answer is because, quite frankly, if you scattergun the money across and give a lot just a little, then you will not get the kinds of results that one needs for these young people. So we are targeting it to those who are most at risk, and those are the 16 and 17-year-olds who are currently completely disengaged, who have actually fallen out of education, and who are currently lost. Some of them will need a light touch, but many of them will actually need far more intensive support, and we are going to wrap that support round them and hopefully stop that track that they are on towards long-term welfare receipt.

Jacinda Ardern: How will an 18-year-old who did not do well in school have any chance of getting back into training or education when they no longer have access to foundation classes, and are they not at risk too?

Hon PAULA BENNETT: It is simply not true that 18-year-olds will not have access to foundation classes; they will. We are still spending more than $40 million a year on that 18-plus age group, who can get employment assistance. There are still places for them in tertiary institutions, and they will be given support to get into them, but we will be focusing on those 16 and 17-yearolds who are currently completely disengaged. They are on a fast track to long-term welfare receipt, and we can do better by them.

Jacinda Ardern: Will successful services like Youth Transition Services, championed by the chair of the Mayors Taskforce for Jobs, Dale Williams, be eligible for funding under this model, or will it close, as the mayor contends?

Hon PAULA BENNETT: Yes, he will be eligible, if he has put an application in.

Jacinda Ardern: Has she spoken to those working on the front line of Youth Transition Services, who say that 70 percent of the clientele whom they work with move into work at 16 and 17, and are in need of their services once they hit 18?

Hon PAULA BENNETT: I spend a lot of time talking to front-line services, and particularly those with Youth Transition Services. For example, the ones in my own patch actually tell me that more than 70 percent of the young people who are going through there are 16 and 17 years old, and that is the reality for it—the New Lynn one, so you can go and visit it, if you like. The reality is that it is those 16 and 17-year-olds who need the most help. Some of it needs to be pretty intensive, and we are putting the money in to back them.

Budget 2012—Impact of Changes to Student Loan Repayment Rate

10. HOLLY WALKER (Green) to the Minister for Tertiary Education, Skills and

Employment: What official advice, if any, has he received about how increasing the student loan repayment rate will impact on young families and those on low incomes?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): The official advice was that those on low incomes, say about $25,000, will be required to contribute a further $2.27 per week towards paying off their loan, and those on a more middle income of, say, $48,000 would pay an additional $11.12 per week. Of course, the average student loan borrower will pay off their loan 4 to 5 months more quickly, and then they will not have to be paying those repayments any further. The unofficial advice was that using the member’s own figure of a person on the average full-time wage with a tertiary qualification—that is, a wage of $59,000—they would be permanently worse off under the Green Party’s tax policy than under our policy of paying off their student loan faster.

Holly Walker: Was he advised that the combined effect of last year’s Working for Families and KiwiSaver changes with the new 12 percent student loan scheme repayment rate will be a 7.6 percent increase in the effective marginal tax rate for working parents with student loans, and how will that affect young families trying to save?

Hon STEVEN JOYCE: No, I have not received that particular piece of advice, but again I want to point out to the member that it does feel a bit like crocodile tears when the Green Party’s tax policy––

Mr SPEAKER: Order! The member got away with that the first time around and I am not going to let him get away with it on that. The question was not provocative. It asked whether the Minister had received certain advice.

Holly Walker: How will the increased repayment rate affect polytechnic and other nonuniversity graduates, who do not attract the 50 to 60 percent income premium he referred to in an answer to an earlier question?

Hon STEVEN JOYCE: The reality is that the repayments are income contingent, so they depend on the level of income. But I would point out that somebody with a mid-level diploma or certificate from a polytechnic is likely to get a premium of 20 to 30 percent over somebody who does not achieve anything in tertiary education.

Holly Walker: Would it not make more sense for student loan repayment rates to be progressive, as they are in many countries including Australia, so that those graduates who can afford to repay their loans faster do so, while those on lower incomes have a chance to find their feet first?

Hon STEVEN JOYCE: The difficulty with just cherry-picking one part of another country’s scheme is that you say “Well, on the one hand we want to keep all the good parts of our scheme, and on the other hand we want to keep the other country’s scheme.”

Hon Trevor Mallard: What’s wrong with that?

Hon STEVEN JOYCE: Well, if you have got limitless money, of course that is a very good idea, but if you have not got limitless money, that is not a good idea. If the member wanted to copy the Australian scheme, then you would have to actually CPI-adjust the value of the student loans for every student each year by 3 percent. You also would have to ban borrowing for living costs. My understanding is the member wants to make the current scheme here even more generous, and I would say that would just be fiscally irresponsible in the current climate.

Hon John Banks—Compliance with Cabinet Manual

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Prime Minister: Does he believe Hon John Banks when he said on Friday, 27 April 2012 that he could not remember a helicopter trip to the Dotcom mansion, and if not, was Mr Banks’ comment consistent with clause 2.53 of the Cabinet Office Manual, which states “… at all times, Ministers are expected to act lawfully and to behave in a way that upholds, and is seen to uphold, the highest ethical standards. Ultimately Ministers are accountable to the Prime Minister for their behaviour.”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Hon Trevor Mallard: Did he personally speak to John Banks before the House resumed last Tuesday to discuss what Mr Banks remembered with regard to the helicopter trip, and if not, why not?

Rt Hon JOHN KEY: No.

Hon Trevor Mallard: Does he stand by his statement: “The appointment of a minister … has to be done on the basis that … I can look that person in the eye and have confidence that I can rely on their word.” and if so, why did he not apply that test to John Banks?

Rt Hon JOHN KEY: Yes, and that is why I would never have that member in my Cabinet.

Hon Trevor Mallard: I raise a point of order, Mr Speaker.

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

Hon Trevor Mallard: I would never want to get close enough—

Mr SPEAKER: Oh, no. Order! [Interruption] No, I am on my feet and all comments will cease. Order! I guess we get into some difficulty when answers are not helpful. I did not intervene, because the line of questioning is a fairly personal line of questioning. But the Prime Minister

should not have given that last part of that answer, and certainly the Hon Trevor Mallard should not have responded under a point of order in the way that he did. Let us call the score one all at this stage and move on.

Hon Trevor Mallard: Why did he not apply the “looking in the eye” test to John Banks?

Rt Hon JOHN KEY: Because that was not necessary. What was necessary was to confirm that the allegations made by the Hon Trevor Mallard that the member had broken the Local Electoral Act were not correct. He gave me that cast-iron assurance through my chief of staff, and I accept that.

Hon Trevor Mallard: Can the Prime Minister confirm that he understands the difference between a Skycity donation and a trip to Dotcom?

Rt Hon JOHN KEY: Well, I do not have any responsibility for that, so I cannot really answer the question for the member.

Hon Trevor Mallard: When he finally did talk to John Banks, did he tell him that employing Simon Lusk was not desirable?

Rt Hon JOHN KEY: No.

Television, Switch-over to Digital—Progress

12. CHRIS AUCHINVOLE (National) to the Minister of Broadcasting: What progress is the Government making towards the digital switchover?

Hon CRAIG FOSS (Minister of Broadcasting): Good progress has been made in helping New Zealand households make the digital switch-over: 84 percent of New Zealand households have already gone digital and are enjoying more channels, better pictures, and new services. In fewer than 5 months, by 30 September, TV in Hawke’s Bay and on the West Coast of the South Island goes digital. The Going Digital team is continuing to work to help thousands make the digital switch-over. To keep watching TV, all New Zealanders need to go digital by getting FreeView, Sky, or TelstraClear by the end of 2013.

Chris Auchinvole: What steps are being taken to help households make the digital switch-over?

Hon CRAIG FOSS: To assist households in Hawke’s Bay and on the West Coast of the South Island to make the digital switch-over, community advisers have been going door-to-door, meeting with community groups, and promoting Going Digital messages. I am informed that by the end of this month, 22,000 households will have been visited in Hawke’s Bay and will have been doorknocked. This is in addition to the TV, radio, and print advertising that has been running. People looking to go digital and wanting to work out when their region goes digital and what equipment they need will need to either visit the Going Digital website or call 0800 838 800.


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