Questions and Answers – August 23

by Desk Editor on Thursday, August 23, 2012 — 5:36 PM


KiwiRail—Confidence in Board

1. PHIL TWYFORD (Labour—Te Atatū) to the Minister for State Owned Enterprises: Does he have confidence in the board of KiwiRail?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) on behalf of the Minister for State Owned Enterprises: Yes.

Phil Twyford: Has the board of KiwiRail advised him that from 2014 onwards the rail asset will decline and disruption risk will grow, that when spending gets back to current levels it will take many years to pull back from the decline, that virtually all rail routes will run down in some way, and that by 2015 KiwiRail will be doing 50 percent less track renewal work; if so, how can he still have confidence in the board?

Hon GERRY BROWNLEE: I do not know where the member got those statistics from. What I would urge him to do is to identify where he got them from and whom he got them from. What I suspect is that this is an internal document in which KiwiRail has scoped risks to its network and made it clear that it needed to make investment in its network. So, if I might say, rather than those things happening, we expect over the next few years $750 million to be invested in upgrading the network, and that will include up to $80 million a year in maintenance. That is quite a different picture to the one the member is trying to paint.

Phil Twyford: Has the board of KiwiRail advised him that the amount to be spent on timber bridges will be cut substantially, projects on the main trunk line will be cancelled or deferred, the overall condition of railway sleepers will decline, and KiwiRail will have to accept a higher level of unplanned disruptions such as slips and erosion?

Hon GERRY BROWNLEE: Well, once again, the member is trying to speak as if he has some document that he can authoritatively quote from without giving any context of it. My answer is no, it has not advised me of that.

Phil Twyford: Has the board of KiwiRail advised him that the coal routes between Lyttelton and the West Coast and the route known as the golden triangle of forestry, which runs between Hamilton, Murupara, and Kawerau, have been coded by KiwiRail as TM4, which means their track metrics are unacceptable and pose a safety risk and are prejudicial to the customer base; if so, how can he still have confidence in the board?

Hon GERRY BROWNLEE: I assume that the member is indicating that KiwiRail has itself identified a number of risks to the network that will require investment. I can confirm that in 2012 the capital investment is $216 million, in 2013 it will be $163 million, in 2014 it will be $133 million, in 2015 it will be $174 million, and in 2016 it will be $175 million. In 2005, when his Government bought the thing, it spent $53 million.

Mr SPEAKER: Order! The supplementary question contained two questions. The first one was whether the Minister had been advised and the second one was, if so, how he still has confidence in KiwiRail. It would be helpful if either of those questions were answered and if the Minister could indicate to the House whether he had been advised of these matters. It would appear from his answer he had not, but it would be helpful to know, or whether he still has confidence in the board, because those were the two questions asked. I call the Hon Gerry Brownlee—because the Minister did not answer—

Hon GERRY BROWNLEE: I was unaware that you were asking questions, Mr Speaker, but the answer simply is that I have confidence in the board of KiwiRail because it identifies risks to the network and then comes along with a capital programme that would be needed to mitigate those risks. That is a good thing.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I thought one of the rules, when electronic devices were allowed in here, was that answers from Ministers were not to be supplied by way of that, the way they were through Mr Joyce’s device then.

Mr SPEAKER: Order! That is not a point of order. How members use their electronic devices, so long as they do not interfere in the proceedings of the House, is up to them.

Andrew Williams: Given the numerous instances of rail track defects and neglect, will he immediately review the KiwiRail Turnaround Plan and direct the KiwiRail board to stop the planned redundancies of around 200 maintenance staff; if not, why not?

Hon GERRY BROWNLEE: Well, one of the ways in which you can measure the quality and condition of a rail track is by looking at the incidence of derailment. Derailment may be just one wheel or it may be a whole train. In New Zealand seldom is it a whole train. But what I can report to the House is that the incidence of derailment in the last couple of years has fallen dramatically— fallen dramatically—because track maintenance has been a priority for KiwiRail since it took over the very distressed asset paid for at a record amount. In fact, it was paid for at what you would say is a bonanza price for the then owners by the New Zealand First – Labour Government.

Clare Curran: Does he agree with the statement—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You will be aware that there was never any New Zealand First – Labour Government, so why was he allowed to say so?

Mr SPEAKER: I really think that if the Speaker was to interfere in every one of those little comments, it would be too much interference. I think the matter should be allowed to pass.

Clare Curran: Does he agree with the statement of the Associate Minister of Transport, Simon Bridges, on 14 August that “The Turnaround Plan that KiwiRail is instituting is about business sustainability and putting precious funds to their best possible uses, but in no way, shape, or form is this compromising safety.”; if so, has he been informed by the KiwiRail board of an engineer losing his sight from flying shards when tightening a nut while repairing one of the faulty China North Rail locomotives?

Hon GERRY BROWNLEE: Yes, I do agree with the comments made by the Hon Simon Bridges.

Clare Curran: I seek leave to table an email informing me of this incident where the engineer lost his sight.

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.

Clare Curran: Has he been informed by the chair of the board of KiwiRail of the appointment of Leon Bennett, the former private secretary for Wayne Mapp, who is not a chartered professional engineer, to the most senior mechanical engineering position in KiwiRail; if so, what action did he take when he was informed?

Hon GERRY BROWNLEE: No. That is an operational matter, and Ministers do not interfere in those operational matters.

Phil Twyford: Will he ask the chair of the board to tell KiwiRail management to call off the cuts to network maintenance because of the risk they pose to the organisation?

Hon GERRY BROWNLEE: Once again, the member is presuming to speak from an authoritative document that he has not named and that he has not tabled, and that therefore has, I think, very little authority. What I can say is that the chairman of KiwiRail has been overseeing a Turnaround Plan that will see KiwiRail invest $750 million over the next few years in the network. That is a good thing.

Phil Twyford: I raise a point of order, Mr Speaker. The question was direct and quite simple, and I do not believe that the Minister even addressed the question.

Mr SPEAKER: I will allow the member to repeat his question, because when I repeated the question for the member last time, I was accused of asking questions on behalf of members. So the member may repeat his question.

Phil Twyford: Your assistance is always appreciated. Will he ask the chair of the board to tell KiwiRail management to call off the cuts to network maintenance because of the risk they pose to the organisation?

Hon GERRY BROWNLEE: Well, I do not accept the hypothetical behind the question.

Phil Twyford: Will he acknowledge not only that KiwiRail cannot meet the financial targets of the Turnaround Plan, as the Minister did in this House last week, but also that the Turnaround Plan is unrealistic and is driving KiwiRail to make decisions like sacking 181 workers and deferring $200 million of network maintenance?

Hon GERRY BROWNLEE: Once again, a supposition is put to the House as if it is authoritative. It is not. What I can say is that KiwiRail is doing its very best to effect the Turnaround Plan. It will put $750 million into the network in the next few years. That will make the operation safer. All the member is doing is pointing out to the whole world what a huge dog this thing was when his Government bought it.

Mr SPEAKER: Supplementary question, Phil Twyford—[Interruption] Order! I want to hear Phil Twyford’s supplementary question. [Interruption] Order! That is sufficient. I want to hear Phil Twyford’s supplementary question.

Phil Twyford: Is he satisfied that the board of KiwiRail acted appropriately in trying to cover up information on the cuts to network maintenance by taking out an injunction against the news media publishing the contents of this report?

Hon GERRY BROWNLEE: Yes, absolutely, because the media outlet that wanted to publish an opinion about that document was going to do so in a most irresponsible way.

Hon Trevor Mallard: I seek leave to table the infrastructure and engineering business plan 2013-15 of KiwiRail.

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

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker.

Mr SPEAKER: The member can object.

Hon GERRY BROWNLEE: Well, Mr Speaker, you cannot ask the House to grant leave to circumvent a court injunction.

Mr SPEAKER: I beg your pardon—I beg your pardon. Let me seek advice on this.

Hon Trevor Mallard: Just to make it absolutely clear, my understanding is that there is not a general injunction against the publication of this document. It applies to only one radio station. It does not apply to me and it does not apply to the House.

Mr SPEAKER: The interesting point that is being made was the last point—that such an injunction probably does not apply to this House. But members, in deciding whether or not they will grant leave for the document to be tabled, may well bear in mind the issue that there are injunctions around the document, or court orders around the document. That is a matter that

members may well consider in deciding whether or not to grant leave for it to be tabled. But it is my feeling that it would be inappropriate for me to refuse the House the opportunity to decide whether or not it wishes to grant leave for the document. So I will put it to the House. Leave is sought to table that document. Is there any objection? There is objection.

Hon Trevor Mallard: In light of the invitation of the Leader of the House, the acting Minister of State Owned Enterprises, to provide documentation that backed up my colleague’s questions, I seek leave to table the executive summary and outcomes section of the infrastructure and engineering business plan.

Mr SPEAKER: Leave is sought to table just the executive summary and outcomes from the report as a document. Is there any objection to that course of action? There is objection. [Interruption] Order! Any member of the House has the right to refuse leave for a document to be tabled.

Economy, Canterbury—Reports

2. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What reports has he received on the Canterbury economy and what effect will this have on the national economy?

Hon BILL ENGLISH (Minister of Finance): The National Bank’s regional trends survey released this week shows that the Canterbury economy grew 4.4 percent in the year to June, its strongest annual rate of increase for any individual region since 2007. The Auckland economy grew 3.0 percent in the year to June. These regions contributed to moderate nationwide growth of 1.9 percent in the year to June.

Maggie Barry: In light of the Government’s programme to build a more competitive economy based on more exports and less debt, what steps is the Government taking to promote business growth?

Hon BILL ENGLISH: The Government is setting out to assist with business growth across all regions of New Zealand. The business growth agenda is based on the idea that business confidence and growth creates sustainable, high-paying jobs and boosts our standard of living. Last week we released the progress report on building our export markets, and this week we produced the progress report on building innovation. The Government is focused on assisting businesses to make the decisions that lift growth—that is, the decisions to invest a bit more, employ another person, and pay a higher wage.

Maggie Barry: Given the unsustainable build-up in New Zealand’s indebtedness in recent decades, what progress is the Government making in lifting household savings and reducing household debt?

Hon BILL ENGLISH: The Government is focusing on lifting its own savings and reducing its own debt. Households, though, are making progress with the very substantial debt New Zealand households have. Savings are up, and household debt is down. The most recent data shows that net household savings are positive for the first time since the year 2000, and positive for only the second time in 19 years, since 1993. Household debt as a percentage of disposable income has fallen from 155 percent of GDP in 2009—one of the highest levels of household debt in the developed world—to around 140 percent. This is moderate progress, but it is progress in the right direction.

Maggie Barry: What reports on alternative approaches to managing the economy has he received?

Hon BILL ENGLISH: I have seen one such report recently that included as an economic policy “Changing Gear”. It was from the Labour Party. It did not say whether it was changing to a slower gear or reverse gear, but it is changing gear.

Child Poverty, Abuse, and Neglect—Indicators of Child Well-being

3. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she agree with the recommendation made by Every Child Counts in its Netherlands Study that national indicators of child well-being should be adopted so progress can be measured; if not, why not?

Hon PAULA BENNETT (Minister for Social Development): The Government is already working on a number of the recommendations that have been made in this report, but this is not one of them. The children of this country do not have precious time to waste on yet another debate on what measures their well-being. This Government has led the most comprehensive and substantial debate on child well-being this country has ever seen, through its green paper process. The white paper will be out shortly, and the public can judge us on that.

Jacinda Ardern: Does she believe that a child can have all of its basic needs met while living in a household on 50 percent of the median income in New Zealand?

Hon PAULA BENNETT: I am sure that would not be easy, and I have absolutely no doubt that there are children in this country who are living in poverty. That is why this Government is focused on growing this economy and getting better jobs for those people, so that they can move off welfare, in many cases, and see a brighter future for themselves and their children.

Jacinda Ardern: Does she believe that the decrease in median household incomes in real terms, as set out in the incomes report released today, has played a role in hardship rates for children rising from 15 percent to 21 percent on her watch?

Hon PAULA BENNETT: Yes, and I think that what we have seen is that the effects of the global economy have really hit those people hard. [Interruption] Well, it is the reality. The Labour Party members might like to think that that has not happened, but, actually, jobs were lost, people on part-time work lost some hours, and that, unsurprisingly, has had a direct effect on some of those people’s household incomes. What we have done is protect those who are really at the bottom, with Consumers Price Index adjustments, by making sure that we actually looked after those who were on benefits when the GST changes were made, and by looking after those children and families, as I think we have got a role to do.

Jacinda Ardern: Does she agree with the suggestion in The Netherlands Study that a universal child or family benefit should be a medium-term goal for her Government as a way to move children out of poverty?

Hon PAULA BENNETT: What I did note in that study also is that it talked about the economy of the Netherlands—and, certainly, of those Nordic countries—and about the kinds of choices you get to make when you have that stronger economy and that sort of money to spend. I think that that is what this Government is pretty well focused on. I hope we debate, when we have got extra cash to spend, where it goes and how those children get it. At the moment we have got the books to sort out, we have got a country to get back into surplus, and that is our focus.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question related directly to the suggestion in the study and to whether or not the Minister agreed that it should be a medium-term goal for the Government to look into a child or family benefit to move children out of poverty.

Mr SPEAKER: I accept that that was the question. The member did seek an opinion—whether the Minister agreed—but it would have been helpful if the Minister could have indicated in her answer whether or not she did agree with universal child support arrangements, if I recollect the question correctly.

Hon PAULA BENNETT: Certainly. My point is that actually the Netherlands economy is so much better off and they have so much more money to spend that they can make those sorts of choices as to whether or not they have a universal child benefit, or what it is they spend on. We actually do not have that luxury in New Zealand at this time, but I do hope that we do have it in the future.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question did not ask about the relative economic situations in the Netherlands versus New Zealand. It asked whether or not as a

consequence of the study, as recommended by Every Child Counts, the Government would be looking into the possibility of a child or family benefit.

Mr SPEAKER: Order! Well, no, that was not what the question asked. The question asked whether the Minister agreed with that finding from the study that a universal child support system was important. The Minister in her answer, because the question was asking for her opinion— whether she agreed with that—indicated that at the moment she could not agree with that, because, she was arguing, New Zealand was not in a position to be even contemplating that at present, if I interpreted the Minister’s answer correctly. If I am wrong then the Minister should correct me.

Jacinda Ardern: Does she take any responsibility for, according to the income report released today, under her Government inequality in New Zealand being the worst it has ever been?

Hon PAULA BENNETT: As I have already said, I am sure that the Labour Party would like to ignore the conditions of the last 3½ years. But they are real. They have affected, if anyone, those on the lower and middle incomes of this country. We actually stand here, and I tell you what New Zealanders say: “Thank goodness for a National Government that has managed its way through it and is now seeing real progress.” that I think we will see as we move out of that.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Could I invite you to either ask the Minister to answer the question, or to provide an interpretation for us, as you did previously, to indicate what the answer was, if, in fact, the question was addressed?

Mr SPEAKER: Well, in fairness, the question was certainly addressed, because the Minister clearly indicated in her answer that she did not disagree with what the member was saying in her question, and explained why she did not disagree with what the member was proposing in her question. I cannot get too pedantic about the detail of an answer.

Accident Compensation Corporation—Reports of Release of Personal Information and


4. DAVID BENNETT (National—Hamilton East) to the Minister for ACC: What are the findings of reports released today by the Privacy Commissioner and the Auditor-General about a privacy breach and governance at ACC?

Hon JUDITH COLLINS (Minister for ACC): The independent report released by the Privacy Commissioner focused on ACC’s culture, policies, and practices around privacy and security of information. It found that these were not up to 21st century standards. The Auditor-General focused on governance of the corporation, and found that senior board members involved and management failed to recognise the systems of systemic failure around privacy and security information, and did not take the appropriate steps. I agree with all the findings.

David Bennett: What specific concerns did the independent report and the Auditor-General raise, and what is ACC doing to address these?

Hon JUDITH COLLINS: The independent report released by the Privacy Commissioner noted systemic weaknesses, including a variable culture around the importance of handling private information carefully and a lack of accountability for addressing privacy issues. ACC will undertake a significant programme of work to address concerns raised by both the independent report and the Auditor-General. A timetable for this programme of work is included in the report from the Privacy Commissioner, and I expect ACC to make the required changes as a priority.

Andrew Little: In view of the findings in today’s reports, both released at 2 p.m., that ACC board members, which her Government appointed, were too inexperienced to appreciate the gravity of Bronwyn Pullar’s complaints, and that the corporation took a cavalier attitude to protecting claimant privacy, what steps is she taking to fill the multiple board and senior management vacancies with people who understand ACC and the importance of utmost public confidence in it?

Hon JUDITH COLLINS: The question is not quite correct in one of the assumptions. I will deal with that first and then deal with the substance of the question. In fact, the board members who were named in the reports as having not appreciated the seriousness of the situation were its

longest-serving board members—the chair and deputy chair. In relation to the filling of the board positions, I can tell the member that there is a very thorough process that is ongoing. Interviews are being undertaken and I am putting a great deal of thought into making sure we get the right combination of board members with the right skills, the right character, and the right experience.

David Bennett: What expectations has she set for ACC to improve public trust and confidence in how it operates?

Hon JUDITH COLLINS: Earlier this year I signed a letter of expectations and a service and purchase agreement with ACC outlining my priorities for the board. I expect the ACC board to improve public trust and confidence, improve the management and security of private information, maintain a focus on levy stability and financial sustainability, ensure early resolution of disputes, and provide high-quality service for clients. The Auditor-General noted that “this approach will lead to a more balanced and comprehensive approach to the governance and operation of ACC.”

Hon Trevor Mallard: In light of the Privacy Commissioner’s comment that the ACC culture change has to start at the top, what action has she taken to plug the leaks from her office?

Hon JUDITH COLLINS: There are no leaks from my office, as that member well knows.

State-owned Assets, Sales—Timing

5. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Is it still the Government’s intention for the first partial privatisation of an SOE to occur in the third quarter of this year; if not, why not?

Hon BILL ENGLISH (Minister of Finance) on behalf of the Minister for State Owned

Enterprises: Yes, that is our intention. As we have always said, the precise timing of all the Government’s partial share offers will be subject to market conditions and other factors. In the case of Mighty River Power, the first offer, we are currently working through issues such as Māori rights and interests in water. The Waitangi Tribunal is due to report on its recommendations tomorrow. We are confident these issues can be resolved.

Hon Clayton Cosgrove: Does he agree with the comments of Rob Cameron, head of the Capital Market Development Taskforce, that the management of the asset sales programme has been “a disaster”?

Hon BILL ENGLISH: I do not believe that those comments are correctly attributed, and if they are, I do not agree with them.

Hon Clayton Cosgrove: How is it good management to first ignore then needlessly inflame a dispute over water rights, potentially costing the taxpayer millions of dollars from a reduced sale price—

Hon Trevor Mallard: Billions.

Hon Clayton Cosgrove: —billions—and, potentially, billions more in legal compensation?

Hon BILL ENGLISH: The member is simply wrong. The Government has been aware of Māori rights and interests in water since the day after it took office, and it has been working with a wide range of Māori representation on those issues. Those discussions continue in a constructive and positive manner.

Hon Clayton Cosgrove: Given that on 1 August he agreed with the Minister of Finance that the asset sales programme was “on track”, how does he reconcile that statement with the news that, as Bill English stated, Solid Energy will be delayed or even cancelled, Meridian Energy is being put over a barrel by tough negotiations by its biggest customer, the chair of Air New Zealand says that the price of the company is too low to sell, and Mighty River Power is faced with potential court action over disputed water rights?

Hon BILL ENGLISH: Well, I just cannot recall exactly what his initial question was, but the sales are on track. The member is referring to a list of what are normal commercial risks. In fact, his question I think underlines the point that these companies are subject to commercial risks. The fact that they are owned by the Government does not make those go away. Our intention is to get an

ownership structure where those commercial risks will be handled more constructively. And, actually, all I said about Solid Energy was that it is not ready for sale now.

Andrew Williams: Does he agree with the Prime Minister’s 7 August comment that the Government’s asset sales have been hamstrung by the market; if so, has he had any discussions with the Prime Minister about shelving the mixed-ownership model?


Hon Clayton Cosgrove: If the sale of State-owned assets does not meet revenue expectations due to his Government’s mismanagement of the float or floats, what actions will his Government take to make up the financial shortfall?

Hon BILL ENGLISH: Any risks to the proceeds from the sales, which the Government has specified as being $5 billion to $7 billion, will not be to do with the Government’s handling of the sales; they will be to do with companies like Solid Energy having to face the reality that coal prices have dropped, and the fact that electricity companies may face flat or falling electricity demand, for instance. Those are all real commercial risks, and we will not know until we are fairly well through the sales process whether the Government will realise $5 billion to $7 billion. We expect we will realise $5 billion to $7 billion.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou katoa. Does the Minister accept that reports of difficult power price negotiations with Rio Tinto jeopardise the timing of the first partial privatisation of a State-owned enterprise, and how does this demonstrate the importance of keeping strategic assets in New Zealand control so that the New Zealand economy cannot be held to ransom by foreign-owned businesses?

Hon BILL ENGLISH: Firstly, I would point out that the so-called foreign-owned business has provided, on average, in excess of a thousand jobs in Southland since the early 1960s, and not too many other investors have actually done that. So let us keep that in perspective. Secondly, of course there is going to be some game playing around what are tough commercial negotiations between the owners of the smelter and Meridian Energy. I have to say that over the period since the mid-1960s, every time the aluminium price gets a bit low the owners of that business front up to the Government and try to get the electricity price down. There is nothing new.

Andrew Williams: Does he agree with the other comment made by the Prime Minister on 7 August that “We don’t have lots of flexibility and they are literally October-November of this year or March-April of next year”; if that is the case, if Mighty River Power is not sold by March-April next year, what effect will it have on the future viability of the mixed-ownership model?

Hon BILL ENGLISH: That is a hypothetical question. The Government is on track for the sale of Mighty River Power this year. We have been working with Māori over water rights and interests for 3 years. Given that that is the principal issue related to Mighty River Power, we believe that that issue can be handled in a constructive and positive way, as it has been for the last 2 or 3 years.

State-owned Energy Companies, Sales—Costs for Mighty River Power

6. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: How much has Mighty River Power spent to date on preparing itself for “transition to the Mixed Ownership Model”?

Hon BILL ENGLISH (Minister of Finance): First, I say to the member that this information will certainly be publicly available, however, Mighty River Power is subject to a disclosure regime similar to that of a publicly listed company, by Government policy, which means that all this information will be made available, but because of the strict legal requirements in the run-up to the float about the provision of information in relation to the individual company, the Government, by policy choice, is running a conservative policy that financial information will be released according to the disclosure regime, not through ad hoc parliamentary processes. I can tell the member that the number will be available on Tuesday next week, when the company discloses it as part of its annual results announcement.

Dr Russel Norman: In order to assist the House, I seek leave to table four documents. The first is a letter from Genesis Energy disclosing that it has so far spent $670,000 preparing for the mixedownership model process.

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.

Dr Russel Norman: The second letter is a letter dated 14 August this year, from Meridian Energy, disclosing that Meridian Energy has spent $562,000 so far preparing for the mixedownership model.

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.

Dr Russel Norman: The third letter is from Solid Energy, dated 12 August, stating that Solid Energy has spent $131,000 so far preparing for mixed ownership.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Please, I must hear this in silence so I can hear if there is any objection. There is no objection on that one. Document, by leave, laid on the Table of the House.

Dr Russel Norman: The final one is a letter from Mighty River Power, refusing to release the information, dated 16 August this year.

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.

Dr Russel Norman: Given that Mighty River Power, according to the Minister’s answer, is going to be releasing the information on Tuesday, why on earth is the Minister not releasing the information today, on Thursday? Is it because the Government is embarrassed by the cost of the asset sale programme, which has now run aground like the Rena and is leaking money left, right, and centre?

Hon BILL ENGLISH: No, that is not the case. The Government intends to be fully transparent about the costs, but we are going about that in a disciplined manner in respect of Mighty River Power because of the strict legal requirements around information about particular companies. We do not intend to put ourselves at risk of breaking the law. I am not implying that giving the member the number now would break the law, but we do not want to put ourselves at risk of it. We have consistently said that the costs will be around 2 percent of the $5 billion to $7 billion proceeds. We plan to release all the information the member is seeking every quarter, so that will prevent him carrying on with his campaign that the Government is somehow hiding these costs. We are not. They will be available, and it is unfortunate that that will be a bit less politically convenient for the member.

Dr Russel Norman: I raise a point of order, Mr Speaker. I am just seeking your advice. The Minister has stated very clearly that he does not believe there is a legal reason preventing him from releasing it. I assume his argument is that it not in the public interest to release this information. Is that your understanding of why that answer is acceptable?

Mr SPEAKER: Indeed the only reason why the Minister could get away with not providing the information the member is seeking, which is pretty straightforward information, is that the Minister, if I heard him correctly, is arguing that it is not in the public interest because the Government has decided to follow the standard—and forgive me for not remembering the correct terminology— programme for release of such information under the Public Companies Act, is it? The Government

has obviously made, one assumes, an assessment that that is the safest way, when dealing with these commercial things, to handle such a matter. So certainly it is the public interest that the Minister has invoked.

Dr Russel Norman: I raise a point of order, Mr Speaker. Sorry, but in listening to the Minister’s answer, he specifically said it was a matter of Government policy, rather than one of following the law and the Companies Act, or any other—that it was a matter of Government policy. Is it OK for the Government to say: “We are not releasing information just because that is our policy not to release information.”?

Mr SPEAKER: It is absolutely at the Minister’s discretion. Only the Minister can make the judgment about what is in the public interest. It would appear from his answer—I stress “appear”, because I know no more than the member—that the Government, from what the Minister has said, has decided that the safest way to handle this, in what is obviously a commercial transaction, is to follow the standard procedures for release of such information, as it is a commercial transaction that is being carried out. It is a fair point that the member is raising, but the Speaker cannot secondguess the Minister. It is quite clear that the public interest is being invoked here.

Dr Russel Norman: Has the Government come up with this new policy of not releasing information, even though there is no legal objection to releasing that information, purely for the reason that the Minister gave in his answer, which is to block political opposition to the asset sale programme?

Hon BILL ENGLISH: No, we would not dignify that member’s opposition to it by going to so much trouble. The fact is the Government is not blocking the release of the information. It will be released on Tuesday. The general information about costs incurred in the process of the float will be released every quarter.

Dr Russel Norman: Are the millions being spent by the State-owned enterprises themselves in preparation for privatisation additional to the $106 million in Vote Finance that the Government has budgeted for the sales process, which includes things like public relations consultants, brokers’ fees, and lawyers?

Hon BILL ENGLISH: As we have said, we have made a general estimate of 2 percent of the proceeds of $5 billion to $7 billion. That is a reasonably wide range of costs because it is a bit hard to predict them out over a period of years. The fact is the total amounts will be available, whether they are spent by the company or the Government. I would say to the member that the expenditure of money by the companies is pretty small in comparison with the much stronger focus they now have on cost control and careful capital investment, which unchecked could have wasted hundreds of millions of dollars of taxpayers’ money.

Mr SPEAKER: Just before I call the member, I think the member’s question was very clear actually on that occasion. The member asked whether the figures he quoted were in addition to any money that might be spent by the companies. I think that was not an unreasonable question to ask. In answering, the Minister said that the Government has made it clear that a certain amount of money will be spent—some percentage—but did not indicate whether that was in addition to the money that would be spent by the companies, which was a fair question. I ask the Minister to please come back to that question.

Hon BILL ENGLISH: We simply have not classified the costs in that way. We have made a broad estimate of 2 percent. The member is free to ask about any costs and whether they are part of the cost of sales. Over future years we think the total of all those costs will be around about 2 percent of proceeds, whether it is paid by the company or paid by the Government.

Dr Russel Norman: Given that the costs of the asset sales programme that we know about include the $106 million in Vote Finance, the millions by the State-owned enterprises themselves, the money spent on the Waitangi Tribunal hearings, the hundreds of thousands on pay rises to energy company managers, potentially the hundreds of millions for the share giveaway, and the

$100 million a year in additional deficits, are there any other hidden costs to the asset sales programme that are not in that list?

Hon BILL ENGLISH: Yes, I think we will be adding to the list of expenditure by the Parliamentary Service Commission on people that the Greens have been paying to approach 12- year-olds—12-year-olds—as I saw the other day, to sign a petition opposing asset sales. We will add that to the list. [Interruption]

Mr SPEAKER: I want to hear Dr Russel Norman’s supplementary question. [Interruption] Order! I say to the National Party back corner there to please be reasonable. I must be able to hear the supplementary question. I see members looking around, saying: “Who? Me?”, but I can see you all from here, and there is too much noise.

Dr Russel Norman: How would mum and dad shareholders be able to afford to buy shares in these companies when today’s household income report shows that middle New Zealand is getting poorer under this Government?

Hon BILL ENGLISH: There are also a lot of figures that show that middle New Zealand is increasing its savings rate for pretty much the first time in a generation. Mums and dads are quite capable of making their own decisions on that. They will not be listening to what the Government tells them and they certainly will not be listening to that member. They will be worried that their taxpayer dollars have been spent by him, paying people to gather signatures from schoolchildren.

Dr Russel Norman: Is the Minister concerned that after 4 years of his Government, middle New Zealanders’ after-tax incomes are in decline, and how will those middle mum and dad New Zealanders be able to afford to buy shares in these companies he is flogging off when their real after-tax incomes are decreasing?

Mr SPEAKER: We are a fair stretch from the primary question, but I do not want to deprive the honourable Minister.

Hon BILL ENGLISH: The member is, of course, being selective about his years, because the years prior to the one he is referring to showed significant increases in real after-tax disposable incomes. Of course, the year to which he is referring shows the impact of a sharp rise in unemployment, particularly among lower income workers. New Zealand mums and dads are quite capable of making their own decisions about whether they can put money aside for this purpose, or whether to put it aside for reducing their credit card debt or their mortgage, because we believe New Zealanders are responsible and capable. Clearly, that member believes New Zealanders should be protected from themselves.

Science and Research—Government Initiatives

7. SCOTT SIMPSON (National—Coromandel) to the Minister of Science and Innovation: What new investment is the Government making in science and research?

Hon STEVEN JOYCE (Minister of Science and Innovation): Today I announced that New Zealand researchers have been awarded $133 million in new research grants, including $32.8 million in this current financial year, as part of the Ministry of Business, Innovation and Employment’s 2012 science investment round. Applications for the grant were reviewed by independent experts and selected by the ministry’s science board. In total, 47 research projects were awarded grants in the areas of biological industries, energy and minerals, hazards and infrastructure, the environment, and health and society. Funding for research in the high-value manufacturing and services sector will be announced in the coming weeks.

Scott Simpson: How does this very significant investment by the Government into science and research improve New Zealand’s economic productivity and competitiveness?

Hon STEVEN JOYCE: Science underpins the innovation required to increase the productivity of firms and create sustained, long-term GDP growth. As part of this year’s science investment round we are providing grants to a range of areas, including, for example, research into combating the Psa bacterial disease in kiwifruit, enhancing the resilience of underground infrastructure in

Christchurch, and clean-energy storage technology to assist the integration of renewable wind energy into the national grid. On Tuesday I released the Government’s Building Innovation progress report, which lays out the science and innovation initiatives that build on our strength as a nation of innovators and scientists. This announcement today is another example of the Government’s science and innovation policies in action.

Housing, Minister—Statements

8. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Housing: Does he stand by all his answers to parliamentary questions; if not, why not?

Hon PHIL HEATLEY (Minister of Housing): Yes, as long as they are taken in context.

Hon Annette King: Does he stand by his statement made recently in Parliament that Housing New Zealand Corporation tenancy managers “will have a laptop. They will no longer be stuck behind a desk in an office, using a whiteboard. We are moving to modern technology,”; if so, when was he informed that tenancy officers have never had laptops, will not be getting laptops, and the so-called modern technology they have got is a cellphone that is not fit for purpose?

Hon PHIL HEATLEY: I am surprised that the member has got it wrong again. First of all, for the first part of the question, the Hansard will say “the changes we are making”, the “tenancy managers will spend”, “They will have”, “They will no longer be stuck behind a desk”, and “We are moving to” new technology. So clearly it is fairly future-focused. That is the first thing. The second thing the member says is that tenancy managers have never used laptops. Actually, in Christchurch after the earthquakes tenancy managers, when they were out and about, did use laptops. But can I say to the member if she could just stop making things up—

Mr SPEAKER: Order!

Hon Annette King: I raise a point of order, Mr Speaker. Would it be appropriate for the Minister to table what he was quoting from, because he missed out the fact that he used the word—

Mr SPEAKER: Order! [Interruption] No, no. Order! The member must resume her seat. The member, if I understood him correctly, was quoting from his Hansard, and that is already available. So it is all available for members anyhow, so we will not be tabling that.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Can you confirm that the uncorrected Hansard is also available to members, because there could well be a difference here between what the member said and what he said he said.

Mr SPEAKER: Order! [Interruption] Order! Since when did members not understand this is a point of order. Both the uncorrected and the corrected are available. And I must say to the member asking the question that if the Minister’s answer missed out a bit she believed should have been in it, that is obviously the next supplementary question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Can the Speaker further confirm from, I think, the Prebble case, dealt with by a Speaker, that it is a breach of privilege to significantly change one’s Hansard to take out a vital fact?

Hon PHIL HEATLEY: What the member’s allegations are—and I think journalists and members can test this by looking at the Hansard—is that I would have had to have changed these words: “are making”—

Mr SPEAKER: No. Order! [Interruption] Order! The member will resume his seat. None of this stuff should be being dealt with by way of point of order. The Minister has the chance to answer further questions, the member has the chance to ask further questions, and that is the way this matter should be dealt with. The member asked a question. The Minister answered it. The member believed that he had left a bit out that, in her view, should have been in the answer. That is an opportunity for further supplementary questions to chase that up to see whether that was the matter. So I invite the Hon Annette King to do that.

Hon Annette King: Does he consider, after the promises he made in Opposition and his undivided attention to the housing portfolio to improve the quality of State houses, that some State

houses are now just “in a serious state of repair”, as he claimed on 2 August this year; or is the Government the biggest slum landlord in the country?

Hon PHIL HEATLEY: I have made it clear in Opposition, and, certainly, coming into Government, since I got the briefing as incoming Minister twice—actually three times—and other documents, that there is a large amount of the State housing stock that is in a serious state of disrepair. The most immediate thing we can do, clearly, is to insulate all State houses. I do not know why they were not done historically, in the last 10 years, but we will be insulating every State house by the end of next year. But there is still an awful lot of work to do to get State housing up to a decent standard. We think we should not just look at those on the waiting list and be concerned about them, but also those who are in State houses should be living in decent conditions, and we are working on that.

Hon Annette King: What was his reaction to the Minister of Finance, Bill English, calling the Government “the biggest slum landlord in the country by a long-shot” just yesterday, therefore making him, as the Minister of State housing, the principal slum landlord; and how does this label stack up against his claim that he has “always suspected” that he was “a very effective member”?

Hon PHIL HEATLEY: I have said ad infinitum for 4 years that the State housing stock is in a serious state of disrepair, that, in fact, you know, it took a decade to deteriorate and we are repairing it. But I can I just say this. You know, the easiest thing you could do is insulate the State houses. They were not insulated in a decade. We are going to finish insulating by the end of next year, and that is a great thing. I am not denying it is in a state of serious disrepair. We have got to get on and do it. One more thing: every time we bowl a State house to rebuild, kick out a gang member, or whatever, those opposite complain.

Hon Annette King: When Bill English said yesterday the Government was looking for “viable capital recycling models” to deliver more efficient State housing, is he indicating floating Housing New Zealand Corporation on the stock market so that we can all become slum landlord millionaires?

Hon PHIL HEATLEY: That is a very complicated way of looking at what Bill English meant. What I think he meant, though, on the face of it, is this: he thinks it would be a really good idea if we sold and bowled the old, crappy ones and built some new ones for our tenants. Personally, I think that is a really good idea.

Agricultural Vehicles—Review of Rules

9. IAN McKELVIE (National—Rangitīkei) to the Associate Minister of Transport: What progress is being made on the Government review into transport rules affecting agricultural vehicles?

Hon SIMON BRIDGES (Associate Minister of Transport): Earlier this month I announced changes to simplify the rules for the use of New Zealand’s 40,000 agricultural vehicles. This followed a review and widespread consultation in response to concerns that the current laws do not take into account the special nature of agricultural vehicles or the demands of agricultural production. The proposed changes will improve compliance and provide greater operational flexibility for this important sector.

Ian McKelvie: What are some of the key changes?

Hon SIMON BRIDGES: Well, there are many. The changes establish a two-tier system for agricultural vehicles based on a 40-kilometre-an-hour operating speed. Vehicles operating below this speed will be exempt from a warrant of fitness and work-time requirements. In addition, a new licence endorsement will allow car licence holders to drive a greater range of agricultural vehicles once they prove that they have the skills to do so. Of course, safety remains an important factor. The changes proposed require agricultural vehicles to use a flashing amber beacon to alert road users.

Mr SPEAKER: Question No. 10, Eugenie Sage. [Interruption] I say to the Labour benches on this occasion, please show some courtesy to a member at the back. I have called Eugenie Sage.

Conservation Land—Concession Applications

10. EUGENIE SAGE (Green) to the Minister of Conservation: Is the financial viability of an applicant company a factor in the consideration of concession applications on conservation land; if not, why not?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister of

Conservation: Yes.

Eugenie Sage: Has the department sought a financial feasibility report from Fiordland monorail promoters Riverstone Holdings Ltd as part of its consideration of the company’s concession application; if not, why not?

Hon STEVEN JOYCE: The department is obviously working on a range of information in terms of this application. Obviously, as I have already said in answer to the primary question, the financial viability is a consideration.

Eugenie Sage: Does the fact that two of the three directors of the monorail company are also the directors of Pegasus Town Ltd, which failed and went into receivership last week, encourage the Minister to ensure that there is full financial disclosure by the company promoting the $175 million monorail proposal?

Hon STEVEN JOYCE: As I have said at the outset, the financial viability of a company is a consideration in all concession applications on conservation land. I am sure all relevant matters will be considered in what is a statutory process.

Eugenie Sage: Given that the proposed monorail would involve felling and clearing more than 25,000 trees and undertaking significant earthworks in a World Heritage area, does the Minister accept that there are significant risks to conservation values if the application is approved and the company subsequently abandons it because of financial difficulties?

Hon STEVEN JOYCE: I think the member is well ahead of herself. There is a concession process, obviously, under way to consider it at the moment. There is also a subsequent Resource Management Act process, so we will be getting a fair way down the track before we will be dealing with the issues the member mentions.

Welfare Reforms—Effect of Future Focus

11. MELISSA LEE (National) to the Minister for Social Development: What impact have the Government’s Future Focus welfare reforms had to date?

Hon PAULA BENNETT (Minister for Social Development): Under the Government’s 2010 Future Focus welfare reforms, we introduced a new obligation requiring those receiving an unemployment benefit to reapply after a year. Since these changes 62,178 people have gone through the reapplication process, and as a result 15,768 people did not reapply during that process. This simple renewal request has saved well over $29.5 million in benefit expenditure.

Melissa Lee: How have these changes supported more sole parents into work?

Hon PAULA BENNETT: As part of those changes we also introduced a part-time work obligation for sole parents with children over 6 years old, which means we were actively working with around 6,000 sole parents each month. As a result we have seen a greater proportion move into part-time work. Compared with 2 years ago, the number of sole parents in part-time work has increased by nearly 2,000 to 16,300.

Melissa Lee: What reports has she seen that show support for the Government’s welfare reforms?

Hon PAULA BENNETT: I have seen a number of reports, as you can imagine. One is that “It is wrong to tax a working person almost to breaking point, then give it to a person who is able to work but refuses to.” That is on the Facebook page of the member for Hutt South. I note that they also

have support from the leader of the Labour Party. I have seen a report there that says he has “little tolerance for people who don’t pull their weight.” I welcome those members’ support for Government welfare reforms.

Maternity Services—Performance

12. BARBARA STEWART (NZ First) to the Minister of Health: Is he satisfied that New Zealand’s maternity services are meeting all the needs of pregnant women in New Zealand; if not, why not?

Hon JO GOODHEW (Associate Minister of Health):on behalf of the Minister of Health: It is important to state that the phrase “meeting all the needs” sets a very broad parameter. There is no definitive list of needs. What I can, however, say is that New Zealand has a world-class maternity system, but we can always do better. From time to time service to an individual may fall short of that required, sometimes with tragic consequences. That is why doctors, midwives, nurses, and other health professionals across all 20 district health boards are now all working together for the first time ever on the national maternity quality and safety programme. We want the best possible services to protect the safety of mothers and babies. That is why the National Government has invested $114 million over the last 4 years in improving safety and quality.

Barbara Stewart: How can he be satisfied with maternity services, when there were 21 infant deaths in 2010, where midwives failed to follow best-practice guidelines including the case where Hastings coroner Chris Devonport last Thursday said that texting was an inappropriate way for midwives to complete clinical assessments, which resulted in the death of a baby boy last June?

Hon JO GOODHEW: Each tragic circumstance is reviewed. Each tragic circumstance where a mother or a baby dies gives the opportunity for the individuals involved to learn from the review process. Ideally, these tragic circumstances would never happen, but the national maternity quality and safety programme gives us a new opportunity to not wait for tragic circumstances to actually move forward and improve the quality and safety of the care that is provided to mothers and babies in New Zealand.

Barbara Stewart: Is he aware that 96 to 98 percent of midwife graduates undertake the additional Midwifery First Year of Practice programme; if so, will he make completion of this programme compulsory to ensure some consistency across the sector?

Hon JO GOODHEW: I am afraid that I am unable to answer that question, given that I have not been briefed on the hypothetical question going to the Minister.


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