Questions and Answers – Sept 25

by Desk Editor on Tuesday, September 25, 2012 — 5:34 PM


Dotcom Case—Actions of Government Communications Security Bureau

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister responsible for the GCSB: Does he consider that he should have been informed about the unlawful bugging of Kim Dotcom earlier than Monday, 17 September 2012; if not, why not?

Rt Hon JOHN KEY (Minister responsible for the GCSB): No, I was informed by the director of the Government Communications Security Bureau on 17 September, which was the first day I was in Wellington following travel to Russia and Japan, and the first opportunity I had to meet with the director in a secure environment once he had confirmed that it was likely an unlawful activity had taken place.

Dr Russel Norman: Is it his understanding that the bugging was unlawful because Mr Kim Dotcom is a resident of New Zealand?

Rt Hon JOHN KEY: I am not in a position to go through what the particular issues are. I can say that the law is quite clear in one regard about what sort of individual can have action taken against them, and in the fullness of time—hopefully, by the end of this week—Justice Neazor’s report will be available for people to be able to read.

Dr Russel Norman: I raise a point of order, Mr Speaker. Am I to understand that the Minister is using a public-interest defence for not answering the question?

Mr SPEAKER: I think the Prime Minister answered the question. He said he is not in a position to answer it, and I think that one has to take a Minister at their word. That is a pretty honest response to a question if he is not today in a position to answer it. I think the Prime Minister indicated that by the end of the week information should be to hand that will enable some of these answers to be available. But the House does have to take the Minister at his word. If he says he is not in a position to answer it, then he is not in a position to answer it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Prime Minister has already gone public saying that it was unlawful. What he is being asked today is to further detail the nature of the unlawfulness not being discovered—namely, that he was a resident. But he has already been publicly out there in numerous media outlets having said that the action was unlawful. That is why he sought the inquiry.

Mr SPEAKER: That is not a—

Rt Hon JOHN KEY: Mr Speaker—

Mr SPEAKER: I will hear from the Prime Minister, but that was not actually a point of order for the House.

Rt Hon JOHN KEY: I have to check; I am not entirely sure. I have actually said it is likely to be unlawful, and, as I said, we will be in a better position to understand the reasons—

Mr SPEAKER: Order! This is the trouble we get into when I allow a point to be heard that is not a point of order. We are now getting into debate over the Prime Minister’s answer, and it always leads to difficulty.

Dr Russel Norman: Given the widespread media coverage that suggests the reason it was unlawful was that Mr Dotcom is a New Zealand resident, is he seriously trying to tell the House that the Government Communications Security Bureau was unaware that Mr Kim Dotcom was a New Zealand resident when it has been in every media outlet in the country and Mr Dotcom organised a $500,000 fireworks display to celebrate getting his residency?

Rt Hon JOHN KEY: The fireworks are an irrelevance, but the memorandum has been released by the court today. That may help the member get some understanding of the issue, but, as I said to him earlier in the earlier answer to the question, I would be cautious about jumping to conclusions until the member has a chance to read Justice Neazor’s report, which I myself have not read.

Dr Russel Norman: Referring to the memo released from the court, which says that the Government Communications Security Bureau sought an assurance from the Organised and Financial Crime Agency of New Zealand as to the fact that Mr Kim Dotcom was not a resident of New Zealand or a citizen, is he seriously trying to tell New Zealand that the Government Communications Security Bureau, the organisation whose job it is to acquire information, could not find out that Mr Kim Dotcom was a New Zealand resident, given that it was in every newspaper in the country and Mr Kim Dotcom had a fireworks display to celebrate his residency?

Rt Hon JOHN KEY: The issue at heart is about the legality or otherwise of the position, and, as the memorandum says, assurances were given about that legality. But Justice Neazor’s report, I am sure, will give us rationale behind why that assurance was given.

Dr Russel Norman: I raise a point of order, Mr Speaker. The Prime Minister has just referred to the memo, and he has now allowed us to—

Mr SPEAKER: Order! What is the issue of order the member—[Interruption] Order! I will let the member explain his issue of order.

Dr Russel Norman: The issue of order is around the Prime Minister’s refusal to answer the first supplementary question. He has now referred explicitly to the issue of concern that he refused to answer the question about.

Mr SPEAKER: Order! The member should think of the question he asked. The question he asked, from my recollection, was whether the Prime Minister was trying to say to New Zealand that the Government Communications Security Bureau did not know certain information? The Prime Minister in answer has explained that the bureau did have certain information, the detail of which is not fully available yet, and when it is available, from my understanding of the Prime Minister’s answer, it will be made public. But the member’s question was one where there was no particular answer. When his question asked “Is he trying to tell New Zealand …”, what the Prime Minister has answered is what he is trying to tell New Zealand—that, in fact, there are legal issues and they are a little more complex than that. That is a perfectly proper answer.

Dr Russel Norman: Does the Prime Minister accept that the court documents to which he referred in his earlier answers state very clearly that the Government Communications Security Bureau sought assurances from police that Kim Dotcom and his co-accused were foreign nationals and hence it was lawful for the bureau to spy on them, and hence the issue at concern was whether Mr Kim Dotcom was a New Zealand citizen or resident?

Rt Hon JOHN KEY: I accept that that is what the memorandum says, yes.

Dr Russel Norman: Does the Prime Minister, hence, come to the conclusion that either the Government Communications Security Bureau was incompetent in not checking whether Mr Kim Dotcom was a New Zealand citizen or resident, or the bureau misled the responsible Minister because it did not tell him much earlier that it had acted unlawfully? Is it incompetence or did it mislead him?

Rt Hon JOHN KEY: I believe neither of those assertions to be correct.

Dr Russel Norman: How can the Prime Minister argue that neither of those assertions is correct when either the Government Communications Security Bureau, the agency responsible for collecting information, did not realise that Kim Dotcom was a New Zealand resident, in spite of all the information—that is one option; it is incompetent—or it did not tell the responsible Minister that it had acted unlawfully? What is the third option?

Rt Hon JOHN KEY: The third option is the Neazor report. The member is jumping to conclusions without all of the information. He is joining dots that actually cannot be joined.


2. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What measures has the Government taken to improve the long-term competitiveness of the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The Government has taken a number of measures, including reforming the tax system to reduce tax on work, savings, and companies, and increase tax on consumption and property speculation, improving regulations and reducing unnecessary costs on business, and progressing our business growth measures that focus on exports, innovation, skills, infrastructure, capital markets, and the use of natural resources. Last week I signed a new policy targets agreement that sets out specific targets for price stability, helping to create a stable macroeconomic environment suitable for growth.

John Hayes: What are the main features of the new policy targets agreement that will contribute to a more competitive economy?

Hon BILL ENGLISH: The agreement continues to require the Reserve Bank to keep CPI inflation between 1 to 3 percent on average over the medium term. Within this target, the new agreement now requires the bank to focus on keeping future average inflation near the 2 percent mid-point. In addition, the policy targets agreement includes a stronger focus on financial stability by including asset prices in the range of indicators that the bank monitors. As with previous agreements, it requires the Reserve Bank to seek to avoid unnecessary instability in output, interest rates, and the exchange rate.

John Hayes: What lessons are there for New Zealand from international attempts to intervene in currency markets in the hope of creating more competitive economic conditions?

Hon BILL ENGLISH: A Reserve Bank paper published earlier this year looks at interventions by the Bank of Japan and the Swiss National Bank and their relevance to New Zealand. It notes that economic conditions are quite different in New Zealand from Japan and Switzerland. Both of them have experienced deflation recently, partly due to their strong currency appreciation. New Zealand has not. New Zealand has in fact experienced an increase in its terms of trade, contributing to upwards pressure on the exchange rate. Switzerland and Japan have been forced to attempt to lower their currencies in order to ease monetary conditions. In New Zealand we could just lower interest rates if we want to ease monetary conditions.

John Hayes: What specific lessons can New Zealand draw from the results of currency market interventions by Switzerland and Japan?

Hon BILL ENGLISH: The Reserve Bank paper confirms that the currency market interventions are expensive and they do not have a lasting impact. They note that currency interventions since 2008 have largely resulted in financial losses for the Swiss National Bank and the Bank of Japan, and they have been ineffective in lowering their currencies. Since the beginning of 2008, despite the efforts of the Swiss bank to keep their currency down, it has actually appreciated 27 percent against the euro and 15 percent against the US dollar. In Japan the yen has appreciated 29 percent against the US dollar and 37 percent against the euro.

Hon David Parker: Which of the following measures is the best indicator of the competitiveness of the New Zealand economy: 53,000 people a year leaving for Australia, large job losses for exporters and local manufacturers competing against imports, or an overvalued exchange rate leading to increases in New Zealand’s net international liabilities?

Hon BILL ENGLISH: Well, there are any number of ways of measuring competitiveness, but in the long run it will be the profitability of our export sector, which was damaged pretty severely in the first decade of this century. We are working hard to restore it. Unfortunately, it is taking some time and there are some international headwinds such as, for instance, the large drop in coal prices recently that have hit Solid Energy.

Government Communications Security Bureau—Briefings Since November 2008

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: How many times has he been formally briefed by the Government Communications Security Bureau, by year, since November 2008?

Rt Hon JOHN KEY (Prime Minister): My diary indicates that I have been formally briefed by the Government Communications Security Bureau the following number of times, by year, since 2008: twice in 2008, 15 times in 2009, 11 times in 2010, 10 times in 2011, and 15 times in 2012.

Rt Hon Winston Peters: Why was he not briefed by the Government Communications Security Bureau about who would be involved in the raid on Kim Dotcom, given the involvement of the Government Communications Security Bureau, the New Zealand Police, and an American agency, so that he could be aware that the Government Communications Security Bureau had met with Crown Law, the police, and US authorities 2 months before the January raid on Dotcom’s residence?

Rt Hon JOHN KEY: The activity in question did not require a ministerial warrant, and I am not briefed on operational matters on every operation it undertakes.

Rt Hon Winston Peters: When was he first briefed about the ministerial certificate that his Deputy Prime Minister signed on his behalf?

Rt Hon JOHN KEY: Last night. [Interruption]

Mr SPEAKER: The Rt Hon Winston Peters—[Interruption] Does the member wish to ask a further supplementary question?

Rt Hon Winston Peters: No, thank you very much.

Mr SPEAKER: My apologies.

Dotcom Case—Actions of Government Communications Security Bureau

4. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements in relation to Kim Dotcom and the inquiry into the actions of the Government Communications Security Bureau?

Rt Hon JOHN KEY (Prime Minister): Yes. I stand by my full statements in the context in which they were given.

David Shearer: Does he stand by his statement that he first heard of Kim Dotcom on 19 January 2012, the day before the police raids on Dotcom’s residence?

Rt Hon JOHN KEY: Yes.

David Shearer: Is he expecting us to believe that that was the first time he had heard of Kim Dotcom, given there was an extradition order for Kim Dotcom from the highest authorities in the US; given his Ministers—Minister Williamson, Minister Power, and Minister Coleman—had dealt with him; given the New Zealand Police, the Solicitor-General, Crown Law, and the US had given substantial assistance up to that raid; given the media had been reporting on him; and given that his own agency, the Government Communications Security Bureau, had been investigating him?

Rt Hon JOHN KEY: That is the truth.

David Shearer: Does he stand by his statement when he said he did not know about the ministerial certificate Bill English signed on 16 August as Acting Prime Minister, and is he, therefore, telling the House that Mr English did not ring him and tell him, did not brief him on it when he returned, sat through an entire Cabinet and did not mention it to him, and told him about it only after the press conference yesterday?

Rt Hon JOHN KEY: In relation to all the earlier points, yes, except that the latter point is incorrect. My agency informed me about the last point. The reason for that, of course, is that the ministerial certificate was simply a certificate around a suppression order that was— [Interruption]—oh, Jesus—granted by an application of the court. The reason why that would not be an extraordinary item is that it is quite normal for the activities of the Government Communications Security Bureau and SIS not to be entered into the public domain, for good public-interest reasons.

David Shearer: In light of that, and in light of the seriousness the situation is in now, does he have confidence in his Acting Prime Minister at the time, Bill English?

Rt Hon JOHN KEY: Yes. It has been a longstanding practice for Government Communications Security Bureau and SIS activities not to be in the public domain, for good public interest. That was the policy that Helen Clark followed—that was exactly the policy that Helen Clark followed—and the ministerial certificate simply does that. It does not do anything else.

David Shearer: Does the ministerial certificate relate to information that if released publicly would prejudice the relationship between the New Zealand and the US Governments?

Rt Hon JOHN KEY: No. The ministerial certificate was in relation to an application by Paul Davison QC to have the involvement of the Government Communications Security Bureau released into the public domain. It was deemed that that was not in the public interest.

David Shearer: Is he suggesting, as he did yesterday, that the Government Communications Security Bureau made a mistake because it did not know the status of Kim Dotcom’s residency, when in fact—this poster will jog the Prime Minister’s memory—he put on a fireworks display that was the biggest in New Zealand’s history?

Rt Hon JOHN KEY: All I can say to the member is that I would caution him, as I would caution every other New Zealander, to wait until they see Paul Neazor’s report, which might make it quite clear how such a situation like this could have taken place.

David Shearer: Does he stand by his statement that as a Minister he did not take any responsibility for the actions of the Government Communications Security Bureau, “because I wasn’t aware of the fact that the operation was taking place. It didn’t require ministerial sign-off.”?

Rt Hon JOHN KEY: I am responsible for the direction and priorities of my agencies; I do not get involved in operational matters. I would note that the Cabinet Manual says that Ministers should not be involved in their departments’ day-to-day operations.

David Shearer: Who is ultimately responsible for the actions of the Government Communications Security Bureau?

Rt Hon JOHN KEY: I am responsible. That is why on Monday, 17 September, when my agency came to me and said that it believed that it may have acted unlawfully, I immediately set about and started an inquiry, rightfully so.

Education, National Standards—Publication of Data

5. NIKKI KAYE (National—Auckland Central) to the Minister of Education: What support exists for the publication of National Standards data?

Hon HEKIA PARATA (Minister of Education): Firstly, parents, because they have consistently said that they want to know how their child is doing, how their school is doing, and how they can be involved. In addition, I have seen a number of reports overwhelmingly in support of the publication of national standards data. I have seen some Colmar Brunton research that shows that parents want three things: they want independent and comprehensive information about their child’s school, they want it regularly and in plain English, and they want to know where their child is and how they compare with other children. I have also seen several media polls that also support the publication of the data, one of which stated a whopping 70 percent of people aged between 18 and 39 are tremendously supportive of schools releasing the information. But the national standards data needs to be considered in the wider context of Public Achievement Information, and that is

why on Friday the Ministry of Education will be making national standards data public, together with links to Education Review Office reports and schools’ annual reports.

Nikki Kaye: What does the first year’s data show?

Hon HEKIA PARATA: Given that this is the first year schools have reported their national standards data, it is variable between schools, but it does give sufficient information to tell us how well we are doing across the country. The first year’s data shows that 76 percent of learners reached or exceeded the national standard for reading, 72 percent for maths, and 68 percent for writing. Of particular interest is the consistency of the achievement trends in writing, reading, and maths by gender and ethnicity with other system health check studies, such as the Progress in International Reading Literacy Study and the National Certificate of Educational Achievement.

Tracey Martin: Can the Minister explain why private schools and future charter schools are not required to report against national standards, even though they are funded either in full or in part by the New Zealand taxpayer?

Hon HEKIA PARATA: I am at a loss to know how that member knows that. We have yet to introduce legislation to establish these schools, and it will then specify what is required.

Tracey Martin: I raise a point of order, Mr Speaker.

Mr SPEAKER: I think I understand—it is a point of order that the member is calling? The question asked about private schools as well as charter schools.

Hon Gerry Brownlee: Two parts.

Mr SPEAKER: Order! I do not believe that was a case of two parts to a question. It was really one question.

Hon HEKIA PARATA: Because parents have a choice, and parents paying private schools can take their kids elsewhere.

Nikki Kaye: Supplementary question to the Minister—[Interruption]

Mr SPEAKER: Order! I want to hear this question. [Interruption] Order! I want to hear this question.

Nikki Kaye: What are you doing to support those children who are not at the national standard?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am sure “you” would do a better job, but you are not to be the subject of questioning, as the member did.

Mr SPEAKER: Order! I did not pick up that bit in the question. There has been such noise, though, that I could not even hear the question. I would ask Nikki Kaye to repeat her question.

Nikki Kaye: What is the Minister doing to support those children who are not at the national standard?

Hon HEKIA PARATA: Our Government is making a number of additional investments. We are investing $22 million per year in the Reading Recovery programme, $1.6 million in Reading Together for 203 low-decile schools, and a further $11 million in targeted support programmes for maths and literacy. And, of course, these supplement the overall first-line investment we make through our teaching profession of $3.8 billion a year.

Solid Energy—Restructuring and Redundancies

6. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his statement that “exporters are actually doing their best, and they need all the help they can get from a Government that is actually in favour of exporting and investing”; if so, what support has the Government given Solid Energy to prevent layoffs and redundancies?

Hon BILL ENGLISH (Minister of Finance): The Government has kept in touch with Solid Energy’s board during this difficult time, starting with analysis produced by the scoping study for potential sale back in 2011, and has received advice from the board that the mine in question simply is not viable in the longer term. That, of course, has made for a very difficult decision-making process for the company, and even more difficulty for those who are adversely affected by it.

Hon David Parker: Given that the Spring Creek Mine contributes $37 million in wages and services to the Greymouth economy, what steps has he taken to ensure any closure does not economically decimate the local community?

Hon BILL ENGLISH: The initial impact of that could certainly affect the community. In light of the fact that coal prices have fallen by about 60 percent in the past 15 months, we look forward to the support of the Labour Party in asking objectors to the Bathurst Resources mine to withdraw their appeals so that that company can get on and provide up to 400 jobs on the West Coast, which many of these highly skilled, well-motivated Solid Energy workers could apply for.

Hon David Parker: What reports has he seen about how different Solid Energy’s performance would be if New Zealand’s currency was not overvalued by 15 percent, as estimated by the International Monetary Fund?

Hon BILL ENGLISH: I have not seen any reports on that, but what I do know is that there is another company keen to open a mine under exactly the same exchange rate on the West Coast. I would hope that all politicians in this House could call on those who are objecting to the opening of that mine to withdraw their objections so that the people who visited Parliament today can believe that the Opposition politicians believe what they said to them, which was that they would do—

Mr SPEAKER: Order! Order! The member is not responsible for the Opposition politicians. I call the Hon Damien O’Connor. [Interruption] Order! I want to hear this question.

Hon Damien O’Connor: Why don’t you listen for a change?

Mr SPEAKER: Order! Order! There is no need for that exchange.

Hon Damien O’Connor: Can the Minister give an unequivocal assurance to the House that there are no links whatsoever between the job losses and the restructure of Solid Energy, and the Government’s plans to float the company on the stock market?

Hon BILL ENGLISH: Yes, I can give that assurance. The primary driver of the decisions, as has been pointed out by the board, has been the drop in the coal price. I sympathise with the member, who has a problem that he wants to see more jobs on the West Coast, as we do, but his political colleagues stand in the way of those new jobs.

Hon Damien O’Connor: How can the Minister and the chief executive of Solid Energy continue to deny that the sale of Solid Energy was not part of these job cuts, when on page 8 of the Solid Energy review document the priorities were to “maximise medium-term cash generation and value uplift consistent with our potential listing objectives form our shareholder …” and “preparing Solid Energy for a potential listing at some stage in one to three years”?

Hon BILL ENGLISH: Close scrutiny of Solid Energy, which began last year, has shown that that company needed to have very high coal prices in order to continue with its strategy, regardless of any future sale. The coal price dropped by 60 percent. That particular mine has been losing millions of dollars per month. The answer for the workforce is for the objections to the Bathurst Resources application to be withdrawn so that that mine can get up and going, providing 400 jobs. We hope the Opposition parties will join with us in calling on those objectors to withdraw, in the interests of the people who lost their jobs yesterday.

Andrew Williams: At a time when more than 60 workers are being laid off at the State-owned Solid Energy Huntly coalmine, and coal production is being scaled back, why in the very same town of Huntly is the State-owned Genesis Energy power station importing coal from Indonesia, when the Huntly power station was built in this very location because of the coalfields in the area?

Hon BILL ENGLISH: I am not familiar with all the commercial arrangements that Genesis Energy makes. I understand that what the member is pointing to has been in place for some time. What is clear, though, is that despite Solid Energy’s difficulties, Bathurst Resources is keen to continue with a mine on the West Coast—

Andrew Williams: I raise a point of order, Mr Speaker. Bathurst Resources has nothing to do with the question I raised.

Mr SPEAKER: Order! And that has got nothing to do with a point of order.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The requirement for the Minister to be terse and to the point has got everything to do with the Standing Orders of this House. And going off from a North Island coalmine to the South Island, the West Coast—

Mr SPEAKER: Order! The member is now debating the issue. [Interruption] Order! It is not a point of order. [Interruption] Order! I am not sure what it has got to do with the proceedings of the House. All points of order must relate to the proceedings going on at this time in the House. The quality of an answer is nothing to do with the proceedings. The Minister answered the question. The member Andrew Williams could have raised a point of order in a proper way, but that was not the proper way to raise one.

Andrew Williams: Is Solid Energy still a contender for the Government’s planned 49 percent share sell-off, or is this another energy State-owned enterprise that is increasingly becoming unsaleable, such as Mighty River Power, with its Waikato River water rights issues?

Hon BILL ENGLISH: Well, I do not agree with the member’s assertion about Mighty River Power. In the case of Solid Energy, the Government can sell it in a public offering to New Zealand mums and dads only if the company is in a viable and sustainable form. We intend to work closely with the board to see whether that can be achieved.

Tertiary Education—Access to Foundation-level Study

7. COLIN KING (National—Kaikōura) to the Minister for Tertiary Education, Skills and

Employment: What is the Government doing to improve access to foundation-level tertiary education for young New Zealanders?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Data released today by the Tertiary Education Commission shows that the Government’s Youth Guarantee scheme is successfully moving young people who have not previously achieved at school into fees-free tertiary education. The 2011 results show that average course completion rates across the Youth Guarantee scheme at all tertiary providers, including private training establishments and wānanga, were 65 percent. This is very encouraging, given that more than half of the 3,597 16 and 17-year-olds taking up fees-free places at tertiary providers under Youth Guarantee had no prior qualification, and a third of them had only National Certificate of Educational Achievement level 1. Clearly, the Youth Guarantee scheme is working very well for young people who find the traditional classroom environment challenging.

Colin King: What other benefits does the Government’s Youth Guarantee scheme provide for young people?

Hon STEVEN JOYCE: Youth Guarantee gives young people the practical skills and the opportunity for a career, particularly those young people at risk of dropping out of school. The scheme is motivating young people to learn skills and gain a qualification that will set them up for a career in priority trades areas such as carpentry, engineering, horticulture, plumbing, gasfitting, bricklaying, and blocklaying. The scheme is also working well for young Māori, who make up a third of the students enrolled in the Youth Guarantee scheme, which is higher than the number of Māori in mainstream tertiary education.

Oil and Gas Extraction—Hydraulic Fracturing in Taranaki

8. GARETH HUGHES (Green) to the Minister of Energy and Resources: Does he stand by his statement on fracking that he has “full confidence in the ability of councils to manage it” when unlined earthen blow-down pits were used without resource consent for over a decade, and now the soil and groundwater near Kapuni wellsites in Taranaki is contaminated?

Hon PHIL HEATLEY (Minister of Energy and Resources): Yes, I stand by my statement in the context that it was given. In the case of Kapuni, which the member refers to, water quality sampling of the Kapuni Stream has been undertaken by the regional council in recent years, and has

shown no evidence of any impact. Regardless, I am advised that the Taranaki Regional Council has indicated that the storing of fluids now requires a resource consent, and pits would need to be lined.

Gareth Hughes: Why, then, has the Minister changed his views in regard to Taranaki fracking from it is being done very, very well to a statement last week, when the extent of the soil and water pollution was revealed, that it is being “reasonably managed, um, there haven’t been any significant incidences”?

Hon PHIL HEATLEY: Well, I stand by both statements. I disagree with the claims of the member that there has been water pollution. As I said, testing of the stream suggests that there has not been, so I no see no particular difference between my supporting the activities of hydraulic fracturing in New Zealand, particularly in Taranaki, over many, many decades. If this is the worst incident that the member can come up with, then I would argue that he is struggling.

Gareth Hughes: Why, then, is more than 50 cubic metres of contaminated soil being trucked to Wellington, 300 cubic metres of soil being remediated from the Kapuni well sites, and there is a plume of dissolved hydrocarbons under five well sites at Kapuni, which the council’s own report says it cannot clean up?

Hon PHIL HEATLEY: The soil is being trucked in order to get it tested. Soil is not groundwater or surface water, I would remind the member. The reason that there is oil and gas under the wells is the reason why the wells are there is they are trying to get out the oil and gas.

Gareth Hughes: How can the Minister still have confidence in the council’s ability to manage fracking, when it has allowed the use of pits without consent for over a decade, it has taken no enforcement action against these polluting companies, and it has no plan to clean up the groundwater pollution, which has come about because of the use of these blow-down frack pits?

Hon PHIL HEATLEY: As TV3 revealed the other night, for decades the normal practice was to use unlined pits. As the Taranaki Regional Council has said and assured the nation, today the practice is not to use unlined pits. All pits would need to be lined if they were to get a resource consent, and I congratulate it on raising its standards.

Hon John Banks—Electoral Returns and Confidence

9. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Is it still his position that the test for his confidence in Hon John Banks was that he complied with the law; if so, on what basis does he believe that Mr Banks complied with the law with respect to anonymous donations under the Local Electoral Act 2001?

Rt Hon JOHN KEY (Prime Minister): Yes, because Mr Banks has given me an assurance that he met the law. The police statement quite clearly said that there was insufficient evidence, that there is a statute of limitations, and that he has complied with the law.

Grant Robertson: Does he accept the view of the police, as outlined in paragraph 38 of the police criminal assessment report on John Banks, that Mr Banks’ return was “wrong in content as the donations for Skycity, Dotcom, and [a withheld name] should not have been recorded as anonymous.”?

Rt Hon JOHN KEY: I am not in a position to offer a view on that, but what I can say is that, as I saw reported in the New Zealand Herald, the police concluded that the return was false, but could not prove Mr Banks had known that when he signed it.

Grant Robertson: Does he further accept the view of the police in paragraph 39 of the police report that the fact that the donations should not have been recorded as anonymous was the reason that this was a false return by Mr Banks?

Rt Hon JOHN KEY: I cannot offer a view of that, but what I can say is that the police statement quite clearly established that the return was compiled by a campaign volunteer, who assured Mr Banks it was accurate before Mr Banks signed it. I would also say that I have seen from the police report that they believed there was insufficient evidence and, as the New Zealand Herald said, not enough information to prove that Mr Banks would have known it was false.

Grant Robertson: What police report was the Prime Minister referring to in that answer?

Rt Hon JOHN KEY: The one the member was talking about.

Grant Robertson: Is the Prime Minister now telling the House that he has read the police report; if so, will he now not conclude that Mr Banks was found by the police to have breached the law; therefore, he did not comply with the law; therefore, he should no longer have the confidence of the Prime Minister?

Rt Hon JOHN KEY: No.

Civil Defence, Disaster Preparedness—ShakeOut Exercise

10. KANWALJIT SINGH BAKSHI (National) to the Minister of Civil Defence: What progress has the Government made in encouraging New Zealanders to participate in the ShakeOut earthquake drill?

Hon CHRIS TREMAIN (Minister of Civil Defence): The Ministry of Civil Defence set a goal of 1 million people taking part in our first ever nationwide earthquake drill, ShakeOut. The good news is that we have exceeded that target, with 1.3 million New Zealanders now signed up. This includes 2,000 businesses and 4,000 schools and preschools, where everyone will drop, cover, and hold at 9.26 a.m. tomorrow morning.

Kanwaljit Singh Bakshi: What reports has he seen of particular plans for participation in ShakeOut?

Hon CHRIS TREMAIN: I have seen reports that Wellington Airport is running a large-scale earthquake drill, including passengers and airport and airline staff. A community hospital in Waikato is turning off its power and water for 24 hours to find out what it would be like in a civil defence emergency. These are great examples of using ShakeOut to improve preparedness. The Parliamentary Service has also signed up, and I encourage all MPs to take part and to particularly consider the preparedness of their own families.

Dotcom Case—Potential Indemnity for Agencies

11. CHARLES CHAUVEL (Labour) to the Attorney-General: Has the Government given any type of indemnity relating to legal actions concerning Kim Dotcom; if so, what are the terms and which agencies were consulted before it was given?

Hon CHRISTOPHER FINLAYSON (Attorney-General): As was reported in newspapers on 24 May, an undertaking as to damages was given by the Commissioner of Police in relation to the foreign restraining order made on Mr Dotcom’s New Zealand – based assets, and I refer the member to section 29 of the Criminal Proceeds (Recovery) Act 2009. It is not related in any way to litigation surrounding the wider extradition proceedings or to criminal charges in the United States. It is not related to any other actions by Government agencies. Undertakings as to damages in litigation are routine, but in this case no Minister, including the Minister of Finance, has any role in approving or signing off this kind of undertaking. That was the sole responsibility of the Commissioner of Police, and I refer the member to section 92 of the same Act. I am advised officials from a number of Government agencies were consulted, including the Ministry of Justice, Crown Law, the Ministry of Foreign Affairs and Trade, and the police.

Charles Chauvel: When the undertaking as to damages was being consulted upon, was the United States Ambassador to New Zealand or the United States Government one of the people or agencies that was consulted about the decision to grant an undertaking as to damages?

Hon CHRISTOPHER FINLAYSON: Not to the best of my knowledge. In these sorts of things, in terms of international criminal litigation, the matter is one where the costs are normally picked up by the country that has requested to undertake the particular activity.

Charles Chauvel: Can he explain to the House why, if the United States Government was not consulted about the indemnity, material was withheld under the Official Information Act citing the

ground of disclosure being likely to prejudice the international relations of the Government of New Zealand; if he cannot, can he explain why that ground was cited in any other respect?

Hon CHRISTOPHER FINLAYSON: I am not privy to that particular decision that was made under the Official Information Act, but I imagine it was because of the general sensitivity concerning these sorts of matters, which would necessarily have a foreign component—namely, in this case, the United States of America.

Charles Chauvel: How likely is it, in his view, that the undertaking as to damages will be called upon?

Hon CHRISTOPHER FINLAYSON: As I say, it relates to the restraining order that was granted under the Criminal Proceeds (Recovery) Act. In terms of section 28 of that Act, a certain amount is being released. At the end of the day, we have to wait until the end of the litigation or the expiration of 3 years to determine whether or not the undertaking would be called on, and then determine at that point what, if any, damages would be payable.

Charles Chauvel: Will the experience of the Government in respect of the present litigation alter his position in respect of the advice he gives as to the wisdom of future such undertakings as to damages?

Hon CHRISTOPHER FINLAYSON: As I said in my answer to the primary question, the decision whether to give an undertaking was for the Commissioner of Police. As I understand it, under another type of legislation in 2002 the Solicitor-General gave an undertaking in relation to certain damages that could be suffered if, as a result of that particular restraining order having been made, damages were suffered. As I say, undertakings as to damages generally in litigation, where a person is seeking either an interim injunction or interim restraining order, are not uncommon.

Charles Chauvel: Can he confirm that in respect of this particular undertaking as to damages, briefings were given to Ministers, including the Minister of Finance and himself, given the highprofile nature of this application to the court, and is he concerned that the Crown was going to be exposed to further damages in respect of the Dotcom litigation, given the admission of the Prime Minister yesterday that illegal actions had occurred in respect of the matters that were dealt with at the post-Cabinet press conference?

Hon CHRISTOPHER FINLAYSON: I have already said that the undertaking is in terms of section 29(1) of the Criminal Proceeds Recovery Act, and that does not extend to any acts or omissions on behalf of the Government Communications Security Bureau. It extends to the making, operation, or extension of the duration of the restraining order. The first part of the question was whether Ministers were given briefings on the subject. The answer is yes, there was a briefing.

Health Targets—Heart and Diabetes Checks

12. SHANE ARDERN (National—Taranaki – King Country) to the Associate Minister of

Health: What initiatives is the Health Promotion Agency taking to assist the Government’s heart health and diabetes targets?

Hon JO GOODHEW (Associate Minister of Health): The Health Promotion Agency is working with the Heart Foundation and Pharmac on a new national campaign raising awareness of the importance of a heart warrant of fitness cardiovascular disease assessment. This is an important preventative health activity. Encouraging more heart and diabetes checks is one of the Government’s six national health targets.

Shane Ardern: What will the campaign involve?

Hon JO GOODHEW: In addition to the national information campaign, everyone who takes their car through Vehicle Testing New Zealand testing stations in October will get a leaflet encouraging them to get their heart checked. Buck Shelford is the face of the campaign and his message is this: “You’ve got a warrant of fitness for your car. Now get one for your heart.” I would certainly encourage all of the members of this House to get their hearts checked as well.


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