Questions and Answers – September 11

by Desk Editor on Tuesday, September 11, 2012 — 6:29 PM


Economies, International—Effect on New Zealand

1. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What advice has he received on the impact global economic developments are having on the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The global outlook remains uncertain. Europe, in particular, continues to grapple with longstanding problems of excessive debt, with significant decisions being made in Europe this week. It has, however, demonstrated an ability to maintain stability while dealing with deep-seated long-term problems. Growth is expected to be maintained at reasonable levels in our second-largest trading partner, China. The outlook for Australia is less positive than it was, but it still remains one of the faster-growing developed economies.

Hon John Banks: I raise a point of order, Mr Speaker. The parliamentary Opposition during the answer from the Minister was yapping out “Tidy yourself up. Why don’t you tidy yourself up?”. I make no comment about that, but I think you are doing a great job and should berate them.

Mr SPEAKER: Order! The member does remind members in the House that when they say “you” they are referring to the Speaker. I did look at the member who made that interjection. He seemed unaware of what he had actually said.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. If you look at the question, it asks the Minister “What advice has he received?”. Well, we are still waiting to hear what that advice was. We heard just his opinion of how the rest of the world is.

Mr SPEAKER: Well, one assumes that that is the advice he has received.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You might assume that, but for the rest of us and the country, we would like to know what was the advice he got and where did he get it from. [Interruption]

Mr SPEAKER: Order! A point of order has been raised. Had the question asked what advice he had got and where did he get it from, there may have been a different answer, but the question did not actually ask that.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The question was “What advice has he received?”. You could pad it out by saying “and from whom and what day did you get it?”, but, strictly speaking, it is a simple question. I would like to know what advice he received, not what his views are on the international economy.

Mr SPEAKER: Order! During question time the right honourable gentleman has absolutely that right to ask that question. He can ask specifically for the source of the advice received. That is absolutely why supplementary questions are allowed.

John Hayes: In the light of New Zealand’s increasing economic links with the Asia- Pacific region, what are the immediate prospects for APEC economies?

Hon BILL ENGLISH: The immediate prospects for these economies on our doorstep are reasonably good. The IMF is forecasting growth of 4.2 percent for the APEC area in 2012 and 4.5 percent in 2013. This is considerably faster than developed economies, and compares with forecast world growth of around 3.5 percent. Ten APEC countries will grow by 4 percent or more this year, which means that in those countries there will be more people with bigger incomes who are willing to pay more for our products. That is good news for New Zealand.

John Hayes: How are international observers viewing the immediate outlook for China, and how will this impact on New Zealand’s growth prospects? 2 Error! No document variable supplied. 11 Sep 2012

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This Minister has no responsibility for international people—none at all. If he was asked about advice or reports or something like that, he might have responsibility, but we have been told that we have to be straight and down the line, and have questions within the Standing Orders and Speakers’ rulings. When they are written patsies, there is no excuse—

Mr SPEAKER: Order! The member was fine up until that point. The member makes a perfectly reasonable point that Ministers can be asked their opinions about matters, but if there is no direct responsibility for what they are being asked about, probably the question should refer to advice or reports that the Minister may have received.

John Hayes: I raise a point of order, Mr Speaker. The second part of my question, and I will just repeat it, asked how this would impact on New Zealand’s growth prospects. I think that is a very fair question to put to the Minister of Finance.

Mr SPEAKER: The member makes a fair point in response. The latter part of the question indeed asked that, and that is absolutely within the Minister’s responsibility.

Hon BILL ENGLISH: Given that it is among the fastest-growing economies in the world, what happens with China does matter to New Zealand. There seems to be a range of views, but a general view would be that China’s growth will be a bit lower this year than it was last year, partly because of the impact of lower demand in Europe. The way this impacts on New Zealand’s growth prospects is that it is our second-largest trading partner, and Chinese demand for our products will determine our income, to a significant extent. China is Australia’s largest trading partner and remains our largest trading partner, so how Australia does is affected by China.

John Hayes: What other reports has he received on New Zealand’s economic prospects, given the significant challenges faced by economies in other parts of the world?

Hon BILL ENGLISH: I recently met with representatives of credit rating agencies Moody’s and Standard and Poor’s. They have noted the good progress the Government is making in getting its own finances in order and returning to surplus, while many other countries face many more years of deficits and rising debt. They note that our moderate growth rate and our positive household savings rate compare favourably with that of many other developed countries, but they reiterate our need to reduce our high levels of household debt, which remain as yet New Zealand’s single-biggest vulnerability to international economic events.

Exchange Rate—Commentary

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: Does he agree with the New Zealand Manufacturers and Exporters Association, the International Monetary Fund, and the Reserve Bank of New Zealand that the New Zealand dollar is overvalued?

Hon BILL ENGLISH (Minister of Finance): We do agree with their level of discomfort about the high level of the New Zealand dollar, but we certainly do not agree with the view held by the Manufacturers and Exporters Association that the New Zealand dollar should be devalued to US60c. This would amount to around a 25 percent devaluation, implying an exchange rate against the Australian dollar of just 58c. That means a drop in income and living standards across the board in New Zealand of about 20 percent. If they think there is a gap between us and Australia now, then following the Manufacturers and Exporters Association call for a 25 percent devaluation, that gap would widen into a chasm and thousands of New Zealanders would be leaving for Australia because of its much higher standard of living. 11 Sep 2012 Error! No document variable supplied. 3

Rt Hon Winston Peters: Does he agree with John Walley, Chief Executive Officer of the New Zealand Manufacturers and Exporters Association, that the overvalued dollar has cost the exports sector up to $10 billion over the past 3½ years?

Hon BILL ENGLISH: No, I do not agree with that. We do agree that the high level of the exchange rate does put a lot of pressure on exporters. The Government is taking every measure it can to exercise its indirect influence on the exchange rate to help our exporters be more competitive. But we do not agree with the view of New Zealand First, the Manufacturers and Exporters Association, and the Labour Party that the New Zealand dollar should be significantly devalued. That would cut the incomes and the standard of living of all New Zealanders.

Rt Hon Winston Peters: Will he acknowledge that the overvalued dollar is contributing to rising unemployment, with hundreds of jobs being lost in the export sector every month—for example, the 100 jobs recently lost at Tīwai Point, the 120 redundancies at Solid Energy’s Huntly East mine, the 100 jobs set to go at the Kawerau mill, or the up to 400 jobs that hang in the balance at Spring Creek Mine, all because of an uncompetitive exchange rate?

Hon BILL ENGLISH: All of those job losses are regrettable but probably unavoidable. What we owe to the people who have lost those jobs is to continue to support the many businesses that are creating jobs. In the last 2 years this economy has created 50,000 net new jobs and over the next 4 years we expect about another 150,000 net new jobs. In an environment of relatively low growth rates and grumpy growth, some companies will be shedding jobs, and more other companies are growing jobs.

Rt Hon Winston Peters: Is it correct that under section 17 of the Reserve Bank of New Zealand Act the Minister of Finance may, for the purpose of influencing the exchange rate or exchange rate trends, from time to time, by notice in writing to the bank, direct the bank to deal in foreign exchange within guidelines prescribed by the Minister in the notice, which is not certainly you, because you have got no experience whatsoever in this area?

Hon BILL ENGLISH: Yes, the member is correct about what is in the Reserve Bank of New Zealand Act. However, it would be irresponsible of any Minister of Finance of New Zealand to instruct the Reserve Bank to try to achieve what he, the Labour Party, the Greens, and the Manufacturers and Exporters Association want, and that is a 20 percent devaluation of the New Zealand currency. That would be extremely risky for the New Zealand taxpayer, but, worse than that, it would cut the standard of living of every New Zealand household by 20 percent.

Hon David Parker: If an inflated exchange rate lies at the heart of our exporters’ problems, our external deficit, and job losses, why will he not do anything about it?

Hon BILL ENGLISH: What lies at the heart of their challenges was the very poor economic policy under the Labour Government where, up to 2008, New Zealand lost competitiveness at a rate among the worst in the developed world. This Government is having to work very hard to re-establish that competitiveness.

Hon David Parker: Does he stand by his statement that New Zealand operates “best-practice” monetary policy, or does he now accept that the economic objectives of the Reserve Bank should be widened to include more than inflation?

Hon BILL ENGLISH: Yes, I do stand by the statement, and if the member read the policy targets agreement he would see that it does encompass other economic objectives.

Hon David Parker: I raise a point of order, Mr Speaker. My question was whether the economic objectives of the Reserve Bank, which are actually laid out in statute, should be widened to more than inflation, and the Minister has not addressed that part of the question. 4 Error! No document variable supplied. 11 Sep 2012

Mr SPEAKER: I will allow the member to repeat his question if there is uncertainty.

Hon David Parker: Does he stand by his statement that New Zealand operates “best-practice” monetary policy, or does he now accept that the economic objectives of the Reserve Bank should be widened in the statute to include more than inflation?

Mr SPEAKER: Order! Before I call the Minister, the Minister actually answered the first part of that question. It is a shame the member did not restrict his question to just the last bit, if he wanted that answered. The Minister answered whether he stood by the—[Interruption] Order! I gave the member the benefit of the doubt; I should have trusted my initial judgment.

Rt Hon Winston Peters: In the light of the Minister’s first answer, and given that he does have the power to do something about the overvalued dollar, when will he stop Nero fiddling whilst New Zealand manufacturing, New Zealand exporting, and New Zealand jobs continue to burn?

Hon BILL ENGLISH: As I have already said, the Government is working across a wide range of fronts, from infrastructure to skills, to supporting exporters in our export markets, and to sorting out the allocation and use of our natural resources, all as mechanisms to assist the competitiveness of our exporters. However, we do not intend to pursue a devaluation of the New Zealand dollar that would cut the living standards of New Zealand households by 20 percent, as advocated by the Opposition parties.

Rt Hon Winston Peters: Given the extreme urgency of this issue, I seek leave for the Reserve Bank of New Zealand (Amending Primary Function of Bank) Amendment Bill to have its first reading immediately after question time today.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.

Schools—Supplying Meals to Students

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement in relation to food in schools that “most of those decile one to three schools have that and are dealing with the issue”; if so, is he therefore satisfied that all children attending New Zealand schools are having their nutritional needs met and are arriving in classrooms ready to learn?

Hon BILL ENGLISH (Acting Prime Minister): Yes, the Prime Minister stands by his full statement, which was that “In my experience, most of those decile one to three schools have that and are dealing with the issue. But obviously, you’ll see with a number of schools [for instance] on the waiting list for the KidsCan … that more needs to be done.” I also noted that the Government provides fruit in schools—indeed, all decile 1 and 2 primary and intermediate schools are able to opt into this scheme—and the Government provides funding to KidsCan for its food for kids programme. As the member will know, we all want children to have their nutritional needs met and arrive in classes ready to learn. The Government is keen to help where that is required, but the fundamental responsibility lies with the parents of those children to feed them.

David Shearer: Has he seen comments from the principal of Finlayson Park School in Manurewa, who said that she is spending $9,000 a year to feed hungry students and “that’s $9,000 not being spent on teaching and learning”, and is this what he meant when he said schools were dealing with the issue?

Hon BILL ENGLISH: I have not seen those particular comments, but I am sure that principal is doing everything she can to lift the achievement of those children. As the member should know, it is important in the case of feeding children that the Government provides support where it is required but does not act in a way that takes 11 Sep 2012 Error! No document variable supplied. 5 from families the responsibility for feeding their own children. I know that the member does not believe it is their responsibility; he wants all children to be fed at school.

Mr SPEAKER: Order! That is sufficient.

David Shearer: How does arguing about this issue resting on parent responsibility, which we all agree on, solve the problem tomorrow morning when more than 80,000 children will turn up to school hungry?

Hon BILL ENGLISH: I have outlined the range of careful measures the Government is taking to provide help where it is most needed. We do not intend to go down the track of taking from families the responsibility to feed their own children. It is a fundamental responsibility of a parent.

David Shearer: Given that his Government is spending $560,000 on sports equipment for private schools and just $320,000 on KidsCan, on feeding kids in schools, does he believe he has his educational priorities right?

Hon BILL ENGLISH: Yes, we do have our educational priorities right. We have committed $9 billion, actually, to the funding of achievement in State-run schools. What we recognise and that member does not is that it is important that the Government does not act in this area in a way that undermines the responsibilities of families to feed their own children.

David Shearer: In light of his comment on fruit in schools, is he suggesting that if a kid turns up hungry at school and is given a piece of fruit, that child is equipped with the nutritional needs it needs for the rest of the day?

Hon BILL ENGLISH: In some cases it might be. There are children who do have fruit for breakfast. In fact, I thought under the previous Government’s Healthy Eating – Healthy Action programme it was trying to make our children eat fruit for breakfast.

Tertiary Institutions—2011 Performance

4. NIKKI KAYE (National—Auckland Central) to the Minister for Tertiary

Education, Skills and Employment: What reports has he received regarding the performance of the tertiary education sector?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and

Employment): On Thursday last week I released the 2011 tertiary education performance data. The information shows that the universities, polytechnics, wānanga, and private training establishments have once again improved their course and qualification completion rates as well as their student retention rates. Course completion rates across the tertiary sector have risen from 77 percent in 2009 to 82 percent in 2011, with qualification rates over the same period increasing from 62 percent to 71 percent.

Nikki Kaye: What has the Government done to help the sector achieve these results?

Hon STEVEN JOYCE: The Government has incentivised better performance by providers by introducing performance-linked funding based on educational performance indicators including course completions, qualification completions, progression to higher levels, and retention. We have also published on the Tertiary Education Commission website the performance information for all providers for the benefit of students, their families, and other stakeholders. The Tertiary Education Commission has supported the focus on performance by taking a more active investment approach, and withdrawing funding from poor-performing courses and also from short award courses that do not result in formal qualifications.

Nikki Kaye: What information has he seen regarding the performance of Māori and Pasifika students in the tertiary education sector?

Hon STEVEN JOYCE: A recent report by the Tertiary Education Commission highlighted that the results for Māori and Pasifika students have greatly improved. Particularly pleasing is the strong increase in Māori and Pasifika course and 6 Error! No document variable supplied. 11 Sep 2012 qualification completion rates, which have increased more than the overall sector average. Māori course completion rates are up 9 percent from 2009 to 2011 and qualification rates are up 7 percent. Pasifika course completion rates are up 9 percent from 2009 to 2011 and qualification rates are also up 7 percent. There is still more work to do, but this is very good progress.

Child Poverty—Proposed Universal Child Payment

5. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement, “I don’t think that [universal child payment] is at all likely; we went away from that some years ago. In New Zealand we have a very targeted system through Working for Families.”?

Hon BILL ENGLISH (Acting Prime Minister): Yes.

Metiria Turei: How does the very targeted in-work tax credit child payment system, which he claims is better than a universal payment for children, help the children of New Zealand’s poorest families whose parents do not work enough hours to qualify for that child payment?

Hon BILL ENGLISH: Those families the member is referring to are, of course, on benefits or are the recipients of the guaranteed minimum family income. The in-work tax credit was designed by the previous Labour Government as a payment for those who were in what was then defined as full-time work. So, by definition, those who are not in full-time work do not qualify for it.

Metiria Turei: If, as the Prime Minister claims, very targeted assistance is better than a universal child payment, will he then support my bill, which specifically targets a child payment to New Zealand’s poorest children whose parents cannot find enough work, because unemployment is so high?

Hon BILL ENGLISH: The answer is that the Government will not be supporting the member’s bill. But she is giving a misleading impression that children in households where the parents are not working are not the recipients of a child payment. Of course they are, as part of the benefit payment. The member can argue about whether that payment should be larger—I suspect she thinks it should be—but there are child payments per child to beneficiary households.

Metiria Turei: How is it fair to the children of families in Christchurch, for example, who lost their jobs due to the earthquake that they lose both their employment income and their in-work tax credit child payment? How does that give those kids who need it the most a good life and a fair future?

Hon BILL ENGLISH: For families in Christchurch it is difficult when they lose their jobs, as it is for many other families where a job is lost. There is income support in place for those families, which includes child payments. As I said before, the member can argue whether they should be larger, but child payments are incorporated. The inwork tax credit was designed on the principle of “work first”—a principle that I see has recently been endorsed by the Children’s Commissioner’s expert group. It is designed as a payment to families to encourage full-time work, and appears to have been successful in doing that.

Metiria Turei: Does the Minister not agree that the in-work tax credit child payment has failed to provide sufficient support to those families who need it the most and the children who need it the most, because parents who might work but do not qualify for enough hours do not get access to that payment, leaving more than 200,000 children in families who do not qualify and who live well below the poverty line? Is that not a failure?

Hon BILL ENGLISH: It is not a failure of the in-work tax credit, because the inwork tax credit was designed by the previous Government—supported by the National 11 Sep 2012 Error! No document variable supplied. 7 Party at the time—as an incentive to work. That appears to have been successful. If the member is concerned about the absolute level of income of those on benefit, then she is quite free to advocate that there should be larger payments. But the in-work tax credit is there for a particular purpose, and we do not intend to change that purpose.

Metiria Turei: Why is the Prime Minister opposing all the options for a child payment that will reach the poorest of New Zealand’s children, including the universal child payment that has been proposed by the Children’s Commissioner for those children zero to 6 years old, and a targeted child payment, as proposed in my bill, that will go to the children of the poorest families, when he knows that 270,000 children are living in poverty—a situation that his Government is making worse? When will he step out of la-la land and do something for the poorest kids?

Hon BILL ENGLISH: I will not deal with each of the member’s propositions, but the universal payment proposed by the Children’s Commissioner’s expert group is, I have to say, a bit unspecified. The group itself recognises that it would have to be paid for, and I think it believes it could be paid for by reducing assistance to families a bit further up the income scale. When the expert group reports to the commissioner, who then reports to the Government, then, of course, we can consider all its propositions. The Government’s focus for low-income families is on dealing with those factors that would lead to persistent poverty and vulnerability. So, for instance, the Minister for Social Development has announced the social obligations, which are part of the encouragement for those who are on benefit with children to get their children into early childhood education, and part of the encouragement for them to look for appropriate part-time work and to get the kinds of skills that will help them lift income. So we have a strong focus on those families being able to get work as a top priority.

Hon Peter Dunne: What advice has the Minister received about the impact on lowincome working families of a shift away from the current targeted arrangement to a more universal payment in respect of children?

Hon BILL ENGLISH: I have not asked for particular advice on that, but I think I could guess what it would say. It would say that a move from a targeted programme to a lower universal payment would leave many low-income working families worse off, to start with, and, secondly, would leave them in a less beneficial position, relevant to being on the benefit. It has been a focus of social policy, regardless of party, in New Zealand in the last 20 years to ensure that the reward for work is significantly greater than the income that one can receive on benefit. We intend to maintain that policy.

Metiria Turei: Why on earth is the Prime Minister opposing any solution, whether it is increasing the minimum wage, food in schools, a universal child payment for some kids, or a targeted payment for the poorest kids? Why is he refusing to support any solution that will help the children he knows are in the worst poverty in this country? What did those kids do to deserve his Government’s neglect and derision?

Hon BILL ENGLISH: I find those comments offensive, actually. The Government is actually dealing with a wide range of complex issues to ensure that people have the opportunity to lift themselves out of the position they are in where they are on low income. The real danger to children is persistent deprivation that goes with low income. That is a relatively smaller proportion of the 200,000 she refers to, and the Government’s measures, particularly in welfare reform, which is a very comprehensive programme, are designed to promote mobility for those families. But, again, I would deny the member’s assertion that the Government is treating these children with neglect and derision. That is typical of the kinds of exaggerated claims she makes to try to get into the political debate. 8 Error! No document variable supplied. 11 Sep 2012

Welfare Reforms—Recent Announcements

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

Social Development: What recent announcements has she made on the Government’s comprehensive welfare reforms?

Hon PAULA BENNETT (Minister for Social Development): Today we have announced that as part of the Government’s welfare reforms we are introducing social obligations for those beneficiaries with children. These social obligations will require that their children are attending 15 hours a week early childhood education from age 3, attending school from age 5 or 6, and enrolled with a general practitioner, and that they complete core Well Child / Tāmariki Ora checks. I believe these obligations are reasonable, achievable, and reflect the expectations of most New Zealanders.

Peseta Sam Lotu-Iiga: How will these new social obligations ensure education and health services benefit vulnerable children?

Hon PAULA BENNETT: Many of our most vulnerable children are dependent on adults in the benefit system, and this is an opportunity to make sure we give these children the best start in life. Research shows that only 40 percent of DPB recipients and only 60 percent of those on the unemployment benefit with a child of early childhood education age were attending early childhood education. We want to get that number up. That is one of the reasons the Minister of Education, Minister Parata, is targeting early childhood education attendance and has made it a key result area, and certainly I am happy to support that with this initiative.

Jacinda Ardern: Does every child in New Zealand at age 3 have access to early childhood education today?

Hon PAULA BENNETT: No, and that is why we have said with the obligations that if there are barriers that people cannot overcome, we want to try and help them do that. But if they have got access and they are not taking it up, then there may be sanctions further down the process.

Jacinda Ardern: What requirements will there be for parents who are not on benefits to fulfil her social obligations?

Hon PAULA BENNETT: As I said, the Minister of Education is putting quite a targeted approach around those who are not actually attending early childhood education, in that there is a requirement, and it would be very helpful for them to be there. This is about those who are on benefits. We know that many of these children are our most vulnerable and do need that kind of support. We can put this lever in, and we are. [Interruption]

Mr SPEAKER: Order! I want to hear this next supplementary question.

Peseta Sam Lotu-Iiga: What other announcements has she made that make changes to the welfare system?

Hon PAULA BENNETT: It is fair to say that it has been very comprehensive. Last week we announced that people with outstanding arrest warrants will no longer receive the benefit while evading the police. If someone has an unresolved arrest warrant, we will stop their benefit until they do the right thing and come forward to the authorities. The truth is that at any one time there are 15—[Interruption]

Mr SPEAKER: Order! Close though I am to the Minister, I can no longer hear her answer, given the level of interjection. It is not reasonable. All members have a right to ask questions.

Hon PAULA BENNETT: Certainly the Opposition can call out, but this is what is called doing your job. That party actually did not do it for 9 years, so there is a lot for me to pick up and actually get right in the welfare system. So if it had gone back and done this many, many years ago, as should have been done—at any one time there are 11 Sep 2012 Error! No document variable supplied. 9 15,000 people in New Zealand with more than 37,000 warrants, and, of those people, 8,200 are on a benefit. We are effectively paying them for being on the run from the police. I think that is disgraceful. I think it is disgraceful that that party let that go for 9 long years, and it is time that this Government actually tidied that up.

Mr SPEAKER: Question No. 7, Grant Robertson. [Interruption] Order! I want to hear this question.

Environment Canterbury—Regional Council Elections

7. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister of Local

Government: Does he agree with the statement by the previous Minister for Local Government, Hon Dr Nick Smith “Under any circumstances the next regional council elections in Canterbury will take place no later than the elections scheduled for late 2013”?

Hon DAVID CARTER (Minister of Local Government): I did at the time. Nick Smith made those comments in March 2010, and although it may have escaped the attention of the member, we have had since then four major earthquake events in Christchurch. The member will also know that the quote he just read out from Nick Smith went on to say this: “The explicit intent is for the commissioners to withdraw and be replaced by elected representatives as soon as their task is achieved and the present systemic issues are resolved.” The commissioners are doing an outstanding job and have made good progress, but the job is not yet complete.

Grant Robertson: How can it not be a broken promise to the people of Canterbury that they would be able to elect their own regional council, when the former Minister said that under any circumstances elections would take place in 2013?

Hon DAVID CARTER: Because, as I have just said to the member, Nick Smith went on to say: “The explicit intent is for the commissioners to withdraw and be replaced … as soon as their task is achieved …”. Because of the earthquake event, because progress is still not finalised around the Canterbury Water Management Strategy, that job is not yet complete.

Grant Robertson: To whom are the commissioners running Environment Canterbury accountable: his Government or the people of Canterbury?

Hon DAVID CARTER: At this stage the people who are responsible are the seven appointed commissioners.

Mr SPEAKER: The Minister may not have heard the question clearly. The question asked to whom they are responsible: the Government or the local people of Canterbury.

Hon DAVID CARTER: I apologise. I did not hear the question properly. The commissioners are responsible, both to the Government and to the people of Canterbury.

Grant Robertson: Is he familiar with the phrase “No taxation without representation”, and why does he think ratepayers in the Canterbury region should continue to pay rates when his Government is denying them the right to be democratically represented at a regional level?

Hon DAVID CARTER: Because of the circumstances. Those Cantabrians had been asked to pay rates to a regional council that was the worst-performing regional council out of 84. They had been asked to pay rates to a regional council that an independent report concluded was ineffective and dysfunctional.

Denis O’Rourke: Will the Minister give an undertaking to the electors in the Canterbury region that they will be given the opportunity, through a comprehensive consultation process, to have a say on the main options for the reform of local government in the region before the Government introduces legislation to end the local democracy – free zone there? 10 Error! No document variable supplied. 11 Sep 2012

Hon DAVID CARTER: It is the intention of the Government to have the legislation put before the select committee. That will be the opportunity for Cantabrians to have their say. It is worth noting that at this stage the only negative comments I have seen have been from the Labour Party, the Christchurch Press, and two former disgruntled Environment Canterbury councillors: Eugenie Sage and Kerry Burke.

Grant Robertson: Does he agree with the statement “Elections are central to democracy but they are not always, on their own, a magic or quick-fix solution.”, made by Frank Bainimarama, and which does he think is likely to occur first: elections in Fiji or elections for Environment Canterbury?

Hon DAVID CARTER: I do not think there would be any Government that wanted to roll over local democracy, but when local democracy is not working, as was the case recently with the Kaipara District Council, Governments have to act. I note that in the case of the Kaipara District Council there was absolutely no criticism from Grant Robertson.

Grant Robertson: I raise a point of order, Mr Speaker. I appreciate my question had two parts to it, but I do not think the Minister addressed whether he agreed with Frank Bainimarama, or whether elections were going to happen in Fiji—

Mr SPEAKER: Order! Given the nature of the question the answer was not too bad.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a serious question, but what I am wondering is whether there has been some effect on the Government benches of your borrowing your tie from Mr Ryall?

Mr SPEAKER: Order! I do not see how that is a point of order. The question that was being referred to was asking for an opinion, and a precise answer is never possible when an opinion is being sought.

Jacqui Dean: Has the Minister seen any reports that show that the performance of Environment Canterbury has dramatically improved since commissioners were appointed?

Hon DAVID CARTER: Yes. I have seen a report that showed that this council under the commissioners processed 92 percent of resource consents within the statutory time frames in 2010-11. This is a massive increase from just 29 percent in 2007-08 under the former model. I am also aware of a number of very positive reports from a wide range of stakeholders in relation to last week’s announcements, including Ngāi Tahu, Local Government New Zealand, Federated Farmers, and a large number of mayors from the region. They all stated that the commissioners have been a dramatic improvement and have done a fantastic job. As I mentioned earlier, the only negative comments that I have seen are from the Labour Party, the Christchurch Press—and that would be of little surprise to any of us—and two former disgruntled councillors—

Mr SPEAKER: Order! The member should not be making those sorts of comments.

Hon Lianne Dalziel: Why did the Minister not agree with his own department’s advice, and also the advice of the Ministry for the Environment, that there be a return to a fully locally elected democratic body under a transitional plan; if he did agree with that at any point, why did he change his mind?

Hon DAVID CARTER: I am aware of advice from officials that suggested a hybrid model as a transition. I am waiting to see the full report from the Land and Water Forum as to what recommendations it makes with regard to all regional councils around New Zealand. In the meantime, officials gave advice to Cabinet, and Cabinet gave it very full discussion and concluded that remaining with the commissioners was the best option for Cantabrians.

Hon Lianne Dalziel: Given the Minister’s response, he obviously has not read it. I seek leave to table the regulatory impact statement. 11 Sep 2012 Error! No document variable supplied. 11

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

Threatened Species, Protection—Deterrents to Smuggling

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

Conservation: What progress has been made to deter smuggling of our threatened species?

Hon KATE WILKINSON (Minister of Conservation): Given that this week is Conservation Week, I am very pleased to inform the House that Cabinet has agreed to tough new penalties for those who are caught poaching or smuggling our native wildlife. The changes will increase the maximum penalty for smuggling native animals such as tuatara, parrots, and geckos from 6 months’ imprisonment or a $100,000 fine to 5 years’ imprisonment and a $300,000 fine. These new penalties will send a clear message to smugglers that taking our precious wildlife will not be tolerated.

Nicky Wagner: What other steps will be taken to help protect our threatened species from poachers and smugglers?

Hon Member: What about achieving democracy?

Mr SPEAKER: Order! Before I call the Minister, it is absolutely unreasonable to start interjecting before the Minister has even opened her mouth to answer. It is totally unreasonable and discourteous.

Hon KATE WILKINSON: On top of increasing the fines and prison terms, Department of Conservation rangers will be provided with additional enforcement powers to ensure that smugglers can be more successfully caught and prosecuted. All of these changes will take effect through an amendment to the Wildlife Act, and I look forward to support from across the House for this bill once introduced.

Unemployment—Budget 2012 and Ministry of Business, Innovation and

Employment Projected Rates

Hon DAVID CUNLIFFE (Labour—New Lynn): To the Minister for Economic Development—[Interruption]

Mr SPEAKER: Order! I have just in one breath admonished members of the Labour Party for making unnecessary interjection before a Minister had opened their mouth. Now I have called a member to ask a question and the National Party is interjecting before he has even started to ask his question. That is not courteous.

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

Development: What was the level of unemployment forecast for 2013 and 2014 in the downside scenario of Budget 2012, and what is the level of unemployment for 2013 and 2014 as forecast by the Ministry of Business, Innovation and Employment last week?

Hon STEVEN JOYCE (Minister for Economic Development): I think the member means the Ministry of Business, Innovation and Employment. The answer is 6 percent and 5.7 percent, and 6.2 percent and 5.9 percent. There are, in fact, a range of forecasts from different Government agencies. Treasury’s main forecast is for 5.7 percent and 5.2 percent, and the Reserve Bank’s current forecast is for 5.5 percent and 4.8 percent. I am sure that somewhere within that range of numbers will be the right answer when it comes to pass.

Hon David Cunliffe: How many jobs were lost in the June 2012 quarter, to the nearest thousand?

Hon STEVEN JOYCE: I do not actually have that number on me. There was a slight decline, but over the last year there has been a very significant increase in the number of jobs. There is no doubt about it, it is a dynamic market at the moment. We 12 Error! No document variable supplied. 11 Sep 2012 are currently seeing around 250,000 jobs created every year, and slightly less than that being lost every year.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The question, as you will appreciate, was a very straight and direct one. It followed directly from the primary question. The question was about how many jobs were lost, not how many jobs were created. Perhaps the Minister could answer if it was to the nearest 10,000.

Mr SPEAKER: Order! The Minister said that he simply did not have that information. There is nothing that the Speaker can do about that.

Hon David Cunliffe: What discussions did he have with Norske Skog prior to its decision to halve production at its Kawerau newsprint mill, with the loss of 100 jobs, and did he offer any form of Government assistance, as the Australian Government has done; if not, why not?

Hon STEVEN JOYCE: I was briefed by Norske Skog at its Kawerau operations as part of one of my many regional visits around the country. It did not seek any Government assistance. It made it clear that it was contemplating this change, which it then subsequently—very shortly—later announced for the first time.

Chris Hipkins: Did he offer any?

Hon STEVEN JOYCE: The answer to the question of whether we offered an additional subsidy to retain the newsprint production is no. The member may or may not be aware that the newsprint industry is in decline. What we are working on with Norske Skog is development opportunities for its geothermal and wood resources in other industries.

Hon David Cunliffe: Why did he respond to the Kawerau job losses by saying that Norske Skog is “very keen to grow their investment in biofuels”, when one of the first acts of the National Government was to cancel Labour’s biofuel obligations?

Hon STEVEN JOYCE: Well, actually, every day businesses and industries go out and invest in their businesses without requiring Government subsidies. In fact, that is generally the preferred way, unless you want to send the taxpayers into the poorhouse. We do try to seek to assist where we can in the research and development space, but just running biofuel subsidies for the sake of it means that you would develop an industry that was not otherwise economic. These people believe that their industry can be economic, and I encourage them to do so.

Hon David Cunliffe: Why, then, is the Minister prepared to subsidise casinos and media companies he used to own while leaving major manufacturers like Norske Skog and Fisher and Paykel, and all their employees, to face the cold winds of an overvalued exchange rate and a Government that is missing in action?

Hon STEVEN JOYCE: There are about six questions in there from the member. Let me address one or two. Firstly, we are not seeking to subsidise casinos. We are seeking to set up a conference centre in Auckland, exactly the same as the previous Government did. Secondly, on media companies, we actually made a loan at the height of the global financial crisis at market interest rates. In relation to the overvalued exchange rate, if the member is advocating following Mr Walley’s advice and dropping the New Zealand exchange rate by 25 percent, and seeking to actually reduce New Zealanders’ standard of living and purchasing power by the same margin, he should just come out and say so.

Hon David Cunliffe: Does he stand by his statements that John Whitaker, Chief Executive Officer of respected Dunedin exporter Farra Engineering, “really does need to go and have a look around” and is “ungracious”, and if he does, should Mr Whitaker visit, for example, the Huntly and Spring Creek mines, KiwiRail’s Hillside workshops, Norske Skog’s Kawerau mill, or APN’s various operations, which, like so many other manufacturers, have lost jobs in recent weeks? 11 Sep 2012 Error! No document variable supplied. 13

Hon STEVEN JOYCE: Well, I would advise him, for example, to go and see Tait Communications in Christchurch, Southern Cross Engineering in Christchurch, Orion Health, Xero and its growing business, and Methanex in Taranaki, and to talk to Bathurst Resources about what it is seeking to do on the West Coast, talk to Marsden Point oil refinery for the upgrade there, or talk to IBM and Unitech Industries, which are setting up 400 jobs together in Auckland. The point is that we are in a very dynamic economic environment, which we are always in, and what the member is seeking to do is to protect jobs that have become uneconomic. It is very tough for the people involved, but, fundamentally, the newsprint industry is going slowly out of business over time, with things like iPads and iPhones. I appreciate that the member wants to prop up declining industries; we do not think that is the way to go.

Louise Upston: Has the Minister seen any new ideas for increasing jobs in the manufacturing sector?

Hon STEVEN JOYCE: Well, I am not sure about new ideas so much as reheated, failed, old ideas from around 40 years ago. I have seen a proposal from a Mr Walley of the New Zealand Manufacturers and Exporters Association to somehow bet against the world markets with taxpayers’ funds and seek to devalue the New Zealand dollar by roughly 25 percent. That would reduce the purchasing power of every New Zealander by around 25 percent. It would increase food prices, fuel prices, and the cost of living by around the same margin, and massively widen the income gap with Australia as the result of a 58c exchange rate against the Australian dollar. If the members of the Opposition want to sign up to that prescription, then it is over to them, but I cannot think of a more destructive economic policy for this country.

Hon Damien O’Connor: Off my piece of paper—is it a higher priority for the Minister to preserve jobs for New Zealanders, including those at Solid Energy, or is it a higher priority for him to reduce costs and tidy up State assets for sale into the mixedownership model?

Hon STEVEN JOYCE: The absolute priority of the Government is to work with Solid Energy on that case and actually give it the opportunity to be successful financially, full stop. The fact of the matter is that the business is struggling at the moment as a result of a sudden change in international coal prices. The challenge is that the Spring Creek Mine is one of its more expensive mines, but it is working very hard with the union and the workers at Spring Creek. We are hopeful of a positive outcome, but it is very tough.

Hon David Cunliffe: I seek leave to table Budget documents showing the $2.1 million subsidy—

Mr SPEAKER: Order! The member knows that we do not seek leave to table Budget documents that are available to all members of the House.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I understand that rule. Your ruling is that it is not proper to table documents that are freely available, but the Minister said that he had not subsidised Skycity Casino—

Mr SPEAKER: Order! Look, the member is now seeking to litigate an answer by way of a point of order, and that is just not on. That is totally outside the Standing Orders. Budget documents are available to all members—

Hon David Cunliffe: Point of order, Mr Speaker—a separate point of order, Mr Speaker.

Mr SPEAKER: Well, if you wait a moment first.

Hon David Cunliffe: I seek leave to table a document compiled by the Parliamentary Library, which tabulates 4,188 recent job losses at workplaces including Canterbury’s Design Line, Yarrows, Colorado Group, Pumpkin Patch, KiwiRail, Hurlstone Earthmoving, Pacific Aerospace— 14 Error! No document variable supplied. 11 Sep 2012

Mr SPEAKER: Order! Leave is sought to table that document. Is there any objection? [Interruption] Order! The House has got a sufficient guide to what the document is. Is there any objection to that document being tabled? There is objection.

Census 2013—Preparations

10. IAN McKELVIE (National—Rangitīkei) to the Minister of Statistics: What progress has been made in preparing for the 2013 Census?

Hon MAURICE WILLIAMSON (Minister of Statistics): There is very good news for the House on this front. Following the cancellation of the census last year because of the earthquake, I am happy to tell the House that we are now less than 6 months away from the next census, which will be held on 5 March 2013. Statistics New Zealand has begun recruiting 440 district supervisors across the country, and in total around 7,500 census staff will be recruited across New Zealand—about 7,500 census staff will be recruited. They will be gathering information from the estimated 4.6 million people in approximately 1.8 million households. The good news—and this is fantastic news—is that this time we are expecting a very, very large percentage of all census forms to be filled out online using the internet.

Ian McKelvie: What is being done to ensure that census information is available for decisions on electoral boundaries before the 2014 election?

Hon MAURICE WILLIAMSON: Well, again, I know there will be huge interest across the House on this. Statistics New Zealand has been working very closely with the Electoral Commission and Land Information New Zealand, and, as a result, we have an agreed detailed time line for the 2013 year covering the Representation Commission process. I am pleased to inform the House that this work means that the Government Statistician will be in a position to announce the number of general and Māori electorates for the 2014 and 2017 elections in early October 2013.

Environment Canterbury—Regional Council Elections

11. EUGENIE SAGE (Green) to the Minister of Local Government: Does he think it is fair to require Cantabrians to pay around $78 million in regional rates annually with no elected regional councillors deciding how to spend those rates?

Hon DAVID CARTER (Minister of Local Government): In view of the extraordinary circumstances that Canterbury faces, yes. What was not fair was for Cantabrians to have to pay rate money to a regional council in 2008 that was rated the worst out of 84 councils in New Zealand. What was not fair was that those Cantabrians had to pay rates to a regional council that was consistently described as ineffective and dysfunctional, and when every mayor in Canterbury signed a letter to the Government expressing a vote of no confidence in Environment Canterbury and its councillors, including the member asking the question.

Eugenie Sage: Is the cancellation of regional council elections for what will be 6 years consistent with the statutory purpose of local government: “To enable democratic local decision-making and action by, and on behalf of, communities”?

Hon DAVID CARTER: As I said in an earlier answer, it is my wish that local democracy works, but in a case like in Canterbury, where the regional council was not working, was dysfunctional, and was ineffective, the Government had to act.

Eugenie Sage: If he trusts the citizens of other regions to elect regional councillors who can provide “stable, effective, and efficient” planning governance, and if he trusts district councils in Canterbury to elect district councillors, why does he not trust Cantabrians to do the same for their regional council?

Hon DAVID CARTER: Because I am aware of no other council in New Zealand about which a report was presented to the Government that made comments like “the 11 Sep 2012 Error! No document variable supplied. 15 extent of the gap between the capability of ECan and what is required for it to adequately manage freshwater issues is enormous and unprecedented.”, or “ECan’s performance … falls well short of what is essential.”, or, further, “This failure requires comprehensive and rapid intervention …”.

Eugenie Sage: Given that commissioners have been appointed now for the last 2 years, what progress have they made if he is still harking back to 2010 and the failings he considers the council had then? What progress have commissioners made?

Hon DAVID CARTER: The commissioners have made tremendous progress. They have recently published the Canterbury Natural Resources Regional Plan, they have recently published the Proposed Canterbury Land and Water Regional Plan, they have recently made significant progress with the Canterbury freshwater management strategy, and they have significantly improved the relationship with key stakeholders. As I mentioned earlier, they have dramatically improved the compliance with statutory consent time lines. These commissioners have done a fantastic job. The job is not yet completed, but the member should recognise that progress is being made.

Schools, Attendance Costs—Donations

12. Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) to the Minister of

Education: Does she stand by her answers to parliamentary written questions that show parents are paying 30 percent more in school donations since National took office?

Hon HEKIA PARATA (Minister of Education): Yes, I stand by my answers to written questions, but, to be accurate, they related to all donations, not only parents’ donations. As I am sure the member is aware, the level of school donations is decided by individual schools and their self-managing boards, in the context of our spending a record $9.6 billion on schooling and early childhood education this year, despite fiscal constraints.

Hon Nanaia Mahuta: How does she respond to the real cost of education, which has outpaced Government funding, resulting in parents of mid-decile schools paying an average of $30 more for each student in school donations than in 2008?

Hon HEKIA PARATA: As I said, we are investing $9.6 billion in education this year. That pays for all the teaching and leading, property, curriculum resources, and operational grants. If boards decide to have supplemental activities and they work with their communities for donations of that kind, then that is a matter that is decided by those individual schools and their boards.

Hon Nanaia Mahuta: Given that schools are relying on donations to fund core programmes like reading recovery, is she concerned that children at low-decile schools will miss out because their parents cannot afford to pay school donations?

Hon HEKIA PARATA: That is inaccurate. Reading recovery is paid for out of Government funds, not by donations.

Hon Nanaia Mahuta: I seek leave to table a written question—[Interruption]

Mr SPEAKER: Order! A point of order is being considered.

Hon Nanaia Mahuta: I seek leave to table an answer to a written question that is not on the website that shows that for the period 2008-09 school donations increased for mid-decile school parents and decreased for decile 1 school parents. This is not available on the website.

Mr SPEAKER: Leave is sought to table this document. It is alleged it is not available on the website. Is there any objection to that?

Hon Gerry Brownlee: Why is it not available on the website? That’s a fair question.

Mr SPEAKER: Order! Let us just deal with this. Leave is sought. Is there any objection? There is objection. 16 Error! No document variable supplied. 11 Sep 2012

Hon Nanaia Mahuta: How does she reconcile that under the Government an extra $35 million in taxpayer subsidies is going to private schools, which account for just 4 percent of New Zealand students, while public school parents are being forced to stump up with an extra $23 million to cover schools’ rising, real costs?

Hon HEKIA PARATA: New Zealand has long had a tradition of providing a diverse range of educational options to parents, of which private schools constitute 4 percent of the 100 percent of provision. We continue to invest $9.6 billion this year into Vote Education to fund all of the costs associated with the delivery of the curriculum in all schools in New Zealand.

Hon Nanaia Mahuta: Supplementary question.

Mr SPEAKER: I believe that the Labour Party has exhausted its allocation of supplementary questions.

Hon Nanaia Mahuta: I seek leave to ask another supplementary question.

Mr SPEAKER: Leave is sought to ask a further supplementary question. Is there any objection? There is objection.

Chris Hipkins: I raise a point of order, Mr Speaker. I just want to raise an issue with you with regard to answers to written parliamentary questions. Where a Minister lodges an answer saying that they cannot provide an answer within the time frame, and that they will provide the information subsequently, and so on, and then sends that information directly to the member concerned, it is therefore not made publicly available. Your rulings have indicated that we should not be seeking to table information that is available through that system, but where an answer is provided directly to the member, not through the system—because the Minister has lodged a placeholder answer saying that they are not able to provide it—is it acceptable for us to then seek leave to table it in the House?

Mr SPEAKER: The member raises a perfectly reasonable point, in my view. To me, what I probably should do is investigate why the second answer is not actually made available on the website. It would seem to me that that is the more helpful answer to the original written question asked. I will undertake to investigate why it is not being—I accept what the member is saying that probably at the moment it is not being put on the website. It seems to me that that would be the best way to deal with the problem. But in the meantime I have no problem with the member seeking leave to table a document that it was alleged was not on the website. The House made its decision, though, in respect of that leave. But I will undertake to try to make sure that we get all those answers on the website.


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