Questions and Answers – February 13

by Desk Editor on Wednesday, February 13, 2013 — 6:46 PM


Question No. 1 to Minister

DAVID BENNETT (National—Hamilton East): My question is to the Minister of Finance: what will be the main focus of Budget 2013? [Interruption]

Mr SPEAKER: Did members not hear that? Could the member please use the hand-held microphone.

Budget 2013—Focus

1.DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What will be the main focus of Budget 2013?

Hon BILL ENGLISH (Minister of Finance): Today I announced that Budget 2013 will be delivered on Thursday, 16 March. It will continue the Government’s prudent management of the economy as we move from recession to recovery. It will focus on four priority areas: responsibly managing the Government’s finances, building a more competitive economy to encourage businesses to grow and employ, delivering Better Public Services, and continuing the rebuilding of Christchurch.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think the Minister inadvertently made a mistake in his answer. He may want to correct the March date to a May date, which he announced this morning.

Mr SPEAKER: We thank the member for his point. I think the correction is made.

David Bennett: Why is controlling Government expenditure an important part of the Budget?

Hon BILL ENGLISH: Because between 2000 and 2009 core Crown expenditure jumped from $35 billion to $64 billion, an increase of 84 percent. If we had stuck with that rate of spending, Treasury forecast that the Government would now be spending well over $80 billion per year. In fact, we are spending currently around $73 billion, and Government expenditure as a proportion of GDP is dropping from 35 percent of the economy to 31 percent over the next 3 or 4 years. At the same time as holding Government expenditure, we are improving public services and getting better results for the public.

David Bennett: How will Government policies help increase job opportunities?

Hon BILL ENGLISH: Government policies are supporting businesses in times when it is difficult to create new jobs. Job growth occurs when employers, businesses, and the Government have sufficient resources to invest and the confidence to hire a new employee. It is a product of both foreign and domestic investment. We will focus on continuing, as we have done for the last 4 years, to create the best environment we can for businesses to make the decision to invest and employ.

David Bennett: What progress is the Government making in its economic plan?

Hon BILL ENGLISH: Despite the fact that conditions remain tough, we are continuing to make moderate progress. We would expect to see the economy grow at an average of around 2 percent in real terms. New Zealanders are saving more, exports are continuing to grow, interest rates are at a 50-year low, and real wages continue to grow. At the same time, we are getting on with the rebuilding of Christchurch. Compared with many other developed economies, New Zealand’s is doing pretty well.

Dr Russel Norman: Given his statement at the select committee this morning that the New Zealand economy is “training for a triathlon”, is the triathlon that New Zealanders are taking part in under his Government that, firstly, they are working long hours for low pay; secondly, they are losing their jobs due to the high Kiwi dollar; and then, thirdly, they are making the trans-Tasman dash?

Hon BILL ENGLISH: The member may recall the context for that remark was his proposition that we should get printing money to fix all our problems. I explained to him that the economies where they are doing that are like a patient on a table in the emergency room where they are trying to decide what kind of respirator to give them. Compared with that, New Zealand is like the person outside training for a triathlon—that is, we are in much better shape than economies like those of the UK and Europe. That is why we are not adopting the member’s silly policies.

Dr Russel Norman: Is the Minister confident that his neo-liberal policy agenda is very successful, in light of the fact that New Zealand is now approaching a 6.5 percent current account deficit under Treasury’s own estimates, when he promised that he would rebalance the economy, and we currently have record high unemployment—unemployment that has not been this high since his party was last in Government?

Hon BILL ENGLISH: The member points to a number of real challenges for the economy. New Zealand has a 30-year history of current account deficits. We believe we are making some progress, but it will take time to make that progress. But there is no problem that he has come up with that will be fixed by cranking up the Greens’ photocopier and printing money.

Prime Minister—Statements

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

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he stand by his 2012 statement that figures for net migration to Australia were “fairly similar” under Labour; if so, how many people have left for Australia in the last 12 months?

Rt Hon JOHN KEY: Yes, and I do not have that number to hand.

David Shearer: Given that 53,676 New Zealanders have left for Australia in the last 12 months, which is an all-time record, what responsibility does he take for that exodus?

Rt Hon JOHN KEY: Well, the Government is going through the long process of rebalancing the economy after the mismanagement of a Labour Government, and there is an enormous amount of work to be done. And the reason business confidence surveys are increasingly showing support is that they can see that we are on the right track, and that the Labour Party, along with its good friends the Greens, has only one policy, and that is to turn New Zealand into a modern-day Zimbabwe by printing money.

David Shearer: What responsibility does he take for the fact that 40 percent of the New Zealanders leaving for Australia are aged between 18 and 30—the future talent of our country?

Rt Hon JOHN KEY: For a long time New Zealanders have taken the opportunity—young New Zealanders—to get some experience overseas. Many of them come back, as the member will be aware. The member did that exact thing himself. One of the areas where they are going to in Australia is mining, so if we go and look at Western Australia or northern Queensland, we see plenty of young New Zealanders going there to work in the mining industry. I say to the member

that if he wants to hold hands with National as we reform the Resource Management Act to make it more possible for people to expand oil and gas exploration and other mineral activity in New Zealand, he should come and see me. He should come up and have a glass of wine and I will take him through the legislation, and we look forward to the support of the Labour Party. But guess what! It will not do that; it will just carry on whingeing like it normally does.

David Shearer: Does he stand by his statement made at Westpac Stadium where he said “It holds nearly 35,000 people, and believe it or not, the equivalent of this entire stadium and more leaves every year to permanently live in Australia.”, and is there a stadium in New Zealand now that could hold the number of people who are leaving to Australia currently?

Rt Hon JOHN KEY: Yes, I stand by the statement. I also note that some of those numbers are starting to come back a little bit, and one should be a little bit careful about getting too excited about Australia, given what is happening on the east coast. But I can count numbers, I can count heads, I can count people, and the remarkable thing is that if I stood for the leadership of the Labour Party, I am pretty sure I would get a unanimous vote.

David Shearer: What responsibility does he take for the fact that 90,000 of our young people are not in education, not in training, and not in employment, and does he think that this provides any incentive for young people to remain in New Zealand?

Rt Hon JOHN KEY: Well, I would have to go and get you the exact “neets” numbers, and that question could be directed to the Minister responsible for tertiary education, who has those off the top of his hand—

David Shearer: No, but I’m asking you.

Rt Hon JOHN KEY: Look, I am more than happy to give you the answer. I am just telling you I do not have them exactly to hand. But the last time I looked at them, the vast, overwhelming bulk of young New Zealanders in that category are in education or training.

Hon Steven Joyce: 80 percent.

Rt Hon JOHN KEY: 80 percent of them. There is a very small group who are not in employment—a very small group relative to the overall cohort. They are either in work, in training, or doing something else, like having a gap year.

Student Achievement—Salvation Army State of the Nation Report

3. METIRIA TUREI (Co-Leader—Green) to the Minister of Education: Given the Salvation Army’s State of the Nation report shows a widening education gap between students from wealthier and poorer communities, would she have done anything differently, in hindsight, to better support children in lower decile schools?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. No, we have a worldclass education system where many—indeed, most—of our students are successful. This Government, however, is focused on all of our students being successful.

Metiria Turei: Does the Minister agree with Treasury that charter schools are not a good way to deal with kids who are not achieving their potential in New Zealand schools, but that better funding of lower-decile schools is?

Hon HEKIA PARATA: No. Treasury often offers advice. It does not mean we accept or agree with it.

Metiria Turei: Did the Ministry of Education advise in its briefing paper to her as incoming Minister that charter schools would address the tail of underachievement; or is it not the fact that officials did not even put charter schools forward as an option to her?

Hon HEKIA PARATA: The Ministry of Education provides me with a range of advice, including on partnership schools.

Metiria Turei: I raise a point of order, Mr Speaker. The question asked very specifically whether the Ministry advised her as to whether charter schools were an option for reducing

underachievement or not. She did not answer that question at all. It is a very straight question, which she should be able to answer.

Mr SPEAKER: The easiest way to resolve the matter is for the member to ask the question again.

Metiria Turei: Thank you, Mr Speaker. Did the Ministry of Education advise in its briefing papers to her as incoming Minister that charter schools would address the tail of underachievement; or is it not the fact that officials did not even put charter schools forward as an option?


Hon Trevor Mallard: I raise a point of order, Mr Speaker. This approach has been ruled on by Speakers a number of times in the past. If there is an answer of “No”, there has to be an indication as to which leg of the double it applies. Dr The Rt Hon Lockwood Smith ruled that way quite recently.

Mr SPEAKER: I do not need any further assistance. I am actually having trouble understanding what part of the question the answer applied to. I think the Minister could take the opportunity of clarifying the answer for the sake of the House.

Hon HEKIA PARATA: No to the first part of the question.

Metiria Turei: Is the Minister, then, even aware that what the Ministry actually recommended to her for underachieving kids was a commitment to mainstreaming Ka Hikitia—Managing for Success and the Pasifika Education Plan 2009-2012, but that subsequently underfunding has meant it has been reduced to just sending teachers a booklet on how to teach Māori kids?

Hon HEKIA PARATA: Yes to the first part of the question.

Metiria Turei: Does the Minister truly believe that of all the children to experiment on with untrained teachers it should be the most vulnerable learners, whom even the OECD experts say need the highest-quality teaching to be successful?

Hon HEKIA PARATA: In the world-class system that New Zealand has, a diversity of options is available to parents across the country. This is true for all children of whatever socio-economic, ethnic, or religious background. This Government is focused—most recently, through our Better Public Services targets—on how it ensures that all children succeed. So in early childhood education we have a target that 98 percent of all new entrants will have participated in quality early childhood education. What we have identified in the past year is that in order to achieve that target by 2016 we need 12,000 more children participating, or 3,000 more each year, of which 1,750 are Māori, 900 are Pasifika. We are targeted on helping those kids who need the most help. That is what this Government is focused on.

Metiria Turei: I raise a point of order, Mr Speaker. The Minister, although giving a very long answer to some question, did not answer my one or even address it. Does she believe that—

Mr SPEAKER: Order! Order! The member asked the question “Does she truly believe … ” indicating “Does the Minister truly believe … ”, and then went on to a range of interpretation about how you address underachievement, particularly amongst Māori and Pasifika. I think the Minister has adequately answered that question.

Metiria Turei: Does the Minister agree with Philip Harding, president of the New Zealand Principals Federation, who said today that vulnerable learners require the very best, high-qualified teaching professionals in front of them?

Hon HEKIA PARATA: I do indeed agree with Philip Harding, and that is why of the $9.6 billion that this Government has committed to education this year, the highest ever, the singlebiggest component of it is $3.6 billion for teachers and principals—they are high-quality people who can facilitate learning for every child.

Metiria Turei: Does the Minister not then see a contradiction in her move to let untrained teachers loose on vulnerable kids, with the Teachers Council’s strategic objective to increase the number of qualified teachers in schools, and improve teacher training; is there not a contradiction in that policy, Minister?

Hon HEKIA PARATA: No, despite the hyperbole in that question, what we are focused on is a range of opportunities. In this system, as we currently have it, there are a number of parts of the system where we have people who deliver learning but do not hold a qualification as a teacher. We are looking for a mix of those across the entire system so that we can move that part that has not been successful. If we keep doing what we have always done, we will keep getting what we have always got, and this Government will not accept that.

Metiria Turei: Is the Minister aware of the Programme for International Student Assessment rankings of student achievement, which puts New Zealand among the top 10 in the OECD, while the UK and America, which are great proponents of charter schools, fall miserably behind; if so, why is she importing a failed model from those countries’ failed systems?

Hon HEKIA PARATA: Indeed I am aware of that, and in fact the Programme for International Student Assessment, to which the member refers, places New Zealand seventh in the world, and five of the countries that are ahead of us now were behind us 5 years ago. By aggregating that figure what we find is that New Zealand European, Pākehā, Palagi students are second in the world. Māori, however, are 34th and Pasifika are 44th. That is the true challenge we have in this education system and that is what we are addressing as a Government.

Metiria Turei: Is the Minister aware of the reports showing US charter schools have been involved in tax fraud, corruption in lobbying, misuse of funds, racketeering, and even charging parents a fee if their children misbehave; if so, why is she exposing our kids to this risk?

Hon HEKIA PARATA: It has long been the tradition of the New Zealand education system to look overseas to see what is happening, take what is best, and then apply it appropriately. It is not the type of school; it is the performance of the school, and what the Education Amendment Bill proposes is a number of features that are designed for this system.

Police—Use of Mobile Technology

4. JACQUI DEAN (National—Waitaki) to the Minister of Police: What announcements has the Government made on the availability of new technology for frontline Police to help them in their fight against crime?

Hon ANNE TOLLEY (Minister of Police): This morning the Prime Minister and I announced the introduction of 6,500 smartphones for all front-line officers and 3,900 tablets for selected staff across the country. This technology will enable police to access, input, and share important information immediately, without having to travel back to their stations to access databases and write reports. This will allow police to focus more on preventing crime and less on paperwork.

Jacqui Dean: How will the introduction of smartphones and tablets improve policing in New Zealand?

Hon ANNE TOLLEY: The introduction of this technology will allow police to provide a better, more efficient, and more visible service for the public, while keeping one step ahead of criminals. The new technology allows officers to quickly feed in and access information, view offenders’ photographs and details, and perform a wide range of tasks without needing to return to the station—a giant leap forward from the police radio. The initial 3-month roll-out to 6,086 officers, starting in April, will deliver around 520,000 additional front-line police hours every year, and that is the equivalent of around 345 extra police focusing on crime prevention.

Jacqui Dean: How will the new mobile technology help police achieve their target of reducing crime?

Hon ANNE TOLLEY: Investing in better mobile technology frees up officers’ time to focus on more effective policing by putting crime prevention and the needs of victims at the forefront of their duties. An 11-month trial of the technology undertaken by police showed that it allowed each officer to spend, on average, an extra 30 minutes per shift on the front line, and these additional hours will be reinvested into preventative crime activities. Along with the 600 additional front-line

officers delivered by this Government and a 70 percent increase in foot patrols, it will mean more police are out on the streets for longer, keeping our communities safe.

Te Ururoa Flavell: Kia ora tātou. What investment has the Government made to help front-line police respond appropriately to de-escalate a conflict, and were such strategies applied in the case of the Howick party in which 15-year-old Ella Eketone alleges that she was assaulted by police, losing two front teeth in the process?

Hon ANNE TOLLEY: As Minister, I am not prepared to comment on an individual case, other than to say that an investigation is currently under way and the matter has been referred to the Independent Police Conduct Authority. But police do receive training in de-escalating conflicts. This training includes maintaining large and out-of-control parties where a large number of drunk people start throwing bottles at the police.

Regional Development—Progress

5. DENIS O’ROURKE (NZ First) to the Minister for Economic Development: What progress, if any, has the Government made in the area of regional development?

Hon STEVEN JOYCE (Minister for Economic Development): The Government is investing heavily in regional development across New Zealand. After all, the national economy is the aggregation of the economies of all the regions in the country. I have just a few examples for the member. We are rolling out ultra-fast broadband to connect fibre-optic technology to schools, hospitals, and 90 percent of businesses by 2015, and also the Rural Broadband Initiative. We are encouraging the development of New Zealand’s resource wealth, which follows, of course, the successful oil and gas industry model in Taranaki, where 5,000 people are employed and it contributes $2 billion to our GDP. We are investing massively in our State highway network, which links all our regions together. That includes, of course, the roads of national significance, which link the regions to our main centres. These are just some examples of the programmes that are contributing to regional development in this country.

Denis O’Rourke: How is regional economic performance in New Zealand being measured, given that there is no official measure?

Hon STEVEN JOYCE: I think the member raises a fair point, actually. The regional GDP statistics have not been prepared for many years, so you will be pleased to learn that that is exactly what is happening at this time. Later this year we will have not actually GDP statistics but regional equivalents to GDP statistics, which will be helpful to the member—and I think to all members of the House—in terms of regional development.

Denis O’Rourke: Does the Minister receive regular, ongoing reports regarding the economy of each region; if so, which regions are underperforming?

Hon STEVEN JOYCE: As I said to the member, the actual measures of regional GDP will be available later this year, but, actually, you can get all sorts of indicators of which regions are going well and which are not. Obviously, the employment ones are an example. I can report to the member, for example, that the South Island and all the regions in the South Island are doing very well in the employment situation at the moment. That is, obviously, being driven partially by the Christchurch rebuild, but also by the health of the various economies in the South Island. The standout is always Taranaki, where they have very, very strong economic performance. Some of the regions are struggling. You would have to say Manawatū and Wanganui would be in that category; Northland would be another. And, of course, the Psa in the Bay of Plenty has really knocked that regional economy, as well.

Denis O’Rourke: Why did the Government allocate less than $5 million in the current year to regional-specific projects compared with a massive $50 million in Hollywood film subsidies, which Treasury says have no economic benefit?

Hon STEVEN JOYCE: Actually, the Government spends massive amounts in each region. Just to give you some examples: things such as schools and hospitals, which are very important for regional infrastructure; the roading system—

Rt Hon Winston Peters: No, no, no.

Hon STEVEN JOYCE: —yes—and the broadband system. And different regions have different industries that the Government supports. For example, the film industry, which the member mentioned, is very important in the Wellington region. There are other industries that are very important in other regions. The Government has just, for example, indicated that it is going to invest in irrigation projects that will be very important in the eastern regions of the country. So it is very much a matter of horses for courses, depending on what the regions need. The Government spends around $70 billion – odd a year around New Zealand, and much of that goes into our regions.

Denis O’Rourke: I raise a point of order, Mr Speaker. The question asked why the Government had allocated less than $5 million to specific regional projects, and that question has not been answered.

Mr SPEAKER: It has been answered to my satisfaction. The Minister went on to say that there are a number of very expensive programmes of which a lot of money was obviously spent in the regions.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: A new point of order?

Rt Hon Winston Peters: Yes. My point of order is that your ruling is totally refuted by the last Budget, which—

Mr SPEAKER: Order! I am on my feet. [Interruption] I am on my feet, and the member will resume his seat. I have ruled that that question was satisfactorily answered. The Minister made a genuine effort to answer the question, saying that there are a number of initiatives where the Government is spending money that is clearly spent within the regions. In my mind, that question was answered quite satisfactorily, and if the member continues to relitigate my answer, that will bring this House into disorder and disrepute.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: A fresh point of order?

Rt Hon Winston Peters: A fresh point of order. My point of order is this: we are required to base questions on certain evidence, and that evidence came from the last Budget.


Rt Hon Winston Peters: Look, excuse me, when he uses the particular words “regionalspecific”, that is a budgetary term. To go outside regional-specific, to use “regional-general”, as the Minister has done, gives my colleague grounds for legitimate complaint; otherwise, sound budgetary processes mean nothing in this Parliament. That is my point.

Mr SPEAKER: I thank the member for his assistance, and I accept that the member raised a genuine point of order. I considered his point of order, and I am absolutely satisfied with the quality of the answer given by the Minister. There is no way that any member can accept an answer by design, and provided that the Minister has addressed the question to my satisfaction, I accept that that is satisfactory.

Denis O’Rourke: Will the Minister consider New Zealand First’s proposal for a regional royalties scheme, which would see almost $100 million a year go to regional development, given that it has been endorsed by Local Government New Zealand; if not, why not?

Hon STEVEN JOYCE: Firstly, that is actually probably a question best directed to the Minister of Energy and Resources, but, my having said that, in terms of economic development we actually invest, as I said before, a massive arrangement in each region. The real benefits for the regions from, for example, resources—and I think that is what the member refers to in terms of royalties— are the jobs and growth that are created within those regions. If you take Taranaki, for example, it has a fantastic record of high-value jobs, both in the oil and gas industry and in downstream

industries. That has been fantastic for that region, and every quarter, when the unemployment statistics come out, one is reminded of that. So my point to the local government people would be to focus on attracting investment to their regions for the obvious benefits that it brings, especially the jobs, because that is the real benefit.

Denis O’Rourke: I raise a point of order, Mr Speaker. The question was whether the Minister would consider a proposal for a regional royalties scheme.

Mr SPEAKER: And the answer given was that that question was more appropriate for the Minister of Energy and Resources. The question is answered.

Denis O’Rourke: I raise a point of order, Mr Speaker. The Minister agreed to answer the question.

Mr SPEAKER: And did give a fulsome answer.

Denis O’Rourke: Therefore, an answer saying it was more appropriate for it to be answered by another Minister is not an answer to the question. If he is going to agree to answer—

Mr SPEAKER: Order! I have ruled that the question was answered satisfactorily. That is the end of that matter.

Denis O’Rourke: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is this a fresh point of order? Otherwise, the member is trifling with the Chair. Is it a fresh point of order?

Denis O’Rourke: The point of order is that one Minister or another needs to answer my question.

Mr SPEAKER: I have given the member every opportunity. That question has been answered to my satisfaction. If the member continues to raise points of order he will bring this House into disorder, and that is a very serious matter, which I will address.

Denis O’Rourke: Mr Speaker—

Mr SPEAKER: I am sorry: is it a point of order or a supplementary question?

Denis O’Rourke: It is a supplementary question, and it is to the Minister, who I hope will answer the question, and it is—

Mr SPEAKER: Just ask the supplementary question.

Denis O’Rourke: Why has no appointment been made of a Minister for regional development?

Mr SPEAKER: Can the member repeat that. It is a difficult day, when we have not got good microphones. Can the member please repeat the question, and can I ask the rest of the House to give silence while the question is being asked.

Denis O’Rourke: Thank you, Mr Speaker. I addressed the supplementary question to the Minister and expressed a hope that he would actually answer it.

Mr SPEAKER: Well, just ask it.

Denis O’Rourke: Why has no appointment been made of a Minister for regional development?

Hon STEVEN JOYCE: I realise I probably do not want to say this at this point, but that is actually not a responsibility of mine, either. That is actually a responsibility of the Prime Minister in terms of allocating portfolios, obviously. But, actually, we do have a responsibility for regional development, it forms part of the economic development portfolio, and I have answered those questions for the member this afternoon.

Hon Damien O’Connor: If resources are the lifeblood of the regions, what will the Minister say to the hundreds of miners who are likely to lose their jobs, with strong rumours of the impending receivership of Buller mining operations?

Hon Gerry Brownlee: What? Didn’t hear the last bit.

Hon Damien O’Connor: Well, if you listened instead of talking, you might hear.

Mr SPEAKER: Order! The member will repeat his question, without embellishment; otherwise, he will lose it.

Hon Damien O’Connor: If resources are the champion of regional development—which I agree with—what will the Minister say to the hundreds of miners who are likely to lose their jobs, with strong rumours of receivership of Buller mining operations?

Hon STEVEN JOYCE: I literally do not know the example the member refers to, but I would point out that the opportunities on the West Coast, which the member is obviously interested in, are many and varied, and one of the very significant opportunities down there is the Bathurst mine, which the Government is having go through a process at the moment. The member will recall that I called on the Labour Party and the Green Party last year to support the Bathurst application and to ask their friends in the environmental movement to remove their objections. If they did so, that would actually help the development of mining on the West Coast. I think the fact that the Labour Party was silent was demonstrative of the fact that it was not that interested.

Economic Growth—Minister’s Statements

6. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his Budget 2012 statement “We are moving towards growth that is driven by savings, exports, and productive investment in the parts of the economy that trade with the rest of the world”?

Hon BILL ENGLISH (Minister of Finance): Yes.

Hon David Parker: With dropping exports, a current account deficit that is projected to be second-worst in the developed world this year—

Hon Steven Joyce: Oh, still complaining about a current account deficit that is half what you had.

Hon David Parker: No, I am complaining about the fact—

Mr SPEAKER: Order! Would the member please ask his supplementary question.

Hon David Parker: I raise a point of order, Mr Speaker. Are you ruling that if we face interjections that are inane—

Mr SPEAKER: No, I am not. [Interruption] No, I am definitely not. I am asking the member to ask his question.

Hon David Parker: With dropping exports and a current account deficit that is projected to be second-worst in the developed world this year and to remain very high for the rest of the forecast period, when will the Minister concede that he has failed in his objective to rebalance the economy?

Hon BILL ENGLISH: I do not accept the member’s contention. Exports over the last 2 or 3 years have continued to rise in value and volume. There has been, I think, one number in a recent quarter where it has been down, but the longer-term trend is pretty clear. Of course, we would like it to be moving faster, and in respect of the current account deficit that member’s party oversaw 3 years of an 8 percent current account deficit—the worst performance ever. It is currently around 4 percent, so that is why we are not complaining about it.

Hon David Parker: Will he support any of the top three ideas consistently proposed by exporting manufacturing, which it says will make it more competitive and help it grow exports and jobs, namely, broadening the mandate of the Reserve Bank, or removing the capital income exemption through a capital gains tax, or universal KiwiSaver; if not, why not?

Hon BILL ENGLISH: We are always open to looking at those sorts of ideas, although the Government has said it does not agree with bringing in a comprehensive capital gains tax. Changing the mandate of the Reserve Bank is something reasonable people can argue about, but is unlikely to yield the results that manufacturers expect. We are working with manufacturers and other businesses every day on the Government’s business growth programme, and we are open to any suggestions, including some that we might disagree with, such as those, to help support their businesses.

Hon David Parker: Given that the Minister for Economic Development claims that greater foreign direct investment is the best way to grow jobs, what recent and significant foreign direct investment has there been in the New Zealand economy outside the primary sector?

Hon BILL ENGLISH: I think, as the Minister has pointed out himself, what he said was that foreign direct investment is part of the recipe for growing jobs, because to have jobs you need investment, and New Zealand has not, for many decades, had sufficient savings to fund all of its own investment. I welcome the Opposition’s new enthusiasm for foreign investment, because up until today they have been mostly opposed to it.

Hon David Parker: Is it not correct that, outside the primary sector, foreign direct investment is shrinking, with job losses and disinvestment by manufacturing exporters from the south to the north of New Zealand pointing to uncompetitive economic settings that need to be changed?

Hon BILL ENGLISH: I would not want to take—I think we would need to check just which figures the member is referring to, if he is saying that there is a contraction in foreign investment outside of the primary sector. Actually, our biggest foreign investors are the owners of our banks. There is no sign of them contracting. They are outside the primary production sector. In the mineral resources and oil sector there is so much enthusiasm from offshore investors that Opposition parties are trying to stop them investing and thereby creating the jobs that many New Zealanders would like to see.

National Certificate of Educational Achievement—2012 Results

7. Dr CAM CALDER (National) to the Minister of Education: What reports has she received on the 2012 NCEA results?

Hon HEKIA PARATA (Minister of Education): I have received a report with provisional 2012 results from the New Zealand Qualifications Authority. These results show that there have been improvements at National Certificate of Educational Achievement (NCEA) level 2. In the context of our Better Public Services target to see 85 percent of 18-year-olds achieving NCEA level 2, some highlights are that overall results for NCEA level 2 for year 12 participants have risen 6.7 percent since we became Government, for year 12 Māori participants results have risen by 10.4 percent since we became Government, and for year 12 Pasifika participants results have risen by 12.9 percent since we became Government. I would like to congratulate all students who achieved in 2012. These are significant improvements over the last 4 years, but we must do better.

Dr Cam Calder: How will she continue to focus on lifting NCEA achievement rates and performance across the rest of the education pipeline?

Hon HEKIA PARATA: Firstly, it is important to understand that this is a pipeline, it is a system and our Government is targeting every part of it. I earlier reported to the House what we are doing in early childhood education. We want 98 percent of all new entrants to have participated in quality early childhood education. We want 85 percent of all 18-year-olds to have NCEA level 2. We will be focusing on lifting national standards to at least 85 percent for all children. We believe in belting and bracing the system. That means that we need to have 2,400 more children in early childhood education this year, and for NCEA level 2—[Interruption]—for those members who are genuinely interested in raising achievement, we need 48,000 18-year-olds. I do not know what the pun was— an additional 1,280—

Mr SPEAKER: I think the Minister has adequately answered the question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Some of us are finding this answer intriguing, and I think if the Minister sought leave to finish her answer it would be accepted by the House.

Mr SPEAKER: I think the Minister has had her turn. It is normally the member who rises to his feet complaining the answers are too long.

Chris Hipkins: Can the Minister guarantee to the House that the improvement in NCEA achievement statistics has not been because of a lowering of the standard; and, if she does guarantee that, to what specific Government policy initiative does she attribute the improved success rates?

Hon HEKIA PARATA: I can absolutely guarantee that. All of us in this House are committed to the New Zealand education system being a 0world-class one, and therefore guaranteeing the

standard of it is something that this Government is particularly committed to. I can point to it because in every year this Government, despite the recession that we have gone through, has raised the investment in Vote Education. We have employed more teachers. We have funded operational grants at a higher level. We have focused $304 million on professional learning and development. I could go on, but the litany of what we have invested in versus what that Government did not invest in would take too long.

Child Poverty—Salvation Army State of the Nation Report

8. JACINDA ARDERN (Labour) to the Deputy Prime Minister: Does he agree with the Salvation Army whose report states today that “Another year of minimal change in levels of child poverty was matched by little tangible progress being made by the Ministerial Committee on Poverty”; if not, why not?

Hon BILL ENGLISH (Deputy Prime Minister): No, I do not agree, and I am sure the member would be concerned that the detail of the Salvation Army report does not support the contention that child poverty is getting worse. In fact, it shows four ways of measuring the percentage of children in poverty. On two measures the proportion of children in poverty has declined since 2007. On one other measure the proportion has remained the same, and on a fourth it has risen slightly. The report also shows that the number of children living in benefit-dependent households has been going down, despite the fact that the unemployment rate has risen slightly. This is a considerable achievement, particularly for those people in those households who have worked so hard to attain for themselves more independence, better incomes, and better prospects for their children.

Jacinda Ardern: Given his drive for an output-focused Public Service, what targets has the ministerial committee set on child poverty, other than immunisation and rheumatic fever targets, which do nothing to address material deprivation levels, which have gone from 15 percent to 21 percent on his watch?

Hon BILL ENGLISH: Well, the Government has set a range of targets through the results that it has published, which include measures of things the member may regard as unimportant, such as violence on children and rheumatic fever rates, but we actually think those things are quite important, as are early childhood participation rates, particularly for those children whom the Labour Government’s policies left completely behind as it lifted investment in early childhood education. There is any number of ways of measuring the state of our children. On the Government’s measures we are making some progress. On the Salvation Army’s measures we are making some progress. There will be others, which neither of us is using, that will show up problems that we should be addressing in the future. But the Government is approaching it with some real focus, in particular, on getting the messy and confusing aspects of the way the Public Service works to focus strongly on their collective impact on changing the lives of individual children and families. We believe that over the next 2 or 3 years it will have significant impact.

Jacinda Ardern: I raise a point of order, Mr Speaker. I did make reference to targets around material deprivation and, specifically, obviously, reference to income measures, but if the Deputy Prime Minister’s answer to that is there are no targets in that area, then that would be quite a simple—

Mr SPEAKER: Order! Order! I listened carefully. He mentioned a target around violence to children. Have you got further supplementary questions?

Jacinda Ardern: Yes, thank you, Mr Speaker. How can he in the past have listed welfare reforms as a way to address child poverty, when the reforms have seen an increase in the number of families having their benefits cut and an increase in benefit uptake, all the while with fewer jobs for people to move into?

Hon BILL ENGLISH: Well, again, we can get the detail about the numbers. The focus of the Government’s welfare reform is to spend more, earlier—that is, invest in assisting individuals and families off the path to long-term dependence. We are increasingly engaged with a wide range of

community groups and individual communities to pursue that path. The Government has committed hundreds of million of dollars, actually, to upfront investment designed to reduce long-term dependency. It is a bit harder when the economy has the moderate growth that it has, rather than 5 or 6 percent growth, but that is not a reason not to do it as the Opposition keeps seeming to suggest—that because it is hard, we should not have a go.

Jacinda Ardern: Can the Deputy Prime Minister reference what part of the current welfare reform bill before the Social Services Committee invests upfront in moving the beneficiaries he has just mentioned into work, other than sanctions and work obligation tests that already exist?

Hon BILL ENGLISH: The funding arrangements are not in the piece of legislation; they are actually done through the appropriation process and the Budget. If the member looks at the last two Budgets and, most likely, at the next one, she will see there is considerable investment. What is interesting is, actually, as the Opposition tries to generate criticism of the welfare reforms, it is not getting any response in the wider community, at all, because the reforms make sense to everybody.

Jacinda Ardern: I raise a point of order, Mr Speaker. With all due respect, what I was asking for was any kind of specificity from the Deputy Prime Minister, whether it be in the legislation or even in a funding stream—just some specificity about where this upfront investment actually is.

Mr SPEAKER: As I recall the question, it was whether there was anything specifically in the legislation, and the Minister said that, no, it was within the appropriation subsequent. So the question was adequately answered.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. During the last point of order two Government whips and three Government Ministers interjected. It is quite hard to hear today, and if you allow people—at least five people in that block—to breach Standing Orders, it will make it worse.

Mr SPEAKER: I thank the honourable member for his assistance. It has been difficult today and there have been a number of interjections from all sides of the House. It would certainly assist my job if there was less interjection while we get through question time.

Darien Fenton: Does he agree that raising the minimum wage to $15 an hour and backing a living wage are two ways of reducing child poverty?

Hon BILL ENGLISH: The Government has raised the minimum wage, I think, each year it has been in office. But the fact is that whatever market income a household has is measured, and where the household falls short of sufficient income to provide for the children in that household, we have continued, through the recession, with the Working for Families scheme, which puts, I think, $2.7 billion into those households. The good news for families is, whether they earn $15 an hour or $30 an hour, that scheme takes their circumstances into account and helps them with the cost of raising children.

Te Ururoa Flavell: Does he believe that things like reports alone will not solve a deep-rooted, serious problem like poverty, and that what is needed is a completely different approach that helps people to take control of their lives and break out from the cycles of dependency, deprivation, and desperation—in other words, Whānau Ora?

Hon BILL ENGLISH: I agree with the member that if committees, reports, and spending more money solved these problems, then, certainly, the last Government would have solved them 50 times over. The member, I think, is quite right: the harder you look into the longstanding deprivation of some New Zealand families, the more obvious it is that bureaucratic intervention by the Government can go so far but it has proven, by the fact of historical failure, not to actually change things enough for those families. At the moment, Whānau Ora is the one programme that does appear to have the ability to reach those families in real deprivation, and their surrounding communities, and to catalyse a sense that the world and their lives can change. That is why we have continued to support its roll out and expansion.

Mr SPEAKER: Honourable members, I can advise that apparently the microphone system is fixed, so we do not need to rely on hand-held microphones. We move to question No. 9, in the name of Jonathan Young.

Jonathan Young: Thank you, Mr Speaker.

Mr SPEAKER: You should be all right with your microphone. [Interruption] OK.

Hon Trevor Mallard: We heard you, Mr Speaker, without a mike.


Telecommunications—Cost of Overseas Mobile Device Use

9. JONATHAN YOUNG (National—New Plymouth) to the Minister for Communications

and Information Technology: What steps is the Government taking to reduce costs for New Zealanders using their mobile devices overseas?

Hon AMY ADAMS (Minister for Communications and Information Technology): Not being the Minister in charge of microphones—on Saturday the Prime Minister with Prime Minister Gillard announced the Government’s intention to introduce new monitoring, reporting, and intervention powers for trans-Tasman regulators on mobile roaming charges, to ensure that New Zealanders travelling to Australia can use their mobile devices at competitive rates. It concerns me greatly when I hear stories of people going to Australia for a holiday and coming home to find their phone bills cost more than the travel. It is our primary business and holiday destination, and that is simply not acceptable. Although New Zealand companies have responded well to reducing charges recently as a consequence of the investigation, we want to ensure that that trend continues.

Jonathan Young: Is the Government considering an extension of these changes to countries other than Australia?

Hon AMY ADAMS: Yes. Competition issues are not unique to the trans-Tasman roaming route, and the legislation we are proposing allows for the possible extension of the new powers to destinations other than Australia. Although reporting and monitoring for other countries can begin immediately on passage of the legislation, the legislation will also allow for the extended powers to apply to new destinations as appropriate and once reciprocal agreements are in place with that country.

Clare Curran: Why does she think that it is a priority for her Government for New Zealanders to pay less for their mobile services while holidaying or doing business overseas, but pay more than they otherwise would for copper broadband services while living in New Zealand?

Hon AMY ADAMS: I would, firstly, reject entirely the assertion in that member’s question. This Government’s interest in telecommunications is the long-term interests of all users of telecommunications services. That is our priority. That is our priority in mobile roaming as much as it is in all other aspects of the portfolio.

Unemployment—Rate for Māori and Pacific Peoples

10. HONE HARAWIRA (Leader—Mana) to the Minister for Tertiary Education, Skills

and Employment: Does he agree that a Māori and Pacific unemployment rate that has been nearly three times higher than the Pākehā rate for each of the four years of his Government’s time in office signals the failure of the National Governments employment, education, skills and training policies for Māori and Pacific peoples; if not, why not?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): No, I do not agree with that assertion. Although the Māori and Pasifika unemployment rate is higher than we would like because of the challenges of the global financial crisis, our employment, education, skills, and training policies are working hard to support a growing economy and provide more training and skills opportunities for all New Zealanders, including and in particular Māori and Pasifika. A few examples for the member are the 8,500 fees-free tertiary places for Youth Guarantee; the nearly 3,700 trades academy places, which are particularly popular with young

Māori; the 300 places for the new Pasifika trades initiative to improve Pasifika achievement in trades; He Toki ki te Rika, $1 million for Māori trades training; and also the—

Hone Harawira: That’s enough. That’s enough.

Hon STEVEN JOYCE: No, I think it is important to get it out to the member, because he is obviously not aware of it. There is also fees-free second-chance foundation training and the new New Zealand Apprenticeships programme.

Hone Harawira: Does the Minister agree that even more appalling than the unemployment rates is the fact that only half of all Māori and Pacific Island people living in New Zealand actually have jobs, and does that mean that National’s promise of a brighter future and an inclusive economy with jobs for all does not actually include Māori and Pacific Island people?

Hon STEVEN JOYCE: No, I do not agree with that assertion, but I think the member raises a good point, and that is that we should all look to encourage opportunities for investment in the different parts of the country where it would be helpful for all New Zealanders. And if you take the member’s own area of Northland, there are lots of initiatives going on there—for example, in the minerals and resources space, which I know the member opposes. But actually Northland has one of the worst unemployment rates in the country, and it is not enough to sit there and say: “We want jobs.”, and then not actually support the measures and initiatives within your own region that encourage jobs. I would encourage the member to change his view on that because I do not like the idea of trade fairs in Kaikohe to get young Northlanders to work in the Western Australian resource sector. I would prefer they were working in Northland.

Hone Harawira: Listening to the Minister blame the global financial crisis—[Interruption] yes, he did—does the Minister agree—[Interruption]

Mr SPEAKER: Order! Order!

Hone Harawira: Order, boys. Order, boys. Does the Minister agree that the global financial crisis has nothing whatsoever to do with the racial mix of the unemployment statistics here, and that those truly appalling statistics are, in fact, the result of his Government’s total lack of commitment to reducing Māori and Pacific Island unemployment rates, and what does that lack of commitment say to his mana-enhancing partners in the Māori Party and the silently suffering Pacific Island MPs in his own party?

Hon STEVEN JOYCE: No, I completely reject everything the member said in that question, of which there was a lot. This Government has been a passionate supporter of training and education opportunities for Māori and Pasifika. We have a higher proportion of success in tertiary education for Māori than there has ever been. We have a higher proportion for Pasifika than there has ever been. It is not high enough, but by goodness we started from a low base that we inherited and we are working a heck of a lot harder than that member is.

Education, Minister—Decisions

11. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she stand by all of her decisions as Minister of Education; if not, which, if any, particular decisions does she now regret?

Hon HEKIA PARATA (Minister of Education): Yes, in the circumstances and with the advice received at the time.

Chris Hipkins: Does she stand by her statement yesterday that she was not advised that the Ministry of Education was considering terminating its contract with Talent2 due to failure to deliver on key milestones; if so, why?

Hon HEKIA PARATA: The question yesterday in fact talked about “within 2 weeks of the final decision”. I was aware that during the course of consideration there were times when meeting the milestones was questioned, but when the proposition to approve the contract was made, it was made with all the advice that the key milestones had been met or largely met and that we should proceed.

Chris Hipkins: If the Minister was in fact aware that the Ministry of Education had considered several times terminating the contract with Talent2, and that several milestones had repeatedly been missed in the development of the Novopay system, why did she sign off on the decision to go live with the new system?

Hon HEKIA PARATA: I think the Hansard will make it clear that I said that there were, over the process—the long process, which, by the way, includes 7 years for which the contract was signed by Labour Ministers of Education. We went live because we were—in the balance of the circumstances, the opportunity, and the risk it was the best advice at the time.

Chris Hipkins: When she signed off the implementation of Novopay, was she aware that the previous contingency arrangement with Datacom Group would expire before Novopay actually went live; if so, why did she not ask for the contingency to be extended until Novopay implementation had been successfully completed?

Hon HEKIA PARATA: Consideration was indeed given to Datacom Group, and it had its own risks. On the balance of both cost and overall risk, the decision that we took was to go with Novopay.

Chris Hipkins: I raise a point of order, Mr Speaker. That does not actually address the question I asked. I am aware the Minister probably did not hear, because of the noise her colleagues were making, but it does not address the question I asked.

Mr SPEAKER: It was very hard to hear the question. I think, possibly, the Minister was challenged in hearing the question herself. I invite the member to ask the question again. I would be grateful for fewer interjections so we can hear the question and then the answer.

Chris Hipkins: When she signed off the implementation of Novopay, was she aware that the previous contingency arrangement with Datacom Group would expire before Novopay actually went live; if so, why did she not ask for the contingency to be extended until Novopay implementation had been successfully completed?

Hon HEKIA PARATA: Officials’ advice compared both the costs and overall risks of maintaining Datacom Group and proceeding to Novopay. On balance the advice given and taken was that we should proceed with Novopay.

Chris Hipkins: Did she take to Cabinet the decision to abandon having the existing and new payroll systems run in parallel as a risk-mitigation contingency measure; if not, why not?

Hon HEKIA PARATA: I took—well, I do not have absolutely every detail available to me now, but I am happy to do that. I did take the paper to Cabinet recommending that we should proceed.

Chris Hipkins: I raise a point of order, Mr Speaker. That was not actually the question that I asked.

Mr SPEAKER: I think that is fair. I will invite the member to ask the question again, rather than me litigate it.

Chris Hipkins: Thank you, Mr Speaker. Did she take to Cabinet the decision to abandon having the existing and new payroll systems run in parallel as a risk-mitigation contingency measure; if not, why not?

Hon HEKIA PARATA: I took to Cabinet a paper proposing that, in the overall balance of consideration, we proceed with Novopay.

Chris Hipkins: I raise a point of order, Mr Speaker. Once again, that did not actually address the question that I asked. She could, basically, say that she took a paper to Cabinet recommending any number of things, but the question was actually quite specific about what the recommendations she took to Cabinet were, or whether she recommended a specific thing to Cabinet. She did not address that.

Mr SPEAKER: Can the Minister assist the House by simply answering the question as to whether the paper she took proposed to continue with the standby with Datacom Group or not.

Hon HEKIA PARATA: I do not have the Cabinet paper with me and I do not have that detail, but a full ministerial inquiry has been organised that will provide all of that detail.

Chris Hipkins: Did Cabinet at any stage rescind the original decision to have the existing and the new payroll systems run in parallel until the new system was adequately operating?

Hon HEKIA PARATA: Well, evidently that is the case. We have run Novopay. We now have a ministerial inquiry that is going to look at all the detail that the member is seeking and that we are just as interested in having available.

Chris Hipkins: Is the Minister confirming for the House that Cabinet rescinded its decision to have the new payroll system and the existing payroll system operating in parallel as a contingency measure until the new system was running effectively?

Hon HEKIA PARATA: No, I am saying I do not have that specific detail so I cannot confirm that, but the ministerial inquiry will be able to do so.

Chris Hipkins: Does she now regret signing off the implementation of Novopay, given the taxpayer is now having to fork out an extra $5 million to prop up the problems within the system, when all of the problems could have been avoided if she had ensured the contingencies that were originally put in place and the development milestones were actually reached before the implementation was approved?

Hon HEKIA PARATA: Well, I can say we regret inheriting the decision of that previous Labour Government, upon which that member advised, and I think that we will leave the ministerial inquiry to look into these matters.

Youth, Ethnic Minorities—Leadership Development

12. MELISSA LEE (National) to the Minister for Ethnic Affairs: What is the Government doing to increase the leadership capabilities in youth of ethnic minorities?

Hon JUDITH COLLINS (Minister for Ethnic Affairs): First off, congratulations, Mr Speaker.

Mr SPEAKER: Thank you.

Hon JUDITH COLLINS: The Office of Ethnic Affairs has launched the Young Leaders Auckland Pilot Programme. Along with the Ministry of Youth Development, it is running a 9- month training course for 10 young Aucklanders. These young leaders of the future will learn crucial skills such as advocacy, public speaking, and project management. The participants will enjoy valuable opportunities to learn about how a Government works, the value of community volunteering, and the importance of professional networking activities. Of course, they will also learn to be professional, unlike that lot over there.

Melissa Lee: Why is this programme necessary for youth of smaller ethnic communities? [Interruption]

Hon JUDITH COLLINS: Unfortunately, the Labour Party considers ethnic minorities something to laugh at, but this Government is committed to a productive and harmonious New Zealand where ethnic minorities equally feel that they have the ability and skills to participate. Illinformed prejudices of a select few may also add additional challenges. It is essential that we equip these young people to become leaders who will not only make a personal contribution to civic, economic, and social outcomes but also pass on their experience and knowledge to their communities.

Mr SPEAKER: That brings to an end oral questions. Can I thank members for their patience and assistance in view of the difficulty we had with microphones today.


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