Questions and Answers – March 13

by Desk Editor on Wednesday, March 13, 2013 — 3:16 PM


Government Financial Position—Reports

1. Hon TAU HENARE (National) to the Minister of Finance: What reports has he received on the Government’s financial position?

Hon BILL ENGLISH (Minister of Finance): Last week Treasury released the Government’s Financial Statements for the 7 months to the end of January. They show that the Government’s financial position continues to track slightly better than forecast in the half-year update. The operating balance before gains and losses for the 7 months was around half a billion dollars smaller than forecast in December, and the operating balance including gains from Government investment funds actually shows a surplus of $4.2 billion, reflecting recent strengths in financial markets— around $4 billion better than expected.

Hon Tau Henare: What were some of the reasons for the slightly better financial results for the 7 months to 31 January?

Hon BILL ENGLISH: Really, the main factor over which we have control has been the control of Government spending. The Public Service and public servants across New Zealand deserve credit for the diligent way in which they have managed Government spending, such that it is running slightly below what we forecast. The other factor is improving revenue. Core Crown tax revenue was $486 million above forecast. We are starting to get some of the benefits of a broad based – low rate tax system, which means it is more efficient and is actually taxing a broader range of income.

Hon Tau Henare: What approach is the Government taking to managing its finances so that it remains on track to achieving a surplus in 2014-15?

Hon BILL ENGLISH: The approach we have taken is considered and consistent change over time on Government expenditure. So Government departments and services such as health and education have now, for 2 or 3 years, had clear constraints within which they are operating. They have taken the time and the trouble to understand how their delivery of services must change, and they are enrolling their staff across the board, particularly front-line staff, in making those changes. This has enabled us to deliver a good restraint on expenditure that will help us get to surplus at the same time as improving the quality of public services.

Hon Tau Henare: How does the Government’s financial position compare with the situation faced by other developed countries?

Hon BILL ENGLISH: We are in a relatively strong position. All developed countries have faced similar pressures since the onset of the global financial crisis. However, in many of them their gross borrowing continues to grow and will grow for quite some time yet. When we reach surplus in 2014-15, then Government borrowing will be able to stop increasing. Secondly, we have been able to avoid large-scale, drastic changes to our public services, such as we are seeing in Australia,

where Australian states have in recent times made tens of thousands of public servants redundant. We have chosen a more moderate and therefore more successful pathway of change.


2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?

Hon BILL ENGLISH (Acting Prime Minister): Yes, they are competent and hard-working Ministers.

David Shearer: What responsibility should the Minister of Finance take for the increase in Solid Energy’s debt?

Hon BILL ENGLISH: The Government, in its first term of office, had a look at State-owned enterprises’ balance sheets and made a decision that many of them could carry more debt in a way that would enhance the performance of the companies. It did make a decision to allow Solid Energy to take on more debt.

David Shearer: In a letter dated 28 May 2009, did the Minister of Finance approve increased debt ratios for Solid Energy that led to debt ballooning from $13 million to $300 million between 2008 and 2012?

Hon BILL ENGLISH: Yes, there was such a letter, signed by myself and the Minister for State Owned Enterprises. The decisions about how much debt to incur were made by the board, but we inherited a range of State-owned enterprises that were badly run, over spending, and over investing, and we took a whole range of measures to lift their performance. In the case of Solid Energy, it has turned out that a company that is operating in the world coal market, which is now so volatile, would have been better with no debt. In retrospect, that is easy to see; at the time it was not.

David Shearer: Why did the Minister of Finance require Solid Energy to increase its dividends and debt at a time when he knew that coal prices were declining?

Hon BILL ENGLISH: At the time, it was not clear that coal prices were declining. In fact, the best advice from the company—with which the Government ended up disagreeing—was that coal prices would continue to rise. But, as I said, that decision was made in the context of the mess that the previous Labour Government left with the State-owned enterprises.

David Shearer: I would like to table a letter from the Minister for State Owned Enterprises to Mr John Palmer on 20 May 2009, copied to the Minister of Finance, where he insists that Stateowned enterprises increase their gearing—

Mr SPEAKER: Leave is sought—[Interruption] I think I have got enough information. Leave is sought for the tabling of that letter. Is there any objection to that? There is none. It may be so tabled. Document, by leave, laid on the Table of the House.

David Shearer: How can he have confidence in his Minister of Finance, when he put pressure on Solid Energy to increase debt at the same time as he was telling New Zealanders that controlling debt was his top priority?

Hon BILL ENGLISH: As the member will know, having State-owned enterprises carry more debt simply shifts the debt around the Government balance sheet—either they carry it or we carry it. Secondly, it is one of the completely normal commercial means by which owners of companies put pressure on companies to perform. The fact is that the State-owned enterprises had been under no pressure to perform under the previous Government, and we expect better value for the taxpayers’ investment. I would have to say that we were successfully able to improve the performance of most State-owned enterprises over that period. In the case of Solid Energy, a sharp drop in the coal price and a loss of export markets put it into financial difficulty.

David Shearer: Was his Minister of Finance advised that such an approach to increase dividends and increase gearing at a time when coal prices were actually falling would stretch State13 Mar 2013 Questions for Oral Answer Page 3 of 15 owned enterprises and “may not be realistically achievable in the short term without inflicting undue harm on the credit rating and/or investment plans”; if so, did he accept that advice?

Hon BILL ENGLISH: I am sure that if it was good advice then the Minister did accept it. The Opposition cannot have it both ways. It is opposing asset sales because the Government is giving away dividends, and now it is opposing measures the Government took to get dividends out of State-owned enterprises.

David Shearer: Does he have confidence in the Minister of Finance, given that he thought it was right to take a $30 million dividend in September 2011, when it was apparent then that Solid Energy was in financial trouble?

Hon BILL ENGLISH: No, I do not agree with that. Bear in mind here that this was a company valued at over $2 billion paying almost no dividends. Opposition parties have been saying that these companies should never be sold, because we are giving away big dividends. In fact, at the time, it looked like billions of dollars of value with very little return for the taxpayer. What is the point in owning a company like that?

Metiria Turei: Will the Prime Minister censure his Minister of Housing for saying yesterday that the metropolitan urban limit has contributed very negatively to housing affordability in Auckland, when the Minister’s own official documents show that he is wrong?

Hon BILL ENGLISH: No, he certainly will not be censuring the Minister of Housing, because that is not what the document shows. What the document shows is that the Auckland regional strategy failed. It was meant to create densification in the city. In fact, there is less new building going on in the city now than ever, and more of the new development in Auckland in the last 10 years has occurred out on the urban limit. We have got ongoing discussions with the Auckland Council to try to get a sensible outcome that will give New Zealanders who live in Auckland, which is a big proportion of them, a reasonable opportunity to get access to reasonably priced housing, even if that does not fit with the planners’ dreams about ideal cities.

Metiria Turei: I raise a point of order, Mr Speaker. I understand that sometimes an explanation is needed by Ministers, but the Standing Orders are very clear that answers should be succinct, and I would hope that you would see those rules as being correct.

Mr SPEAKER: It certainly was a very lengthy answer. It has now concluded. Has the member got further supplementary questions?

Metiria Turei: Is it therefore acceptable to the Prime Minister for his Minister of Housing to intentionally misrepresent the facts of housing to the public?

Hon BILL ENGLISH: The Minister did not misrepresent the facts. In fact, I would advise the member to read the report, the most stunning conclusion from which is that where Auckland Council said there were 15,000 sections ready for building, it turns out there are 2,000 sections ready for building. That is why so many middle and low income New Zealanders cannot afford houses in Auckland. That member might like it that way. We think it is a bad outcome, and we want to change it.

Street Racing, Illegal—Trends

3. IAN McKELVIE (National—Rangitīkei) to the Minister of Police: What trends have been seen by Police since laws were changed in 2009 to combat illegal street racing?

Hon ANNE TOLLEY (Minister of Police): In 2009 we introduced new laws to crack down on illegal street racing and send a strong message that the dangerous behaviour of boy racers will not be tolerated. Between 2009 and 2012 the number of infringement notices issued by police for illegal street racing fell by 35 percent. Over the same period the number of 15 to 24-year-olds killed on our roads fell by over 38 percent.

Ian McKelvie: What changes were made in 2009 to deter illegal street racing?

Hon ANNE TOLLEY: The 2009 law changes gave courts the power to seize and destroy the cars of repeat offenders, allowed councils to outlaw boy racers cruising the streets, and made it

easier to impound vehicles caught racing. Of the 8,765 offences since 2009, only 172 offenders are on two strikes. This shows that these law changes are having a strong deterrent effect and are reducing reoffending. But the number of young lives lost on the roads is still too high and police will be continuing their crackdown, and boy racers should be warned that if they do not change their behaviour, they will be dealt with by the police.

Job Creation—Numbers and Government Policy

4, GRANT ROBERTSON (Deputy Leader—Labour) to the Minister for Tertiary

Education, Skills and Employment: On a scale of 1 to 10, with 1 being very poor and 10 being outstanding, how does he rate the Government’s performance on job creation?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I have given this question quite a lot of thought for the member, because I think it does require a considered judgment, as he is, of course, asking for an opinion. On the one hand, the number of people looking for jobs is higher than we would all like. On the other hand, compared with other OECD countries we are doing relatively well. Of course, we have had to deal with the impact of the Christchurch earthquakes on the New Zealand economy, as well as the global financial crisis. The global financial crisis has, of course, resulted in higher savings by New Zealanders, which I think is broadly acknowledged as a good thing, but this has limited job growth in areas like the retail industry, which is a traditional source of larger numbers of lower-skill jobs. In terms of the Government actions we have, of course, a comprehensive Business Growth Agenda of 300 different agendas, which will lift new investment and jobs in the New Zealand economy. On the other hand, we have seen some people propose some more radical options, which are a bit panicky, and would in all likelihood—

Hon David Parker: I raise a point of order, Mr Speaker. I do not think I need to give my point of order.

Mr SPEAKER: What is the point of order?

Hon David Parker: Length!

Mr SPEAKER: It was—

Grant Robertson: It was a very specific question.

Mr SPEAKER: No, it was not. That was the difficulty. It was not a specific question at all, and it was very much an opinion question, but it was certainly a very lengthy answer. I accept that, and I think that now we can conclude. I assume that the Minister has concluded.

Hon Gerry Brownlee: I think the problem is the question, and if, in fact, members keep asking these questions—how he rates the Government’s performance, etc.—and then asking for a rating between one and 10, they could expect only that the criteria the Government might use to make such a rating would be explained to the House. So I think it would be unfortunate if the question stands, but the answer is constrained.

Mr SPEAKER: As I said, I disagree with Grant Robertson. It was not a specific question; it was a very general question. It sought an opinion. It was a lengthy opinion, but it is now concluded, and I certainly invite—

Grant Robertson: A number? No, we haven’t had an answer to that question.

Mr SPEAKER: And it does not have to have a number given in the answer. It is an opinion question, and your own colleague cut the Minister down, not wanting him to complete his answer. The Opposition cannot have it both ways.

Grant Robertson: I raise a point of order, Mr Speaker. This question was accepted, and it begins with the statement: “On a scale of 1 to 10”—

Mr SPEAKER: Correct.

Grant Robertson: —so your office has accepted that as a question. Therefore, there must be at least some reference—


Grant Robertson: —to that scale.

Mr SPEAKER: And I appreciate the member’s position. I took some advice from the Clerk after noting the question, and it is an opinion question that does not require an answer to be given in a range of one to 10. The essence of the question is how does the Government rate job creation. A lengthy answer was given. There is the ability for the member to ask further supplementary questions if he so wishes.

Grant Robertson: How does he then explain that 69 percent of businesses recently surveyed by Ernst and Young rated his Government’s performance on job creation as “average to very poor” or “less than 5”, or, as the Sunday Star-Times called it, a fail mark?

Hon STEVEN JOYCE: Well, the Sunday Star-Times has always been a massive fan of this Government, but I note the survey—which had a sample size, which, interestingly, was not mentioned by the newspaper, of around 200—said that five out of 10 or better was around 52 percent, as I recall. There were also other surveys that, of course, the member probably is not interested in hearing about because he likes to talk the New Zealand economy down, and one of them, of course, is the BNZ Confidence Survey, which has a net 40 percent positive for the New Zealand economy. There is also the ANZ survey, which was also very positive about the New Zealand economy, and there is also the Quarterly Survey of Business Opinion, which rates business confidence the highest since 2007, at 19 percent positive.

Grant Robertson: What credibility does that answer have when the same Ernst and Young survey shows that 71 percent of businesses rated his Government’s ability to develop and execute a Business Growth Agenda as being five or less out of 10 or, in other words, a fail mark?

Hon STEVEN JOYCE: Well, again, that same survey said that five out of 10 or better was 50- something percent. So I actually think that although we can always do more and while we are always facing the challenges of the global financial crisis and the Christchurch earthquakes, one thing we could be sure of is that if they surveyed “Which Government would you prefer, this one or the last one?”, they would say—

Mr SPEAKER: Order!

Grant Robertson: Which of the following does he think is the main reason that 70 percent of the businesses have given his Government’s job creation record a fail mark: 163,000 people unemployed; youth unemployment hitting 30 percent in the last quarter; a 23,000-person increase in those young people not in education, employment, or training; or just the 30,000 jobs that were lost last year on his watch?

Hon STEVEN JOYCE: I think there are about three issues with the suppositions that the member raised there in terms of actual facts. But, nevertheless, in terms of the Government’s Business Growth Agenda, we are, in fact, proceeding very strongly. We have just released, for example, the East Coast oil and gas study, we have announced further reforms of the Resource Management Act, we have announced the draft decision in favour of the MacKays to Peka Peka Expressway, we have announced $25 million more in research and development grants, we have announced that the mixed-ownership model is proceeding, and that will boost New Zealand’s capital markets—all of these things in just the last 10 days.

Grant Robertson: Is the Minister aware that only two businesses in the survey rated the Government’s performance on job creation as outstanding, and when will he be calling Cameron Slater and David Farrar to thank them?

Hon STEVEN JOYCE: That is a pathetic question.

Drought Conditions—Minister’s Statements

5. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he stand by his statement, in relation to drought-stricken farmers, that “I wasn’t referring to climate change. It’s just that if it turned out that there was a succession of droughts, there’s no amount of government assistance that can offset that effect on farming”?

Hon BILL ENGLISH (Minister of Finance): Yes. Although the Greens think they own climate change, in fact climate has been fluctuating for ever, including in the last 40 or 50 years, and farmers have several times had to change their farming practices according to longer periods of drier or wetter summers, and that is the point I was making. Government assistance for droughts is in no way intended to take pressure off farmers to adapt their farming practice if that is what is required by weather patterns.

Dr Russel Norman: Does he agree with the Government’s own research body the National Institute of Water and Atmospheric Research (NIWA) when it states: “Droughts are projected to become more frequent and more intense under climate change.”?

Hon BILL ENGLISH: I would not want to question the scientific effort that has gone into that, although there is always uncertainty about these predictions. I recall similar predictions made by similar scientific bodies in Australia just 4 or 5 years ago and it has not stopped raining since.

Dr Russel Norman: Does he accept that human-induced climate change is real?

Hon BILL ENGLISH: It may well be, but I am not sure what that has got to do with this particular question. The fact is that the Government is assisting farmers with short-term emergencytype assistance through a drought. If there is a succession of droughts farmers would need to change their farming practice; Government assistance will not protect them from the consequences of it.

Dr Russel Norman: Does he understand that what it has to do with this question is that if climate change is happening and it is human-caused, we will face more droughts and more intense droughts?

Hon BILL ENGLISH: That could turn out to be the case. The point I am making is that fluctuating climate is not new to farmers. It might be a recent discovery by the Greens as a way of making political points, but farmers in New Zealand have for a few hundred years, actually, been adapting their farming practice according to relatively short cycles of weather change. In the 1970s there was a run of droughts. Later on in the 1980s there was a run of quite wet summers, and farming practice changed significantly. It may have to change again.

Dr Russel Norman: If New Zealand is facing more droughts and more intense droughts because of climate change, why is his Government doing nothing to reduce New Zealand’s greenhouse emissions, and at an international level why is it undermining international efforts to cut greenhouse emissions?

Hon BILL ENGLISH: Well, the member is simply wrong. I could run through the whole range of initiatives, including the Government continuing to implement the emissions trading system, which the Greens were part of creating. The result, of course, is quite striking. When the Greens were supporting a Labour Government emissions were going up rapidly; since that Government went out, emissions have flattened or dropped.

Dr Russel Norman: Why has the Government undermined international efforts to take action on climate change by refusing to make commitments under Kyoto II?

Hon BILL ENGLISH: We just do not agree with the member’s interpretation of that. I have to say, though, that the New Zealand Government is happy to be judged by what it does. Climate change is a policy area where there is an awful lot of rhetoric, including coming from countries that have not taken anything like the decisive actions that the New Zealand Government has taken, but we are happy to be judged by what we have done and there is quite a long list of it.

Dr Russel Norman: Is he aware that the New Zealand Government is being judged internationally and that as a result of the decision of his Government to not make binding commitments in the second Kyoto period New Zealand has been condemned internationally for undermining efforts to address climate change that causes more drought and more intense drought?

Hon BILL ENGLISH: I do not know what the member is referring to, but I have to say sometimes I am bit taken aback by the willingness of the Green Party and its global cohorts, but particularly the New Zealand Green Party, to condemn New Zealand Government policy from the safety of offshore conferences where everyone thinks that they agree the same things about climate

change. The fact is that being condemned internationally by a handful of NGOs is not going to influence New Zealand Government policy.

Dr Russel Norman: How is it consistent on the one hand for the Minister to say he cares about droughts and the impact of drought on farmers and on New Zealand, when on the other hand in terms of climate change policy this Government has watered down the emissions trading scheme very significantly, and in terms of international negotiations has made it much harder for international cooperation by refusing to make commitments under the Kyoto Protocol?

Hon BILL ENGLISH: Well, we think it is quite consistent to make the statements that I have made about our concern about drought and to continue to advance New Zealand’s contribution to reducing emissions. I might say that if the measurement is actual reduction in emissions then New Zealand is in a much better state 5 years on from the change of Government than we might have imagined even just 3 or 4 years ago. If the measurement is rhetoric about climate change, then I accept the member’s criticism. We do not go on about it, do not boast, and do not try to inflate what we are doing.

Dr Russel Norman: If climate change is having an effect on the New Zealand climate and producing more droughts and more intense droughts, and the only way to really resolve it is through global action, surely the Government should be leading in global action to address climate change instead of being dragged behind, which would mean that New Zealand farmers would benefit from the actions of his Government instead of suffering as a result of them.

Mr SPEAKER: I call the Hon Bill English, in so far as there is a question there.

Hon BILL ENGLISH: I think if the member compares the actions of the New Zealand Government over the last 6 or 8 years, actually, with almost any other Government in the developed world you would find us near the top of the list for sensible climate change policy, and near the top of the list for the actual change in emissions, which ultimately is the measure of whether we are getting anywhere.

Dr Russel Norman: I seek leave to table a NIWA report on climate change scenarios for the Building Research Association of New Zealand Inc. study of the built environment—

Mr SPEAKER: Are NIWA reports available to members readily?

Hon Members: Yes.

Mr SPEAKER: Then leave will not be put.

Apprentices and Trades Training—Progress

6. SIMON O’CONNOR (National—Tāmaki) to the Minister for Tertiary Education, Skills

and Employment: What progress has been made with the Government’s Apprenticeship Re-boot?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): In late January the Government announced a raft of changes to simplify and strengthen industry training to ensure more New Zealanders have the skills and qualifications they need to set them up for their working lives. To lift the participation in apprenticeships, we set up the apprenticeship reboot initiative, which will provide the first 10,000 new apprentices to enrol a grant of $1,000 towards their tools and off-job costs, or $2,000 if they are in priority trades. Employers receive an identical payment for each new apprentice they take on. The apprenticeship reboot initiative was due to start next month on 1 April, but due to its popularity with employers and with industry training organisations I am very pleased to announce that it has been brought forward a month and is now under way.

Simon O’Connor: What reports has he seen on the reboot’s popularity?

Hon STEVEN JOYCE: Well, of course, it is very early days, and official numbers are still being collated. I can report that in just 1 week, since the reboot initiative was brought forward to last Wednesday, approximately 350 young people have signed on as apprentices in the building and construction sectors, while around 60 have signed up already in specialist trades such as plumbing, drainlaying, roofing, scaffolding, and rigging. These enrolments are in key trade sectors that will

support increased demand in Canterbury and Auckland. Although we expected the first 10,000 reboot places eligible to be available for 18 months, I have now seen reports that 10,000 could sign on within 12 months. That is very good news for industry training, young people, and employers.

Income Gap, Parity with Australia—Growth of Wage Gap

7. Hon DAVID PARKER (Labour) to the Minister of Finance: By how many dollars has the gap between New Zealand and Australian average weekly wages grown since December 2008, based on the methodology tabled by Hon John Key on 28 July 2010?

Hon BILL ENGLISH (Minister of Finance): I cannot actually answer the member’s question on the actual dollars for two reasons; one is that the Government has never updated that table, because it believes the methodology has proven to be flawed, and I will explain why. The wage series is not an official measure. The calculation did not take account of tax cuts, and the purchasing power parities that are used are quite volatile. Nevertheless I understand the Parliamentary Library has a series that attempts to replicate it. Based on those numbers the member put out a press release claiming that “The median weekly wage gap with Australia has ballooned by $60 to $180 a week …”. That refers to the median weekly wage rather than the average, and that is other reason that I cannot answer the member’s question, because he has made a mistake by confusing average and median.

Hon David Parker: Can he then confirm that the median wage gap with Australia on a purchase price parity basis has increased by NZ$60 a week—50 percent more than when he took office—and now sits at $180 a week; and does he agree that the Government will not achieve its aim of closing the wage gap with Australia?

Hon BILL ENGLISH: No, I cannot confirm it, because I think the member is comparing an average with a median, and that is not a valid way to compare statistics. What I can tell the member is that I believe we are making progress in closing the wage gap with Australia despite the fact that Australia has had higher economic growth rates than we have had through our recession. Real aftertax wages have grown 12 percent in New Zealand under this Government, and at the same time in Australia real after-tax wages have grown 9 percent, so we are closing the gap on real after-tax wages.

Hon David Parker: Is he aware that the gap between the take-home pay of Australians and New Zealanders has not closed, once Labour’s 2008 tax cut is removed from his calculation and once National’s 2010 GST increase and its ACC increase are included?

Hon BILL ENGLISH: No, I am not aware of those calculations, but what I can tell the member is that, obviously, when Australia was growing at 3.5 percent and New Zealand was in recession, it made it harder to close the gap. New Zealand went into recession under the Labour Government before the global financial crisis. We have made every possible effort to dig New Zealand out of recession and get New Zealanders’ wages growing again, and the good news is they are growing again.

Hon David Parker: Has he seen the Treasury advice that was provided to the Government in 2010 that stated that the wage gap between New Zealand and Australia grew by 50 percent in the 1990s under National and shrank by 9 percent during Labour’s 9 years of Government; if so, why does he think that New Zealanders do so badly under National Governments?

Hon BILL ENGLISH: I did see the advice. The reason New Zealanders are doing better now is because the Government is making moderate and considered changes over time consistently and it is focusing on everything that can be done to get businesses investing and employing. That has been difficult in the face of recession, earthquakes, and now drought, but the good news is that the New Zealand business community is much more resilient than the Opposition believes, and we are beginning to close the gap on Australia.

Hon David Parker: Given the—[Interruption]

Mr SPEAKER: Order! Allow Mr David Parker’s supplementary question to be heard.

Hon David Parker: Given the Minister’s reference to the difference, on the basis of average weekly earnings in one of his earlier answers to questions, is he aware that when comparing average weekly earnings on a purchasing power parity basis with Australia—not the median—the gap has grown from $121 per week to $179.94 in the period since he took office?

Hon BILL ENGLISH: No, I am not aware of that. But even if I was, it is not the relevant measure for take-home pay for New Zealanders. Real after-tax wages—that is, pay adjusted for inflation and for tax—have grown 12 percent in New Zealand since 2009 and they grew 9 percent in Australia. So real after-tax wages, which is what people pay their bills with, have closed the gap between New Zealand and Australia.

Skycity, Problem Gambling—Host Responsibility Programme

8. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister of Internal Affairs: Does he intend to take any action about the failure of SkyCity Auckland to prevent access to the casino by people with gambling problems as recently reported in the media?

Hon CHRIS TREMAIN (Minister of Internal Affairs): Action is constantly being taken to ensure casinos’ harm minimisation obligations are met and are being updated. The Gambling Commission is already reviewing the Host Responsibility programme in place at Skycity to ensure that it continues to be enhanced. The Department of Internal Affairs is also looking into the issue to see whether any further action needs to be taken.

Te Ururoa Flavell: Does the Minister believe that it is consistent with their responsibilities to prevent problem gambling for the holder of a casino licence to encourage the return of highspending customers by the use of incentives such as free parking, free meals, free drinks, free hotel stays, and free tickets to sponsored sporting events, as described in the New Zealand Herald article yesterday?

Hon CHRIS TREMAIN: I acknowledge that like many businesses in New Zealand, Skycity makes use of incentive programmes. These incentives are weighed up by Skycity to ensure consistency with its Host Responsibility obligations. The Gambling Commission is reviewing its current Host Responsibility programme, and my expectation is that the review will identify and resolve any issues at Skycity.

Te Ururoa Flavell: Does the Minister think that any of those incentives are, in fact, free, or does he think that they are, in reality, a shrewd marketing investment by Skycity to encourage gamblers who have already lost a lot of money to lose even more?

Hon CHRIS TREMAIN: I acknowledge that there is a financial cost to these incentive programmes, just as in many other businesses across this country that provide incentive programmes to their customers. But casinos’ Host Responsibility programmes include sections on responsible marketing, and harm minimisation issues are addressed by Skycity as it develops its marketing campaigns.

Health Targets—Progress

9. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Is he confident that the Government’s initiative to provide Better, Sooner, More Convenient health care is meeting his expectations, if not, why not?

Hon TONY RYALL (Minister of Health): The Government has high expectations of its plans for better health services for patients, and in many services I am confident that we are meeting those high expectations, but in some other areas we need to do better. I say this because despite tight times we have put an extra $2 billion into the public health service, with the OECD reporting in its latest report that New Zealand had the third-highest increase in health spending of developed nations.

Hon Annette King: In light of that answer, is 86-year-old Mrs Margaret Mollring of Hastings receiving better, sooner, more convenient health care after recently being discharged from the

hospital following heart failure and pneumonia, who cannot walk across the room without becoming breathless and now has been told that her home help will be slashed to 1 hour a week and that her showering is threatened to be cut to just 3 days a week?

Hon TONY RYALL: What I would be able to say to that member is that if she could please provide the circumstances and the reference to that information, then I will check it out. But I can certainly tell that member that we have put significant new money into the Hawke’s Bay District Health Board. It looks to me to be over $60 million extra under this Government. I can also say to that lady that it is generally a very good service provided by the Hawke’s Bay District Health Board and we do not cull patients off waiting lists, like we did when that member was in Government.

Hon Annette King: Has he been told that because Mrs Margaret Mollring’s home-help carer was unable to complete all her housework in the 1 hour allocated, Mrs Mollring went out and brought in her own washing, fell over twice, and is fortunate that she was not seriously injured; and does he think that with all the money he has put in, and all his bluster, that that is better, sooner, more convenient health care in the Hawke’s Bay?

Hon TONY RYALL: That word hurt them last week, did it not. What I am aware of is that there have been some changes to home-care services in Hawke’s Bay. My understanding is that this is so that services can be better targeted at other people who have been discharged from hospital—that they do hope that they can help more people with that money—but I say to the member to please bring that case to my attention, and I will make inquiries on behalf of her. But what I can say is that we are putting substantially more money into the Hawke’s Bay District Health Board, we are providing more services, and we do have an elected district health board in the Hawke’s Bay, which is quite different from when that party was in office.

Hon Annette King: In the light of that answer, did he read Mrs Mollring’s letter, sent to him and to the Prime Minister, about her plight before he passed it on to Jo Goodhew, none of you have answered her letter, and is that the way the Government can claim it does not get any complaints in health—nothing to see here?

Hon TONY RYALL: I would have to verify those facts from the member, but I am absolutely sure that if they have been passed on to Mrs Goodhew, they will be looked into. What I can tell the member is that more money is going to Hawke’s Bay—they want to help more people. But, actually, if the member brings the facts to my attention, we will endeavour to deal with the case.

Hon Annette King: Did he tell the people of Hawke’s Bay, when he signed off their annual plan, that the level of service provided, and the standard of some services “may have to be modified”, and that meant there could be reductions in the amount of care the elderly would get in Hawke’s Bay?

Hon TONY RYALL: I do not think there will be any reduction in the level of service that the elderly will get in Hawke’s Bay. I think you will find that spending in core services for the elderly is increasing in the Hawke’s Bay, not the least of which is in the amount of elective surgery for the people of Hawke’s Bay, which mainly benefits the ageing population—a very significant increase, and far more than when that member was culling 30,000 people off waiting lists.

Dr Paul Hutchison: What reports has he received in relation to expectations of the New Zealand public health service?

Hon TONY RYALL: As it happens I have received a copy of a very important, prominent report that clearly lays out the expectations of the New Zealand public health service. These expectations were shockingly low. In fact these expectations were depressing, explicitly saying that New Zealand’s health system “is not rich enough to have the kind of health service found in Australia, Canada, Britain, or the United States”. The report further declares that “There is a growing understanding, I believe, in the wider community that no Government can meet all New Zealanders’ expectations about health.” That was a comment made by a new health Minister last century—the Hon Annette King.

Overseas Investment Rules—Farmland in Foreign Ownership

10. ANDREW WILLIAMS (NZ First) to the Minister for Land Information: How much of New Zealand farmland is foreign-owned?

Hon MAURICE WILLIAMSON (Minister for Land Information): The Overseas Investment Office does not keep statistics on current ownership—

Rt Hon Winston Peters: Why not?

Hon MAURICE WILLIAMSON: —of farmland in New Zealand—I will get to that, just wait. The role of the Overseas Investment Office is to approve applicants based on the criteria set down in the Act and the regulations. Absolute statistics of foreign ownership are impossible to produce because, one, foreigners are free to sell their land to New Zealanders without any notification; and, two, many foreign owners eventually become New Zealanders by way of citizenship.

Andrew Williams: How can that information be correct, when independent analysis by economist Bill Rosenberg last year—[Interruption]

Mr SPEAKER: Order! The member has a right to have his question heard.

Andrew Williams: How can that information be correct, when independent analysis by economist Bill Rosenberg last year put the real figure of foreign ownership at more than 1.2 million hectares, or 8.7 percent of all farmland in New Zealand?

Hon MAURICE WILLIAMSON: I repeat, as I said in my answer to the primary question, it is not possible to know that, because many, many foreigners who do buy land after several years of being here then become citizens, so they are now New Zealand owners. Secondly, many foreigners, after having bought land here, have then sold it to a New Zealander, so they do not need to notify anybody and it is not possible to track those statistics. I would suggest that Mr Rosenberg’s numbers are a bit shonky.

Andrew Williams: I seek leave to table the report by Bill Rosenberg, entitled “Overseas Ownership of Land Far Greater Than the 1% the PM claims”.

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

Andrew Williams: Given the huge discrepancy between the independent analysis of Dr Rosenberg—[Interruption]

Mr SPEAKER: Order! I am having trouble hearing the supplementary question. I apologise to the member. Could he start again.

Andrew Williams: Thank you. Given the huge discrepancy between the independent analysis of Dr Rosenberg and that of the Minister’s office, how can he have any confidence in the quality of advice he is receiving from the Overseas Investment Office, or is he just skewing the figures?

Hon MAURICE WILLIAMSON: The member is trying to get me to choose between that terribly impartial economist Bill Rosenberg and the fact that the Overseas Investment Office says it is not possible to tell the actual status of each owner of each land title because of it having been sold on to a New Zealander and not being recorded, or them becoming a citizen. So I do not quite know where the member says there is a discrepancy. The Overseas Investment Office says it cannot do it. Bill Rosenberg has got some magical crystal ball or a Ouija board and has come up with a number.

Andrew Williams: Why does his office and the Overseas Investment Office continue to skew the figures and the information of foreign ownership by excluding all land purchased— [Interruption]

Mr SPEAKER: Order!

Andrew Williams: Can I start again?

Mr SPEAKER: Yes, the member can start again.

Andrew Williams: Thank you—[Interruption]

Mr SPEAKER: Order! If there is not going to be an opportunity given because of interjections being thrown across the House, then I am going to have to ask a member to leave the Chamber.

Andrew Williams: Why have his office and the Overseas Investment Office skewed the figures of foreign ownership by excluding all land purchased prior to 2002?

Hon MAURICE WILLIAMSON: The Overseas Investment Office has not skewed anything. It will publish figures back as far as the member likes. This graph here shows the amount of land sold to foreigners under the last Labour Government relative to the land sold under the 4 years of the current National Government. I have to say that in just 1 year, 2006, a year when the Hon Winston Peters was a Minister in that Government, 383,000 hectares—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Maurice Williamson knows full well that New Zealand First had signed a confidence and supply agreement, not a coalition agreement, with the Government, and I was a Minister outside of Cabinet—

Mr SPEAKER: Order! I thank the member for his contribution, but that is not a point of order. Supplementary question, Andrew Williams. [Interruption] Order!

Andrew Williams: The last is the best one. In the interests of transparency and good policymaking, will the Government consider an official land register, which is being released as a New Zealand First policy today, which would allow the public to see once and for all how much their country is being flogged off; if not, why not?

Hon MAURICE WILLIAMSON: No. Consideration to such a scheme has been given in the past. We have also had a look at it. It would become so problematic to actually identify the information, because you would then have to make every ordinary New Zealander somehow keep reporting back to a registry if they were selling their land on, or if they had been a foreigner and became a New Zealand citizen you would have to have their citizenship status changed. So, no, I do not believe it is that serious a problem, and we certainly would not do it.

Rt Hon Winston Peters: I seek leave to table the evidence that the greatest number of declines and refusals of the Overseas Investment Office was when I was the Minister.

Mr SPEAKER: Could I just have the source of that evidence, please?

Rt Hon Winston Peters: Me.

Mr SPEAKER: No, I am not putting that.

Health Targets—Reducing Infections in Intensive Care Units

11. Dr JACKIE BLUE (National) to the Associate Minister of Health: What progress has been made in reducing infections in intensive care units?

Hon JO GOODHEW (Associate Minister of Health): In 2011 about four to six patients per month in New Zealand intensive care units developed a bloodstream infection called central line associated bacteraemia or CLAB. The rate of this type of infection has now reduced to between zero and two patients per month.

Dr Jackie Blue: Why is it important to reduce this type of infection?

Hon JO GOODHEW: People who develop this type of infection are very ill, have to stay in hospital longer, and have more medical complications. In addition to the personal consequences for patients and their families, each case of CLAB costs about $20,000. Reducing infection rates means this funding is able to be spent by district health boards in other areas of health care.

Dr Jackie Blue: How has this progress been achieved?

Hon JO GOODHEW: Since October 2011 the Health Quality and Safety Commission has been running a national project to reduce the number of these infections, focusing on compliance with best practice and improving data collection. Clinical leadership within district health boards and at regional level has been vital, and I thank clinicians for their increased focus on preventing these infections. This successful project is now planned to be extended to other clinical areas.

Housing Affordability and Availability—Auckland Council Planning Practices

12. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Housing: What specific actions, if any, does Auckland Council need to take to avoid Government intervention, given his reported statement that “the Government would use the reformed RMA to intervene in Auckland”, if Auckland Council doesn’t change its planning practices?

Hon Dr NICK SMITH (Minister of Housing): The Government is already intervening in the council’s planning process with the Resource Management Reform Bill. This bill is currently before Parliament and provides for a board of inquiry to consider the Auckland Unitary Plan with limited appeal rights.

Phil Twyford: I seek leave to table a letter from the Hon David Carter to His Worship the Mayor Len Brown setting out the Government’s support for key elements of the Auckland Plan.

Mr SPEAKER: Leave is sought to table that letter. Is there any objection? There appears to be none. Document, by leave, laid on the Table of the House.

Phil Twyford: There appears to be none. Thank you—it is an excellent letter, Mr Speaker. I seek leave of the House to table a letter of reply from the office of the Mayor of Auckland, Len Brown, to the Hon David Carter.

Mr SPEAKER: Leave is sought to table the response to that letter. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Phil Twyford: Why is he now blaming Auckland Council for the housing crisis, when only 4 months ago his Government said that the Auckland Plan is “broadly consistent” with the Productivity Commission’s recommendations on housing affordability, and that “The Government recognises the need to continue working with Auckland Council to support the implementation of the Auckland Plan.”?

Hon Dr NICK SMITH: The people I principally hold responsible for the huge challenge we have of housing affordability in Auckland are those who set the policy a decade ago around the metropolitan urban limit, which did not work, and, secondly, the last Government, which endorsed that plan and saw house prices double, section prices double, and interest rates go up in almost every year it was in Government.

Phil Twyford: I seek leave to table the Government’s response to the Productivity Commission’s recommendations on housing affordability, where it confirms that the Auckland Plan is consistent with the—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Phil Twyford: What reports has he received that show that if the Auckland Unitary Plan takes effect in September, as Auckland Council has requested, new greenfield land would be available by 2015—2 years after he stated in the House yesterday—and that under his scenario, changes to the Resource Management Act, new land would not be available until 2017, and will he correct the statement he made in the House yesterday?

Hon Dr NICK SMITH: The statement I made in the House yesterday was absolutely correct, and it is this: if the unitary plan takes effect in September, then it would still require the formal notification of new subdivisions. I will seek the leave of the House immediately to table the legal advice from Roger Blakeley, the head of the planning department at Auckland Council, to share that advice that is consistent with yesterday’s answer.

Mr SPEAKER: So is leave being sought?

Hon Dr NICK SMITH: I seek leave of the House to table an email from Roger Blakeley, the manager of the Auckland Council’s planning department, setting out the process—

Mr SPEAKER: Leave—

Hon Annette King: To whom?

Hon Dr NICK SMITH: To my office.

Mr SPEAKER: Leave is sought to table that email. Is there any objection? There appears to be none. It can be tabled. Document, by leave, laid on the Table of the House.

Phil Twyford: I seek leave of the House to table advice from Roger Blakeley, the chief planning officer of Auckland Council, that shows conclusively—

Mr SPEAKER: Whom is the advice to?

Phil Twyford: It is advice from Auckland Council.

Mr SPEAKER: It is Blakeley’s advice to the Auckland Council, which you have a copy of?

Phil Twyford: I have a copy of it.

Mr SPEAKER: Leave is sought to table that advice from Blakeley to the—

Phil Twyford: Mr Speaker, can I just say what is in it?

Mr SPEAKER: No, that is all that is—

Phil Twyford: It makes no sense, Mr Speaker.

Mr SPEAKER: The House can make a decision on whether it wants that information tabled. It is a legal opinion from Roger Blakeley to the Auckland Council—

David Shearer: What about? Transport, housing, hospitals—

Mr SPEAKER: No, on housing affordability, we are assuming.

Phil Twyford: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will give the member a minute to explain it further.

Phil Twyford: I would argue that it makes no sense to ask the leave of the House—

Mr SPEAKER: No, I am giving the member the opportunity to further explain it.

Phil Twyford: OK. I seek the leave of the House to table advice from Roger Blakeley of Auckland Council that shows conclusively that the scenario that Mr Smith has proposed would take 2 years longer to bring in new greenfield land than what is being proposed by the Auckland Council.

Mr SPEAKER: OK. Leave is now sought. Is there any objection? There is.

Alfred Ngaro: Is the Minister concerned that even with the council having only half the greenfield residential land that its own development strategy requires, this development strategy relies on a massive building programme for high-density housing?

Hon Dr NICK SMITH: Yes, I am. The council’s plan requires the building of 4,000 new apartments and compact townhouses per year for the next decade, and 10,000 per year for the two decades thereafter. We should be reminded that last year 1,000 houses of that same category were built. The metropolitan urban limit was set a decade ago on the assumption of massive intensification that did not occur. We should not repeat that mistake again.

Phil Twyford: Does he support the views of Federated Farmers Chief Executive Officer Conor English, who says that Auckland needs to stop sprawling across the countryside, “gobbling up productive land”, as well as to deliver more investment in public transport, more affordable housing, and more intensification, which sounds very much like Len Brown’s plan for a compact city?

Hon Dr NICK SMITH: No, I do not agree. Let me tell you why. In the Urban Technical Advisory Group report it points out that if all of Auckland’s population growth over the next 20 years was on quarter acre sections, it would require less than 0.4 percent of New Zealand’s agricultural land. Agricultural production in New Zealand is improving its productivity by between 1.5 and 2 percent per year, so over a 20-year period the effect of Auckland growing in that way will have negative impact on New Zealand’s productivity.

Alfred Ngaro: Can the Minister specifically state how many greenfield sections are available at each stage of development in Auckland, and how does this compare with what is required?

Hon Dr NICK SMITH: The report I have released today shows that 1,900 sections are ready to be built on now. That compares with previous claims of over 15,000. The report also shows that in

terms of land ready to be subdivided there are 14,500 sections, when the council’s own development strategy requires 32,000. In the category of land in the pipeline for subdivision there are 54,000 sections, when the council’s development strategy requires 103,000 in that category. What the report shows is that we have less than half the land available than even the council’s own strategy requires, and it reinforces the view that more land is needed for residential development.

Phil Twyford: Is he satisfied that the approach he took with ACC and local government— shonky numbers and blaming other people—is a constructive approach for—

Mr SPEAKER: Order!

Phil Twyford: —dealing with the housing crisis?

Mr SPEAKER: Is the Hon Nick Smith happy to answer it?

Hon Dr NICK SMITH: I think it is interesting for the member to talk about shonky numbers, because the Government’s report shows that 2,000 sections are available today to be built on, when claims were made by members opposite and by the Auckland Council that that number was 15,000. I invite the member opposite to actually read the technical report by the Auckland Council officials and the Ministry of Business, Innovation and Employment released today, so that he can be better informed. I seek leave of the House to table the report Housing Affordability: Residential Land Available in Auckland, published by the Ministry of Business, Innovation and Employment today.

Mr SPEAKER: It is available on a website?

Hon Dr Nick Smith: No, it has just been publicly released today.

Mr SPEAKER: Is it on the ministry’s website?

Hon Dr Nick Smith: I am not sure whether it is on the website yet. I publicly released it today.

Mr SPEAKER: It will be on the website.


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