Questions And Answers – December 5

by Desk Editor on Thursday, December 5, 2013 — 3:40 PM


Economic Growth and Job Creation—Reports

1. Hon TAU HENARE (National) to the Minister of Finance: What reports has he received showing progress in lifting economic growth and creating new job opportunities?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The Minister has seen several reports pointing to steady job growth as the economic momentum created by a combination of Government policies and the hard work of New Zealanders bears fruit. The OECD is now forecasting that New Zealand will be one of the fastest-growing developed economies next year, forecasting a growth rate of 3.6 percent in calendar year 2014. The stronger economy is being reflected in employment indicators. For example, the Ministry of Business, Innovation and Employment’s Medium-Long Term Employment Outlook shows employment growth averaging about 1.6 percent a year, or about 36,000 new jobs each year on average up to 2016. In the same period it projects unemployment to fall to 4.8 percent.

Hon Tau Henare: What other reports has he received confirming improvements in the job market?

Hon STEVEN JOYCE: The Government’s economic programme, and especially the Business Growth Agenda, is creating the conditions for businesses to invest for jobs and growth, and that is exactly what is happening. The most recent ANZ Job Ads survey revealed that total advertising for jobs rose by a seasonally adjusted 4.5 percent in October, building on rises in the previous 4 months. That came from a rise in newspaper ads of 6.1 percent and internet ads rising by 4.2 percent. The ANZ noted that this was the first time in 4 years that internet job advertising had increased for 5 consecutive months. The ANZ said: “It is very encouraging that the labour market is finally lifting more markedly. Given already-high household debt levels, income growth is the key to a more sustainable consumption upturn, not selling houses to each other at ever-higher prices.”

Hon Tau Henare: How is New Zealand’s improving economy and labour market affecting trans-Tasman migration?

Hon STEVEN JOYCE: It is affecting it very positively. I have seen a report from Hays recruitment agency saying that New Zealand’s buoyant economy is attracting the attention of an increasing number of Australians. Hays reports that there has been a 25 to 30 percent increase in inquiries from Australians about taking up permanent roles in New Zealand. That trend is supported by the latest migration data, which shows that the net loss of people to Australia has fallen every month since last December. In the October 2013 year New Zealand had a net gain of 17,500 migrants compared with a net loss of 2,300 in the previous year. The latest figure is above the average annual net gain of 11,300 migrants over the last 20 years, and is almost certainly attributable, at least in part, to our favourable growth rate compared with many other developed countries.

Hon David Parker: If the economy is going as well as he claims, why are 150,000 people unemployed, just as many as there were 3 years ago in the midst of a recession, and why are average and median wages growing at the slowest rate in 13 years?

Hon STEVEN JOYCE: The member, I know, is pretty unaware of this event that occurred that was called the global financial crisis. I appreciate that it has not really permeated his understanding of economic life, but the reality is—

Hon David Parker: It was 5 years ago.

Hon STEVEN JOYCE: He says that it was 5 years ago. He should pop out and go and have a look at what is happening in the US, he should have a look at what is happening in Japan, he should have a look at what is happening in Europe, he should have a look at what is happening in the UK, and then he should thank his lucky stars that he lives in New Zealand.

Hon Tau Henare: What other indicators show that the economy is performing better than it was 5 years ago?

Hon STEVEN JOYCE: Other than employment rising, unemployment falling, and inward migration increasing, we are making considerable progress as a country in reining in debt. Before our first Budget back in 2008 Treasury warned that if the Government continued on the previous Labour Government’s spending track, we would run deficits forever and net debt would soar to over 60 percent of GDP by 2023 and never come down. So under our careful and prudent policies, we are now on track to achieve a surplus in 2014-15 and net debt is expected now to peak below 30 percent of GDP, despite dealing with the $15 billion expected cost to the Crown of rebuilding Christchurch. Back in 2008 the current account deficit was around 8 percent of GDP, and New Zealand’s net external debt was 84 percent of GDP. The current account deficit is now below 4 percent of GDP, and net external debt is 71 percent of GDP. The economy is in much better shape than it was 5 years ago, but there is more work to do, and this Government is doing it.

Student Achievement—Minister’s Statements

2. TRACEY MARTIN (NZ First) to the Minister of Education: Does she stand by her statement “We know that great teaching and learning goes on in our schools, but having modern learning environments just makes the whole process of raising achievement for all our young people that much easier”?

Hon HEKIA PARATA (Minister of Education): Yes, and that is why this Government is investing over $300 million to support specific schools with major developments, nearly $700 million on the roll-out of a managed network through Network for Learning, which is the schools network upgrade, and the roll-out of ultra-fast broadband, and over $1 billion to rebuild the education network in Christchurch. There is much to do because the neglect we found the education system in when we came into office was substantial, but we are making progress.

Tracey Martin: Does she stand by her statement from 14 November 2013: “Raising student achievement and assuring that all young people can access high quality teaching in modern educational environments is one of the Government’s main priorities.”?

Hon HEKIA PARATA: Yes, and that is why we are spending $300 million over 6 years to better support 21st century learning environments and improved outcomes for all children. There are 18 new schools to be constructed, and 400 new school buildings. In Christchurch, $1.137 billion over 10 years is being spent to restore and renew schools. We are building 1,200 new classrooms and repairing a further 1,200 classrooms. Eighty percent of classrooms are to be modern learning environments. We are spending $211 million for a managed network in schools, with 21 schools to be connected before the end of the year. Seven hundred schools are to be connected to the managed network in 2014. More than $200 million will be spent connecting schools to ultra-fast broadband. We have spent $157 million to date on school network upgrades. A further $136 million—

Hon David Parker: I raise a point of order, Mr Speaker.

Hon HEKIA PARATA: —over the next—

Mr SPEAKER: Order! I can anticipate the point of order.

Hon David Parker: Well, no, I would like to make my point of order.

Mr SPEAKER: OK, the member can make his point of order.

Hon David Parker: The last two answers that we have had from this Minister and, prior to that, from the Prime Minister were speeches, not answers to questions.

Mr SPEAKER: Order! I am conscious of the point of order the member is raising. I think it is a valid point. Ministers are required to keep their answers to the questions relatively brief.

Tracey Martin: Is the Minister aware that Te Kura Hourua ki Whangaruru, a charter school being set up by the Ngā Parirau Mātauranga Charitable Trust, has received over $1.6 million from the Government, which it has spent on 81 hectares of farmland in Northland, and it now finds itself without enough funds to build the school itself, so it is looking at placing portable accommodation and Portaloos in a paddock, and would she consider this to be a modern learning environment?

Hon HEKIA PARATA: Could the member tell me again what the name of that school is so that I know which one she is talking about?

Mr SPEAKER: Would the member please assist the Minister by just naming that school again?

Tracey Martin: Te Kura Hourua ki Whangaruru.

Hon HEKIA PARATA: Thank you, Mr Speaker. No, I am not aware that that is what has occurred, in terms of those details. I would have to check that with the Ministry of Education.

Tracey Martin: Can the Minister confirm that the agreement between herself as the Minister and the sponsor shows that the nearly 100 hectares of farmland, purchased with taxpayers’ money, now belongs to the trust, regardless of whether they build a school or not?

Hon HEKIA PARATA: I do not have that detail to hand. I would be very happy, however, to answer those questions and deal with the member on every one of those details.

Tracey Martin: Should the trust not build the charter school it claims it would, will she, as the Minister, take steps to recover the $1.6 million of taxpayer education money it has received; if not, why not?

Hon HEKIA PARATA: Although I do not have the particular details to hand of that particular contract, what I can tell the member, and assure the House of, is that there are significant performance and accountability requirements of each and every one of the five partnership schools. All of that detail is up on the website and available to anyone who wishes to look at them. In terms of the specific assertions that the member is making about one particular school, I am happy to get the detail of that and work with the member.

Tracey Martin: Is the Minister able to confirm, with her knowledge of the contracts to date, whether there are any clauses inside of any of the partnership school contracts whereby should the schools close, the assets purchased with taxpayer dollars can be claimed back by the State?

Hon HEKIA PARATA: It is my expectation that school properties that are to be disposed of will follow the Public Works Act. That is the usual practice.

Tracey Martin: I raise a point of order, Mr Speaker. I am sorry, but I did not ask about the Public Works Act or schools in the disposal. Charter schools and partnership schools do not enter that area. I asked whether—[Interruption]

Mr SPEAKER: Order!

Tracey Martin: —there was a clause inside the contracts—

Mr SPEAKER: Order! I am sorry, but I am going to have to ask the member to start again. I am getting so many interruptions from my left-hand side.

Tracey Martin: The question was whether the Minister is able to tell the House whether inside the partnership schools contracts—

Mr SPEAKER: Order! I think that the quickest way forward is to actually allow the member to repeat the question. Thank you.

Tracey Martin: I will try to bring it back. So is the Minister able to tell the House whether, inside the partnership schools contracts she has knowledge of, there is any clause that allows the

State—the ministry—to take back the assets purchased by those partnership schools should they close or fold for any reason?

Hon HEKIA PARATA: I do not have that detail to hand, and I am happy to work with the member.

State-owned Assets, Sales—Criteria

3. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Has the asset sale programme met all five tests he set in Budget 2011; if not, does he accept responsibility for any of its failures?

Hon TONY RYALL (Minister for State Owned Enterprises) on behalf of the Minister of

Finance: Yes.

Hon David Parker: How can he say that he met the test for widespread and substantial New Zealand ownership when his rushed sale of Air New Zealand shares, rammed through in advance of the referendum, had only 6,500 retail investors—just 0.1 percent of the New Zealand population?

Hon TONY RYALL: I think that the Air New Zealand sell-down was a remarkable success for the New Zealand taxpayers. It certainly provided us with, I think, well over $360 million of cash, and New Zealanders still retain 53 percent of the company in terms of the Government’s shareholding.

Hon David Parker: I raise a point of order, Mr Speaker. My primary question was about the five tests, my supplementary question was about the test for widespread and substantial New Zealand ownership, and the answer did not address that.

Mr SPEAKER: Order! The answer did address that, in my opinion.

Hon David Parker: How can he say that the capital will be used to fund “schools and hospitals” when he and his colleagues have promised the asset sales money many times over to projects including subsidising irrigation, Minister Guy; rebuilding Christchurch, Minister Brownlee; capitalising Kiwibank, Minister English; KiwiRail recapitalisation, Mr Joyce; paying down debt, Mr Ryall; paying for the war memorial, Mr Finlayson; paying for the City Rail Link, Mr Key; and, of course, the bailout of Solid Energy?

Hon TONY RYALL: Well, when you have $4 billion of proceeds in the Future Investment Fund, the Government has a number of options. That is why we have always said that the benefit of the mixed-ownership model programme, as part of our wider economic plan, is to help us to control debt and use those proceeds for important infrastructure. There is no need, therefore, to borrow those funds from overseas bankers, as the party opposite would do.

Hon David Parker: How can he say that the asset sales programme is a success when he is now $2 billion short on the proceeds he promised?

Hon TONY RYALL: I can say that the mixed-ownership model programme is a success because the Government has achieved the five objectives that it set. The main one, of course, is the fact that we have money—$4 billion—that we can use as part of the Future Investment Fund for important social investments. If that party is so confident in its own position, we are awaiting its pledge to buy back those assets.

Hon David Parker: Does the Minister take any responsibility for the collapse of Solid Energy, given that he has been the shareholding Minister since 2008, and it was him who told Solid Energy to expand, take on more debt, and pay higher dividends, thereby turning a billion-dollar company into something that is insolvent and had to reach a compromise with its creditors?

Hon TONY RYALL: The Minister of Finance is not responsible for the 40 percent collapse in world coal prices, nor is he responsible for the business path that that company was put on by the Hon Trevor Mallard.

Hon David Parker: How can he claim that the asset sales programme is a success when he is billions of dollars short of the minimum $5 billion he promised, he has failed to achieve widespread ownership, and those who have invested have suffered losses and now have less confidence in

capital markets rather than more, as shown by the decreasing number of retail investors who have invested in each of these companies as they have been flogged off?

Hon TONY RYALL: I think it is very straightforward why the Minister of Finance would have confidence in the success of the programme. Although I have got to say that the people who will not have confidence or success in their own programme is the party opposite, because if it did believe what it is saying, it would commit to buy back these assets. Mr Cunliffe was sort of: “Oh, we might do, or we might not”. It is all over the show.

State-owned Energy Companies, Sales—Meridian Energy and New Zealand Ownership

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Is he confident that more than 85 percent of Meridian Energy remains owned by New Zealanders?

Hon TONY RYALL (Minister for State Owned Enterprises) on behalf of the Minister of

Finance: The Government’s successful float of Meridian Energy resulted in New Zealand ownership of 86.5 percent, exceeding the Government’s target. I have had no updates since then, but I am aware that the New Zealand shareholding in Mighty River Power has actually increased, and there is no reason to think that the same will not happen with Meridian Energy.

Dr Russel Norman: Is he aware that one overseas investment bank, BNY Mellon, bought 5 percent of Meridian Energy in the days following its float on the stock market, and is it not likely that that single overseas buyer has taken New Zealand ownership below his 85 percent limit?

Hon TONY RYALL: I do not have the specifics on who that company bought its shares from, but I have received some advice that, as far as Meridian Energy can tell, it believes that that purchaser was purchasing shares from offshore investors.

Dr Russel Norman: Given that the Minister is not exactly sure where the shares has come from, is it not a fact that by taking ownership of an extra 5 percent of Meridian Energy, BNY Mellon may well have reduced New Zealand ownership to as low as 81 percent, well below his 85 percent limit?


Dr Russel Norman: Did the Minister not know all along that once the shares in Meridian Energy were sold, they would quickly start to fall into foreign ownership, just as happened with Contact Energy, and that the 85 percent New Zealand ownership limit that he talked about at great length was simply spin, a bit like the mums and dads spin he talked about?

Hon TONY RYALL: No. I have already indicated to the member that information has been made available to the Minister that makes it clear that the New Zealand shareholding in Mighty River Power has increased since it was floated. We know that in another mixed-ownership model – type company, the Port of Tauranga Ltd, it is the New Zealanders buying out the overseas interests. The only question I would ask is whether the member is suggesting that he himself is buying Meridian Energy shares. Then, I suppose, foreign ownership would be increasing.

Dr Russel Norman: A bit more immigrant bashing from the Minister—wonderful.

Mr SPEAKER: Order! I would say that the score is about one all.

Dr Russel Norman: Is he comfortable with the fact that at its current level of investment BNY Mellon will receive $18 million in dividends from Meridian Energy next year, paid for by the power bills of New Zealand families?

Hon TONY RYALL: I am comfortable that those people who have bought shares in Meridian Energy are entitled to receive the dividends they will qualify for. It would be interesting if the Greens were promising not to allow those people to receive their dividends, and we are still awaiting Mr Norman’s pledge to buy back the shares. He was rather all over the place this morning on the radio, I thought.

Dr Russel Norman: Does the Minister accept that it is difficult for the Greens and others to promise to buy back the shares, because the Government has completely crashed the books by borrowing $60 billion, and when this Government borrows $60 billion and we have no idea what a catastrophe it might leave us next year, that makes it difficult to make that kind of a promise?

Hon TONY RYALL: Well, that is a new position. Having spent most of the time for the last 2½ years saying that the books of the country go backwards through the assets sales process, he is now trying to stand up and say he cannot project what is going to happen. He cannot have it both ways. If he thinks that the Government’s books go backwards because of this, then he should make the pledge to buy these assets back.

Dr Russel Norman: Has the Minister actually read Treasury’s Budget Policy Statement 2012- 13, which shows that the deficit, the operating balance excluding gains and losses—and, for the Minister’s benefit, that is how Treasury measures it—increases as a result of his asset sales programme? Treasury projects that it will increase by $180 million over 5 years, but, given the poor showing by this Government, it will probably—

Mr SPEAKER: Order! That is getting to be a very lengthy question.

Hon TONY RYALL: Over the period, the matter is relatively balanced. What the member fails to appreciate is that there is risk associated with these businesses, and the fact is we have converted some of that risk into cash for New Zealand taxpayers—$4 billion that we do not need to borrow from overseas bankers. If that party opposite truly believed what he just asked in his question, it would promise now to buy back those assets. It would promise to borrow that money because it would be better for New Zealand, according to his logic. But I notice—

Mr SPEAKER: Order! Now the answer is getting very long.

Corruption Perception Index—Ranking

5. Hon KATE WILKINSON (National—Waimakariri) to the Minister of Justice: What recent report has she received on New Zealand’s ranking on the corruption index?

Hon JUDITH COLLINS (Minister of Justice): I am pleased to report to the House that Transparency International has, for the eighth year in a row, ranked New Zealand as the least corrupt country in the world. Out of 177 countries—[Interruption] Well, I know that the Labour Party finds that amusing, but—

Mr SPEAKER: Order! Just continue with the answer; I would be grateful.

Hon JUDITH COLLINS: Out of 177 countries, New Zealand and Denmark are ranked first equal as having the lowest perception of corruption in the public sector. New Zealand’s reputation for being corruption-free is one of its biggest assets internationally. People who do business and invest in New Zealand know they can trust our laws and our Government to protect their rights and freedoms. New Zealand’s ranking by Forbes as the best country for doing business is in part due to the high trust in our public sector. Well done, New Zealand.

Hon Kate Wilkinson: What further steps is the Government taking to maintain this reputation?

Hon JUDITH COLLINS: We cannot rest on our laurels. This year the Government has announced a range of initiatives to combat corruption and further enhance transparency. These include development of the organised crime and anti-corruption legislation, which will strengthen bribery and corruption offences, and I expect to introduce this legislation next year; development of a national anti-corruption strategy to address the prevention, detection, investigation, and remedy of bribery and corruption across both private and public sectors; joining the Open Government Partnership, which is an international partnership committed to promoting transparency and open government; increasing the transparency of the judiciary by making all court decisions available to the public online; and the recent coming into force of the Anti-Money Laundering and Countering Financing of Terrorism Act, which will significantly improve the ability to detect and investigate crimes like corruption.

Chris Hipkins: Will perceptions of corruption in New Zealand be enhanced or diminished by those who actively seek donations, pretend they are anonymous, fail to declare them in their electoral returns, and receive John Key’s endorsement in the process?

Hon JUDITH COLLINS: Well, there are many actions that might well start to diminish the perceptions of corruption in New Zealand, whether it is forging paintings, breaching electoral rules

on election days, or saying that someone has 70 people living in their home so that they can actually breach the Electoral Act. There are lots of things that could diminish the perceptions of corruption in New Zealand, and I think that member should just think of his own history in it.

Poverty Reduction—Government Action

6. JACINDA ARDERN (Labour) to the Minister for Social Development: How many children has her Government lifted out of poverty since 2009, if any?

Hon PAULA BENNETT (Minister for Social Development): There is no one measure of poverty. However, according to the latest Ministry of Social Development household incomes report child poverty rates were flat between 2009 and 2012 on all standard measures. I think that is pretty remarkable considering the global financial crisis and what the country went through at that time. In addition, between 2011 and 2012 inequality as measured by the Gini index fell significantly. In fact, the report shows that the widest gap in incomes actually occurred in the mid- 2000s and peaked in 2004.

Jacinda Ardern: I raise a point of order, Mr Speaker. I may have missed this in the—

Mr SPEAKER: Order! Can I just understand what the point of order is?

Jacinda Ardern: I asked quite a direct question, and I am not sure that the Minister—

Mr SPEAKER: Order! No, very definitely the Minister answered the question immediately.

Jacinda Ardern: If her Government is measuring and acting on child poverty and child wellbeing, why did the United Nations make the criticism in this report that “Budgetary processes did not enable identification of the children in greatest need.”, and that more needed to be done to lift children out of poverty, or is she claiming that the UN is wrong?

Hon PAULA BENNETT: What I am aware of is that because of when we reported back on the United Nations Convention on the Rights of the Child to Unicef it had not actually taken into consideration the Vulnerable Children Bill or the Children’s Action Plan, so that work was not in place. The Vulnerable Children’s Board was not there. There is a whole lot of work that has actually gone on and is not being considered as part of the report. I do not think that anyone denies that there are children living in this country at a standard that we do not find acceptable, but that would be why we have put such a range of things in place that make the biggest difference. We are warming up their homes, we are getting them immunised, we are getting them into early childhood education, and we are making sure that we wrap support around those children who are most vulnerable, and that is making a difference.

Jacinda Ardern: How many children will the Vulnerable Children Bill lift out of poverty, and how?

Hon PAULA BENNETT: The work of the Vulnerable Children Bill goes beyond just those children in poverty. It is working with those most vulnerable who are at serious risk of harm and neglect in this country. We see that that will affect actually thousands of children. You just need to take the number of notifications that we get to Child, Youth and Family, which is around 150,000. Of them, 60,000 require further action. That means that we have nearly 90,000 that do not. We need to work with those children at a different response so we are getting in earlier so that they are safer and grow up and have a happier and healthier life.

Jacinda Ardern: I raise a point of order, Mr Speaker. My question was quite explicit. It was “How many children will the Vulnerable Children Bill lift out of poverty, and how?”, and the Minister said that it was doing something else entirely. In her first answer, though, she claimed that the UN had not taken into account the impact of the Vulnerable Children Bill on poverty, so I am left quite confused by that response.

Mr SPEAKER: I acknowledge the point that the member has made. In my opinion, on this occasion the Minister basically was saying it is impossible to give an exact number. She then talked about thousands being affected. I do not think the way forward is to repeat the question because in

this case I think it has been addressed—I accept it was not to your satisfaction—but I am happy to allow the member an additional supplementary question.

Jacinda Ardern: Will the Vulnerable Children Bill lift children out of poverty?

Hon PAULA BENNETT: It is one part of what is a much bigger piece of work for these children. Actually, they are not getting beaten, hurt, and sexually abused because their parents are poor. That is an ongoing, complex piece of work that needs to take in and address more than just the income of that family. Actually, poverty is relative. We have many, many thousands of people who do not have enough money but they do not treat their children as appallingly as what we have seen. That is where our attention is at, and I am unapologetic about it.

Jacinda Ardern: Does she accept that the last time Unicef acknowledged that New Zealand had made progress on lifting children out of poverty was when Labour introduced Working for Families, which John Key called communism by stealth?

Hon PAULA BENNETT: No, I do not. What I accept is that during the years 2009 to 2012 what we saw was that child poverty rates were flat. What I see is that more than 300,000 homes have been warmed up thanks to this Government. What I have seen is that actually free health care for under-6-year-olds has been extended thanks to this Minister of Health. What I am seeing is an increase in the number of children in early childhood education thanks to that Minister of Education. What I am seeing is an absolute emphasis on those children who are being abused and neglected. It is a comprehensive piece of work for something that there is no easy answer to, but we are willing to put a plan in place and tackle it.

Jacinda Ardern: I am going to try one more time, Mr Speaker. [Interruption]

Mr SPEAKER: Order! Supplementary question, Jacinda Ardern.

Jacinda Ardern: Can the Minister explicitly name what policies her Government has introduced—

Hon Dr Nick Smith: She just did.

Jacinda Ardern: —to try to improve the economic well-being of children who are living in poverty—and not policies on insulation or early childhood education—because their parents do not have enough to survive?

Hon PAULA BENNETT: I could quite happily talk about the 16,548 fewer people on benefits now than there were 1 year ago. I could quite happily talk about the 7,258 sole parents whose children are now better off because their parents are in work thanks to the policies of this Government, so those children are actually in families where is there is a better income than what they would get on a benefit, and they are able to get ahead. I could talk about the economic policies of actually putting that money back into the schools, which helps them. I could talk about KidsCan and the money that we are putting there. I could talk about the money that we have put into breakfasts in schools—

Mr SPEAKER: Order! Supplementary question—[Interruption]. Order!

Jacinda Ardern: What does she say, then, to the two out of five children who are living in poverty but whose parents are in work?

Hon PAULA BENNETT: What I could do is actually quote the United Nations Development Programme Director, Helen Clark, who pointed out in August that “We have poverty here in New Zealand, but it is relative poverty. No one lives below the $2.25 a day. No one even lives under $5 a day.”

Jacinda Ardern: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! A point of order has been raised and I will hear it.

Jacinda Ardern: I asked explicitly what the Government is doing for working families living in poverty.

Mr SPEAKER: Order! The member asked “What would the Minister say to children living in poverty whose parents are in work?”. The Minister then responded and said what she would say.

Oil and Gas Exploration—Permits Awarded for 2013 Block Offer

7. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and

Resources: What recent announcement has he made about Block Offer 2013?

Hon SIMON BRIDGES (Minister of Energy and Resources): This morning I was very happy to award 10 new exploration permits in the Reinga-Northland basin, offshore Taranaki, the Great South Basin, onshore Taranaki, and the East Coast. The competitive block offer approach allows us to award exploration permits to the best bid based on the quality of its proposed work programme. Three of the permits go to international companies new to New Zealand, and I welcome their strong interest in Block Offer 2013. This interest is testimony to the continuing work we have put in to put New Zealand on the map as a key destination for investors and oil and gas exploration.

Jonathan Young: What does Block Offer 2013 mean for the sector and New Zealand generally?

Hon SIMON BRIDGES: Collectively, the permits awarded today have committed work programme expenditure of around NZ$62 million, which is a significant boost in investment in New Zealand. If the work is successful, it could lead to further expenditure of more than $700 million within 5 years. This adds to historically high expenditure last year, when nearly $1.5 billion was invested in exploration and development. Block Offer 2013 will also open the previously unexplored Reinga-Northland basin, one of our promising frontier basins. These results are another important and substantial step in the right direction for New Zealand’s exploration industry.

Student Achievement—Impact of Government Priorities

8. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she satisfied that the Government’s policies are providing every student with the opportunities they need to achieve to their full potential?

Hon HEKIA PARATA (Minister of Education): I am satisfied that we are making progress in many areas, but I will not be fully satisfied until five out of five young New Zealanders are getting the opportunities to achieve their full potential. That is why our Government has been investing in and delivering on a plan to better engage with parents, report on achievement data, value and strengthen the teaching profession, and support 21st century learning environments.

Chris Hipkins: Is she satisfied that all students in New Zealand are being given a fair go at education, given the OECD study released this week that showed that 32 percent of the decline in our maths scores, 72 percent of the fall in our reading scores, and 41 percent of the fall in our science scores can be linked to demographic change and, particularly, increasing inequality?

Hon HEKIA PARATA: The analysis of the OECD report, the elements of which the member has referred to, culminates in a final result that says that of all of the factors that contribute to our rankings, 18 percent is linked to socio-economic status, and 82 percent is linked to the quality of teaching and leadership, to the presence and engagement of students, and to factors such as tardiness. So yes, New Zealand does have a correlation between underachievement and low socioeconomic status. It amounts to 18 percent, based on the OECD results. As Andreas Schleicher, the designer and the manager of the Programme for International Student Assessment, said on Radio New Zealand National this morning, New Zealand does have this challenge, but it also has a record of schools teaching past that challenge. Other countries also face this challenge, and in the Programme for International Student Assessment study it is clear that they have become better at teaching, to change this situation. As he said, poverty is not destiny.

Chris Hipkins: Given her acknowledgment that inequality does play a role in educational inequality, is she satisfied that all students in New Zealand are being given a fair go at education, given the study released this week that shows that the number of students defined as having a low economic, social, and cultural status had increased by 34 percent during this Government’s watch?

Hon HEKIA PARATA: I am satisfied that our over 2,500 schools are doing their very best to meet all of the challenges, including those students who come from homes that face difficulties. My colleague who has already spoken comprehensively in the House this afternoon has indicated the

wide range of initiatives that our Government is investing in, out of school. In addition, within schools we have Social Workers in Schools. We have nurses in schools. We offer breakfasts to those schools that wish to take them up, and 536 schools have taken up that breakfast in schools offer, but not all have. But the sheer fact of the matter is that it is education that can moderate that background, and our challenge is to raise the quality of teaching across all schools so that every young person gets the chance of a better education.

Chris Hipkins: Given that answer, is she satisfied that all students attempting the National Certificate of Educational Achievement (NCEA) are given a level playing field, given that 2,169 students with special learning needs in decile 8, decile 9, and decile 10 schools—our richest schools—received additional assistance with their NCEA exams last year, while only 73 students at decile 1 and decile 2 schools received the same level of assistance?

Hon HEKIA PARATA: I am not satisfied with that, and that is why I have asked the New Zealand Qualifications Authority to investigate how we can ensure that there is greater equity of access for all schools. The obstruction to this is the psych report that is required in order to have access to the tools that will assist. That is exactly the process that we are in the middle of doing, and I expect that this will be available for all schools next year. No school is precluded from applying for access to that tool. What is clear is that we have to give greater assistance to those schools, in order for them to take up the application process, and we are working on that.

Chris Hipkins: How many additional students in low-decile schools, low socio-economic areas, received that level of support for the NCEA exams this year as compared with last year?

Hon HEKIA PARATA: I do not have that detail to hand, but I am happy to find it for the member. What I do know is—

Chris Hipkins: So another review and nothing’s changed—another review and nothing’s changed.

Mr SPEAKER: Order!

Hon HEKIA PARATA: No one is barred from applying for these tools, but schools are not applying for them because they are unable to meet the entry requirements, and now that we know that, we are working with those schools to overcome that obstacle. So this—

Mr SPEAKER: Order! Order! The question has been adequately answered.

Offenders—Community Work

9. MARK MITCHELL (National—Rodney) to the Minister of Corrections: What recent announcements has she made on the number of hours worked by offenders on community work?

Hon ANNE TOLLEY (Minister of Corrections): Today I announced that offenders have undertaken a million hours of community work so far this financial year.

Hon Member: How much?

Hon ANNE TOLLEY: A million hours. Community work is a sentence for lower-end offending that holds offenders accountable for their crimes by undertaking unpaid work in their communities. The types of work undertaken by offenders includes cleaning up graffiti, gardening, clearing litter from public places, and assisting communities to clean up after storms such as the recent flooding in Whanganui. This is not only a suitable punishment of offenders but also allows them to give something back to the communities they have offended against.

Mark Mitchell: How does community work help reduce reoffending?

Hon ANNE TOLLEY: Offenders are less likely to reoffend if they have the skills to find a job. Community work provides an opportunity for offenders to gain new skills and work experience and to develop employment habits. The recently passed Administration of Community Sentences and Orders Act also allows probation officers to direct that up to 20 percent of a community work sentence can be spent in training on basic work and living skills, if it will reduce the offender’s risk of reoffending. The Department of Corrections has already reduced reoffending by over 11 percent

and this change has been important in helping the department further reduce reoffending and reach its goal of a 25 percent reduction by 2017.

Finance, Associate Minister—Responsibilities

10. CLARE CURRAN (Labour—Dunedin South) to the Associate Minister of Finance: Does he still have responsibility for the “Day to day responsibilities, functions and powers of the Minister of Finance in relation to Chorus Limited” as Associate Minister of Finance?

Hon STEVEN JOYCE (Associate Minister of Finance): Yes.

Clare Curran: Does he accept any responsibility at all for Chorus’s current predicament and the troubled roll-out of the ultra-fast broadband programme?

Hon STEVEN JOYCE: Well, there are a couple of problems with that question. One is that the member says that Chorus has a predicament, when I noticed that only a few weeks ago she was saying that there was no predicament and it was crying wolf. The second thing is that this is the member who also told us that copper broadband prices were going to go up hugely. The Commerce Commission has made a decision. We know that. That has made it difficult for Chorus to proceed with its part in ultra-fast broadband. We know that. The Government and its agent Crown Fibre Holdings are now working through solutions with Chorus. It is no more simple or complex than that, Ms Curran.

Clare Curran: How is the potential renegotiation of the Chorus contract fair to other ultra-fast broadband contractors who are fulfilling their contractual obligations without the need for corporate welfare?

Hon STEVEN JOYCE: Well, the member is quite wide of the mark in terms of my responsibilities in that matter. If she has read the day-to-day responsibilities, functions, and powers of the Minister of Finance in relation to Chorus, she will know that that does not come into that category. But, nevertheless, I am sure that a satisfactory solution will be found for this. The reality is that the Minister has got Crown Fibre Holdings working with Chorus as would be appropriate.

Clare Curran: Is not the verbal Ernst and Young report political justification to send Crown Fibre Holdings to the table with Chorus?

Hon STEVEN JOYCE: Well, shock, horror, probe! The reality is that Crown Fibre Holdings did the original negotiations and deal with Chorus in the first place. It would be the logical organisation, irrespective of whether there were one, three, five, or seven reports produced.

Clare Curran: Does he still stand by his statement that “This Government’s ultra-fast broadband project is seen worldwide as a success.”; if so, what world was he referring to, and does he mean “success” in the same way that the asset sales are a success?


Mr SPEAKER: Order! The Hon Steven Joyce.

Hon STEVEN JOYCE: Sorry, I was rushing. I thank the member for her question. Yes, absolutely. And let us compare it with a jurisdiction not too far from here called Australia. I think the member was quite enamoured with the approach in Australia, where it has spent something like 30 to 60 times the amount of taxpayers’ money to achieve fewer houses passed and fewer houses connected on both a comparative and an absolute basis than New Zealand. So, absolutely, I stand by that. I know that the member has hated it the whole way through. I know that she has hated the legislation—

Mr SPEAKER: Order! I thank the Minister. It is clear that he stands by his statement.

Vulnerable Children—Government Response to Unicef Report

11. JAN LOGIE (Green) to the Minister for Social Development: Does the Government intend to respond to the question in UNICEF’s report Kids Missing Out, “why has such a low priority been placed on implementation of children’s rights” in order to protect vulnerable children; if so, how?

Hon PAULA BENNETT (Minister for Social Development): Yes, I do intend to respond. In fact, I am happy to respond right now. I do not agree that it has been a lower priority.

Jan Logie: Why does she think that Unicef’s Deborah Morris-Travers said today that New Zealand has failed to incorporate the United Nations Convention on the Rights of the Child into its domestic law or given priority to addressing child poverty?

Hon PAULA BENNETT: Because she has her own perspective on that.

Jan Logie: Why has she spent so much time and money taking benefits off struggling families instead of focusing on the real ways to lift children out of poverty?

Hon PAULA BENNETT: I have not. Actually, fewer benefits are being cancelled now than they were in 2008—that is a fact. We are actually working more to support people. We have put more money into wrapping support around people earlier, and that is a fact. We are seeing results for it; more than 7,000 are going into work. We are seeing really positive results and I stand by them.

Jan Logie: If the Government is doing so much, why do Unicef, the Child Poverty Action Group, and the Children’s Commissioner all say that you cannot fix child poverty until you measure it and deliver a comprehensive strategy for eradicating it? [Interruption]

Mr SPEAKER: Order! It is the privilege of the Hon Paula Bennett to answer.

Hon PAULA BENNETT: That is from the party that is against us measuring national standards in children. It now wants to have one absolute measure for poverty. We have a number of measures. We do measure it. We are making progress. We put a lot of emphasis on these children, on the economy, on how we get people into jobs, and on how we warm up their homes. That party can have whatever perspective it likes. That is its right. It is independent. That is the beauty of living in a democracy like New Zealand.

Housing, Affordable—New Developments in Auckland and Christchurch

12. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Housing: What new developments in Christchurch and Auckland is the Government progressing to increase the supply of housing?

Hon Dr NICK SMITH (Minister of Housing): Last week I announced a new $12 million 44- unit social housing complex in Hornby involving the New Zealand Housing Foundation, the Salvation Army, Abbeyfield, and the Housing Plus Charitable Foundation, with financial support from the Government and the Canterbury Community Trust, and the Christchurch City Council contributing the land. I have also announced today the Government’s approval for a further $31 million investment by the Government in the Hobsonville Land Co., to enable the next stage of this project to be brought forward. The combination of this funding and the fast-track development approval process from the Housing Accords and Special Housing Areas Bill will enable 1,000 new homes to be built earlier at Hobsonville, and will contribute to the housing accord goal of 39,000 homes over the next 3 years.

Peseta Sam Lotu-Iiga: What specific measure included in these developments will help middle and lower income New Zealanders access good quality housing?

Hon Dr NICK SMITH: The Housing Foundation development of new homes in Christchurch is specifically targeted at families struggling to replace homes lost in the earthquakes and at first-home buyers. The complex also includes homes for vulnerable families to be provided by the Salvation Army, and it further includes Christchurch’s first Abbeyfield house, a British model of elderly housing that is focused on low-income older people who benefit from shared living but who do not need rest home care. The Hobsonville development includes a specific requirement for 10 percent of homes to be under $400,000, and a further 10 percent to be under $485,000. I am pleased to report that these targets are being met, with 248 sales at Hobsonville to date.

Dr Megan Woods: Does he think his Government’s response to the housing crisis in Christchurch of 44 units is sufficient 3 years on from the earthquakes, given that the number of

multi-family households in Christchurch has increased by 36.5 percent, there is a report in today’s Press of 30 people living in a four-bedroom home, there are 5,000 to 7,000 people estimated by the Ministry of Business, Innovation and Employment to be in insecure housing in the city, and there are 15,000 to 25,000 workers arriving for the rebuild?

Hon Dr NICK SMITH: The new initiative announced in Hornby is just one of many. In fact, Labour is now complaining that I am making too many housing announcements. In Christchurch, Housing New Zealand is building a new house every single day—700. It is committed to repairing every one of its 5,000 damaged houses in Christchurch by the end of 2015. The Canterbury Earthquake Temporary Accommodation Service has provided four villages. But I do accept that no amount of work will ever satisfy the whingers in the Opposition.


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