QUESTIONS TO MINISTERS
Economy—Cost of Living
1. Hon DAVID CUNLIFFE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “for most New Zealanders an indicator of how well the economy is doing is whether or not they can keep up with the cost of living”?
Rt Hon JOHN KEY (Prime Minister): I think the word was “indicator”, but, yes, and we have official statistics that regularly measure those things. Last year average weekly wages went up by 2.8 percent, compared with inflation of 1.6 percent. The year before that, average weekly wages went up by 2.9 percent, compared with inflation of 0.9 percent. The New Zealand income survey shows that the median personal income from all sources went up by 2.7 percent in the last year and median household income went up by 4.1 percent. So although people’s circumstances are all different, it is very clear that, on average, cost of living increases have been quite modest and New Zealanders and their families have been getting ahead.
Hon David Cunliffe: What does he say to the West Coast family who say that their power bills are bleeding them dry to the point where they have had to switch off their hot water, or the elderly couple who say that they, like hundreds of others, are dreading the winter months to come and the power bills that go with them? Is this how we want New Zealanders to live?
Rt Hon JOHN KEY: I say to those families that they should follow David Cunliffe on Twitter, when he managed to deliver an own goal that showed how electricity prices skyrocketed under Labour, actually, but have not been going up nearly as quickly under National.
Hon David Cunliffe: How does the Prime Minister expect everyday New Zealanders to keep up with the cost of living when many of them will be paying 7 or 8 percent more for their power and some face increases of up to 24 percent in this year alone?
Rt Hon JOHN KEY: One of the hallmarks of this National-led Government that is in contrast to the previous Labour Government is that, in fact, wages have been going up faster than the price of inflation. It is worth remembering that in terms of electricity prices, they make up less than 4 percent of the CPI. So in overall terms, when one looks at the CPI, some things go up and some things go down. For example, car prices went down, clothing and footwear prices went down, and household contents went down. So in many categories lots of things went down; the odd things went up. Overall, most consumers have not actually faced power increases of that level.
Hon David Cunliffe: If that is all so rosy, why did the Prime Minister try to blame Transpower when Transpower’s charges make up less than 10 percent of electricity prices and Transpower stated that its increases are likely to be less than $1 a month on average; and is the truth of it not that the power price increases are going to the privatised companies and enriching the foreign buyers that he is in league with?
Hon Bill English: What a load of nonsense.
Rt Hon JOHN KEY: To quote the Deputy Prime Minister, what a load of nonsense. If you look at what has been driving up power prices insomuch as there have been rises at all for consumers, it has been a combination of Transpower increases and lines companies, if one looks at those two together. Interestingly enough, though, if we look at, say, for instance, the last 5 years of power price increases—
Dr David Clark: Out of touch—5 long years.
Rt Hon JOHN KEY: Well, 5 long years with half the power increases, because they have been 19.7 percent as opposed to 39.1 percent for the 5 years under Labour.
Louise Upston: Do official measures of the cost of living include electricity prices, and what does this tell us?
Rt Hon JOHN KEY: Yes, a very good question. The electricity prices in the CPI differ slightly from those that the Ministry of Business, Innovation and Employment, but they tell the same story. Over the last 5 years, going back to December 2008, electricity prices in the CPI rose 19.7 percent, and in the 5 years before that they rose 39.1 percent. So it is no wonder people think that power prices are high—in 5 years under Labour, electricity prices went up by 40 percent. That is why you cannot trust Labour when it comes to power prices.
Hon David Cunliffe: When will the Prime Minister listen to New Zealanders who are facing median house prices that are up by 8.6 percent on last year, when first-home buyers are now being shut out of the market, which he has made safe for speculators?
Rt Hon JOHN KEY: One of the things that the Government has been doing is working hard to ensure, actually, that first-home buyers can get into the market. There are a few ways of doing that. Firstly, the release of land will have a substantial impact. But let us just ask any first-home buyer we like what they would prefer to pay for their floating mortgage rate. Would they prefer to pay around 5 percent at the moment under a National-led Government, or 11 percent under Labour, which is what it was when we came into office?
Hon David Cunliffe: Speaking of interest rate rises, given that wholesale rates appear to be on their way from 5.75 percent to 8 percent, can he confirm that a household currently paying $500 a week in mortgage costs will face another $136 a week by the time that mortgage hits 8 percent?
Rt Hon JOHN KEY: For a start off, it is likely—I think the interest rates will make a gradual return towards a slightly more normalised level, but it is worth understanding that we have interest rates that are on a 50-year low. Secondly, if we want to talk about individual consumers, I am surprised that the Leader of the Opposition is worried about them at the moment, because he showed absolutely no worry about them when interest rates were at 11 percent. When the Government was putting so much pressure on spending, it was forcing up inflation and forcing the Reserve Bank to raise rates. In fact, let us just take that household that has a $200,000 mortgage. That household, in comparison, is paying $200 a week less today than when Labour left office. You see, when we go to the polls on 20 September and the voters ask themselves who they can trust with the economy, it certainly will not be Labour that will be the answer coming from their TV sets.
Hon David Cunliffe: When the Prime Minister said in 2008 that New Zealanders should “not be fearful of their next bill”, why are so many people now fearful of their housing, power, and other bills, under this uncaring National Government?
Rt Hon JOHN KEY: For a start off, the member is wrong. I did not make that statement, and he will never actually be able to demonstrate that I did. I was asked about the definition of poverty, and I said that the definition, at least of being well off, is that you are not fearful of a bill. But if it comes to bills, then I say this to New Zealanders. What would they rather have: a 19.7 percent increase in power prices under National, or a 40 percent increase under Labour over 5 years, and 72 percent? Would they rather have interest rates at about 5 and a bit percent, or would they rather have them at 11 percent? Would they rather have an economy under a National-led Government that is growing in excess of 3.5 to 4 percent, with 1,500 people a week coming off welfare and going to work?
Would they rather have an economy that most people around the world have envied? And would they rather have an economy that is actually going to be back into surplus?
Mr SPEAKER: Order!
Hon David Cunliffe: I seek leave, on this occasion, to table media reports from 2008 that quote the Prime Minister—
Mr SPEAKER: Order! Media reports are freely available to members who want them.
Hon David Cunliffe: I raise a point of order, Mr Speaker. I accept your general ruling and am ordinarily respectful of it, but on this particular occasion the Prime Minister disputed the quote, which came directly from a media report. I therefore seek leave to table the report—
Mr SPEAKER: Order!
Rt Hon JOHN KEY: That is not what I said. I made it quite clear that the Leader of the Opposition applied the quote—[Interruption]
Mr SPEAKER: Order! This is a point of order. I have given the Prime Minister the floor to speak to the point of order.
Rt Hon JOHN KEY: The Leader of the Opposition, if he wants to go and check his Hansard, applied a quote to something I did not say.
Mr SPEAKER: Order! I now accept we are moving into the area of debate. I am going to let the House make a decision on this. Leave is sought to table this particular document. Is there any objection? There is objection.
2. Hon KATE WILKINSON (National—Waimakariri) to the Minister of Finance: What will be the focus of the Government’s economic programme going into the election on 20 September?
Hon BILL ENGLISH (Minister of Finance): The Government will focus on building on the recovery that is now under way to support New Zealand households and businesses, to create more jobs, and to earn higher incomes. Now that we have been able to manage through a very significant recession and the impact of the earthquake, and clean up some of the damage done by the last Labour Government, we will look forward to helping New Zealanders organise the capital and the skills required to take advantage of the very substantial opportunities offered by a growing Asia- Pacific region.
Hon Kate Wilkinson: What progress is the Government making with its economic programme and how is this helping households and businesses?
Hon BILL ENGLISH: First of all, the recovery in the economy is principally the work of New Zealand’s households and businesses, supported by Government. Government policy that has helped to support that has been to get the Government finances under control and get back to surplus; and to focus on all those areas across the economy that support growth, such as better infrastructure investment, a tidier, more effective, and more efficient system for giving young New Zealanders skills, reducing welfare dependency, re-regulating the use of our natural resources so that we can be a prosperous economy as well as a clean, green economy, and, of course, there are many other ways we have been supporting New Zealand households and businesses.
Hon David Parker: Why is he claiming that everything is going swimmingly when the $1 billion deficit to 31 January in his Government’s accounts is $637 million worse than he forecast in just December?
Hon BILL ENGLISH: As I have pointed out regularly in this House, we can control expenditure to a significant extent but revenue can fluctuate. In this case—
Hon Members: Ha, ha!
Hon BILL ENGLISH: Well, bear in mind that in the previous financial year we finished about $3 billion ahead of budget. On the most recent figures in this year tax revenue is about $800 million
behind budget. The people who should take the most notice of that are the Opposition parties, because it makes it pretty clear there is not room to splash cash everywhere in election year.
Hon Kate Wilkinson: What are some of the ongoing economic challenges the economy faces, and how will the Government work to overcome them?
Hon BILL ENGLISH: Probably the main economic challenge is to manage our way through the next growth cycle, avoiding the excessive damage created during the last growth cycle under the last Labour Government. For instance, it is inevitable that interest rates will rise some time this year, according to decisions of the Reserve Bank. We want to make sure that interest rates are not driven to 10.5 to 11 percent by bad Government policy and excessive Government spending. That is probably one of the best things we can do to support New Zealand households.
Hon David Parker: Is it correct that having inherited close to zero net Government debt he is soon to clock over $60 billion of borrowings; and is this more than any other Minister of Finance in New Zealand’s history in nominal terms and the worst in real terms since Muldoon?
Hon BILL ENGLISH: No, but it is another symptom of “Planet Labour”, a place where the global financial crisis and the Christchurch earthquakes never happened. Voters will increasingly see a party marooned on “Planet Labour”—1970s Fabianism at its worst.
Hon Kate Wilkinson: Going into the election on 20 September, what economic policies will this Government reject because they would impose costs on households and cost jobs?
Hon BILL ENGLISH: It is pretty clear from lessons learnt from the last cycle through the early 2000s up to 2008 what policies to avoid. One of those is a sharp increase in Government spending, because that will push interest rates up much faster than they need to go. The second one would be imposing a costly emissions trading system, which is guaranteed to put power bills up by around $500 per year and, in combination with a single-buyer electricity authority, would make household electricity bills significantly more expensive, not cheaper, as the Opposition claims.
Grant Robertson: I raise a point of order, Mr Speaker. I would ask you to reflect on the question that was just asked there to the Minister of Finance in terms of ministerial responsibility by the way the question began with reference to the election. I know that in the past when the Labour Party has tried to raise matters that were talked about in an election campaign we have been told that that has not necessarily been the responsibility of a Minister. I just wonder whether those sorts of questions are actually in order.
Mr SPEAKER: And in this case I think it was a line-ball call by myself at the time. The question went along the lines of what economic policies the Government would reject in the lead-in. I think on that basis it was enough to get it across the line for the Minister to address it as a responsibility of the current Government. But I will be mindful of these sorts of supplementary questions between now and 31 July.
3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he have confidence in all his Ministers; if so, why?
Rt Hon JOHN KEY (Prime Minister): Yes; because they are competent and hard-working and they are working for a brighter future for all New Zealanders.
Rt Hon Winston Peters: How can he have confidence in Judith Collins when she chose not to visit some of the many other Kiwi businesses in Shanghai but just so happened to pop in to her husband’s company for a cup of tea?
Rt Hon JOHN KEY: I do not think it is quite correct to describe it as her husband’s company. Her husband is a director of Oravida. My understanding is that on other occasions she has popped in to promote other New Zealand companies.
Rt Hon Winston Peters: Does he believe that Judith Collins should have reported her visit to Oravida in her travel report to Cabinet; if not, why not?
Rt Hon JOHN KEY: I think that as a general rule a Minister actually would not record all of the visits they make on a particular trip, because that would include an excessive number of visits that people make. They are very busy. Generally, those travel reports cover the main things, and the main purpose of the trip was in her capacity as Minister of Justice.
Rt Hon Winston Peters: Has Judith Collins produced evidence to him that she informed Oravida that it may not use any photos or publicise the event as an endorsement of its products, as stipulated in paragraph 2.89 of the Cabinet Manual?
Rt Hon JOHN KEY: No, but I have not asked her for that. I have accepted the member at her word.
Rt Hon Winston Peters: In the interests of transparency, how is Judith Collins’ behaviour not in direct contravention of paragraph 2.87 of the Cabinet Manual, “No Minister should endorse in any media any product or service.”, and why, unlike Richard Worth and his case, is this not a sackable offence?
Rt Hon JOHN KEY: It is actually quite clear. The Cabinet Office advice is the same as it was under the previous Government, and that is that it is quite—
Hon Trevor Mallard: No, no.
Rt Hon JOHN KEY: Actually, yes, yes—it is identical to that under the previous Government. It is quite possible—in fact, it is quite within the rules—for a Minister to be involved in the promotion of a company but not the endorsement of a company. For an endorsement to take place, a Minister would actually have to say the words themselves, produce those words, or put out a statement or a speech. And they actually would probably have to do that in isolation for one company over another. None of that actually occurred.
Rt Hon Winston Peters: Is it a fact that this issue of the different treatment of a former and now a current Minister is explained only because he is gravely concerned that if he is unable to do negotiations with other parties, Judith Collins and other MPs in his caucus are very prepared to do them instead?
Rt Hon JOHN KEY: No.
Grant Robertson: With reference to the Prime Minister’s answer to the supplementary question before last, when he said that an endorsement would require the Minister to “say the words”, is he aware of the statement on the Oravida website where the Minister said, depending on the translation, that she was either full of praise or endorsing the products of Oravida?
Rt Hon JOHN KEY: Well, I am certainly aware of reports that that was on the Chinese version and taken down, but what is quite clear from the Cabinet Office—
Grant Robertson: Why is that not an endorsement?
Rt Hon JOHN KEY: Well, as the Cabinet Office would tell the member—and it has been true for successive Governments—in fact, just because a company says something, just because a company makes a comment, just because it writes it down, it does not count as an endorsement; it counts as a promotion.
Rt Hon Winston Peters: I seek the leave of the House to table a record of the New Zealand companies that have an office in Shanghai—none of which got a visit from Judith Collins.
Mr SPEAKER: What is the source of the document?
Rt Hon Winston Peters: An impeccable source: the Parliamentary Library.
Mr SPEAKER: Well, then it is available to all members if they want to see it. [Interruption] Order! The member will resume his seat.
Rt Hon Winston Peters: I requested this information. It is not available to all other members. It was sent specifically to me. That is why I wish to table it.
Mr SPEAKER: Order! It seems to me that if any other members wanted it, they could get it, but on this occasion I am quite happy to put the leave. Leave is sought to table this particular document prepared for the Rt Hon Winston Peters by the Parliamentary Library. Is there any objection to that being tabled? There is none.
Document, by leave, laid on the Table of the House.
4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his Government’s policies?
Rt Hon JOHN KEY (Prime Minister): Yes.
Dr Russel Norman: How can he stand by his policies when it is his policies that have driven up the average yearly household power bill by $360 a year since he became Prime Minister or, as he said in his earlier answer, by 20 percent?
Rt Hon JOHN KEY: I think it is firstly important to understand what has been driving any increase in power prices, and it has largely been expenditure either by Transpower or lines companies. The member may not like that, and I actually accept that consumers will not necessarily like paying a little bit more, but I also remember the howls of anguish and concern from Aucklanders, for instance, when, essentially, Transpower failed because of the problems out in its station. So in the end we do actually have to spend money upgrading our infrastructure. What I do know, though, and what I have seen are reports on how much more consumers will actually pay under a Labour-Greens power policy, and that is provided by analysts who have looked at their policy.
Dr Russel Norman: Does the Prime Minister realise that, in fact, most of the power price rises are coming from the big electricity power companies—the five big oligarchies—that are controlling the electricity sector; and why is the Prime Minister so vehemently defending the big power companies and their price hikes, when around the country families are receiving letters in the post, telling them that their bills are about to go up even more, sometimes by as much as 24 percent?
Rt Hon JOHN KEY: I will start off, I think, by saying that the member himself would have to accept, if he is being objective, that a 24 percent increase was because the consumers were on the wrong tariff rate and, on the same basis, some have gone down. But if he wants to talk about the five oligarchies, if he ever got to power, there would be only one oligarchy, and that would be a very interesting place for competition.
Dr Russel Norman: Why does the Prime Minister so vehemently defend the big power companies that are driving up the price of power for ordinary New Zealand households?
Rt Hon JOHN KEY: I do defend the rights of Transpower and the lines companies to invest in their infrastructure. I think, in the end, we can either have a grown-up debate about the fact that we need a stronger infrastructure, or not. But, in fact, there is actually no evidence to support the claim that the power companies themselves are making excessive profits. If they were, their share prices would be responding in that direction.
Dr Russel Norman: Why is the Prime Minister protecting the big power companies that are stifling innovation, stifling competition, and blocking lower prices for ordinary Kiwi households?
Rt Hon JOHN KEY: Far from blocking competition, this is actually the Government that has introduced a system that allows consumers to switch with great ease, and hundreds of thousands have. It is very interesting—the co-leader of the Greens seems to be rewriting his energy policy on his feet, because if anyone wants to stifle competition and drive up prices, the way to do that is to create one single buyer of electricity, which, by the way, the analysts think will massively drive up prices. And if that is not a wedge through their hearts, attached to it may as well be the bill for $500 for his emissions trading scheme—but, by the way, they will have plenty of time to look at the bill because they will not have a job under a Greens Government.
Dr Russel Norman: If the Prime Minister is so convinced that the current market is competitive, why are people all around the country receiving notifications in the post that their power bills are set to rise again, sometimes by as much as 24 percent, even as overall demand for electricity is falling; is this not a classic example of abject market failure?
Rt Hon JOHN KEY: No, and the fastest way to have market failure is to not have a market, which is what the Greens are proposing. Secondly, I go back to the points I made to the Leader of the Opposition, as inconvenient as they were for him because they tell such a good story. Last year average weekly wages went up 2.8 percent and inflation went up 1.6 percent. This year average weekly wages went up 2.9 percent, compared with inflation of 0.9 percent. Correct me if I am wrong, but that member, Russel Norman, was happily supporting the Labour Government while it was producing this chart, which David Cunliffe helpfully sent to everybody because I am sure everyone is following him on Twitter. So that is what they got to see—this massive line that looks like, I do not know, the number of people who want to vote National. It looks like our polls. That is actually the price increases under a Labour Government.
Housing, Affordable—First-home Buyers in Regions
5. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Housing: Does he believe the Government is making it easier for young people in the regions to buy their first home?
Hon Dr NICK SMITH (Minister of Housing): Yes, because house prices in the regions have risen more slowly under National, because interest rates have been significantly lower under National, and because housing affordability has improved in every region under National with National’s policies of expanding the Welcome Home Loan, expanding the KiwiSaver first-home deposit subsidy, and introducing the FirstHome initiative. Let me give you the specific numbers for a region like Hawke’s Bay. Between 2000 and 2008 house prices went up 116 percent, and interest rates went from 7 percent to 11 percent, meaning the cost of the average mortgage trebled. Under National, in contrast, house prices in Hawke’s Bay have gone up by 3 percent, not 116 percent, and interest rates have come down from 11 percent to—
Grant Robertson: I raise a point of order, Mr Speaker. [Interruption]
Mr SPEAKER: Order! Point of order, Grant Robertson.
Grant Robertson: My point of order was that that answer had been going on very long, but I could add to it that the Minister stayed on his feet for an extensive period after you—
Mr SPEAKER: Order! The answer was very long. I was hoping it was coming to an end and kept thinking that it was.
Phil Twyford: Is he making it easier for first-home buyers in Napier, Hamilton, and Rotorua, where the proportion of first-home buyers has dropped by more than double the national average since his Government signed off on loan-to-value ratio lending restrictions, and when will he concede that his housing policy has failed ambitious young New Zealanders trying to buy their first home?
Hon Dr NICK SMITH: If you want to know what a failing policy is around house ownership, let house prices more than double, as they did during Labour’s period. The best way we can help Kiwi families be able to own their own home is to keep interest rates low and to constrain house price inflation, and that is exactly what has occurred under this Government.
Phil Twyford: Why did he agree to the Government signing off on loan-to-value ratio lending restrictions being applied to the entire country when 95 percent of house price inflation is taking place in Auckland and Canterbury, incomes are flat-lining for most people, housing costs are soaring, and interest rates are heading north of 8 percent according to the banks, or are they just scaremongering too?
Hon Dr NICK SMITH: The first point is that interest rates today are 5.85 percent. When we came into Government they were 11 percent. So even if the Reserve Bank moves by the odd point later this week, interest rates will still be significantly lower than they were after 9 years of a Labour Government—[Interruption] Nine long years, as my colleagues point out. I would further make the point that the idea that the Reserve Bank can apply its monetary policy on a regional basis is the sort of loopy, lunatic economics that we expect from members opposite.
Tim Macindoe: In what regions has there been an improvement in housing affordability under this National-led Government?
Hon Dr NICK SMITH: The data from the independent Roost Home Loan Affordability Report make for interesting reading. In Northland, housing affordability under this Government has improved by 49 percent. In the Waikato, where the member comes from, housing affordability under this Government has improved by 39 percent. In the Hawke’s Bay, housing affordability has improved by 42 percent. In the Manawatū, it has improved by 49 percent. In Nelson and Marlborough, my home community, it has improved by 37 percent. In Otago and Southland, it has improved under this Government by 37 percent. The message is very clear—
Mr SPEAKER: Order!
Phil Twyford: Will he admit his mistakes and change his policy to support the regions being exempt from loan-to-value ratio lending restrictions; if not, how does he justify making regional New Zealand pay the price for his failure to deal with property speculators in Auckland?
Hon Dr NICK SMITH: It has been a long-established consensus across this Parliament that the Reserve Bank is independent. I still would love to know—and I am sure electors would love to know, as they reflect on the sort of interest rates they might pay in future—just what is the policy of members opposite. But I say again: the idea that you can have different monetary policy in different regions of New Zealand is just loopy economics.
Phil Twyford: How can he continue to claim that his policies are fair and even-handed for all New Zealanders when he continues to shut first-home buyers out of the housing market in parts of New Zealand where house prices are static or even declining?
Hon Dr NICK SMITH: The policies that this Government has adopted of ensuring lower interest rates for longer; of increasing housing supply; and of initiatives like the Welcome Home Loan expansion, the first-home deposit scheme, and the FirstHome scheme all ensure that New Zealanders get a fairer crack at home affordability than they ever got under the previous Labour administration.
6. IAN McKELVIE (National—Rangitīkei) to the Minister for Economic Development: What recent reports has he received on the manufacturing sector?
Hon STEVEN JOYCE (Minister for Economic Development): Thank you for the question. Yesterday Statistics New Zealand released its Economic Survey of Manufacturing for the December 2013 quarter. I am pleased to report to the House that the total manufacturing sales volumes rose 5.7 percent in the quarter. This is the largest seasonal-adjusted increase since March 1995. Meat and dairy product manufacturing rose 15 percent, which is obviously good, but what is really good is that the whole sector of manufacturing expanded. Sales for eight of the other 12 manufacturing industries rose in the quarter. For example, transport was up nearly 6 percent, furniture was up 6.2 percent, and seafood was up 2.7 percent. It is fair to say this is, undeniably, very disappointing for those trying to manufacture the manufacturing crisis.
Ian McKelvie: What other reports has he seen on the manufacturing sector?
Hon STEVEN JOYCE: Well, I have also seen the most recent BNZ-Business New Zealand Performance of Manufacturing Index—
Hon David Parker: Non-primary exports are down.
Hon STEVEN JOYCE: —somebody should give this guy a question so he can ask about the crisis—which measures whether the sector is expanding or contracting. The index currently stands at 56.2. It has now been in expansion for 16 consecutive months. I have also seen a survey of small and medium sized manufacturers by Mind Your Own Business. Its latest research shows that in the last 12 months, manufacturing small to medium sized enterprises have seen more revenue growth than any other sector, and in 2014 “they expect to do even better.” With a continuing high New Zealand dollar and a fragile global economy, it has, undoubtedly, been difficult for some
manufacturers and exporters, so the continued growth in the sector is a real testament to manufacturing businesses and their workers. Sadly, I think the Opposition—
Hon David Cunliffe: I raise a point of order, Mr Speaker. I am loath to interrupt the Minister, but there has been something of a habit in this question time for a range of Ministers to drone on and on and on in a seeming competition to give the longest answer to a parliamentary—
Mr SPEAKER: Order! [Interruption] Order! I thank the member for his very helpful comment. Some answers have been significantly longer than they need to be in answering the question.
Ian McKelvie: What steps has the Government taken to further grow the manufacturing sector?
Hon STEVEN JOYCE: This is a very important sector, and we have a remarkable number of innovative companies in the high and medium-high technology industries that are carving out market share on the world stage in tough international markets. The Government’s Business Growth Agenda—
Hon David Cunliffe: The what?
Hon STEVEN JOYCE: —contains something like 58 separate initiatives. You might learn something, Mr Cunliffe; I will slow down for you. There are 58 separate initiatives to encourage greater business investment in research and development, which is at the heart of the sector’s success. This includes establishing Callaghan Innovation; lifting research and development cofunding to $142 million a year; the introduction of repayable funding for start-up technology companies, distributed by new private sector technology-led incubators; new grants to help companies take on—
Hon David Parker: I raise a point of order, Mr Speaker.
Mr SPEAKER: Order! I can anticipate the point of order, and it is that the answer is going on too long.
Hon David Parker: This has happened all question time, and every time it has taken a point of order for you to agree—
Mr SPEAKER: Order! The member will resume his seat. I will make a decision as to when I think the answer has gone on too long. I think the member has, on both occasions recently, raised the question. I am always eternally hopeful that answers are about to come to an end. I am inclined to think they are, and then the Ministers get a second breath of wind and continue. It is not helpful to have long answers, and members should take note that lengthy answers do lead to the possibility of disorder in the House.
Hon STEVEN JOYCE: I would certainly accept your point. It is just that in this particular instance the Leader of the Opposition was declaring his lack of knowledge of the plan, and I thought it was important—
Mr SPEAKER: Order! That is not helpful. I do note that in that very lengthy answer the Minister did get his second breath of wind when there was an interjection. If members want shorter answers, that is helped if they do not interject during question time.
Hon David Cunliffe: I raise a point of order, Mr Speaker. It may assist the Opposition, if the length of answers is deemed to be appropriate by your good self, if we were to ensure that our questions were of a similar length. That would rebalance things between the Government and the Opposition, but it might not lead to good order in the House.
Mr SPEAKER: Order! One of the problems today is that some of the questions have been quite long as well.
Freshwater Management—National Objectives Framework
7. EUGENIE SAGE (Green) to the Minister for the Environment: Will she strengthen the proposed water quality national objectives for human health so that New Zealanders can safely swim in our rivers?
Hon AMY ADAMS (Minister for the Environment): Consultation on the amendments to the National Policy Statement on Freshwater Management and the creation of the National Objectives
Framework has recently closed, and no final decisions have yet been made. What I will say to the member is that the proposals will help to improve water quality across New Zealand, particularly through the national bottom lines and a collaborative option for water management. Many of the attributes necessary to meet bottom lines will be attributes that will also improve water towards swimmability. As I have said before, where a community determines that particular rivers or lakes are valued for swimming, the National Objectives Framework provides a robust, scientifically backed set of attributes that help communities to plan to meet that objective. These are bottom lines, not targets, and they do not limit the ability for communities to set an objective of swimmability. In fact, they make it easier to do so.
Eugenie Sage: Is the Minister saying that New Zealanders just have to give up on central government taking the lead and ensuring our rivers are clean enough to swim in?
Hon AMY ADAMS: No. Central government has finally, under this National-led Government, stepped up and shown leadership through the creation of a national policy statement, through the creation of a National Objectives Framework, through the creation of community-led collaborative planning, and through the institution of water metering and water management techniques. Finally, they are getting some action from central government.
Eugenie Sage: Does the Minister agree with the Otago Regional Council’s submission that the Government’s proposed national bottom lines for water quality would result in water bodies that are unsafe for swimming, recreation, and food gathering, including water that is potentially toxic, smothered in periphyton, unable to sustain sensitive fish species, unsafe for swimming, unsafe for allowing your dog to swim in, and unsafe for stock consumption; if not, why not?
Hon AMY ADAMS: Absolutely not, because it is finally the decision of each community as to what objectives they want for their water quality. For the first time ever those communities will not be allowed to choose toxic, unhealthy water levels, because the National Government is insisting on national bottom lines. Above that, it is for each community led by their regional council, to choose their objectives and to work towards them. So if the Otago Regional Council is concerned about it, they are in exactly the right position to address it.
Health and Safety, Workplace—Reform
8. CHRIS AUCHINVOLE (National) to the Minister of Labour: What recent progress has the Government made on health and safety reform in New Zealand?
Hon SIMON BRIDGES (Minister of Labour): The biggest health and safety reforms of the last 20 years were brought one step closer yesterday when I introduced the Health and Safety Reform Bill to this House. The bill is part of the Government’s Working Safer reform package, which will improve health and safety throughout New Zealand and play an important role in meeting our target of reducing workplace injuries and fatalities by 25 percent by 2020. I look forward to wide support in this House for this legislation.
Chris Auchinvole: What does the bill specifically do in order to improve the health and safety culture in New Zealand?
Hon SIMON BRIDGES: The bill repeals and replaces the current health and safety legislative framework. It will beef up penalties for non-compliance, including new enforcement tools and court powers, place more of an onus on managers and directors to manage risk, and require greater worker participation so that workers are more involved in health and safety in their workplace. The bill will be supported by two tranches of regulations, as well as codes of practice and guidance. Achieving the step change we need to see in health and safety is not something that the Government can do alone. Business and workers must all share responsibility for sustainable change.
Darien Fenton: What extra resources will be available to enforce the new obligations on worker engagement and participation under the bill and how will the training of workers be funded?
Hon SIMON BRIDGES: It is a good question from the member. She will be well aware that a significant—and perhaps the most important—part of the Working Safer reform package was the
establishment of WorkSafe New Zealand. The funding for that body has gone from $50 million as a regulator to some $80 million, and I expect within that it will be putting resources into worker participation issues.
Hon Damien O’Connor: In regard to accountability and penalties for health and safety breaches that the Minister is referring to, who was Judge Farish referring to when she said that the decision not to proceed with the case against Peter Whittall was made “at the highest levels”—was it the Minister of Labour or was it the chief executive of the Ministry of Business, Innovation and Employment?
Hon SIMON BRIDGES: I played no part in the decisions in relation to Peter Whittall and his prosecution.
Power Prices—Estimated Increase
9. DAVID SHEARER (Labour—Mt Albert) to the Minister of Energy and Resources: What is his Ministry’s best estimate for the percentage increase in retail electricity prices for the period 1 February to 1 August this year for a household of four persons, averaged across New Zealand?
Hon SIMON BRIDGES (Minister of Energy and Resources): Firstly, can I congratulate the member for asking me his first ever question—[Interruption]
Mr SPEAKER: Order! The Minister will simply stand and answer the question that has been asked.
Grant Robertson: I raise a point of order, Mr Speaker. [Interruption]
Mr SPEAKER: Order! This is a point of order and it will be heard in silence.
Grant Robertson: You have now had cause to intervene in every answer from a Government Minister today to a question from an Opposition member, where they have breached the Standing Orders. I would ask that we be granted an additional supplementary question in light of that.
Mr SPEAKER: I will consider that when I hear the quality of the supplementary questions that are being asked. The Hon Simon Bridges will now rise and answer the question that has been asked.
Hon SIMON BRIDGES: The ministry’s best estimate, based on increases in transmission and line charges, is an average increase—[Interruption]
Mr SPEAKER: Order! I am having trouble hearing this answer, and I think it would be helpful to the members if we could have—
Hon David Cunliffe: I raise a point of order, Mr Speaker. You are quite right to point out that there is some noise coming from the Opposition benches behind me. But you may wish to note that that occurred after the previous exchange of points of order, where you ruled that it was a matter of the supplementary questions and not the Minister’s original answer that—
Mr SPEAKER: Order! I think the House needs to settle down. The question has been asked and I require the Minister to now answer that question. Where we go to with further supplementary questions is a matter I will consider.
Hon SIMON BRIDGES: The ministry’s best estimate, based on increases in transmission and line charges, is an average increase of 2.6 percent from 1 April. Advertised price increases tell only, of course, part of the story. There are sharp deals for customers who shop around. For example, discounts of between $80 and $300 are available, effectively reducing a power bill by up to 13.8 percent for an average consumer. I would also remind members on that side of the House that this Government has halved the runaway price increases that they sat back and did nothing about on their watch.
David Shearer: Does he stand by the Prime Minister’s statement that electricity increases “are a result of the increasing costs they face because of the upgrade of the grid by Transpower”, or that of Transpower itself, which said that “transmission charges made up only a small part—less than 10 percent—of … power bills” and therefore could not possibly be responsible for those increases?
Hon SIMON BRIDGES: I agree with the Prime Minister.
David Shearer: Can he fall back on the consumer price switching model, as he calls it, when the agency Covec, on behalf of the Ministry of Business, Innovation and Employment, produced a report that said that the switching had no significant effect on retail prices or on competitiveness?
Hon SIMON BRIDGES: That is not quite what it said. As I said in the answer to the primary question, people who do shop around can see some $80 to $300 discounts. We are seeing increasingly sharp discounts for paying online, paying on time, and so on. Of course, those discounts I talked about are in the vicinity of being much higher than the overall price increases that we are seeing from 1 April.
David Shearer: Why does he tell the people of New Zealand, many of whom have written in to me—with price increases of up to 20 percent—that their prices are going up by only 2.6 percent, when at the same time the prices of electricity here in Wellington are going up by 7 percent and only less than half of that can be attributed to Transpower and lines charges?
Hon SIMON BRIDGES: Obviously, at 20 percent—24 percent, I think the member has talked about—they are absolute outliers. I have already given the average, which is much lower than that. But it is hard to take a lecture on policy from the Labour Party, when David Parker and Russel Norman last week would not answer any more questions on the detail of their so-called NZ Power plan.
David Shearer: Does the Minister agree with the Prime Minister that the electricity market is “operating effectively and transparently”; if so, why is the Electricity Authority investigating it for a lack of transparency?
Hon SIMON BRIDGES: The reforms of this Government have halved the steep power price increases we saw in a tweet from David Cunliffe last week when he railed against price increases. We believe we have got a competitive market that is becoming more competitive and where there are a lot of options for customers who shop around. But I happen to agree with the Electricity Authority that transparency is something where there is room for improvement, and that is why I am focused on that and am making sure that it is focused on that and that it is working on that issue vis-à-vis power bills.
David Shearer: I seek leave for the Electricity (Transparency) Bill—in light of his answer just now—in my name to be introduced as a member’s bill and set down for first reading at the next sitting day.
Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.
Health Services—West Auckland
10. Dr PAUL HUTCHISON (National—Hunua) to the Minister of Health: What investment is the Government making in improving health services in West Auckland?
Hon TONY RYALL (Minister of Health): Waitematā District Health Board will invest $10 million to upgrade and expand the emergency department at Waitakere Hospital. The expansion will see the department almost double in size to 19 new cubicles, four new rooms, and better facilities for patients and whānau. This investment will contribute to the significant improvements that people in west Auckland have had over the last 5 years in terms of health services.
Dr Paul Hutchison: Why are the improvements to Waitakere Hospital’s emergency department needed?
Hon TONY RYALL: Over the past 8 years the number of patients presenting to the department has increased substantially. I have to say that health services at Waitakere have improved significantly since 2008, when the emergency department was regularly closed, it was not operating 24 hours due to a lack of staffing, and newspaper headlines shouted “Hospital emergency department in ‘crisis’ ” and “Hospital staff shortages cut emergency care”. Meanwhile the local MP and Minister of Health, David Cunliffe, was, famously, running the show back then.
Freshwater Management—Regulation of Pollution
11. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: Does she think that companies should be allowed to pollute our rivers for an unlimited amount of time using section 107(2) of the Resource Management Act 1991, or does she think that the use of “exceptional circumstances” should be time limited?
Hon AMY ADAMS (Minister for the Environment): Despite the allegation in the member’s question, companies are not allowed to pollute our rivers for an unlimited period of time. Section 107(2)(a) of the Resource Management Act, which the member refers to, has been used on only rare occasions, which have been subject to stringent oversight and control by the Environment Court and never for an unlimited period of time. I note that the Local Government and Environment Committee has considered and rejected the member’s proposal to amend that section, and, in my view, rightly so.
Catherine Delahunty: So will she support my member’s bill, which would limit to 5 years the amount of time companies can pollute our rivers without impacting on current consents; if not, can she explain why not any further than she already has done, because it was not a good enough reason, I am sorry.
Hon AMY ADAMS: Well, I am devastated that the member did not like the answer I have already given to that question, but I can tell her that, no, I will not be supporting it, for the same reasons that the select committee has recommended that the bill not proceed: it is not necessary and it is not helpful.
Catherine Delahunty: Is she saying that the majority of New Zealanders—in fact, 92 percent in a recent poll—are wrong to expect our rivers, such as Tarawera, to be clean enough to swim in?
Hon Gerry Brownlee: No; just that your bill’s hopeless.
Hon AMY ADAMS: Well, I am not sure that I can improve on Gerry Brownlee’s answer to that question, but I would certainly dispute the finding that she has reported as giving that example. But what I do say to the member is that there is no evidence that her amendment to section 107(2)(a) of the Resource Management Act is necessary or helpful.
Justice, Minister—Visit to China and Potential Conflict of Interest
12. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Justice: Did she note her visit to the Shanghai offices of Oravida Limited in her report to Cabinet on her Ministerial visit to China in October 2013; if not, why not?
Hon JUDITH COLLINS (Minister of Justice): As that member knows from the information provided a month ago, the answer is no. Just as when Labour was in office, Cabinet reports do not include every minor stop on a trip. In the same way, my stopping off at Cafe Flat White in Beijing was not included in the Cabinet report. As that member already knows, I agreed that I would call in to see Oravida’s Shanghai office if time allowed. I will continue to do everything I can to support “New Zealand Inc.”, especially when I am overseas.
Grant Robertson: In light of that answer, why did she name the businesses that she visited in her report to Cabinet on her June 2012 visit to China, but failed to do so for her visit to Oravida in 2013, which was the subject of a formal invitation?
Hon JUDITH COLLINS: The member must be referring to my visit to the Red Pear Company in the Yunnan Province. Primarily because it took about 3 hours to get there, have the visit, and then go back again. It was a very long visit. It was not a 20-minute stop.
Grant Robertson: After receiving the invitation on 9 October to visit Oravida in Shanghai from the chairman Stone Shi, did she discuss the visit with either of the other two directors of Oravida Ltd?
Hon JUDITH COLLINS: I had already spoken to the chairman and the managing director on 7 October when they invited me, and I have said that any request like that I would normally like to have in writing so that I could release, which of course I did.
Grant Robertson: What does she say to former National Party president Michelle Boag, who has described her decision to go to Oravida as naive?
Mr SPEAKER: The Hon Judith Collins, in so far as there is ministerial responsibility.
Hon JUDITH COLLINS: I would say that that was very sweet that she feels about me like that. It is very sweet of her.
Grant Robertson: Given the condemnation of her visit from the editorial writers of the New Zealand Herald, the Dominion Post, the Sunday Star-Times, and numerous political commentators, will she now admit that the visit to Oravida did give rise to a conflict of interest and that she should apologise to New Zealand taxpayers for making that visit on a taxpayer-funded trip?
Hon JUDITH COLLINS: I am always very concerned when I have any editorial that agrees with me in any way, because I represent the people of this country.
Grant Robertson: I seek leave of the House to table the trip report provided to Cabinet by Judith Collins on her June 2012 visit to China that lists companies she visited.
Mr SPEAKER: Leave is sought to table this particular Cabinet document. Is there any objection? There is objection.
Grant Robertson: I seek leave of the House to table the trip report to Cabinet by Judith Collins on her October 2013 visit to China, which did not name Oravida, which she visited.
Mr SPEAKER: Order! Leave is sought to also table this particular Cabinet document. Is there any objection? There is objection.