Questions and Answers – May 27

by Desk Editor on Wednesday, May 27, 2015 — 5:22 PM

Questions to Ministers

Social Services—Contracting Arrangements

1. DARROCH BALL (NZ First) to the Minister for Social Development : Does she agree with the Minister of Finance when he said of the delivery of social services, “There is no evidence at all that contracting out, as the member calls it, will reduce service provision.”?

Hon ANNE TOLLEY (Minister for Social Development): Yes.

Darroch Ball : In her Government’s statements indicating a shift in social service provision to a voucher system, is the Minister aware that a 2009 evaluation on a voucher system in Australia, the Netherlands, and the USA found that quality and supply to rural and provincial communities were reduced significantly, aligning with the concerns in the Productivity Commission’s recent report; if so, how is she going to address this?

Hon ANNE TOLLEY : I have made no such statement.

Darroch Ball : I raise a point of order, Mr Speaker. The question was—

Mr SPEAKER : Order! [Interruption] Order! I am going to ask the member to repeat the question. The question as I understood it was more whether the Minister was aware of something. It is difficult to hear; the mikes are not working. So I invite the member to ask his question again.

Darroch Ball : In her Government’s statements indicating a shift in social service provision to a voucher system, is the Minister aware that a 2009 evaluation on a voucher system in Australia, the Netherlands, and the USA found that quality and supply to rural and provincial communities was reduced significantly, aligning with the concerns in the Productivity Commission’s recent report; if so, how is she going to address this?

Hon ANNE TOLLEY : The Government has made no such statements.

Darroch Ball : Is the Minister aware that under her Government’s current investment approach for the delivery of social services a regular flow of regional closures has included services to Veterans Affairs New Zealand and to youth services provided by the Salvation Army, which have shut down in Kaikohe, Matamata, Wairoa, Waipukurau, Cambridge, Ngāruawāhia, and Blenheim?

Hon ANNE TOLLEY : This Government has made no decisions on an investment strategy.

Darroch Ball : That is interesting. How can she justify letting Relationships Aotearoa close its doors on 7,000 clients—operating under her Government’s failing investment approach to social services—and now leaving a huge gap in domestic violence expertise and expertise on working with Māori whanau, with nothing to replace it?

Hon ANNE TOLLEY : None of those assertions are correct. The Ministry of Social Development has worked very hard with Relationships Aotearoa over a number of years. In fact, the figures I produced in this House last week showed that Ministry of Social Development funding had in fact increased by more than a Consumers Price Index adjustment. However, no Government, whatever the colour—whatever the colour—can underwrite with taxpayers money an organisation that is not financially viable. Unfortunately, Relationships Aotearoa is not solvent. Moreover, it was not delivering. It was not actually delivering the services it was paid for. It made the decision to close. This Government is working with a number of service providers to make sure that those clients of Relationships Aotearoa are well looked after.

Darroch Ball : Can she reassure New Zealanders in our regions that social service provision will not continue to decrease, with providers shutting down under her Government’s investment approach, or be under threat of decreased supply and quality by the new voucher system; and how will she replace the vital services already lost?

Hon ANNE TOLLEY : What I can say from this Government is that we are absolutely determined to make sure that every dollar of taxpayers’ money that is invested in our communities actually gets some results. That is what we want. We want to change people’s lives for the better and we want to use that $313 million that the Ministry of Social Development alone spends in our communities supporting the social sector to make a difference in people’s lives.

Building and Housing, Minister—Confidence

2. ANDREW LITTLE (Leader—Labour) to the Prime Minister : Does he have confidence in the Minister for Building and Housing, given that the Minister is considering building houses in Auckland on the site of an electrical substation?

Rt Hon JOHN KEY (Prime Minister): Yes, and I can assure the member that no houses will be built on a substation. But I do agree with this comment supporting the Government’s policy to free up Crown-owned land for new housing: “it is a no brainer to develop vacant government land in Auckland.” That, of course, was from Phil Twyford after the Budget was so well received by Labour, I thought, on Thursday. I thank Labour for the support.

Andrew Little : Did anyone in his Government bother to check with Transpower about why it has a buffer of land around its substation and high-voltage power pylons before Nick Smith said he can jam some houses in there?

Rt Hon JOHN KEY : I may be incorrect, but I do not actually think it was Dr Smith who raised that particular piece of land in question—I think it was Mr Twyford. Actually, as we can see in this photograph, there is lots of land—and oh! What are those? They are houses. So I guess if you are building there—

Hon Gerry Brownlee : Are they next door?

Rt Hon JOHN KEY : Yes, they are right next door. They are just there, you see? If you can build them there, I guess you can build them on the other side, I suppose. [Interruption]

Mr SPEAKER : Order! It is hard enough to conduct question time today when the microphones are not working. I have called for silence to assist Andrew Little with his supplementary question.

Andrew Little : Has he been advised that an explosion and fire at the substation in question cut power to much of west Auckland, with one nearby resident saying: “there was a really loud arcing sound, and a second after that there was a huge explosion.”? Do Bill English’s reassuring words that “I presume it’s not always exploding.” relate to the substation or to Nick Smith’s portfolio?

Rt Hon JOHN KEY : I am sure Mr English is right. I am sure it is not always exploding. Otherwise all of the neighbours here in this photo would be concerned. But let us just get something in perspective here. What the Minister has said is that he thinks—and that is the best advice I have had—there will be around about 430 hectares of land. Is that a shock? Well, no, because the Government actually owns 150,000 hectares of Crown land in Auckland, and I am sure we will eke 430 out from all of that.

Andrew Little : Can he categorically deny that the Māngere Lawn Cemetery is on any of the lists, including the initial list, of sites identified by the Government as residential land that it could build houses on?

Rt Hon JOHN KEY : I do not have the list from the Minister, but I am happy to accept it is quite a good idea to build houses on Crown land. Why do I think that is a good idea? I know, because in 2008 Helen Clark actually announced it. And, believe or not, the programme, Home Ownership on the Public Estate, was called “HOPE”. Back then the Labour Party members had hope for housing in Auckland. Now they have hope that the Labour Party will just survive. [Interruption]

Mr SPEAKER : Order! When I am on my feet members will be quiet.

Andrew Little : How can anyone trust Nick Smith’s denials about his list when that Minister flatly denied any substations on his land on Monday, only to discover a substation on his land on Tuesday?

Rt Hon JOHN KEY : The member is just making it up. There is a thorough process that the Minister is going through to identify what is the best estimate from the Ministry of Business, Innovation and Employment of about 430 hectares out of 150,000. Here is a bit of logic for you. If it is such a hard idea to identify 430 hectares, answer this question: how on earth was Labour going to build 100,000 houses on Crown land? Oh, that is right. If it is Labour’s idea—

Mr SPEAKER : Order! The question has been answered.

Andrew Little : Does he agree with Nick Smith’s assessment of his 500 hectares for affordable housing in Auckland that any house sold, no matter the price, “will be affordable to somebody”; if not, how on earth can he justify leaving him in charge of affordable housing?

Rt Hon JOHN KEY : By definition, that is correct. [Interruption] Well, it is just technically correct. But the aim of what we are going to do on this approximate 430 hectares of land is to do what we did in Weymouth and other places. I go back to the point I was making earlier. If Labour believes it could build 100,000 houses on Crown land, surely it must be possible for National in Government to build a smaller subset than that. We cannot both be right or wrong in this particular instance. Either the land is there or not, and it is there.

Andrew Little : Will he guarantee to every New Zealander that the houses built on the Crown land that he and his Minister are talking about will all be affordable houses for Aucklanders?

Rt Hon JOHN KEY : The member has just defeated his own question because he said—by definition every house is affordable to somebody.

Andrew Little : Given that his housing announcement can now be summarised as a speculator tax that will be lucky to catch a thousand speculators a year, requirements on foreign buyers that are so weak they are a joke, and the building of unaffordable houses among Auckland’s power plants and gravestones, when will he admit that he and his Government have no answers to Auckland’s housing crisis?

Rt Hon JOHN KEY : I can see where the “live in hope” policy came from. Let us just get a few facts on the table. House prices doubled under Labour and went up faster in Auckland than they have under National. Secondly, if the member thinks it is soft, when it comes to foreigners, actually having to give us an Inland Revenue Department number, to have a New Zealand bank account, and to actually have any profits withheld for tax, I would hate to think what he thinks difficult is. If you look at the activity happening in Auckland under a National-led Government and the policies that we have adopted, Aucklanders can see real progress. What they saw under Labour was no progress.

Budget 2015—Impact on Government Debt and Expenditure

3. JACQUI DEAN (National—Waitaki) to the Minister of Finance : How does Budget 2015 continue the Government’s plan to manage spending and start paying down debt?

Hon STEVEN JOYCE (Associate Minister of Finance): on behalf of the Minister of Finance : Spending is firmly under control. Core Crown expenses have fallen from 34.1 percent of GDP in 2008-09 and are expected to drop to 30 percent next year. We have stuck to a $1 billion allowance in Budget 2015, but we have been able to spend $1.5 billion per year on new initiatives because we have identified around half a billion dollars of savings in reprioritisation each year. This spending restraint means that we have come from an $18.4 billion deficit 4 years ago to seeing steadily rising surpluses into the future. In line with our long-term fiscal target, net debt is now expected to fall to 19.7 percent of GDP in 2020-21.

Jacqui Dean : What initiatives are included in Budget 2015 to support more economic growth and jobs?

Hon STEVEN JOYCE : Constrained Government spending is helping to keep interest rates lower for longer, and that makes it easier for businesses to invest and to hire more staff. As part of the Business Growth Agenda, Budget 2015 also invests in a range of initiatives that contribute to better infrastructure, more innovation, and lower costs for business. These include around half a billion dollars of further ACC levy reductions, on top of the $1.5 billion already in place, $86 million for targeted increases in university tuition rates, $100 million from the Future Investment Fund for Lincoln University to rebuild its science facilities; $80 million for research and development growth grants; and $210 million from the Future Investment Fund to invest in the national rail network.

Jacqui Dean : What are Treasury’s latest expectations for job and wage growth for New Zealand families?

Hon STEVEN JOYCE : This Government is working very hard to support higher wages for Kiwi families. Treasury’s Budget forecasts show that there are 194,000 extra jobs in the economy since late 2010, and another 150,000 jobs are expected by 2019. Unemployment is expected to fall below 5 percent in 2016. Average annual wages have increased by $5,700 in the last 4 years and are forecast to rise to around $63,000 a year in 4 years’ time, and that is an increase of a further $7,000. If we take the 8-year period as a whole, the average wage is expected to go up almost $13,000, or over 25 percent, over that period, compared with inflation of less than 14 percent over the same time. So the Business Growth Agenda is supporting a growing economy that is working for New Zealanders.

Jacqui Dean : What other measures are being progressed to support further growth in the regions?

Hon STEVEN JOYCE : Almost all of the initiatives announced in the Budget will support the regions, from increased health and education spending to higher welfare payments for families and reductions in ACC levies. In addition, Budget 2015 also provides up to $25 million to support the establishment of new privately led regional research institutes to undertake scientific research in the regions, $210 million to extend the roll-out of ultra-fast broadband into smaller regional towns, and an additional $150 million from the telecommunications development levy, which will go into rural broadband and filling mobile black spots. The first tranche of the $212 million regional highway package will be $97 million, and up to $52 million will be provided to replace the Waitangi wharf on the Chatham Islands.

Rt Hon Winston Peters : If there is a plan to start paying down debt, what is the total debt attributable to the Crown, as opposed to core Crown debt?

Hon STEVEN JOYCE : I do not have that figure in front of me for the member, but if he is happy to put it down in writing, then I am more than happy to give an answer to it.

Local Government—Advice on Māori Participation

4. MARAMA FOX (Co-Leader—Māori Party) to the Minister of Local Government : What advice has she received through report back from officials in March this year about Māori participation in local government processes, and what consideration, if any, has been given by her as a result of that advice?

Hon PAULA BENNETT (Minister of Local Government): I have not yet received the advice that the member is referring to, because officials are taking more time to work on it than originally thought. What I would say to the member, though, is that I am very supportive of Māori representation within local councils, and I certainly support that and would like to see that increasing. For example, here in the House, over 20 percent of the members of Parliament are Māori. However, I think it is quite interesting to point out that 72 percent of our Māori MPs are in general seats or are from the list, and, actually, 28 percent are from Māori seats. We can see the skew that is going towards people being selected and put forward in general seats, and that is what I would like to see happening on local councils.

Marama Fox : Although we celebrate the Te Arawa partnership proposal and the decision that was made in Rotorua, what is the Minister prepared to do to remove unfair provisions in current legislation that allow for the establishment of Māori wards on local councils to be overturned by referendum, given this discriminatory legislation applies only to Māori representation, as witnessed by the result in New Plymouth?

Hon PAULA BENNETT : Although I respect that that is the member’s stance, it is actually not mine, and I do not think that it is unfair that people have their say and that there is a referendum. As I say, it is not about us not wanting to see an increase of Māori on councils, and the Te Arawa example is a good one, where they have given them voting rights and this has gone through. But, as such, I think that if Māori wards are being put up, then the current system that they go through a referendum is fair.

Marama Fox : Does the Minister accept that given that this piece of legislation applies only to Māori and Māori wards, it is, in fact, unfair?

Hon PAULA BENNETT : Other groups that are set up are very different from what is proposed for Māori wards. For example, they are advisory groups that might be through different ethnicities. They are not similar to what is proposed for Māori wards. They are different and, as such, there are special provisions within the law for them.

David Seymour : What advice and consideration has the Minister applied to similarly numerous ethnic groups, such as Chinese and Indian New Zealanders, when it comes to participation in local government?

Hon PAULA BENNETT : I cannot think of any advice that I have received on that to date.

Finance, Minister—Statement

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does he stand by his statement, “we would expect to be able to continue to expand the use of user charges”; if so, what further user charges will he introduce?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance : Yes, in the context it was made. The Government is not actively looking to identify further user charges. However, there may be occasional instances that arise where it is fairer that the users of a service pay for it, rather than taxpayers—such as the biosecurity and customs clearance charge on international passengers, introduced as part of the Budget.

Grant Robertson : Will he rule out user charges in the health sector?

Hon STEVEN JOYCE : There are absolutely no plans for new user-charges in the health sector. I think we could go on this all afternoon, Mr Speaker.

Mr SPEAKER : Order! [Interruption] Order! The question has been answered.

Grant Robertson : Is the $150 million telecommunications development levy passed under urgency last Friday a user charge given that Spark, one of the country’s biggest telecommunications providers, announced within an hour of the bill’s introduction in the House that it was passing the levy on to consumers?

Hon STEVEN JOYCE : It was actually announced at the last election and was campaigned on at the last election, and was already in place. For Spark to suggest that it is going to pass it on, in terms of an increase, suggests that it is not passing it on already, because it is already being charged. But, actually, on this side of the House, we think it is a good idea to have a levy across the whole network to maintain—

Grant Robertson : Is it a user charge?

Hon STEVEN JOYCE : —shh, Grant. And—

Grant Robertson : I raise a point of order, Mr Speaker. That was a direct question, and the Minister has failed to answer the question as to whether it is a user charge.

Mr SPEAKER : The difficulty is that it was not a direct question. If the member had simply asked—and I think the way forward is that I am going to give him an additional supplementary question. If the question had been simply “Is it a user charge?”, then he might have got an answer, but when the member took the opportunity to include a Spark announcement etc., that then gave the Minister the opportunity to use that as part of his answer. I will allow the member an additional supplementary question.

Grant Robertson : Is the $150 million telecommunications development levy passed under urgency last Friday a user charge?

Hon STEVEN JOYCE : The $150 million extension of the telecommunications development levy over 3 years is a user charge, and it is a user charge across the whole of the network to encourage the development of the periphery of the network, which is the rural areas that would otherwise not get good telecommunications development. This Government is in favour of telecommunications extensions and broadband extensions in rural areas.

Grant Robertson : Does he think that New Zealanders who are now paying more to travel, more for their broadband, and more if they sell their houses will think that they are paying a user charge or that they are just paying new taxes from a Government that said “No new taxes.”?

Hon STEVEN JOYCE : They will think that they are paying a user charge. Firstly, the telecommunications development levy is already in place. They will not be paying anything more, no matter what the mouthpiece for Spark on that side of the House says. That is not going to happen. The second thing is that I think New Zealanders can make a very clear distinction between user charges and increases in, for example, income taxation—as regularly promised by the Labour Party—or, indeed, means testing of superannuation.

Grant Robertson : Does he agree with his National Party colleague Ian McKelvie that people-smuggling and the movement of sheep are much the same; if so, will any sheep that need to be returned from the dodgy deal with the Saudi farm be forced to pay his border arrivals tax when they come back?

Mr SPEAKER : In as far as there is ministerial responsibility, the Hon Steven Joyce.

Hon STEVEN JOYCE : I am sure Grant sat up all last night to try to do that one, but it is just too tortuous to actually require an answer.


6. PAUL FOSTER-BELL (National) to the Minister of Education : How is the Government assisting New Zealand students who need the most support?

Hon HEKIA PARATA (Minister of Education): Talofa lava, Mr Speaker. I was pleased to announce last week as part of Budget 2015 that this Government is investing an extra $62.9 million of operating funding over the next 4 years to better assist children with special education needs to learn and achieve. The funding includes an additional $39.5 for the ongoing resourcing scheme and $23.3 million for extra in-class teacher-aide support. This represents a significant investment in our most vulnerable students and builds on the increased funding under this National Government. Spending on special education has increased significantly, up approximately 26 percent from 2008.

Paul Foster-Bell : How many children will benefit from this investment?

Hon HEKIA PARATA : The ongoing resourcing scheme supports the children with the highest special education needs. The additional funding in Budget 2015 will provide support for an extra 500 students, taking the total number supported by this scheme to approximately 9,000. The additional spending for in-class teacher-aide support will benefit approximately 1,500 students from years 1 to 13. This extra classroom support will assist teachers to personalise students’ learning to encourage their participation and achievement.

Chris Hipkins : Talofa lava, Mr Speaker. How are students most in need being catered for when 60 percent of the support for National Certificate of Educational Achievement candidates with special needs is going to students at decile 8, 9, and 10 schools—the wealthiest 25 percent of schools—while only 6 percent is going to students in the lowest-decile schools?

Hon HEKIA PARATA : The number of approved applications for the special assessment conditions, which I believe the member is referring to, increased by 42.8 percent in 2014. We are reliant on schools applying, and we have made the eligibility criteria much simpler for schools to apply since it was introduced by that member’s administration, with the burden of bureaucracy, and we have seen an increase, and 98.4 percent of the applications received were approved. There is still work to be done on helping schools to apply, but there is no ceiling on those who do apply.

Chris Hipkins : Given the significant growth in the number of students applying for special assessment conditions over the past few years and the knowledge that has existed now for several years that those are predominantly in high-decile schools, what is the Government doing to ensure that students with special needs in low-decile schools get access to the same support as students in wealthier areas are getting?

Hon HEKIA PARATA : We have made it easier for schools to apply. We have simplified—

Chris Hipkins : It’s not working.

Hon HEKIA PARATA : Well, it is clearly working if the member understood that it has increased significantly in the period that it has been operating.

Hon Phil Goff : The lower deciles are missing out.

Hon HEKIA PARATA : Well, we work with schools. We make it easier, but we do not take the choice away from them to use this. And we have had 98.4 percent of the applications approved. Clearly, almost 100 percent of applications are approved. There is no ceiling. We are working with schools, but schools themselves know which of their kids need the support, and therefore schools need to take advantage of the simplified process.

Skycity, Convention Centre—Revised Preliminary Design

7. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development : How much smaller in percentage terms is the floor area of the main exhibition hall at the New Zealand International Convention Centre announced yesterday when compared to the 10,000 square metre exhibition space heralded in 2011 when SkyCity became the Government’s preferred development partner; and how many fewer exhibitors does such a reduction represent in a “world-class convention centre”?

Hon STEVEN JOYCE (Minister for Economic Development): The member uses an interesting term in his question when he suggests heralding. I cannot actually pinpoint whether heralding occurred, but I can tell the member that the proposed size of the exhibition space has varied a lot as this project has developed. For example, the Crown’s expressions of interest called for greater than 6,000 square metres; Skycity’s initial concept images suggested 10,000 square metres but included catering areas. It then became 7,500 square metres in the exhibition centre—

Dr David Clark : I raise a point of order, Mr Speaker.

Mr SPEAKER : I will hear the point of order, but if it is that you have not got your answer yet, I think that if we gave the Minister time to answer, it may well arrive. The Hon Steven Joyce—if he could give us the answer.

Hon STEVEN JOYCE : Thank you. It then became 7,500 square metres, following independent advice from Horwath HTL as to what was required. It then became 8,500 square metres at concept design, followed by 8,768 square metres at the first preliminary design stage, and now dropping to 8,100 square metres in the revised preliminary design. For completeness, and to be helpful to the House, the percentage movements are up 67 percent, down 25 percent, up 13 percent, up 3 percent, and down 7.6 percent, and for the member’s particular example, down 19 percent. In terms of how many exhibitors each change represents, that would depend on how much space each exhibitor occupied.

Dr David Clark : I raise a point of order, Mr Speaker. I understand that the first part of my question was answered. If we could just look at strictly the second part—and it was a question on notice.

Mr SPEAKER : The second part was also answered as well.

Dr David Clark : There is a definition that they are working with of what a world-class—

Mr SPEAKER : In my opinion, there was absolutely no doubt the question has been answered. If the member wants to now take it further, the answer is using a supplementary question.

Dr David Clark : What is 2,850 as a percentage of 5,000?

Hon STEVEN JOYCE : I am not quite as good at the old mental calculations as I was in the old days, but 2,850 as a percentage of 5,000 is definitely more than half and definitely less than 60 percent.

Dr David Clark : When the maximum conference capacity in the Skycity deal announced yesterday is just 57 percent of the maximum capacity mooted before other bidders were knocked out of the process, which the Auditor-General described as neither transparent nor even-handed, how can he say the taxpayer is getting a good deal?

Hon STEVEN JOYCE : I am sorry for the member, but the supposition in his question is incorrect on about three levels.

Dr David Clark : What value has been attributed in the final deal to the additional income Skycity has received as a result of the laneway retail development?

Hon STEVEN JOYCE : Actually, that is an interesting question. I have been advised of a value of around $4 million and, of course, Skycity has increased its contribution by $28 million, so it would suggest that the Crown is doing better under this revised deal than it was previously.

Hon Member : Well, it couldn’t get worse.

Hon STEVEN JOYCE : Well, it happens to be true.

Dr David Clark : How can he tell New Zealanders he has delivered the promised world-class convention centre when he has delivered a convention centre 19 percent smaller, which at maximum capacity accommodates just 57 percent of the conference guests mooted when Skycity edged other competing bidders out, and which is built off the back of problem gambling?

Hon STEVEN JOYCE : The member is incorrect in a number of ways, and I will take a little bit of time because he obviously did not listen to the answer to the primary question.

Hon David Parker : You always do.

Hon STEVEN JOYCE : This is an important issue, I presume—otherwise the member would not ask the question. The initial expression of interest from the Crown called for 6,000 square metres. It then became 7,500 square metres, following independent advice from Horwath HTL as to what was required. The actual second revised preliminary design is 8,100 square metres. I have also sought advice in terms of the current size of the revised International Convention Centre, and it has absolutely no negative impact on the initial assessment of economic benefit as supplied by Horwath HTL. So the member is simply wrong, and trying to create a figure and then subtract a percentage is, frankly—although typical—actually quite silly.

Financial Advice—Review of Financial Advice Legislation

8. KANWALJIT SINGH BAKSHI (National) to the Minister of Commerce and Consumer Affairs : What action is the Government taking to improve the quality of financial advice?

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): Strong capital markets are integral to any productive and competitive economy, as businesses need access to capital to grow. Access to quality financial advice is an important part of ensuring that they function well. The Government is reviewing the Financial Advisers Act and the Financial Service Providers (Registration and Dispute Resolution) Act to ensure that these pieces of legislation are working as well as they can be. Yesterday we released an issues paper for public consultation as part of this review, and the aim is to identify opportunities to limit complexity, identify any barriers to advice, and ensure that appropriate levels of consumer protection are in place.

Kanwaljit Singh Bakshi : What areas will the issues paper seek feedback on?

Hon PAUL GOLDSMITH : We want to ask all stakeholders and consumers key questions such as whether people feel they have access to good quality financial advice and whether they understand how advisers are regulated. We also want to find out whether the complexity of regulations has prevented people from considering advice and we also ask whether compliance costs have made advice less accessible. I encourage all New Zealanders with an interest in this issue to have their say. Making sure that our capital markets are strong and stable is just one of the many goals set by our Business Growth Agenda.

Prime Minister—Statements

9. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister : Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Firstly, let me acknowledge that this will be the last question that the member will ask me as co-leader of the Greens. I look forward to questions from James Shaw next week. The answer is yes.

Dr Russel Norman : Does he stand by his statement with regard to climate change that New Zealand is a country that is doing its fair share to tackle climate change, given that New Zealand’s net greenhouse gas emissions have increased by 13 percent since he has been Prime Minister?

Rt Hon JOHN KEY : Yes, I do stand by that statement. I think the member is being, as I said before, selective with the truth. If you look at New Zealand’s total emissions now, they are about 4 percent lower than they were at the peak of 2005, and New Zealand’s net emissions are at about the same level as they were in 2007.

Dr Russel Norman : I seek leave to table Parliamentary Library research showing a 13 percent increase in New Zealand’s greenhouse gas emissions.

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

Dr Russel Norman : Is the Prime Minister saying that the Government’s own greenhouse gas inventory, released just a month ago, which shows a 13 percent increase in net greenhouse gas emissions from 2008 to 2013, is incorrect when it shows that net emissions have increased by 13 percent?

Rt Hon JOHN KEY : No, but I am saying that the member is, I think, being selective because of the time frame that has been used. As I said, net emissions are about the same as they were in 2007.

Dr Russel Norman : How much have net greenhouse gas emissions increased since he has been Prime Minister from 2008?

Rt Hon JOHN KEY : I do not have that information with me.

Dr Russel Norman : Why does he not know how much New Zealand’s net greenhouse gas emissions have increased since he has been Prime Minister, given that it is probably one of the most important things that will determine the kind of planet our children inherit?

Rt Hon JOHN KEY : Because the member put down a general question. If he wants a specific question about climate change, he should direct it to that Minister.

Dr Russel Norman : Does the Prime Minister not think that climate change is one of the most important issues that a Prime Minister should be aware of, given that it will have a phenomenal impact on his children, my children, and their children if we do not reduce our emissions?

Rt Hon JOHN KEY : Yes, I think it is an important issue, and that is one of the reasons why the Government has an emissions trading scheme and it is why the Government has pursued quite a number of policies. I think if we look at ourselves on a relative basis—I have always said that I do not think we should be a leader but more of a fast follower in this area, and I think we are.

Dr Russel Norman : Is it being a “fast follower” to increase New Zealand’s net greenhouse gas emissions by 13 percent in the years since he has been Prime Minister, according to the Government’s own greenhouse gas inventory—

Hon Dr Nick Smith : No—selective.

Dr Russel Norman : And Prime Minister, do not listen to Nick Smith. He has—

Mr SPEAKER : Order!

Rt Hon JOHN KEY : I think the member is being selective with the data. New Zealand’s total emissions are now 4 percent lower than they were in the peak of 2005, and net emissions are at about the same level as they were in 2007.

Dr Russel Norman : If the vast majority of those who submit on the Government’s climate change targets to take to the Paris conference call for a target of 40 percent under 1990 levels, will he listen to them?

Rt Hon JOHN KEY : I will, of course, listen to them, but it does not mean I will agree with them.

Saudi Arabia—Cabinet Paper on Payments

10. Hon DAVID PARKER (Labour) to the Minister of Foreign Affairs : Who was paid the first $4 million in respect of the multimillion-dollar payments to Saudi Arabian interests, referred to in the Cabinet paper of 13 February 2013 he tabled yesterday, and how was the value calculated and split between “intellectual property which the Saudi investor brings to the platform, the services and in-market networks he will contribute” and “the settlement of the long-running dispute”?

Hon MURRAY McCULLY (Minister of Foreign Affairs): The $4 million was paid to Hamood Al Ali Al Khalaf Trading and Transportation, under a contract for services between the Ministry of Foreign Affairs and Trade and Hamood Al Ali Al Khalaf Trading and Transportation. The value was identified in negotiations between the parties. This was a process overseen by senior officials of the Ministry of Foreign Affairs and Trade, and the final agreement was signed off by the Secretary of Foreign Affairs and Trade with the support of myself as foreign affairs Minister and the Cabinet.

Hon David Parker : I raise a point of order, Mr Speaker. My question asked for the split between those different cost centres.

Mr SPEAKER : The question very clearly did. Could the Minister address the part of the question as to the split of the $4 million.

Hon MURRAY McCULLY : The matters that were considered by the officials who conducted the negotiations are referred to very fully in the Cabinet paper that I tabled in the House yesterday. They relate to all of the costs associated with shifting the operations that were previously based in New Zealand to a new hub in Saudi Arabia. They included the intellectual property of the Al Khalaf group and access to its physical location in Saudi Arabia, and, as I say, many other items that are enumerated in the Cabinet paper that I tabled in the House yesterday.

Hon David Parker : I raise a point of order, Mr Speaker. I did ask for the split, and I still have not received it.

Mr SPEAKER : I agree with that, and we have now tried on two occasions to get it. The way forward now is with further supplementary questions. I invite the member to ask further supplementary questions.

Hon David Parker : If this businessman needed New Zealand to pay many millions of dollars for the model farm using New Zealand technology and New Zealand sheep, what intellectual property justified this multimillion-dollar payment?

Hon MURRAY McCULLY : As the paper that I tabled yesterday makes clear, the New Zealand Government specifically resisted the concept of compensation to the Al Khalaf group. But no doubt they would have had in their minds the fact that the actions of the previous Labour Government had exposed the New Zealand Government to legal claims estimated to be up to $30 million. The honourable member may wish to ask himself whether he, as a member of that former Government, carries some of the responsibility for that sorry state of affairs.

Hon David Parker : 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.

Hon David Parker : That is all very interesting, but my question was—

Mr SPEAKER : Order! Can I invite the member to re-ask that question.

Hon David Parker : If this businessman needed New Zealanders to pay for the model farm using New Zealand technology and New Zealand sheep, what intellectual property justified this multi-million dollar payment?

Hon MURRAY McCULLY : As I indicated in my primary answer, the agreement that was struck between officials and the Al Khalaf group included all of the intellectual property associated with shifting the Awassi sheep breeding operation from New Zealand to a new location in Saudi Arabia. Also in the minds of officials would have been the fact that the Al Khalaf group had taken legal advice and could mount a legal claim against the Government for an amount estimated to be up to $30 million. It is a bit rich for members of the former Government, who exposed New Zealand to the risk of a $30 million claim, to berate members of this Government for resolving the issue for one-third of that amount.

Hon David Parker : Given that his Government renewed the customs export prohibition order on animals for slaughter in 2010, and that it is perfectly legal for New Zealand to have a policy banning live sheep exports, how can he justify paying millions of dollars to settle a hollow legal threat?

Hon MURRAY McCULLY : I agree that the customs export prohibition order was renewed by the current Government. What was different was that we did not mislead the Saudi investors about the consequences of the roll over of that order. We fronted up and told them the truth, when the previous Government had actively misled them over many years and exposed the New Zealand taxpayer to a claim of up to $30 million.

Hon David Parker : Was the real reason the first $4 million was paid to pay off people whose influence in Saudi Arabia was getting in the way of the Gulf free-trade agreement?

Hon MURRAY McCULLY : I made it clear that one of the consequences, sadly, from this whole saga was that the relationship between New Zealand and Saudi Arabia was poisoned, and that poisoned relationship spilled over into the wider Gulf Cooperation Council. But I have also made it clear that the officials negotiating this matter had to consider the fact that there was a looming claim for up to $30 million, resulting from the actions of a Government of which the honourable Mr Parker was a member.

Hon David Parker : Can the Minister point to any other example where the New Zealand Government has ever paid millions of dollars to an overseas businessman in order to advance a free-trade agreement?

Hon MURRAY McCULLY : I cannot point to any such example, because I do not think New Zealanders had a Government as stupid and dishonest as the Government that Mr Parker was a member of.

Rt Hon Winston Peters : Is it not a fact that this is a new low in our international relationships, and that this is a multimillion-dollar bribe that has been given to private interests in Saudi Arabia? Is that not a fact?

Hon MURRAY McCULLY : I have made it clear that the officials who were dealing with this matter would have had on their minds the damage that had been done to New Zealand’s fading relationship with Saudi Arabia and the wider Gulf, as well as having on their minds the exposure of the New Zealand Government to a substantial claim for damages resulting from the actions of the Government of which the right honourable member was a member.

James Shaw : What legal advice did the Government receive as to the likely success of the potential claim by Mr Al Khalaf?

Hon MURRAY McCULLY : As I have made clear, the Government did not wish to proceed down that path, and it entered into talks with the parties to try to avoid such an outcome. I am satisfied that we would never have done so had we not been advised that the claim had some prospect of success. The member may wish to look at the Cabinet paper and see that there is a redaction there, which is a reference that would have been disadvantageous to the interests of the New Zealand taxpayers.

Hon David Parker : Why is he the first Minister in history to back a multimillion-dollar facilitation payment, which in other jurisdictions is called a bribe?

Hon MURRAY McCULLY : Unfortunately, the current Government inherited a serious problem in 2008, and—[Interruption]

Mr SPEAKER : Order! The question has been asked. The Minister has now got a right and a responsibility to answer it.

Hon MURRAY McCULLY : It is clear to the Government that the relationship with the Saudi Arabian Government was poisoned, that the relationship with the Gulf States had been poisoned, and that the New Zealand Government was also exposed to a legal claim for up to $30 million. One solution was for us to go on misleading people, as the previous Government had done, but we decided it was time to front up and try to resolve that situation.

James Shaw : How can the public be assured of the credibility of the tender process when it was overseen by the Ministry of Foreign Affairs and Trade, which had already decided to compensate Mr Al Khalaf and is also responsible for negotiating the trade deal that was being blocked by Mr Al Khalaf?

Hon MURRAY McCULLY : I have already told the House yesterday that the tender process was overseen by Ministry of Foreign Affairs and Trade officials, New Zealand Trade and Enterprise officials, and an independent expert who was also a previous chief executive of Landcorp. I am satisfied as to both the capabilities and the integrity of all of the individuals involved.

Photography, Aerial—Measures to Protect New Zealand Collection

11. IAN McKELVIE (National—Rangitīkei) to the Minister for Land Information : What work is she aware of that has been completed to safeguard New Zealand’s historic aerial photo collection?

Hon LOUISE UPSTON (Minister for Land Information): Land Information New Zealand is leading a project in partnership with regional councils to scan negatives of historical aerial photographs. This imagery consists of around 650,000 film negatives of photographs taken from 1936 to 2005. These images contain a wealth of information, spanning a third of New Zealand’s modern history. Land Information New Zealand is working to safeguard New Zealanders’ ability to use these photographs by digitising them to make them increasingly available to the public.

Ian McKelvie : What benefits do historical aerial photographs have in New Zealand?

Hon LOUISE UPSTON : Historical aerial photographs have a variety of uses. They show us changes in land use and coastal changes, and assist with archaeologic and cultural research. By using these images we are able to make better decisions on future land use. An example is developers who have been able to use these photographs quickly to assess whether land can be safely used for the rebuild of housing, for example, in Canterbury. [Interruption] It is a shame that the members opposite are not interested in the rebuild of Canterbury. The work that Land Information New Zealand is doing contributes to this Government’s investment in open data by making location-based information increasingly available.

Dairy Industry—Dairy Processing in Waikato

12. BARBARA STEWART (NZ First) to the Minister for Primary Industries : Does he believe Hong Kong-based He Run International Investment’s plan to build a dairy factory in Otorohanga will benefit the Waikato and wider New Zealand dairy industry; if so, why?

Hon NATHAN GUY (Minister for Primary Industries): I have not seen the full detail of the particular proposal so I cannot comment specifically, but, generally, new dairy investments reinforce the fact that the medium to long term outlook for the New Zealand dairy industry is indeed very positive. These investments often generate hundreds of jobs and millions of dollars for local economies and help support regional economic growth.

Barbara Stewart : Does he believe it is right that Fonterra farmers in the King Country will have to supply a direct competitor with 50 million litres of milk at just above cost because this Government wants foreign companies to have a hand up?

Hon NATHAN GUY : I would not agree with the latter part of that question. To the first part of it, if the member was up to speed with what is happening in the dairy industry, she would in fact know that recently Minister Goldsmith and I announced that we have requested a report, beginning next month, on the state of competition in New Zealand’s dairy industry, which will, in fact, address this.

David Seymour : Can the Minister explain the difference between a dollar of foreign capital invested from Hong Kong, as the member noted in her primary question, and a dollar of foreign capital from Australia, Switzerland, the US, the UK, Canada, France, Germany, or Russia?

Mr SPEAKER : Order! I think there is very little ministerial responsibility for that.

Barbara Stewart : Given He Run International Investment follows the larger Yashili factory at Pōkeno, Yili’s expansion of Oceania Dairy, Bright Dairy – controlled Synlait, and Danone’s purchase of Gardians, does he have any concern that we are on the path to becoming farm labourers in our own country?

Hon NATHAN GUY : No, I reject the latter part of that question. In fact, I am embarrassed that the member has even bothered to raise it in the House.

Barbara Stewart : I seek leave to table an extract from the Hong Kong company list showing He Run International Investment was only incorporated at the beginning of May.

Mr SPEAKER : Leave is sought to table that information from the Hong Kong company register. Is there any objection? There is no objection. It can be tabled. Document, by leave, laid on the Table of the House.

Question No. 2 to Minister

Hon GERRY BROWNLEE (Leader of the House): I raise a point of order, Mr Speaker. I did not raise this at the time, because I thought it was not of such significance at the time. But I do think in general it would be useful if you could have a look at question No. 2 and perhaps the paperwork that was provided that led to a question saying that this was a proposal to put houses on the site of an electrical substation, when quite clearly that is completely nonsensical and should not have been allowed.

Mr SPEAKER : I will have a look for the member’s sake, but it was an authenticated question, and I think—[Interruption] Order! I am speaking. It was based, I think, on authentication that was gained from a paper tabled yesterday in the House, but I will have a further look at the question.


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