Questions and Answers – May 7

by Desk Editor on Thursday, May 7, 2015 — 4:51 PM

Questions for oral answer

1. Budget 2015—Surplus

1. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does he agree with the Prime Minister with regard to achieving a budget surplus that “If we had to take $300 million out of the health budget or something to achieve that, I think most people would think that’s a bit silly”; if so, why did he reduce the new operating spending allowance by $500 million for 2015/16 after the Treasury forecast a deficit for that year?

Hon BILL ENGLISH (Minister of Finance): Yes , I agree with the Prime Minister. In regards to the second part of the question, the member is simply wrong. We did not reduce the allowance for “new spending” at all. What we did say is that we allowed an average of $1.5 billion across 3 years for both spending and tax reductions, and in light of the forecasts, we moved the $500 million in the first 2 years into the third year. This is all simply Government accounting. What we know the member is going to try to do is say that there is $500 million of cuts, because that is what he has been saying since he was a student protest leader, and his economics have not changed since then.

Grant Robertson : So to clarify, is it correct that he increased the spending allowance for Budgets 2015 and 2016 by $500 million in an election year Budget, and then cut them again by $500 million just a couple of months after the election?

Hon BILL ENGLISH : No, that is not correct. As I explained before, the Government allowed $1.5 billion over the next 3 years, on average. That was all quite transparent in the election campaign, and we always said it was for spending and tax cuts and reductions in ACC levies. We have this year simply used the $1 billion that we specified for spending and pushed the $500 million for moderate tax reductions into 2017. It does affect the surplus numbers, as the member as pointed out.

Grant Robertson : Is this not, as he has just described it, exactly the kind of fiddling around with the books that has led New Zealand businesses and workers to be overcharged by hundreds of millions of dollars for ACC—in search of a Budget surplus that he has now pushed out to the never-never ?

Hon BILL ENGLISH : No, and the member is giving a misleading impression that it is the Government’s books. The Government’s books are absolutely transparent. The spending allowance is simply a construction that we use to discipline our spending; it is not Government accounting. But it brings me back to the heart of this issue, which is that Labour always wants to spend more, regardless of whether it works and regardless of whether it changes anything, and it cannot stand it when it thinks someone may be being careful with the spending.

Grant Robertson : How is it responsible to be “manipulating the books” or “using a construction”, in his words, to offer the prospect of tax cuts in an election year in 2017, when over successive Budgets he has failed to meet needs in core areas like health and education? How is that responsible, Minister?

Hon BILL ENGLISH : The member is simply wrong. The impact of our health and education systems on New Zealanders is better than ever. There is more of pretty much everything that New Zealanders need, despite the fact that money has been pretty tight. There are a lot more children—for instance, Māori and Pacific students—achieving the National Certificate of Educational Achievement level 2. Māori immunisation rates are now almost as high as the general population’s, when for 30 years they lagged by a long way. Actually, the key to this Government’s management is Better Public Services, even if we are a bit tighter with the money.

Grant Robertson : With our exports dropping, a failure to diversify beyond commodities, leaving a $7 billion hole in the economy, and the Christchurch earthquake rebuild peaking, can he give New Zealanders today just one new idea that he has to grow the economy, or is he just plain tired and out of ideas?

Hon BILL ENGLISH : The great thing is we have a country where there are thousands of people with thousands of new ideas about developing the economy. It is my job and the Government’s job to support them. Labour’s view is that the country should wait around for Grant Robertson’s new idea, and apparently his new idea is work. Labour has discovered work; it is just that it is against all of the policies that create work.

2. Government Financial Position—Spending

2. ANDREW BAYLY (National—Hunua) to the Minister of Finance : What steps has the Government taken to get on top of its spending?

Hon BILL ENGLISH (Minister of Finance): It is a continuous job of the Government’s, not just through Budgets but day to day across the Public Service, to improve value for money. After all, we have hundreds of millions of dollars only because people working in the rain today will next week hand over $200 or $300 of PAYE, money that they could have used a lot better. So we take a very serious view of the stewardship. The total annual cost of new initiatives in this Government’s previous six Budgets is less than $2.9 billion. The last six Budgets of the previous Governments had $20 billion of new spending, and the best measure of the problem with that was the Salvation Army in 2008 saying that it had not seen any measurable improvement in social outcomes, for all the huge new spending.

Andrew Bayly : Will the Government take further steps to cut spending in light of lower than expected revenue?

Hon BILL ENGLISH : No, we will not be pursuing cuts in services or income support in a knee-jerk response to lower tax revenue. It is not to say that there will not be some services that we stop paying for because they are ineffective and they are not making a difference to New Zealanders’ lives. Such measures, if we were to cut services randomly to chase revenue targets, would undermine the confidence of New Zealanders in the quality and effectiveness of public services at a time when public trust in public services is the highest it has been. So we do not want to upset that level of confidence.

Andrew Bayly : What is the Government’s record in delivering better public services while staying on top of spending?

Hon BILL ENGLISH : The Government’s record is good but, of course, we need to do a lot better. Three years ago the Prime Minister set 10 challenging targets for the Public Service that ranged over better health, better educational achievement, reducing crime, and lowering welfare dependency. We are making improvements in pretty well all of these areas, and we are not satisfied that continuing with all existing programmes just to keep people happy is good enough for New Zealanders. We have also been reprioritising. In fact, over the last six Budgets there has been around $15 billion of reprioritisation to make sure we get better results.

Andrew Bayly : What is the Government’s approach to delivering long-term cost savings in relation to the provision of public services?

Hon BILL ENGLISH : Of course, the Government is focused not just on savings this year; we are focusing on intergenerational savings. If we resolve problems in complicated families and struggling communities, then we will be spending less in the long run. For example, 1 percent of the children born in 1990 had contact with Child, Youth and Family before the age of 5. They had parents who were in contact with the corrections system and had been in households supported by benefits for most of their lives. Thirty-six percent of people with these three factors will be on a benefit at age 35. So you know that pretty much from when they are born, compared with 9 percent of the general population. Almost 5 percent of this group will be in prison at the age of 35. Some of these individuals will cost around $1 million each, just in corrections, Child, Youth and Family, and income support costs , and that represents significant misery in families and communities. We will continue to change things in order to change their lives.

Grant Robertson : With reference to the first supplementary answer that the Minister gave, which of the following items of spending from Labour Budgets that he likes to criticise has he got rid of: 20 hours of free early childhood education, Working for Families, interest-free student loans; or is it not just true that the Minister has failed to come up with new ideas and now has failed to get new ideas to grow the economy, as well?

Hon BILL ENGLISH : I can confirm that even by Labour’s measure of those programmes, its best years are behind it.

3. Whānau Ora—Allocation of Funding

3. Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) to the Minister for Māori Development : Does he agree with the Auditor-General that one-third of the $137.6 million appropriated for Whānau Ora was spent on administration and could have been spent “on those people and providers who Whānau Ora was meant to help”?

Hon TE URUROA FLAVELL (Minister for Māori Development): [Authorised te reo text to be inserted by the Hansard Office.] [Authorised translation to be inserted by the Hansard Office.] In response to the question, I can say that although I welcome the findings of the Auditor-General and her report, I do want to emphasise that in 2010 Whānau Ora was a new initiative and required that level of administrative support. Many of the costs were one-off costs for the design and implementation of the programme, and included research and evaluation. So I believe that the building of this infrastructure was an important step in ensuring that long-term benefits for whānau could be achieved.

Hon Nanaia Mahuta : Is he satisfied that the $7.9 million of taxpayer dollars allocated towards research and evaluation between 2010 and 2014 is justifiable, given that there is no published ethnicity data, no ability to measure short-term gains, and no ability to measure outcomes across key Government agencies in a consistent manner?

Hon TE URUROA FLAVELL : My information says that the amount of money that was used on research and evaluation was $9.7 million, which equated to about 22.9 percent of the overall spend. As I say, the Auditor-General—you cannot have it both ways, and on one side call for accountability for the spending of funds for Whānau Ora, and not follow the fact that there was, and clearly is, an amount of money set aside for those sorts of things, such as evaluation. Those things were put in place to ensure that the programme did have a robust background to it and was able to add to the development on into future years. Having cut away pretty much all of those costs identified earlier, the officials tell me that about 20 percent was left, which under current circumstances, according to the information I have, is a pretty responsible amount of money available for the administration of the programme.

Hon Nanaia Mahuta : I raise a point of order, Mr Speaker. The question was specific—

Mr SPEAKER : Order! The member will resume her seat. I listened very carefully to the question. I listened very carefully to the answer. That question was certainly addressed.

Pita Paraone : [Authorised te reo text to be inserted by the Hansard Office.] [Authorised translation to be inserted by the Hansard Office.] How long will we have to wait before the issues raised within the Auditor-General’s report on Whānau Ora are addressed; if already addressed , which of the issues have, in fact, been addressed?

Mr SPEAKER : The Hon Te Ururoa Flavell—either of those supplementary questions.

Hon TE URUROA FLAVELL : The audit report was from 2010-2014, which was phase one of the roll-out of Whānau Ora. We are now moving into a new phase, and I can give the member an assurance that as a Minister, indeed a new Minister, I have taken up the recommendations of the Auditor-General and intend to keep a close watch on how those are dealt with into the future.

Hon Nanaia Mahuta : Does he believe that the $6.6 million for the three commissioning agencies was money well spent; if so, are they best equipped to make decisions about funding of Whānau Ora providers?

Hon TE URUROA FLAVELL : The decision to roll out into a commissioning model was another bold move on the part of this Government in association with the Māori Party, and allows us to move into a new phase, building on the information that came out of the Auditor-General’s report and, indeed, the Productivity Commission’s report. So I am comfortable enough with the fact that we are moving into a new phase and that commissioning agencies are an important ingredient in that picture. Having been around all of them, I am clear that they have the processes and infrastructure in place to ensure that the same accountabilities required of Ministers will in fact be able to be measured and reported back to the House, as they are required to do to me as the Minister, over the years to come.

Pita Paraone : Can the Minister guarantee that the changes already made to Whānau Ora ensure public funds can no longer go towards events such as Ōtaki’s Rahui Rugby Football Club ’s $60,000 one-day hui; if not, why not?

Hon TE URUROA FLAVELL : The approach taken with Whānau Ora is that it is not about one approach fits all, and that there are many ways in which we can support families to achieve their goals of being resilient, of living healthy lives, of being economically sustainable, and of being able to be full participants in society. I can say that, in answer to the question from the member, I will be having a close look, as will the Whānau Ora Partnership Group, at all proposals that come our way. But in the end we have commissioned certain outcomes from the commissioning agencies. We expect those outcomes to be delivered.

Hon Nanaia Mahuta : In a nutshell, what outcomes has the Minister sought from the Whānau Ora commissioning agencies?

Hon TE URUROA FLAVELL : Those are far and wide-ranging—a desire on the part of this Government, and indeed me as a Minister, to have families be strong within themselves and to be resilient. It can range from everything from helping those mums who happen to be associated with violent lives to be able to live in a safe environment—a warm, healthy home—and that the children will be brought up in a safe environment, all the way through to allowing those who want to seek a new way of doing things in the economic development sphere to be able to do so. It is wide-ranging, and that is the beauty of Whānau Ora.

Hon Nanaia Mahuta : Has the Minister sought an assurance from the Whānau Ora commissioning agencies that existing Whānau Ora providers are informed of the new contracting and funding process, and that there is a clear time line that has been explained to them to implement those decisions to support whānau?

Hon TE URUROA FLAVELL : That is a rather difficult question at this point in time because much depends on the Budget, and I am unable to provide too much information about the very good Budget coming out shortly. Under those circumstances, I am rather restricted in what I can say, but there is an expectation, as I said, when there has been so much work done in this particular kaupapa. I am not about to let it lie as the Minister, and I will ensure that systems and procedures in place will deliver the best possible results for Māori and, indeed, the country.

4. Health Services—Elective Surgery

4. SIMON O’CONNOR (National—Tāmaki) to the Minister of Health : What steps is the Government taking to increase access to elective surgery?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yesterday the Prime Minister and I announced that an extra $98 million will be invested in Budget 2015 to provide more New Zealanders with timely elective surgery and to improve the prevention and treatment of orthopaedic conditions. Of this, $48 million over 4 years is to continue this Government’s ongoing commitment to increasing elective surgery by an average of 4,000 operations per year. An additional $44 million is being invested over 3 years to support extra orthopaedic and general surgeries.

Simon O’Connor : What other steps are being taken to help those with muscle and pain conditions?

Hon Dr JONATHAN COLEMAN : In addition to increasing the number of elective surgeries, the Government has announced that $6 million will be invested to establish early intervention multi-disciplinary teams in every district health board. These community-based teams will provide broader and earlier treatment options for patients with a range of musculoskeletal problems. It is an innovative initiative that will help alleviate suffering.

Dr David Clark : Is the $48 million to increase elective surgeries by 4,000 a year he announced yesterday completely different from the $48 million Tony Ryall announced to increase elective surgeries by 4,000 a year in last year’s Budget; if not, why is the Government putting old wine into new bottles?

Hon Dr JONATHAN COLEMAN : The member is absolutely incorrect. Last year it was $110 million over 4 years. This is new money—$98 million in total. He is referring to $48 million over 4 years.

5. Housing—Foreign Ownership of New Zealand Residential Property

5. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Finance : Does he stand by his statement that determining who is foreign for the purposes of restricting residential property ownership by foreign speculators is a “swamp”?

Hon BILL ENGLISH (Minister of Finance): Yes.

Phil Twyford : Why has he ruled out restricting the purchase of existing homes to New Zealand citizens and residents given that Australia, Canada, and Singapore have all enacted such policies or similar restrictions, or is it that these successful nations are just xenophobic?

Hon BILL ENGLISH : No. I would note that all of them have more intensive house price cycles than we do, for a start, and, secondly, actually, observation of those systems shows just how difficult it is to determine and enforce this type of measure. But, you know, we are gradually picking our way through the swamp.

Phil Twyford : Is he aware that the state of Victoria, Australia, now has a jail sentence for foreign speculators who rort its homeownership rules, and, given that ANZ data shows that in New South Wales and Victoria foreign speculators account for between 25 percent and 30 percent of purchases, why has he repeatedly refused to even collect the data here?

Mr SPEAKER : The Hon Bill English—either of those two supplementary questions.

Hon BILL ENGLISH : I think that the member has just highlighted the problem. They have had rules in Australia that foreigners cannot buy existing houses, and they have got data that shows that 35 percent of house sales are to foreign buyers. The reason they are bringing in prison sentences is that they have not been able to enforce the law, and now they are trying to scare the wits out of foreigners who have been getting round the law on a large scale.

Phil Twyford : Why does his speculator-friendly Government deny that demand pressure caused by property speculation is contributing to skyrocketing house prices in Auckland when the Reserve Bank thinks that speculation-driven demand is a threat to financial stability, or is it wrong too?

Hon BILL ENGLISH : In fact, the Government set up a memorandum of understanding with the Reserve Bank, which is enforcing macro-prudential measures in a way that they are not doing in Australia, and with some success. The Government keeps an eye on how these other jurisdictions are dealing with the pressure of overseas capital. Looking at those systems shows how complex it is, and that is why we are picking our way carefully through the swamp.

Metiria Turei : Will the Minister rule out selling State houses such as those that are soon to be on the block in Invercargill, Tauranga, and elsewhere to non-resident foreign buyers?

Hon BILL ENGLISH : We have not put in any such rule, but they would have to be registered as a community housing provider, and, as far as we know, there are none of that sort that have registered. We are very pleased to be able to proceed with those transactions because I think we can get a better deal for tenants, and give the opportunity for those communities to redevelop parts of their housing stock, and, except for the Greens and the Labour Party, everyone else in New Zealand thinks we can do a better job with State housing.

Metiria Turei : Can the Minister, then, confirm that he intends to place no restrictions at all on a non-resident foreign buyer organisation registering as a community housing provider in New Zealand for the purpose of purchasing State housing?

Hon BILL ENGLISH : No, there are not restrictions, just as in the same way in our register of charities we do not restrict global lobby groups like Greenpeace, which is another foreign multinational that tries to impose its views on New Zealand.

Metiria Turei : Can the Minister rule out State houses that are sold by this Government, such as those in Invercargill and Tauranga, being sold on at a later date and not, therefore, being used for social housing?

Hon BILL ENGLISH : No, not only are we not ruling it out but we do not want to rule it out, because part of the thing that needs to change in our State housing—and the Greens might have missed this; the population is different from what it was in 1950 when we built thousands of three-bedroom houses for two-parent households with three to five children. Now a quarter of all New Zealand children are born into a sole-parent household. The fastest-growing category of households in New Zealand is the single-person household. The Greens and the Labour Party are the only ones who seem to think that that bit of New Zealand life should be frozen in 1950. We disagree and we are proud to disagree, and we are going to make rules that ensure it changes.

Metiria Turei : I seek leave to table a letter to Housing New Zealand tenants dated 6 May 2015 that assures them they will remain in social housing.

Mr SPEAKER : Leave is sought to table that particular letter. Is there any objection? There is no objection. It can be tabled. Document, by leave, laid on the Table of the House

6. Oil Spill—Environmental Impact

6. CLAYTON MITCHELL (NZ First) to the Minister of Transport : Does he stand by his statement that “the recent oil spill was not a disaster for the Tauranga environment”?

Hon SIMON BRIDGES (Minister of Transport): Yes, of course the oil spill was incredibly unfortunate and must be—and I think has been—treated very seriously. But to say it was a disaster, in my view, is going too far, for Tauranga. Can I take this opportunity to acknowledge the very hard work of the many involved in the clean-up—it has been a laborious, painstaking job, and I am sure the House wishes to thank them.

Clayton Mitchell : With that answer in mind, how can he possibly say that 20 tonnes of oil and waste on our pristine Tauranga Harbour and on our beaches is not a disaster?

Hon SIMON BRIDGES : Of course, I accept that it is highly regrettable. No one in this House or in New Zealand would wish that to happen. I think it is worth bearing in mind, though, that we have a tiered response in New Zealand, and this is tier 2. That means that it is able to be dealt with in this case by the Bay of Plenty Regional Council. There is of course tier 3, and Tauranga, as the member well knows and as I well know, has had some experience of those tier 3 incidents, which I think in some cases are disasters.

Clayton Mitchell : Can he assure this House that not a single cent of taxpayers’ or ratepayers’ money will be spent cleaning up this big oil company’s mess?

Hon SIMON BRIDGES : There is still some time to elapse before we work all of those things through. What we know is that Mobil has accepted full responsibility for this. At the moment there is a clean-up going on, and we are the majority of the way through that, but, of course, what is also happening and will continue to happen after the clean-up is an investigation where those sorts of issues will be entirely worked through.

Clayton Mitchell : Is the Minister aware of any reports showing that Mobil is considering abandoning its New Zealand operation and, as a result, has not been maintaining its infrastructure to safe levels?


Clayton Mitchell : What are the consequences, if any, for these fuel companies when they spill oil on our waters?

Hon SIMON BRIDGES : I think that we have seen very clearly the consequences from these things. The reputational damage from these sorts of incidents around the world is probably first and foremost, above anything else, but, of course, there is also a full spectrum of other civil and criminal penalties that can be applied.

Clayton Mitchell : Can the public expect inaction on essential improvements to the maintenance of Mobil’s pipelines in our ports, given his comments that “he could not ensure further spills in the future” and “there needs to be some realism”?

Hon SIMON BRIDGES : I think we need to wait and see what the investigation and other potential actions are before we decide on that.

7. Research—Government Investment

7. JOANNE HAYES (National) to the Minister for Tertiary Education, Skills and Employment : How is the Government investing in more collaborative and innovative research?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): This morning I announced the funding of four more centres of research excellence over the next 5 years, increasing the number of cross-institutional centres of research excellence around the country from six to 10. All 10 will receive 5 years of funding from 2016 to 2020. Of the 10 that will be funded, five are existing centres of research excellence (CORE) and five will be receiving CORE funding for the first time. They provide an excellent collaborative environment for the delivery of world-leading, innovative, and strategically focused research. The work of all 10 COREs will deliver benefits to New Zealand across a range of areas and will make a difference to the lives of New Zealanders.

Joanne Hayes : What areas of research do these additional centres cover?

Hon STEVEN JOYCE : Sixteen applications were presented for the four available centres. Three of the four COREs selected were previous COREs that were not successful in the first funding round last year. The successful ones are the Bio-Protection Research Centre at Lincoln University, the Riddet Institute at Massey University for food science and human health, the new QuakeCore, which is the centre for earthquake resilience at the University of Canterbury, and the revamped Māori CORE Ngā Pae o te Māramatanga, based at the University of Auckland, which stood out for the quality and coverage of its research programme. [Interruption] Get a supplementary question. Shh! To accommodate these additional COREs, the CORE fund increases by $14.94 million, up from the existing $34.8 million to $49.8 million, from 2016-17, and does not the Labour Party hate the fact that this Government is investing in science and research?

Joanne Hayes : And we are all going to love this one. What other research is undertaken by COREs?

Hon STEVEN JOYCE : The COREs support growth in research excellence through the increase in quantity and quality of research and they contribute to New Zealand’s development. Other COREs include the Dodds-Wall Centre for Photonic and Quantum Technologies based at Otago University, the Brain Research New Zealand institute, also based at Otago, Medical Technologies, the existing Maurice Wilkins Centre and the McDairmid Institute, and the new Centre for Complex Systems and Networks, which works to develop the methods and tools for transforming data into knowledge. With the increased funding for additional COREs, the Government’s total science investment will be over $1.5 billion in 2015-16. That is an increase of more than 70 percent since 2007-08.

Hon Te Ururoa Flavell : How has the Māori Party Budget gain for 2014 of $12.45 million over 3 years contributed to maintaining the depth and calibre of Māori research capability within the tertiary sector?

Hon STEVEN JOYCE : I would like to acknowledge the Māori Party’s strong advocacy for a dedicated Māori centre of research excellence, which has resulted in a process for a—

Grant Robertson : Yes, after you cut it and then put it back in again.

Hon STEVEN JOYCE : Shh! Grant, you just—is it not hilarious that Mr Robertson, “Mr Fiscal Conservative”, has, once again, never found a bit of expenditure that should ever be changed, despite the fact that he tries to hassle Bill English for not balancing the Budget? That is the sort—[Interruption] I should be able to continue on. He will not stop; why should I?

Mr SPEAKER : Order! The answer is complete.

Hon Te Ururoa Flavell : I raise a point of order, Mr Speaker. The Minister did start but I did not quite hear the rest of the answer.

Mr SPEAKER : Order!

Hon Te Ururoa Flavell : No?

Mr SPEAKER : I am concluding that the question was addressed—maybe not very satisfactorily, but we are leaving it at that.

Hon Te Ururoa Flavell : Since the successful lobbying by the Māori Party to ensure the continuation of high-quality Māori research, what steps has the Minister taken since 2014 to ensure the maintenance of Māori research into the future?

Hon STEVEN JOYCE : A range of initiatives, actually. Again, I would like to acknowledge the Māori Party’s advocacy in this area.

Grant Robertson : Get a room.

Hon STEVEN JOYCE : The new strengthened Ngā Pae o te Māramatanga will be an institute that delivers—I do not know, Grant. It is just one of those things—

Mr SPEAKER : Order! Can the Minister just complete the answer.

Hon STEVEN JOYCE : The new strengthened Ngā Pae o te Māramatanga will focus on the Māori economy, environment, and human flourishing, which I think is very important. We have also got a range of other areas that we are investing in, including the new Vision Mātauranga Science Fund, which is investing significantly in the Māori communities, the Māori Innovation Fund, and the Māori Information and Communications Development Fund. So it is great to see the opportunity to invest in science and research in the Māori research community.

8. Workplace Relations and Safety, Minister—Statements

8. SUE MORONEY (Labour) to the Minister of Immigration : Does he agree with the statement made by the Hon Michael Woodhouse in Parliament last week with regard to Chinese engineers repairing KiwiRail trains that the Minister of Immigration “is very satisfied that the Chinese workers in this instance were on short-term visas, and these were generally for no more than 3 months per year”?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes , I am satisfied that the Minister for Workplace Relations and Safety articulated my advice to him accurately. However, I have since been advised that some of these workers were provided, as an exception to instructions, a subsequent visa for another 90 days. I am comfortable with the original visas being granted.

Hon Trevor Mallard : How many times?

Hon MICHAEL WOODHOUSE : Is that a supplementary question, or would you like to hear the primary answer first? [Interruption]

Mr SPEAKER : Order! I am not putting up with that level of interjection. I want to hear the answer.

Hon MICHAEL WOODHOUSE : I am comfortable with the original visas being granted, but, given that these visas are for projects of a very specific and temporary nature, I have made it clear to my officials that they should not be granting any further subsequent visas for those in New Zealand unless there are truly exceptional circumstances.

Sue Moroney : Is he aware that the New Zealand – China free-trade agreement stipulates that the duration stay of people doing this type of work shall not exceed 3 months; therefore, how does he justify the decision that he has made?

Hon MICHAEL WOODHOUSE : I do not have the full details of the arrangements that the member specifies. I am quite happy to take advice on it. I am advised that special purpose visas are for that purpose, and I have made my expectations very clear to immigration officials.

Sue Moroney : Well, in granting these visas as the Minister of Immigration, is he aware that the New Zealand – China free-trade agreement stipulates that the granting of temporary employment visas does not replace the requirement to carry out an activity according to the specific laws and regulations in force in the country; and how does this reconcile with the views of the Minister for Workplace Relations and Safety, Michael Woodhouse, that New Zealand’s employment laws probably do not apply to these very Chinese engineers that he has granted these visas to?

Mr SPEAKER : The Hon Michael Woodhouse—either of those two supplementary questions.

Hon MICHAEL WOODHOUSE : I refer the member to my answer to her previous supplementary question.

Sue Moroney : Is the Minister of Immigration, who ought to know the rules under which he has—

Mr SPEAKER : Order! Ask the question.

Sue Moroney : Will he revoke the work visas of the Chinese engineers given that their employer is in breach of New Zealand laws requiring employers to provide wage and time records, and that the workers in question have been here longer than allowed under the provision he granted them visas for?

Hon MICHAEL WOODHOUSE : I reject the prefacing statement in that comment that these workers were employed in breach of New Zealand employment laws. The labour inspectorate, on its best advice, did not find that to be the case.

9. Air Services—Progress

9. JACQUI DEAN (National—Waitaki) to the Minister of Transport : What progress has the Government made on strengthening New Zealand’s global air links?

Hon SIMON BRIDGES (Minister of Transport): I was very pleased to announce recently that the Government has approved new air services agreements with Bahrain, Colombia, Egypt, Greece, Oman, Serbia, and the Seychelles. The new agreements mean that airlines from these countries will have the opportunity to offer services to New Zealand. It also means that New Zealand airlines now have the opportunity to offer services to these countries, including on a code-share basis. All up, the new agreements will provide New Zealand with more travel, tourist, and trade opportunities within these countries. That has got to be a good thing.

Jacqui Dean : How does the Government’s work to improve global air links benefit New Zealand?

Hon SIMON BRIDGES : Well, in a number of ways. New and expanded aviation agreements with other countries give New Zealand many opportunities to expand tourism, trade, and personal ties globally. That is why the Government has managed to position New Zealand as a world leader in liberalising international aviation: from just a trickle to over 40 new or amended agreements having been negotiated in the last 3 years. We will continue to work hard on seeking opportunities to open and expand new and existing air links with other countries around the world.

10. Electricity Market—Competition

10. GARETH HUGHES (Green) to the Minister of Energy and Resources : Does he think that there is sufficient competition in the pre-paid retail electricity market to keep prices low for consumers?

Hon SIMON BRIDGES (Minister of Energy and Resources): Well, yes, but in a sense it is wrong to say that competition in the markets is ever sufficient. There is always room for more of it. The other thing I would say is that competition, the Government thinks, needs to be viewed not as just some theoretical prepaid retail market but across the pre and post paid retail electricity market, which represents the real choice, the real spectrum of choices available to consumers of electricity.

Gareth Hughes : Well, does the Minister consider it a competitive market at all when in rural Northland, the Hawke’s Bay, central North Island, Nelson, Tasman, rural Canterbury, and the West Coast, according to data released from the Parliamentary Library, there is only a single retailer provider of prepaid electricity?

Hon SIMON BRIDGES : It is an exceptionally competitive market. I do not think it is actually arguable to say anything other than that it is the most competitive it has ever been in New Zealand. We have got more electricity retailers than ever before—21—running 28 brands. We have seen a million switches since 2011. As I said in response to the member’s primary question and I say again in response to his supplementary question, it is not just the prepaid market, it is the entire electricity market that is more competitive than ever.

Gareth Hughes : How on earth can it be a competitive market for prepaid electricity when the Minister’s answers to consumers are to shop around, yet that does not apply to prepaid customers because in many regions a single supplier has a regional monopoly?

Hon SIMON BRIDGES : It is an incredibly artificial position that the member has taken. He is right in some areas—Mighty River Power’s GLO-BUG is the only prepaid service. This is a relatively new innovation, which, broadly speaking, is very competitive with post-paid retail plans. Again I say that consumers all over New Zealand, in every single region, have many effective choices between prepaid and many post-paid retailers. Shopping around does provide real answers and real competition for consumers.

Gareth Hughes : Is the Minister aware that many consumers are literally forced on to a prepaid plan and, for some of the tens of thousands of households on such plans, compared with the cheapest standard plan, it is 25 percent more expensive in Auckland for the average family household on a prepaid plan, 24 percent more expensive in Dunedin, 20 percent more expensive in Northland, and 18 percent more expensive in Christchurch?

Hon SIMON BRIDGES : One can always cherry-pick answers. What is very clear is that across the spectrum, prepaid—[Interruption] They do not like it, but these are the facts. Prepaid is competitive with post-paid, and in some instances it is cheaper. We have the most competitive market ever, and that is why even David Shearer has dropped David Parker’s barmy NZ Power scheme.

Gareth Hughes : Is the Minister concerned that 58 percent of households with children that have prepaid electricity have run out of credit and run out of power in the space of a single year, according to the New Zealand Medical Journal?

Hon SIMON BRIDGES : The manner in which the member has asked that question is highly misleading. There are times, of course, where they have gone straight back out and reconnected on to those prepaid plans within minutes. As I say, there is very effective competition in New Zealand in our power schemes, and it is more competitive than ever.

Gareth Hughes : For the House’s benefit, I seek leave to table the report in the New Zealand Medical Journal titled “Kids in the Cold: Outcomes for New Zealand Households with Children Using Prepaid—

Mr SPEAKER : Order! You have described the document. We now need the date.

Gareth Hughes : That was just the title. The date is 15 March 2013.

Mr SPEAKER : On the basis that it may be informative I will put the leave. Leave is sought to table this particular article in the New Zealand Medical Journal. Is there any objection? There is objection.

Gareth Hughes : Would the Minister consider immediately starting work on a code of conduct for the prepaid electricity market, to help protect what are some of our most vulnerable families?

Hon SIMON BRIDGES : There is a vulnerable consumer code of conduct, and to all intents and purposes it is working very well.

11. Labour Inspectorate—Report

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister for Workplace Relations and Safety : Does he agree with the report of the labour inspectorate that found that it is unclear whether New Zealand minimum standards law would apply to Chinese workers employed by CNR and working in New Zealand?

Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): Firstly, I accept the overall findings of the labour inspectorate’s independent investigation, which concluded it “could not identify any welfare issues or find of evidence of breaches of New Zealand minimum employment standard law.” The report went on to say more than the member has quoted in his primary question. It said that after taking independent legal advice, it also formed the view that it was more than likely that the Minimum Wage Act did not apply in this case. It said that the evidence pointed to the workers receiving adequate pay for their daily needs and living in sound, well-maintained accommodation that appeared to provide no concerns for the workers. There was no evidence pointing to the workers’ welfare being undermined.

Hon Trevor Mallard : I seek leave to table a letter to me from Mr George Mason, the general manager of the labour inspectorate, dated 17 April, which says there is considerable doubt about whether the workers are in fact covered by New Zealand minimum employment—

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

Hon Trevor Mallard : Who has ministerial responsibility for ensuring that employment minimum standards law in New Zealand is clear?

Hon MICHAEL WOODHOUSE : That would fall to me as the Minister, and if investigators thought that these workers were covered by those laws, they would have continued to press for more information. I am sure of that. But the best advice they received was that they were not.

Hon Trevor Mallard : Is there a specific exemption for foreign firms from the requirement to produce time and wage records to the labour inspectorate in New Zealand?

Hon MICHAEL WOODHOUSE : The requirement to produce time and wage records is a New Zealand law that covers minimum employment standards for those workers covered by it.

Hon Trevor Mallard : Do New Zealand health and safety laws apply to Chinese workers removing asbestos from locomotives at Woburn?

Hon MICHAEL WOODHOUSE : Yes, they do.

Hon Trevor Mallard : Does he believe that it is realistic to expect Chinese workers to complain about conditions to New Zealand officials when they have to return to China and their families are currently held there?

Hon MICHAEL WOODHOUSE : Regardless of whether the answer to that question is yes or no, I am aware that the local MP complained vociferously on their behalf. The labour inspectorate took that complaint seriously and investigated in a very thorough manner. I am satisfied with the outcome of that investigation.

Hon Trevor Mallard : I raise a point of order, Mr Speaker. The question was very specific and asked about Chinese workers complaining to labour inspectors. That was not addressed.

Mr SPEAKER : I think it is a very marginal call, to be honest, but I will allow the member to re-ask his question, and it is over to the Minister then as to how he answers it.

Hon Trevor Mallard : As best as I can. Does he believe that it is realistic to expect Chinese workers to complain about their conditions in New Zealand to New Zealand labour inspectors when they have to return to China and their families are still there?

Hon MICHAEL WOODHOUSE : The member calls for an assessment of my belief about a hypothetical scenario. I believe that a local MP in that scenario complaining vociferously on their behalf would prompt a very thorough and fair investigation by the labour inspectorate. And in the case that relates to this primary question, I am satisfied that it did.

12. Business—Changes

12. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Commerce and Consumer Affairs : What changes has the Government made to better protect New Zealand’s business reputation?

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): Recently , the Government announced changes to legislation to protect New Zealand’s integrity and reputation as a good place to do business. Changes to the Companies Act began to come into effect from 1 May and are being phased in to ensure that all companies have the time they need to prepare for and meet their obligations. New Zealand is seen as an easy and transparent place to do business, and the National Government is committed to ensuring that this reputation is maintained and protected.

Alastair Scott : What obligations will businesses be required to meet under the changes to the Companies Act?

Hon PAUL GOLDSMITH : The new obligations are designed to reduce the misuse of New Zealand’s company register regime. For example, from 1 May all new companies will need to have at least one director who lives in New Zealand, or who lives in Australia and is a director of an Australian company. This new obligation will apply to all companies from 29 October. These changes will make it more difficult for criminals to operate undetected in New Zealand, while keeping down compliance costs for new and existing New Zealand businesses. They are an important part of this Government’s Business Growth Agenda and our goal to improve regulation and lift confidence in New Zealand’s capital markets.


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