Questions and Answers – June 3

by Desk Editor on Wednesday, June 3, 2015 — 7:32 PM

Questions to Ministers

Saudi Arabia—Payments

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : When he said that part of the reason for paying $4 million of taxpayer money to a Saudi business was “wanting to resolve the issues that were holding back the Gulf States free-trade agreement”; what were those issues and why did he think paying Hamood Al Ali Al Khalaf’s company $4 million would help resolve them?

Mr SPEAKER : In calling the Prime Minister, my office has been advised that the answer will be longer than normal.

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement, which was that there was a range of different issues, including: the potential exposure to a legal claim, wanting to resolve the issues that were holding back the Gulf States free-trade agreement, the fact that we thought we could promote New Zealand in an international environment, and that we thought it was the right thing to do. In respect of what the issues were, it has been well canvassed in this House that New Zealand’s relationship with Saudi Arabia had been damaged by the events relating to Mr Al Khalaf’s business. Minister McCully took steps to resolve that issue, and those steps included a contract for service between the Ministry of Foreign Affairs and Trade and Mr Al Khalaf’s company. The $4 million relate to costs associated with shifting operations that were previously based in New Zealand to a new hub in Saudi Arabia. The Cabinet was satisfied that the full partnership outlined in the Cabinet paper resolved fully the prospect of any litigation.

Andrew Little : Given his answer yesterday that part of the $4 million payment was to settle a potential legal claim, why did he admit on Breakfast TV today that the threat of legal action was withdrawn a year before the Cabinet paper was ever written? Is it his Cabinet’s normal practice to settle legal claims that have already been withdrawn?

Rt Hon JOHN KEY : I think the point that I was making this morning—it is not new information—is that people do set aside, on the basis of negotiation, legal claims that they might want to take. The second point I would make is that these issues are issues that have actually been dealt with by successive Governments. I would take this opportunity to encourage the member to speak to Annette King and Phil Goff about the warnings that they received on these issues when they were in Government and about the actions that they were looking to take. He might be amazingly surprised to hear the answers.

Andrew Little : Is he aware that on 14 May Murray McCully stated that he was unaware of any threatened domestic legal action by Mr Al Khalaf?

Rt Hon JOHN KEY : I have not seen all of the comments by Mr McCully, but if you look at the Cabinet paper, it spells it out quite clearly that there was the threat, potentially, of legal action. As I said just before in my rather fulsome answer, it is not just this Government that was aware; actually, it was the previous Government. I encourage the member to look to his right and speak with Annette King and with Phil Goff, because he will become very aware that he has just been set up by his deputy leader. [Interruption]

Mr SPEAKER : Order! [Interruption] Order! This interjection between the two front benches is to cease immediately.

Andrew Little : Can he confirm that in 2010 his Government renewed the live sheep export ban that lies at the heart of Mr Al Khalaf’s claims against the Government?

Rt Hon JOHN KEY : Actually, as paperwork may one day show, the heart of the issues was not actually with this Government; it was with the actions taken in 2007. And, by the way, the previous Government was well and truly aware of that.

Grant Robertson : I raise a point of order, Mr Speaker. That question by Andrew Little was very direct—

Mr SPEAKER : Order! I agree totally with the point that the member is raising. I am going to ask Andrew Little to ask the question again. [Interruption] Order!

Andrew Little : Can he confirm that in 2010 his Government renewed the live sheep export ban that lies at the heart of Mr Al Khalaf’s claims?

Rt Hon JOHN KEY : What lies at the heart of this problem are the actions taken in 2007. The record will show that the previous Government was well and truly aware of that. Mr Little has just been set up by Phil Goff and Annette King.

Grant Robertson : Point of order, Mr Speaker. [Interruption]

Mr SPEAKER : Order! I can appreciate the point that the member is going to make. The way forward is that I will allow the member two additional supplementary questions.

Andrew Little : If he now accepts that the payment was not in settlement of a potential legal claim, will he now admit that it was a pay-off to stop Mr Al Khalaf using his influence to hold up the Saudi free-trade agreement?

Rt Hon JOHN KEY : No, I do not accept that. As I said in my answer to the primary question, there were a number of factors: firstly, the legal action that could, potentially, have been taken; secondly, the potential for it to be an irritant to the free-trade agreement; thirdly, the opportunity to showcase New Zealand; and, fourthly, as maybe the record will show, in 2007 the previous Labour Government was well and truly aware of the situation and was looking to take its own actions. That member has been set up by Annette King and Phil Goff.

Mr SPEAKER : Supplementary question—[Interruption] Order!

Rt Hon Winston Peters : Prime Minister—

Mr SPEAKER : Order! I have not called the member yet. I am just dealing with a little bit of noise down here.

Rt Hon Winston Peters : Can the Prime Minister advise why, if he has got all this ammunition that implicates the Labour Party in Government and if he has this legal opinion that backs up his actions, he is not prepared to show the public rather than seeking to go on covering up a blatant bribe?

Rt Hon JOHN KEY : I am surprised the member is asking that question. I thought he would be aware of the Cabinet Manual.

Andrew Little : Can he confirm that his Government renewed the live sheep export ban in 2010?

Rt Hon JOHN KEY : Yes, this Government did renew the ban put in place by Labour, and what I can also confirm is: firstly, the 2007 Labour Government was aware of the problem; secondly, it was looking to take its own actions; and, thirdly, the Leader of the Opposition has been set up by Annette King and Phil Goff.

Hon Annette King : I raise a point of order, Mr Speaker. I take exception to the last part of that answer. On three occasions, he has claimed that I set somebody up. I object to that. It is a lie.

Mr SPEAKER : On the basis that the member has taken offence, I am going to ask the Prime Minister to stand and withdraw that part of the answer.

Rt Hon JOHN KEY : I withdraw.

Andrew Little : Given that he has jetted Murray McCully out of the country for 3 weeks in order to avoid questions, has he told him that it might be better not to come back, or is he waiting for a “Sepp Blatter, road to Damascus” conversion to strike Mr McCully?

Rt Hon JOHN KEY : The person in danger is not the person who is not here to answer the questions—Mr McCully. The person in danger is the person who is asking the question, as he might just find that it is a bit of a boomerang.

Andrew Little : In light of all the irregularities around this payment of taxpayer money to a foreign sheep farmer obstructing a free-trade agreement, and given the high trust required in the office of the Minister of Foreign Affairs, how can he possibly justify retaining Murray McCully in that role?

Rt Hon JOHN KEY : Because the Minister of Foreign Affairs is doing an outstanding job, and he has done absolutely nothing wrong. He has looked for a commercial solution—and those might be words that will ring true soon. He has looked for a commercial solution. He has acknowledged that there was a problem—those words might ring true soon. He has done the right thing to remove an irritant to the relationship with Saudi Arabia—those words might ring true soon. He has done a good job of promoting New Zealand on the world stage—those words always ring true with this Government. The Minister of Foreign Affairs has done an outstanding job.

Economy—Economic Growth and Support for Vulnerable People

2. STUART SMITH (National—Kaikōura) to the Minister of Finance : How is the Government’s economic plan continuing to support the most vulnerable New Zealanders while at the same time encouraging economic growth?

Hon BILL ENGLISH (Minister of Finance): The Government is focused on striking a good balance between responsibly managing a growing economy, keeping spending under control, and supporting the most vulnerable New Zealanders. Despite tight fiscal constraints the Government delivered several important gains for families from 1 April this year. Paid parental leave increased by 2 weeks, and it will increase by another 2 weeks next April. The adult minimum wage increased from $14.25 to $14.75 an hour. New Zealand superannuation increased by another 2 percent, and average ACC levies paid by employers and self-employed people fell by over 5 percent. From 1 July children under 13 have access to free general practitioner visits and prescriptions. An average ACC levy for a private motor vehicle will fall by around $130 a year.

Stuart Smith : How will Budget 2015 advance the Government’s programme to support more jobs and higher incomes for New Zealand families?

Hon BILL ENGLISH : One of the most important things we can do for families, particularly vulnerable families, is to support an economy that is generating more jobs. The growing economy has generated 194,000 extra jobs since 2011, and Treasury forecasts that another 150,000 jobs will be created by mid-2019. Average annual wages have increased by $5,700 in the last 4 years, and they are forecast to rise by another $7,000 in the next 4 years, to $63,000 a year. That is a $13,000 increase over 8 years, or about a 25 percent increase in the average wage compared with inflation of around 14 percent over the same period.

Stuart Smith : How will the $790 million child hardship package in Budget 2015 deliver more support for families in need?

Hon BILL ENGLISH : It will certainly deliver more support for family budgets. Benefit rates for families with children will rise by $25 a week, which is the first increase—

Andrew Little : Why do they have to wait 10 months?

Hon BILL ENGLISH : Actually, they have had to wait 43 years because it is the first increase—which I think is through two Labour Governments. It is the first increase separate from inflation adjustments for 43 years. Interestingly, Labour voted against it yesterday in the House.

Stuart Smith : What further steps did the Budget take to help vulnerable New Zealanders, particularly in the area of finding work?

Hon BILL ENGLISH : It is not just families with children who need work to get out of welfare dependency; there are also large numbers of other New Zealanders who are on or who will be on benefits for a long time without additional support. The Budget provided $28.8 million for four social bonds programmes. The first will expand on a small and successful pilot delivering employment services to New Zealanders with mental health conditions. Social bonds, which have been used overseas, will become another part of the Government’s drive to deliver better results, with innovation between the public and private sector organisations working together. Some, of course, would rather leave people with mental illness isolated, alone, and out of work than try something new to get them into work.

Grant Robertson : Is it correct that his so-called economic plan will mean, in fact, according to the Budget, that growth will halve to less than 2 percent within 4 years?

Hon BILL ENGLISH : The forecasts do show that after several years of growth at around 3 percent, which is regarded as the economy’s potential, that growth will drop back a bit. Of course, part of this Government’s intent is economic policy that supports the rates of growth that we currently have, and we will be trying very hard to support those businesses that invest, employ, and create higher growth rates than those projected.

Grant Robertson : With reference to that answer, is it correct that Treasury’s forecasts that show a halving of growth actually rely on dairy prices rebounding, and now they have dropped 54 percent since last year?

Hon BILL ENGLISH : No, the member is not correct. The growth forecasts do not rely only on the dairy prices. Many other aspects of the export economy are going very well. The wine industry is growing strongly; the IT industry is growing strongly; the meat industry is not doing too badly; our biggest industry, tourism, is going gangbusters; and our third-biggest, international education, is also growing strongly. Those things are also part of the forecasts.

SuperGold Card—Correspondence

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Senior Citizens : When can my office expect a response to the letter sent to her on 27 May 2015 regarding SuperGold Card concessions?

Hon MAGGIE BARRY (Minister for Senior Citizens): As the member’s office was made aware on 27 May after his email to the office, Minister Foss will respond in due course because the transport concessions around the SuperGold card fall under his delegation and not mine.

Rt Hon Winston Peters : Can the Minister for Senior Citizens please explain to the House and to the fool over here—

Mr SPEAKER : Order! [Interruption] Order! That is the sort of remark that will lead to disorder in this House. [Interruption] Order! If the member wants the opportunity to complete his line of supplementary questions, I advise him to cooperate. Would he simply ask his supplementary questions.

Rt Hon Winston Peters : Can the Minister for Senior Citizens please explain to the House, the New Zealand Herald, and seniors what arguments she has made against the Government’s continual delays in the SuperGold card review and the lifting of the moratorium on new transport allocations?

Hon MAGGIE BARRY : As that member may or may not be aware, there was a review that began in 2013. That will be released in due course. It is not very far away now. That member asked me to make it apparent to the readers of the New Zealand Herald. I wonder whether “Peters yet to act on promises made to Northland” is not prompt—

Mr SPEAKER : Order!

Rt Hon Winston Peters : Point of order. [Interruption]

Mr SPEAKER : Order! This is a point of order. It will be heard in silence.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. My point of order is about what arguments she has made to stop the delay in the review. That is precise.

Mr SPEAKER : Well, I wish the supplementary question had been as precise as that. Would the Minister please address that—because I had trouble listening to the answer.

Hon MAGGIE BARRY : There has been no delay. The review has been going on since 2013 and will continue until it is finished. It is appropriate to give good time and attention and care to detail—something that member could well learn from.

Mr SPEAKER : Order!

Rt Hon Winston Peters : If she is, as has been described by her colleague the Hon Craig Foss, very robust in representing seniors, as he advised me on 18 February this year, then why is she saying that there has not been a delay when it was planned to announce that that review was completed in June 2014?

Hon MAGGIE BARRY : That member is entirely incorrect about the dates, so the premise that there is a delay is totally flawed. As the Minister for Senior Citizens I am very proud indeed of the progress that this Government has made with the SuperGold card. From its very, very humble beginnings in 2008 there are now more than 12,000 businesses that the card is able to be used for. This is a great gain for seniors. In the last 3 months we have increased that by 650 further outlets, to do with things that—

Mr SPEAKER : Order! The question has been answered.

Rt Hon Winston Peters : What is she doing on behalf of seniors to advocate for an end to the SuperGold card review, described by Mr Voss on 18 February—

Hon Members : Foss.

Rt Hon Winston Peters : —Mr Foss—as being completed in June 2014—he gave the date back then—and what is she doing about new applications being made, for example, from the Paihia to Russell ferry, the Ōkiato to Ōpua ferry, the Kohukohu to Rāwene ferry, or, for example, the Bluff to Stewart Island ferry, all of which were stopped by the closure of all applications until the moratorium is over?

Mr SPEAKER : The Hon Maggie Barry—either question.

Hon MAGGIE BARRY : The moratorium was put in place in 2010 so the member is somewhat behind the times. The member may be stung by the notion that he has done little to serve his electorate, but let us not cloud the issue. Minister Foss said in this House in February—and I checked the Hansard, because I am in the habit of checking facts rather than just burbling off the top of my head like that member—in response to a question from that member, that there would be, he expected, an answer by the end of June this year. That may happen; it may be a little longer. Those were his expectations. We do things thoroughly—

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

Rt Hon Winston Peters : In answer to the Minister as to what she is doing, is it not a fact that a moratorium exists that prevents new applications for the transport allocations, and that has been extended now by over a year; if so, can she explain to this House and the confused New Zealand Herald journalist what the facts are, including the one in the Dominion Post yesterday saying that she was particularly ineffective?

Mr SPEAKER : Order! Either of those two supplementary questions.

Hon MAGGIE BARRY : When it comes to ineffective, I take lessons from the master, and that would be you. [Interruption]

Mr SPEAKER : Order! I need to remind all members, particularly those to my right, that this is a point of order. [Interruption] That is the very sort of interjection that will have that Minister leaving the Chamber.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. My point of order is that I am asking whether or not the moratorium prevents any new applications.

Mr SPEAKER : No, the member can resume his seat immediately. He also asked about the effectiveness of the Minister and the Minister took the opportunity to respond.

Rt Hon Winston Peters : Point of order.

Mr SPEAKER : I have just addressed the matter. If the member is raising a fresh point of order, I will look forward to it.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. This is a new matter, and it goes to numerous answers from the Minister. Of the four answers she gave, all attacking me personally, none of which I objected to—none of which I objected to—

Mr SPEAKER : Order! The member will resume his seat. This member gives as good as he gets.

Housing, Affordable—Consultation with Iwi on Development of Crown Land in Auckland

4. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing : Did he consult Auckland iwi on his plan to use vacant Government-owned land for private housing developments before he made the announcement on 21 May?

Hon Dr NICK SMITH (Minister for Building and Housing): My ministry met with the Tāmaki Collective, representing 13 Auckland iwi and hapū, about a month before the Budget, on 23 April, to outline the proposed Auckland Crown land housing programme and some of the sites that were under consideration. Consultation is not specifically required under the policy as the Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act, passed by this Parliament last year, specifically makes provision in section 136 for Governments selling Crown land for housing purposes.

Peeni Henare : Did he consult the Minister for Treaty of Waitangi Negotiations and/or the Minister for Māori Development on whether not offering surplus Crown land to iwi under the right of first refusal would expose the Government to judicial review that could completely overturn his Budget housing policy?

Hon Dr NICK SMITH : The entire Parliament was consulted on the policy because the 2014 Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act, voted on by members opposite, specifically makes provision for land owned by the Crown to be used for housing purposes and not being subject to the right of first refusal. In respect of my colleague Chris Finlayson, he is a member of Cabinet and was part of the Budget decisions relating to Crown land.

Peeni Henare : Does he think that deliberately cutting out the iwi of Tāmaki-makau-rau so he can do a deal with the Australian property developers is consistent with the Crown’s obligation under the Treaty settlements to act in good faith?

Hon Dr NICK SMITH : I can only read to the member section 136 of the Ngā Mana Whenua o Tāmaki Makaurau Collective Redress Act, entitled “Disposals for State housing purposes”. It specifically says that the Crown can sell land and dispose of it to support the Crown’s social objectives in relation to housing or services relating to housing—legislation that was voted upon by every member of this Parliament.

Phil Twyford : Why did it take his office 10 days to hand pick the 30 hectares of clean sites for his media stunt mystery bus tour, out of the 500 hectares that he promised, and can he confirm that his refusal to release the full list of 500 hectares is down to the damage that it would cause his collapsing housing policy and his crumbling reputation?

Hon Dr NICK SMITH : I know the member was very jealous that he was not able to come around Auckland and see the thousands and thousands of houses that this Government is building. I would also note that in the most recent building consent figures, coming out on Friday, we are now building 8,000 homes a year in Auckland. That is double the number of just 3 years ago. I cannot help the fact that the member is jealous of the progress this Government is making on the issue.

Phil Twyford : Does he recognise this quote from the latest Metro magazine as an accurate description: “No matter what he took over, it would never take long before it would look as though things really were a complete shambles.”?

Hon Dr NICK SMITH : I would draw to the attention of this House that 3 years ago one of the real challenges we had was housing issues in Christchurch. I have not had a single question from that member on Christchurch housing issues, because we are on top of the problem, and that member has not been on the ball to be able to challenge those.

Budget 2015—Support for Research and Innovation in Regional Areas

5. Hon JUDITH COLLINS (National—Papakura) to the Minister of Science and Innovation : How does Budget 2015 support research and innovation in regional areas?

Hon STEVEN JOYCE (Minister of Science and Innovation): Budget 2015 will see the Government invest up to $25 million over 3 years to support the establishment of new, privately led regional research institutes and centres outside of the main centres. Regional research institutes will be funded from a mixture of public and private sources and modelled along the lines of the successful Cawthron Institute in Nelson, which is a specialist, not-for-profit institute for aquaculture, marine biosecurity, and coastal and freshwater ecology. We envisage funding a launch of up to three new institutes over the next 4 to 5 years depending on demand.

Hon Judith Collins : Why will the new research institutes be located in regional areas?

Hon STEVEN JOYCE : Regional economies have different resources and strengths but can lack important components to their innovation networks that help drive economic growth and regional benefit. The regional research institutes will focus on scientific research relevant to a particular region, with a strong emphasis on the effect of transfer of research into new technologies, new firms, and new products and services. This investment in innovation, growth, and jobs in the regions comes alongside the Government’s $1.5 billion science spend in 2015-16, which is more than a 70 percent increase in the last 8 years.

Hon Judith Collins : What other support does the Government provide to encourage innovation and investment in the regions?

Hon STEVEN JOYCE : There are many things, but I will pick just a few examples. The regional business partners are a network of specialist business advisers who give guidance, identify opportunities, and provide access to business development funding. Through New Zealand Trade and Enterprise we have developed regional investment attraction programmes to encourage new investment in the regions. Government agencies like Callaghan Innovation and New Zealand Trade and Enterprise are working more closely with local agencies through initiatives such as the Hawke’s Bay Business Hub, which I helped to open last month. We are investing strongly in regional infrastructure with things like ultra-fast broadband and the Rural Broadband Initiative, and with Callaghan Innovation we have established an incubator network with incubators in the main centres plus in Palmerston North, Hamilton, and Tauranga.

Greenhouse Gas Emissions—Prime Minister’s Statements on 2020 Target

6. JAMES SHAW (Co-Leader—Green) to the Prime Minister : Does he stand by his answer to a supplementary question yesterday about carbon emissions that “A target of a 40 percent reduction on 1990 levels would be disastrous for the New Zealand economy”?

Rt Hon JOHN KEY (Prime Minister): Yes.

James Shaw : Does he agree with the Infometrics modelling commissioned by his Government that shows that the impact of a 40 percent reduction in emissions by 2030 would be just one-tenth of 1 percent of GDP growth compared with no reduction in emissions?

Rt Hon JOHN KEY : There has been a wide range of modelling done, but one of the models I have seen indicates that if we were to take a 40 percent reduction target off 1990 levels, that would come at a $5 billion cost to the economy. Probably more interesting is that, by about $1,800 a household per year, households would be worse off. Of course, that impact would have the biggest impact on lower income households.

James Shaw : I raise a point of order, Mr Speaker. I just ask that the Prime Minister table that document.

Mr SPEAKER : Well, only if the Prime Minister was quoting from an official document. [Interruption] It was not an official document.

James Shaw : Does he agree with the Infometrics modelling commissioned by his Government that shows that whether New Zealand has an emissions reduction target of 5 percent, 20 percent, or 40 percent by 2030, our GDP will still grow at 2.1 percent on average throughout the 2020s?

Rt Hon JOHN KEY : Our GDP will continue to grow. What is true is that if you have a 5 percent reduction, it comes at about a $3.5 billion cost. So the biggest cost actually comes in doing something off a 1990 base. But there is no question that a bigger target has a greater impact on the economy. I think it is worth for a moment to actually look at some comparisons, because for the same level of cost as the EU’s minus 40 percent target, New Zealand should be setting a target of a 10 to 20 percent increase. The facts of life are that New Zealand has had a large population increase since 1990, half of all its emissions come from agriculture, and it has a very high level of renewable energy. In fact, setting targets at the sort of level that the Greens are advocating is very expensive for households and New Zealand businesses.

James Shaw : So would he agree that the Infometrics modelling overstates the cost of acting to prevent climate change, because it deliberately does not take account of the rapid adoption of new lower emissions technologies like electric cars or solar panels, which have trebled in the last 18 months?

Rt Hon JOHN KEY : There is no question, actually, that modern technology will help New Zealand meet its climate change targets. That is likely to be the case, I think, not just in transport, actually, but equally when it comes to agriculture, where half of our emissions come from. That is why New Zealand was at the forefront of establishing the Global Research Alliance on Agricultural Greenhouse Gases, and why we think we will find scientific solutions. But for New Zealand to go to Paris on the whim of a hope that we will find a solution without one is, I think, actually a bit irresponsible for households and the economy.

James Shaw : I seek leave to table a document dated 2 June 2015, showing that solar panels trebled in New Zealand in the past 18 months, from the Electricity Networks Association.

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

James Shaw : Why is his Government making it more expensive to prevent climate change by under-investing in clean transport options like Auckland’s City Rail Link, meaning that New Zealanders will have to pay to offset our emissions rather than saving money to lower them?

Rt Hon JOHN KEY : That is not true. The Government has made it clear that it is committed to the central business district rail tunnel in Auckland, but it wants to do that under a time frame that is actually fair on Auckland ratepayers, who also have to pay half of the costs.

James Shaw : Why has the Government not released any economic modelling to show what the costs of doing nothing to stop climate change are?

Rt Hon JOHN KEY : There will be plenty of people who will want to put up their own models, and the truth is that all of them rely on some form of assumption. But the Government has released a discussion document, which the member will be aware of. The discussion document makes it clear, actually, that the Government’s intention is to set what it believes is a realistic target and to do the right thing. I simply make the point that for New Zealand to achieve the sort of reduction targets that you are seeing proposed in the EU is far more expensive. In fact, actually, if the member wants to go and use the Official Information Act, or go on to the Treasury website and have a look at the recommendations from Treasury, the Treasury’s recommendations are that the Government should do a lot less than what it is proposing to do, because it believes the relative costs to New Zealand compared with our competitors is much greater.

James Shaw : Given his reference, in that last supplementary answer, to the Government’s discussion document in relation to the current consultation that ends today, the modelling in the document shows that a 40 percent reduction in emissions would be one-tenth of 1 percent of GDP growth. Does he still believe that that would be disastrous?

Rt Hon JOHN KEY : As I said, the consultation document includes—or, I did not say, but the consultation document does include some modelling from Infometrics. But it is also true that if you look at other modelling—which I think is also in that document, though I would have to check—it shows that the costs to the consumers in New Zealand would be about $1,800 a household. That, by the way, is assuming carbon prices are $50 a ton. But in 15 years from now carbon prices could be a lot greater than that, and the costs could be a lot greater. In the end, New Zealand has to do the right thing, but putting our businesses—particularly our trade-exposed ones—out of business simply to meet some target that most other countries find much easier to reach, when some very large emitters are not prepared to take those steps, is not, I think, an economically rational thing to do.

Education, Minister—Statements on National Standards Data

7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education : Does she stand by her statement that national standards data has been “remarkably consistent”; if so, why?

Hon HEKIA PARATA (Minister of Education): Yes. The picture of achievement in reading, writing, and mathematics that national standards presents has been remarkably consistent since public reporting began in 2012. The information collected through national standards is highly comparable with other domestic and international studies. Prior to the introduction of national standards, there was no systematic collection of information on student achievement from years 1 to 8 to make sure that those kids who need the support get it. Many, many teachers today are more confident in using data and are relying on it to identify and grow achievement for their students. I see this as I go around the country—as recently as Friday at Whakatane Intermediate School, which I visited with the outstanding local MP, the Hon Anne Tolley. We saw highly competent, really engaged, very inquiring teachers developing data maps of the specific learning needs of individual students and then sharing them with those students so that they too could be excited and track their own progress. So, yes—

Mr SPEAKER : Order! That answer is long enough.

Chris Hipkins : Why does she continue to claim that national standards provide, in any way, an accurate picture of student achievement when the latest study by the Ministry of Education, of 15,838 children at 100 schools, found that 60 percent of the national standards results were wrong?

Hon HEKIA PARATA : As usual, Mr Hipkins is quoting selectively out of a really big context. First of all, that report was indeed commissioned by the Ministry of Education. We were so interested in seeing where we needed to improve in the implementation of national standards that when this was commissioned for 3 years, we extended it by 2 years. Why is the member continuing to attack teachers, who are themselves trying their very best to improve the consistency of their overall teacher judgments? National standards now give them a very clear and very consistent way of measuring these against the New Zealand curriculum.

Chris Hipkins : What evidence does she have to support the claim that she just made that national standards data is getting more accurate, given a September 2013 report found that they had incorrectly measured achievement of four out of 10 students, and the latest report suggests that they are now incorrectly measuring the achievement of six out of 10 students—in other words, it is getting worse?

Hon HEKIA PARATA : In the report that the member is referring to, it actually said that 90 percent of principals were confident that their teachers were making good use of national standards. In the same report, Mr Hipkins, and in the New Zealand Council for Educational Research of 2013, it said that 70 percent of teachers were becoming more confident about their own assessments. If the member wants even more numbers, the reason why I am confident is that about 30,000 teachers are making independent judgments of 400,000 kids in 2,100 schools. The difference at the macro level is about 1 percent or 2 percent. That is how I know; it is because I trust the teachers’ judgments.

Chris Hipkins : How can parents have confidence in the accuracy of national standards when the Ministry of Education’s analysis of 352 children who were judged to have met the maths standard for their age showed that only 28 percent—less than a third of them—had actually met the standard?

Hon HEKIA PARATA : Under national standards, it is the first time that parents have had reporting to them twice a year in language—

Chris Hipkins : It is wrong.

Hon HEKIA PARATA : No. The alacrity with which the member jumps on the potential of failure is really, really depressing because, actually, what this showed was how committed the Ministry of Education and the education sector are to getting this right, to finding where it is not working, and to working with the teachers to get it right to ensure that parents do understand exactly how well their individual child is doing.

Chris Hipkins : What action has she taken to address the finding of the latest report that there is growing concern amongst principals that the standards will have unintended consequences such as narrowing what is taught, creating league tables of school results, and demotivating the very children whom they are supposed to be targeting?

Hon HEKIA PARATA : The member is so out of date. It is really rather sad that he is quoting things that are really out of date. What action have I taken? What action have I taken? Let me count the ways: the 78 moderation workshops for teachers last year, and the 128 workshops this year; the design and development with the sector of the progression and consistency tool, which is an online tool that works on the curriculum with national standards; the learning and change networks, which are focused on a particular achievement challenge; and the Investing in Educational Success policy that this Government introduced last year for $359 million in order to form an end-to-end pathway for kids from early childhood to senior secondary. We have been a Government that is absolutely putting its money where its mouth is, and we are seeing the results both in national standards and at the National Certificate of Educational Achievement level. Sorry to bore you with success.

Chris Hipkins : If national standards were supposed to improve children’s learning, why, 5 years after they were implemented, does an independently audited national monitoring study show that less than half of year 8 children were performing at or above level 4 of the maths curriculum—the level they are expected to be performing at?

Hon HEKIA PARATA : It is inappropriate to blame the measuring system for what it found. What it has found is that we have particular challenges.

Hon Members : Ha, ha!

Hon HEKIA PARATA : The members may well laugh but we are interested in understanding where exactly kids are in their learning and what we need to do about it to help them to do better, and in then doing it. That is what national standards do, and every review of parents says that they welcome them. There have been reports subsequent to the 2013 one that the member is basing his comments on.

Chris Hipkins : Why does she continue to use national standards data to claim that the Government’s education policies are working, when the Ministry of Education’s own evaluation has found that increases in the percentage of children at or above the standards should not be read as indicating that children are performing better over time?

Hon HEKIA PARATA : Because the system was relatively new when that report was written. We have been publicly reporting in 2012, 2013, and 2014 only. We are working with the sector to get better at this, and that has been the case with the National Certificate of Educational Achievement.

Chris Hipkins : It’s getting worse.

Hon HEKIA PARATA : It is not getting worse. I understand that the member hopes that it is, in the absence of his being confident about kids, but the fact of the matter is that all around the country, schools are using national standards, and they are getting better, and they are getting more confident in using data—

Mr SPEAKER : Order! [Interruption] Order! Question No.8, Denis O’Rourke.

KiwiRail—Turnaround Plan

8. DENIS O’ROURKE (NZ First) to the Minister of Transport : Does he intend to fully implement the Ten Year Turnaround Plan for KiwiRail, announced by Hon Steven Joyce in 2010, to get rail working for all New Zealand, to have all modes of transport working to complement each other, and priced appropriately so importers and exporters have clear choices?

Hon SIMON BRIDGES (Minister of Transport): I thank the member for the question. The Government is committed to the Turnaround Plan for KiwiRail. We have always been clear that it is an ambitious plan, and progress for the implementation of it has been impacted on by the global financial crisis, the Christchurch earthquakes, and, for example, international commodity prices. To take account of these impacts, KiwiRail has recently completed a commercial review of the business, with the aim of developing a new, 30 year long-term plan. As part of the new long-term plan, the Government has asked KiwiRail to work with the New Zealand Transport Agency to investigate an integrated approach to transport planning and investment.

Denis O’Rourke : Why will the Minister not act to accelerate Auckland’s City Rail Link project when rail patronage has increased by 22 percent in the last 12 months and the system is now facing gridlock?

Hon SIMON BRIDGES : I disagree with the assertion, of course. We brought the funding of that forward by a decade. But as the Prime Minister has said today in response to an earlier question, we also need to be fair to the ratepayers of Auckland, who will be funding a good half of it.

Denis O’Rourke : When will the Minister prevent KiwiRail from de-electrifying the main trunk line from Hamilton to Palmerston North and stop it, instead, buying substandard diesel locomotives from China to replace the EF class electric locomotives, which could be economically reconditioned in New Zealand; if not, why not?

Hon SIMON BRIDGES : I think that, as we have heard from other Ministers in this House—the Minister for State Owned Enterprises—those are operational matters for KiwiRail, which it is working through. But what we also know is that KiwiRail, and rail, is an environmentally sustainable solution. That is part of why we have been backing it so strongly.

Rules Reduction Task force—Progress

9. JACQUI DEAN (National—Waitaki) to the Minister of Local Government : What progress is being made by the Government’s Rules Reduction Taskforce?

Hon PAULA BENNETT (Minister of Local Government): Excellent progress is being made by the Rules Reduction Task force, which is identifying the loopy rules that just do not make any sense. The task force, which is being run very well by that member herself, has held 46 community meetings all around the country and received 844 online submissions. It is hearing from property owners, business people, and tradespeople who are frustrated by the bureaucratic and often petty rules that are costing them time and money. Given how successful it has been so far, we have extended the deadline for submissions, and I encourage people to keep submitting.

Jacqui Dean : What are some of the loopy rules the task force has come across?

Hon PAULA BENNETT : The task force has heard about anything from a person being told they needed to have round handled handrails, rather than a square one, to match the picture in the building code to one farmer who was told he had to turn his vehicle lights off at night because rare birds flew over his property, despite the fact that they did not land or nest there. Although some of these rules may have been well intentioned, they have ended up becoming costly, frustrating, and sometimes seem to have no real reason at all.

Jacqui Dean : What are the next steps for the task force?

Hon PAULA BENNETT : I would like the member to keep doing the great work that she is doing, but also, of course, the most important part will be the process of getting rid of some of these rules—some that are unintentional, some that have grown over time—and working closely with local councils and those bureaucrats to make sure they understand the intention of Parliament. The task force is reporting back in late August, and we will be carefully considering those recommendations and then making plans forthwith.

Business, Innovation and Employment, Ministry—Signage

10. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development : Does the Ministry of Business, Innovation and Employment’s expenditure of $43,000 on a sign show it is achieving one of its principal goals of realising efficiency gains over time?

Hon STEVEN JOYCE (Minister for Economic Development): Firstly, although the cost and installation of the sign itself was $43,490, I was advised before the House sat today that there were a number of associated costs, and I would like to take the opportunity to keep the House informed of them now. These associated costs include more than $900 for lighting, $13,500 for the construction and installation of the foundation, $2,000 for resource consents, plus fees and margins for the construction company—

Hon Member : Is this in addition?

Hon STEVEN JOYCE : Yes, it is in addition—to the total of $67,339. So in answer to the member’s question: no, I do not think that it is indicative of the broader efficiency gains that are being achieved. In fact, it underlines what I have said previously: that the cost is clearly over the top. I have made that very clear to the chief executive of the Ministry of Business, Innovation and Employment, and I have sought and received a strong assurance that nothing like this will be spent on signage again.

Dr David Clark : Was the $360,000 that his department spent on comfort couches, motorised desks, and apple stools part of the same programme of realising efficiency gains over time?

Hon STEVEN JOYCE : In fact, the article that the member is relying on for that information was incorrect in some details. The motorised tables were not purchased, and the prices of the sofas were incorrect as well. However, the member makes a valid point overall. It is part of the overall cost of the shift of the agency, which will save taxpayers $40 million to $50 million over 20 years, on top of the savings from merging the agencies, which are around the $9 million a year mark. Nevertheless, I agree with the member that—

Hon Trevor Mallard : More than that on consultants already.

Hon STEVEN JOYCE : I agree with the member—[Interruption] Shh, Trevor! I agree with the member that those costs are over the top, and I have made that clear to the chief executive.

Dr David Clark : Did he choose the colour of The Small Business Sector Report, choose landscape over portrait orientation for the same document, and criticise the clarity of language that was cut and pasted from his own previous report?

Hon STEVEN JOYCE : Well, we are really on the big issues here. I can confirm one thing for the member: I often criticise the lack of clarity of written information and seek that it be clarified. But beyond that, I think the rest of it is up to the member’s imagination.

Dr David Clark : I seek leave to table an internal email dated 24 February 2014, released under the Official Information Act, which shows the Minister’s demand to change a document to landscape style.

Mr SPEAKER : The email has been described. I will put the leave. Leave is sought to table it. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Dr David Clark : I seek leave to table an internal email dated 18 February 2014, in which officials ask him to choose between colour options.

Mr SPEAKER : Leave is sought to table that particular document. Is there any objection? [Interruption] Was there objection from my left? No, there was not. It can be tabled. Document, by leave, laid on the Table of the House.

Dr David Clark : I seek leave to table a third exchange of emails—

Mr SPEAKER : Is this your final one?

Dr David Clark : —it is—dated 23 February 2014, in which it is recorded that the Minister, despite officials borrowing language directly—

Mr SPEAKER : Order! Just describe the email quickly.

Dr David Clark : —insisted on clearer language.

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

Dr David Clark : Who is the Minister responsible to this House for the expenditure referred to in my primary question and also in the last two supplementary questions?

Hon STEVEN JOYCE : Well, the Minister responsible for the Ministry of Business, Innovation and Employment is me. I have made it absolutely clear to the chief executive that I do not condone the expenditure on the sign. He has accepted that and has given me a very clear assurance. Overall, the ministry has done a good job at reducing costs and, actually, through the move to a refurbished building—unlike the new buildings that the Labour Government used to build all around Wellington all the time—it has actually saved $40 million to $50 million over 20 years. On top of that, the merger will save around $9.5 million a year. Nevertheless, those particular items were over the top.

Dr David Clark : Is his officials’ assessment accurate that the Minister often does not know what he wants until he sees what he does not want?

Hon STEVEN JOYCE : Golly gosh! This is a case of the member perhaps burying the lead. Nevertheless, I think Ministers often decide what they want once they have seen something they do not want. I do not think this is a particularly marvellous revelation from the member.

Security Intelligence Service—Review

11. Dr KENNEDY GRAHAM (Green) to the ActingAttorney-General : Will the terms of reference of the New Zealand security and intelligence review be amended to reflect the views of other legislatures, which are protecting civil liberties, including the United States Congress, which yesterday passed the Freedom Act to end mass collection of American phone records?

Hon AMY ADAMS (Acting Attorney-General): The terms of reference have been finalised and already provide for consideration of how civil liberties are protected. As required by the Act, the terms direct the reviewers to consider the legislation governing the agencies and the oversight of those agencies, while protecting individual rights. Furthermore, as the responsible Minister has said, there is no mass collection of phone records in New Zealand; therefore, the issue is moot.

Dr Kennedy Graham : Given that the terms of reference in fact allow for additional matters to be considered, will the Government include the adoption of the Freedom Act in the United States and its implications in New Zealand?

Hon AMY ADAMS : The terms of reference already contain considerable width for the reviewers to consider the appropriateness of the legislation for the agencies and their oversight, but I would note that the Freedom Act in the United States has moved their regime from being far more permissive than ours to being more permissive than ours. It is hardly a model for New Zealand. It would be a backwards step.

Dr Kennedy Graham : Was the Prime Minister himself not wrong to call the Snowden documents incorrect, out of date, and just plain wrong, given that the US Congress has used those documents as a basis to pass the Freedom Act to limit the National Security Agency’s spying powers?

Hon AMY ADAMS : My capacity as the Acting Attorney-General is very narrow and is simply limited to appointing the reviewers and setting the terms of reference. But I can assure you that the Prime Minister is not wrong.

Dr Kennedy Graham : Why are New Zealanders being forced to accept lower levels of privacy protection given that Europe has become more transparent and that the National Security Agency has had its ability to spy hauled back?

Hon AMY ADAMS : As I mentioned in my answer to the previous question, my responsibilities as the Acting Attorney-General are to set up the review, to appoint the reviewers, and to set the terms of reference. I do not, however, accept any part of the member’s assumptions in that question.

Fire Service Review—Announcements

12. BRETT HUDSON (National) to the Minister of Internal Affairs : What recent announcements has he made in regard to New Zealand’s Fire Services?

Hon PETER DUNNE (Minister of Internal Affairs): Last week I announced what is potentially the most significant review of New Zealand’s fire services since the aftermath of the Ballantynes fire in Christchurch in 1947. The review concentrates on three main areas for change: an enhancement of the status quo; a move to coordinated service delivery, which continues with separate rural fire districts; or the option of moving to one integrated national fire service.

Brett Hudson : Why is this review necessary?

Hon PETER DUNNE : There are a number of challenges currently confronting the Fire Service: a changing expectation of the way fire services are performed, a lack of coordination and variable leadership, and inconsistent investment for community needs. If I can put it in a nutshell, much of what the modern Fire Service does it has no mandate for. The irony is that we have an internationally acclaimed urban search and rescue service that is mandated now by the United Nations but, strictly speaking, probably outside the mandate of the New Zealand Fire Service. That is clearly absurd.

Clayton Mitchell : In light of his answers, can the Minister explain why in the relatively short time since 1994, when the present funding arrangements came into force, there have been no fewer than 16 reports and reviews—

Rt Hon Winston Peters : How many?

Clayton Mitchell : —16 reports and reviews—addressed at improving the commission’s funding arrangements, and these reports were generally critical of the present funding arrangements, and still nothing has changed?

Hon PETER DUNNE : I make two points in response to the member’s question. Firstly, just in the last 2 weeks there was a very significant Supreme Court decision relating to the way in which the levies were being applied by insurance companies, and, second, as part of the current review we will be looking at a range of financial options, excluding using general taxation. So the matters the member raises will be addressed as part of this review.

Brett Hudson : Keeping that in mind, will the review also look at how the Fire Service is funded?

Hon PETER DUNNE : Yes, it will. As I said in my previous answer, we have ruled out looking at general taxation as an option, but beyond that all other funding options are under consideration.

Brett Hudson : What feedback has the Minister received on this announcement so far?

Hon PETER DUNNE : It is early days. It has been just a week since the document has been released, but so far the United Fire Brigades Association, the Professional Firefighters Union, and the Insurance Council of New Zealand, in a range of public meetings I have been to, have all expressed support for the notion of a review. Over the next 6 to 8 weeks, while the review is going on, I will be getting around the country and conducting a number of meetings with interested parties, before decisions are made later in the year.

Questions to Members

Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill—Purpose

1. RIA BOND (NZ First) to the Member in charge of the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill: What is the intention of the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill?

TRACEY MARTIN (Member in charge of the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill): The intention of the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill is to place recognition in statute that an orphan is an orphan whether placed with foster parents or kin carers, and that any State support should be based upon the circumstances of the child, not the circumstances of the adult.

Ria Bond : How will orphans and unsupported children be better off under the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill?

TRACEY MARTIN : When the Social Security (Clothing Allowances for Orphans and Unsupported Children) Amendment Bill passes into law, all orphans and unsupported children will be recognised equally by Government services, as should always have been the case. This will bring the focus of service provision back to child-focused provision, which was, I believe, the original intent of previous Parliaments.

ENDS

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