Questions & Answers – Dec 1

by Desk Editor on Wednesday, December 2, 2015 — 12:00 PM

1. MARK MITCHELL (National—Rodney) to the Minister of Finance: What reports has he received showing a recent lift in business confidence supports an outlook for continuing moderate growth and a more diversified economy?

Hon BILL ENGLISH (Minister of Finance): Yesterday ANZ published its Business Outlook survey. Business sentiment continued to improve in November, with net 15 percent of businesses being optimistic about the economy for the year ahead. Thirty two percent of own-activity expectations are positive; profit expectations, investment intentions, employment intentions, and export intentions all improved.

Mark Mitchell: What reports has he received showing that strengthening activity in sectors of the economy, besides dairy, is expected to underpin higher growth in 2016?

Hon BILL ENGLISH: The New Zealand Institute of Economic Research quarterly predications say that stronger activities in sectors of the economy outside dairy, including services, will underpin a pick-up in growth towards 3 percent over 2016. The current account deficit is expected to stabilise at around 3 to 3.5 percent over the next 4 years, well below the record 8 percent current account deficit back in 2008, and they forecast around 160,000 jobs will be added to the economy over the next 5 years, so this suggests some confidence in the future of the economy.

Mark Mitchell: What factors does the New Zealand Institute of Economic Research point to as supporting increasing diversification in the New Zealand economy?

Hon BILL ENGLISH: Tourism is now New Zealand’s second-largest export, and probably at the current rate of growth it is expected to overtake the dairy industry. There has been particularly strong growth in interest from international students coming to study in New Zealand, which accounts for some aspects of the currently very high migration numbers.

Mr SPEAKER: Supplementary question, Fletcher Tabuteau.

Fletcher Tabuteau: Thank you—[Interruption]

Mr SPEAKER: Order! David Bennett will cease his interjection across the House.

Fletcher Tabuteau: Including dairy, what reports have you seen on the impact on future New Zealand business confidence should the El Nino drought be as bad as predicted, and what plans are being made?

Hon BILL ENGLISH: I have seen some reports that the prospects of an El Nino – induced drought could have an impact on the growth rate of the economy. The IMF, which was here recently, forecast it would knock off around half a percent of GDP; that is, where the economy may have grown at 2.5 percent it might end up growing at 2 percent. The plans that are being made are being made by the businesses that will be directly affected by it. For instance, farmers may be choosing to destock earlier in the summer.

Mark Mitchell: What reports has he seen on trends for economic growth in regional New Zealand?

Hon BILL ENGLISH: ANZ has released its quarterly review of regional trends. Activity rose in eight of the nine North Island regions and in four out of the five South Island regions, with the strongest activity growth occurring in Northland, Auckland, Bay of Plenty, Gisborne, and Otago. It is particularly pleasing to see Northland and Gisborne showing some signs of strong growth. Economic activity increased by 0.3 percent in the last quarter in the North Island, taking it to 3.1 percent for the year, and 0.9 percent in the South Island. All of these are forward-looking indicators suggesting that a solid pace of expansion will be sustained in most regions.

Climate Change—Paris Climate Change Conference

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that New Zealand “shouldn’t be a leader in climate change”, given that New Zealand was awarded the “Fossil of the Day award” following his speech on the first day of the Paris climate talks?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes. New Zealand is committed to doing its fair share on climate change, but the cost of a further reduction in carbon emissions is more expensive for New Zealand than for any other developed country. Overall leadership needs to be provided by the major emitting nations of the world. New Zealand provides leadership in areas where we deliver the most impact, such as research into agricultural emissions, support of our Pacific neighbours, and leading the charge on reform of fossil fuel subsidies.

Andrew Little: Why is he being a “fossil fool” by proposing only an 11 percent reduction in carbon dioxide emissions, while people who take climate change seriously, such as the EU and the New Zealand Labour Party, are proposing a 40 percent reduction?

Hon BILL ENGLISH: Because we are reasonable and pragmatic, and we set targets we would expect to be able to achieve. Any number of targets can be set over the next 20 or 30 years, but we are practical about what can be achieved and take a balanced approach.

Andrew Little: Why is he embarrassing New Zealand on the world stage by saying we should reduce per person emissions only a quarter as quickly as Europe?

Hon BILL ENGLISH: I do not think there is any embarrassment whatsoever. New Zealand has been a long-time participant in the global discussions about climate change. We have credible targets that take into account the real cost to our economy. If the Labour Party wants to get up and say it is going to shut down all the major emitters—the aluminium smelter, New Zealand Steel, and the refinery—then it is welcome to do so, but we do not agree with that approach.

Andrew Little: Why will he not follow Labour’s lead, match Europe’s proposal, and make a real commitment to tackle climate change? Why are you sticking your head in the sand?

Hon BILL ENGLISH: Because, in general, following Labour’s lead would lead to 30 percent support among the public and a lot of contradictory and difficult policies.

Andrew Little: Given his Government’s claims about being concerned by climate change, why is his Government spending more on subsidising foreign oil companies than on climate change research?

Hon Dr Nick Smith: Rubbish.

Hon BILL ENGLISH: That is rubbish. In respect of the statements that have been made about fossil fuel subsidies, the World Wildlife Fund for Nature New Zealand assessment is based on what one would describe as fine-grained interpretations about tax law; that is, the treatment of development expenditure as to whether it is capitalised or deductible. The assessment done by APEC and one other international body says that New Zealand has no fossil fuel subsidies. The Labour Party should be supporting New Zealand’s effort to lead the reform of fossil fuel subsidies around the world, because if all countries eliminated the subsidies, we would reduce carbon output by 12 percent.

Andrew Little: When the Parliamentary Commissioner for the Environment says that rising sea levels will cause billions of dollars of damage, does he really think that $20 million a year for research is an adequate response?

Hon BILL ENGLISH: New Zealand has committed itself to research related to livestock emissions because that is a unique aspect of our carbon emissions profile. We have had international success in attracting the interest and the funding of a range of countries. It has been a very successful exercise. But I do not know of any research programme that is based around the idea that it is going to be able to prevent a rise in ocean levels. We focus on researching where we can have an impact.

Andrew Little: When future generations ask what he did to tackle climate change, will he proudly say “I took greenhouse emissions to record levels.”, or “I gutted the emissions trading scheme.”, or “I failed to get agriculture to get cleaner.”, or “I increased oil imports.”, or “I did the bare minimum to look like I was doing something.”?

Hon BILL ENGLISH: I think we would say one of the successful things we did was keep the Labour Party out of Government, so that it did not pursue a reckless climate change policy that was bad for the economy, that shut down our major emitters, and that hobbled our farming sector so it could not compete.

Health Services—Elective Surgery

3. Dr SHANE RETI (National—Whangarei) to the Minister of Health: Can he confirm that as at September 2015, 99.31 percent of patients waiting for elective surgery received their treatment within 4 months?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, I can. In September 99.82 percent of patients received their first specialist assessment within 4 months of referral, and 99.31 percent of patients waited no longer than 4 months for their surgery. These statistics were published last week by the Office of the Auditor-General. The Auditor-General also noted in its report: “From 2011 to 2015 more people per 10,000 of population had access to scheduled surgery.” In plain English, the growth of elective surgery delivered has exceeded population growth.

Dr Shane Reti: What did the Auditor-General’s report state about hospitals delivering more elective surgeries year on year?

Hon Dr JONATHAN COLEMAN: The Auditor-General noted that as well as delivering shorter waiting times for first specialist assessments, district health boards are increasing the volume of elective surgeries they deliver by at least 4,000 per year. In fact, they “exceeded this target in all years from 2008-09 to 2014-15.” That is a fantastic result and underlines the commitment of our health workforce to provide for patients, as well as the Government’s $4.1 billion increase in health funding over the last 7 years.

Hon Annette King: When he said on 17 November, in answer to a question from Dr Reti, that there had been a third increase in elective orthopaedic surgical discharges under this Government, did he include operations undertaken under two Labour health budgets, 2007-08 and 2008-09?

Hon Dr JONATHAN COLEMAN: What I was including is the increase of 50,000 operations a year under this Government and 100,000 specialist appointments. You cannot beat that.

Hon Annette King: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will invite the member to ask the question again.

Hon Annette King: When he said on 17 November, in answer to a question from Dr Reti, that there had been a third increase in elective orthopaedic surgical discharges under this Government, did he include operations undertaken under two Labour health budgets, 2007-08 and 2008-09?

Hon Dr JONATHAN COLEMAN: What I included is the 50,000 extra operations per year that this Government is delivering—50,000 more each year.

Barbara Stewart: Can the increased percentage of Northland District Health Board patients receiving elective surgery within 4 months be attributed to the 30 percent blowout in Northland District Health Board’s current financial budget?

Hon Dr JONATHAN COLEMAN: There is no 30 percent blowout in the budget. The member has got the facts wrong.

Canterbury Earthquake Recovery—Treasury Report

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the Minister for Canterbury Earthquake Recovery that Treasury has an “arrogant bureaucratic attitude” to Christchurch and that the report he released yesterday is “utter tripe”; if not, why not?

Hon BILL ENGLISH (Minister of Finance): To some extent, and I can understand the Minister’s view. He has dealt with the expenditure of over $15 billion, in what would be the most complicated set of decisions that any Government or Minister has had to make. Treasury measures these projects against a theoretically perfect yardstick, and, of course, in Christchurch almost no project has been able to follow the theoretically perfect yardstick. The Minister has, of course, been able to cut through a lot of bureaucratic process, make decisions, and get things done, and that is why Christchurch is in such good shape.

Hon Gerry Brownlee: Another patsy.

Grant Robertson: It is all about you, Gerry. Is Gerry Brownlee correct when he told Radio New Zealand that Treasury, which prepares the Government’s Budget, “did not appreciate the amount of money the Government was spending in Christchurch”?

Hon BILL ENGLISH: I think that is probably right. There are parts of Treasury that do the accounting, and parts of it do the project monitoring. It is possible that the people who monitor the projects are not aware of quite how much money is being spent there. Of course, you have to go to Christchurch to be aware of how effectively it has been spent.

Grant Robertson: In light of those two answers, why is he, as Minister of Finance, overseeing an agency that does reports that he has accepted are “utter tripe” and that does not actually understand how much money the Government is spending in Christchurch; why is he allowing those kinds—

Mr SPEAKER: Order! The question has been asked.

Hon BILL ENGLISH: The member needs to understand the context, which is that the Government is issuing reports on—

Hon Members: The context—ah, the context.

Hon BILL ENGLISH: Well, we have issued reports on 409 projects, costing $6.5 billion this year, and further detail on 38 projects with more complexity, of which the Christchurch project is just one. We are bringing more transparency and accountability to the expenditure of the Government’s capital budgets than has ever been seen. In that context, if Treasury made one mistake, it would be that the red rating should not actually indicate that the project is unachievable, because these projects are being achieved.

Joanne Hayes: What reports has he received on the performance of the Government’s most complex investment projects?

Hon BILL ENGLISH: As I said, we have just released the first report, Managing Government Investment Projects—an annual report. The $6.4 billion worth of projects will cost, over their lifetime, $74 billion. We also released the first 4-monthly Major Projects Performance Report, which includes our 38 most complex investment projects and the ratings for how they have been conducted up to June last year. As I said, the use of the term “unachievable” is not correct, because, actually, the half a dozen projects that had some red rating at some stage will all be achieved—particularly those in Christchurch.

Grant Robertson: Can he guarantee today that there will be no further slippage in the time line for the delivery of the convention centre and Metro Sports Facility projects—one of the main concerns raised by Treasury?

Hon Gerry Brownlee: What time lines are we talking about? There are no time lines.

Hon BILL ENGLISH: As the Minister has said, time lines had not been set for those projects, which, according to Treasury’s perfect benchmark, is one of the reasons that they were rated with some uncertainty. Both are now involved in detailed commercial discussions, and the member can be reassured that those projects will be completed and that the funding is readily available for them.

Joanne Hayes: What steps has the Government taken to improve transparency around the performance of the most complex of these projects?

Hon BILL ENGLISH: The reports that have been issued are a major step forward in transparency over the expenditure of billions of dollars, because this information had not been available to the Government until recently, let alone to the public. We expect that it will continue the pressure for improved performance in delivering projects across the public sector.

Grant Robertson: Is what has really happened here not that Treasury has said what most Cantabrians have known for some time: that the rebuild of Christchurch under his and Mr Brownlee’s watch is a complete mess and that the promises of the project will continue to be delayed and fail to deliver?

Hon BILL ENGLISH: The member does suffer from the political problem of being completely Wellington bound, and these statements make it evident. I invite the member to visit Christchurch, which is—[Interruption]

Mr SPEAKER: Order! Less interjection please. It was a political question that was asked. The Minister can answer it.

Hon BILL ENGLISH: I invite the member to visit Christchurch, which is in the South Island—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! I rose to my feet a minute ago. There was very loud interjection coming from two members particularly. I asked that it cease. It has not ceased at all. The question has been asked; the Minister now has a right to answer it. Members may not like the answer they are getting, but he still has a right to deliver it without the level of interjection that is coming from my left. If it happens again, I will be asking a particular member to leave.

Hon BILL ENGLISH: I invite the member to visit Christchurch, which is in the South Island, and the Minister will give him a free, lengthy briefing. I also invite him to visit Reg, whose house was the 5,000th State house repair. He is a very happy customer—one of 5,000 in Christchurch who have had their State house all done up.

Tax Deductions—Oil and Gas Exploration

5. METIRIA TUREI (Co-Leader—Green) to the Minister of Revenue: What has been the overall impact of tax deductions for petroleum and mining expenditures on the level of oil and gas exploration and prospecting in New Zealand since 2012/13, and how much revenue has the Government forgone as a result of these tax deductions in this period?

Hon TODD McCLAY (Minister of Revenue): I am advised that the Inland Revenue Department does not collect data on tax deductions for petroleum mining or any other industry. However, I can confirm that the petroleum industry is treated the same as other businesses in New Zealand in respect of deductions. It is therefore not possible to ascertain what the impact of tax measures is on the level of prospecting and exploration. However, other factors such as prospectivity and global commodity prices are likely to have a greater impact on petroleum investment decisions in New Zealand. I am advised that the Government has not forgone any revenue based on tax measures in place for the oil industry.

Metiria Turei: Can the Minister confirm that the tax breaks his Government has given to the oil industry are more or less than the estimated $36 million that the former Minister of Revenue, Peter Dunne, confirmed in 2012?

Hon TODD McCLAY: In my answer I said that the industry is treated the same, and so I cannot confirm that, because it is not correct. There is, however, one exemption that is in place for the prospecting industry for oil. I am advised that this is either neutral from a tax sense or that it is slightly tax positive, and it is a result of our double tax agreements, which mean that any non-resident who has things in place in New Zealand for more than 183 days must pay tax in New Zealand. We found that there was a churning, where items used for exploration could be exported out of the country and brought back in and deductions therefore would be available. This has been rectified so that they do not have to be taken out of the country. It actually is good not only for the economy—

Mr SPEAKER: Could you bring the answer to a conclusion.

Hon TODD McCLAY: —it is very good for the environment.

Metiria Turei: Why is it that his department is not now calculating how much the Government is losing in tax breaks to oil companies, when the previous Minister of Revenue, Peter Dunne, could when he was the Minister?

Hon TODD McCLAY: I am not sure where the member gets her figures from, nor whether she is making a reasonable or fair comparison. The Inland Revenue Department does not collect information on deductions. There are no special deductions for the industry she has raised, or for any other industry in New Zealand. All companies are treated the same. We expect everybody to pay their fair share of tax. We expect that where there is a deduction that is allowed under law, they may use that on their profits. They must also pay tax.

Metiria Turei: I seek leave to table a letter from the office of Peter Dunne, dated 19 June 2012, which answered the exact question—

Mr SPEAKER: Order! The letter has been described. I will put the leave. 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.

Metiria Turei: Can the Minister confirm for this House that he does not know how much public money is being lost to the public purse on tax breaks to oil companies?

Hon TODD McCLAY: No, no, it is not that I do not know; what I am saying to that member is that, in as far as revenue collection is concerned, all businesses in New Zealand are treated the same. Where there is a business activity and then there is a cost that is allowable for a deduction under the Income Tax Act, that business can have that deduction. There is nothing special about the oil exploration business, or any other business in New Zealand, when it comes to the way that we apply proper tax policy.

Metiria Turei: Are the tax breaks that are given to the fossil fuel industry by this Government more or less than the tax breaks given to the clean-energy sector?

Hon TODD McCLAY: I refer to my earlier answers, but will be as clear as I can—there are no tax breaks, in as far as tax deductions are concerned, for the oil industry.

Metiria Turei: Does the Minister believe that he has a better understanding of what constitutes a subsidy or a tax break than the OECD, which has said that New Zealand’s tax concessions “distort investment decisions in favour of fossil fuel production … and counteract New Zealand’s efforts to address global climate change, and thus should be discontinued.”?

Hon TODD McCLAY: No, but what I would say is that the Government is very open and transparent. I note that the APEC inefficient fossil fuel subsidy peer review found that as well as being fiscally neutral or positive for the taxpayer, the policies in place actually reduce greenhouse gas emissions and did not encourage wasteful consumption. Further than that, we volunteered to have our policies on mining and extraction and the oil industry reviewed by independent energy and climate change experts at APEC and by the Friends of Fossil Fuel Subsidy Reform. They looked at eight key policy areas, including the four related to oil and natural gas production and four relating to consumption and Solid Energy. New Zealand’s position was completely vindicated this year when the reviews concluded that New Zealand has no inefficient subsidies that encourage wasteful consumption.

Metiria Turei: Can the Minister not see how his failure to reveal to the New Zealand public the tax breaks for the fossil fuel industry makes the Prime Minister look hypocritical when last night he demanded that other countries reveal their subsidies for the fossil fuel industry?

Hon TODD McCLAY: No, quite the contrary. The Prime Minister has shown exceptional international leadership on this issue when today he presented a message, along with 40 nations, calling for the removal of inefficient fossil fuel subsidies. He said “Phasing out fossil fuel subsidies is absolutely vital if the world is to succeed in substantially reducing emissions.” He went on to say “Countries subsidised fossil fuels to the tune of US$500 billion in 2014.” I note New Zealand is not one of those, but I have seen a report that was on the TV this morning from Green Party MP—

Mr SPEAKER: Order! That part of the answer is not going to be necessary.

Trades Academies—Announcements

6. SARAH DOWIE (National—Invercargill) to the Minister of Education: What announcements has she made recently on trades academies?

Hon HEKIA PARATA (Minister of Education): Together with my colleague the Minister for Tertiary Education, Skills and Employment, I was pleased to announce a new trades academy for Southland. This means that next year, school students in every region of the country will now have the opportunity to gain practical skills while studying towards NCEA credits and tertiary qualifications. Southland, up until now, has been the only region in New Zealand without a trades academy, and the recognition of the Southland Institute of Technology as a trades academy lead provider will be a big boost to the skills pipeline for Southland employers. The new academy, to be known as the Murihiku Trades Academy, will begin operation next year and will initially have places for 40 students. The new academy will work closely with local secondary schools to offer these places to their students.

Sarah Dowie: How do trades academies benefit students and the local community?

Hon HEKIA PARATA: Trades academies are proving to be a popular and successful learning choice for many students, and are helping to lift achievement. Young people are highly motivated by applied learning and trade pathways. As well, more of those who were at risk of dropping out are staying engaged in education, and gaining qualifications. Last year about 1,200 18-year-olds achieved NCEA level 2 through trades academies and Youth Guarantee fees-free places who otherwise would not have gained these qualifications. Trades academies help address skills shortages in many communities. For example, in Southland there are a number of labour shortages in trade-related industries, and the new academy will provide secondary school students with an opportunity to transition into these industries with good career opportunities.

Tertiary Education Programmes—Spending

7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister for Tertiary Education, Skills and Employment: Is he satisfied with the oversight he and his officials have of spending on tertiary education programmes?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Thank you Mr Speaker, and congratulations to the member.

Hon Member: Ha ha!

Hon STEVEN JOYCE: Well, it is important—

Mr SPEAKER: Order! Just answer the question.

Hon STEVEN JOYCE: Overall, yes. There is always room to do more, but there have been a small number of providers out of the 730 funded each year that have not been meeting their funding obligations. When that occurs the Tertiary Education Commission does and will take the appropriate steps to recover any funding shortfall. It is certainly better now than in the bad old days when it was all about getting enrolments in the door and not worrying about what happened once they were in there.

Chris Hipkins: What action did he or his officials take when they became aware that Quantum Education Group reported a 91 percent completion rate in 2012, despite over 1,500 of the 3,700 students who received student loans to study at Quantum that year dropping out, making their true completion rate more like 47 percent?

Hon STEVEN JOYCE: My understanding is that the member’s characterisation of that may not be correct but, nevertheless, in answer to his question, the agencies are conducting some inquiries into that matter; in fact, not just the tertiary agencies but also, I understand, the Financial Markets Authority.

Chris Hipkins: Why is he satisfied that he has adequate oversight of spending in tertiary education when Quantum Education Group received student loan fee payments from over 3,600 students in 2013 although the Tertiary Education Commission records enrolments for only half that number?

Hon STEVEN JOYCE: I just repeat the answer that I gave to the previous question.

Mr SPEAKER: No. I think you have got to do better than that. The question is quite a different question that requires—it may be a similar answer, but it requires an answer.

Hon STEVEN JOYCE: Well, as I said, those matters that the member refers to, I am not sure that he is characterising them correctly, but in any event they are under investigation by the relevant agencies, including the Financial Markets Authority.

Chris Hipkins: Why does he believe it is acceptable for a tertiary institution to enrol and receive student loan tuition fee payments from thousands of students, only to have half of those students drop out within a month of the course starting, before they were even counted for Tertiary Education Commission enrolment purposes?

Hon STEVEN JOYCE: Nobody is saying it is acceptable—nobody is saying that.

Chris Hipkins: If it is not acceptable, why did he continue to allow it to happen for at least 3 years: in 2012, 2013, and 2014?

Hon STEVEN JOYCE: Well, the member is incorrect. I did not allow it to happen at all. There are 730 institutions that are funded in this country. They are required to follow funding rules. If they do not follow the funding rules, they will be taken to account by the Tertiary Education Commission, as the member may have learnt in recent weeks and months. He has seen a couple of high-profile examples of institutions that have either gone out of business or, in fact, had to repay large amounts of money because they broke those funding rules.

Housing, Auckland—Building Consents

8. JAMI-LEE ROSS (National–Botany) to the Minister for Building and Housing: Can he confirm that the number of building consents issued for homes in Auckland in October 2015 was 805 as compared with 205 in October 2008, and that the yearly total is the highest in 11 years?

Hon Dr NICK SMITH (Minister for Building and Housing): Yes, I can confirm that the latest rate of monthly home construction is nearly four times what it was when the last Government left office. The annual figures are equally strong, with 8,900 new homes consented in Auckland in the last year—the highest annual total in over a decade. The last 4 years of home construction has seen annual growth of 19 percent, 32 percent, 28 percent, and 23 percent—the longest and strongest period of growth on record—confirming our policies to grow supply are working.

Jami-Lee Ross: What advice has he received on the impact of growing supply on prices, and are there any lessons to learn from the experience in Christchurch?

Hon Dr NICK SMITH: The Government’s advice is that house prices will ease in Auckland when supply matches demand. The experience in Christchurch has been where it had house price inflation of 21 percent in 2012, 2013, and 2014. We had a massive residential construction programme with Minister Gerry Brownlee, and 10,000 homes were built over the last 3 years. We have seen house price inflation in Christchurch drop to just 2 percent, and rents there in the last year have dropped by 7 percent. The Auckland housing market is four times the size, and so it will take longer to get supply and demand in balance. I note that the auction clearance rate has dropped from 85 percent to 30 percent, indicating that things are coming better into balance.

Jami-Lee Ross: What comments has the Minister seen on the connection between the Resource Management Act and housing challenges in Auckland?

Hon Dr NICK SMITH: I have read a range of comments. In March this year I read a statement saying: “You cannot blame the RMA for the housing problem. It’s nuts to claim they are connected. It is just a scapegoat.” I have also read a statement last week: “The way councils regulate housing under the RMA is the root cause”—

Mr SPEAKER: Order! [Interruption] Order! I know where the—[Interruption] The member can resume his seat.

Phil Twyford: Why does he pretend that the current consenting rate is some kind of success when Auckland needs 14,500 new builds a year just to keep up with population growth, and, at the current rate of 8,900, the 25,000 shortfall of houses built up under his watch is getting worse, at a rate of 5,600 houses every year?

Hon Dr NICK SMITH: The member’s numbers are dodgy, just like his position on the Resource Management Act. The fact is that when Labour left Government, we were building 200 houses a month. We are now building over 800 a month, and that is huge progress. [Interruption]

Mr SPEAKER: Order! [Interruption] Mr Brownlee. Order!

Finance, Minister—Statements

9. FLETCHER TABUTEAU (NZ First) to the Minister of Finance: Does he stand by all his statements?

Hon BILL ENGLISH (Minister of Finance): Yes, in the context in which they were made.

Fletcher Tabuteau: Does he stand by his statement that “… it does not matter that much whether there is a small surplus or a small deficit—it is the fact that Government finances are headed, broadly, in the right direction.”?

Hon BILL ENGLISH: Yes, that sounds pretty sensible. Getting the Government back to surplus is a very important symbolic target to achieve, but in the long run it is a matter of whether we have good disciplines around capital spending and a strong focus on getting results for our social spending. Those are the things that determine Government spending in the long run.

Fletcher Tabuteau: How can he assure the New Zealand public that the September quarter’s $545 million deficit is heading in the right direction?

Hon BILL ENGLISH: I am not sure what the member is referring to; it may be the first 3 months, the first quarterly accounts for the Government. The Treasury does do some quarterly forecasts about where the accounts will be, and generally it would expect them to track towards the number that was estimated in the Budget. That will be all updated in the next few weeks, when the Government issues the Half Year Economic and Fiscal Update.

Fletcher Tabuteau: Would he acknowledge that the whole surplus reported in the June quarter simply arose due to a very artificially manufactured exercise in creative accounting; if not, why not?

Hon BILL ENGLISH: No, I certainly would not acknowledge that. The Government accounts are signed off by the Auditor-General according to, really, the strictest standards of public sector accounting in the world. The number is what the number is. Of course, getting to a deficit or a surplus is a result of a whole lot of decisions, not just one decision, but there is no question of the member’s assertion of dodgy accounting.

Fletcher Tabuteau: How can he say he is confident about Government finances given that he has cut departmental budgets, resulting in cuts to SuperGold card travel entitlements, cuts to support to rural ACC clients, and abandoning payments into the Cullen fund, for example? I could go on, but how can he be confident?

Hon BILL ENGLISH: The public seems to have confidence, because the most recent Kiwis Count survey shows that members of the public rate their public services higher than ever and as continuing to improve. So if the measure is not what politicians like going on about—that is, whether the Budget was cut or expanded—but what the public cares about, which is the quality of service, then I think we can have growing confidence that we are getting value for money.

Fletcher Tabuteau: Would he concede that the Government finances are heading in completely the wrong direction, given that the last four consecutive financial quarters combined show a huge deficit? Minister, you do not have a surplus at all, do you?

Hon Member: That’s not a question.

Hon BILL ENGLISH: In answer to the part of the question that was a question, no, I do not agree with the member. The Government has got its books basically back to balance. It has done that through a combination of some growth in tax revenue from a growing economy and from a strong focus on the quality of spending. I suspect it will be a matter for public debate, because New Zealand First and Labour have a track record of throwing money at every problem and making no difference to those problems. We have a track record of being much more thoughtful about how the money is spent, and actually are now starting to address some of the hard-core social problems in New Zealand that generate a lot of Government expenditure.

Primary Industries, Ministry—Food Safety, Advice

10. Hon DAMIEN O’CONNOR (Labour—West Coast – Tasman) to the Minister for Food Safety: Is she satisfied by all the advice she has received from the Ministry of Primary Industries on food safety?

Hon JO GOODHEW (Minister for Food Safety): Yes.

Hon Damien O’Connor: When was she, or when were her officials, first alerted to the possible risk of hepatitis A associated with imported frozen berries?

Hon JO GOODHEW: The medical officer of health made the Ministry for Primary Industries officials aware late in October of a case, which subsequently became four cases, of hepatitis A. There are about 20 cases in New Zealand a year. What happens after a case is notified to the medical officer of health is that exhaustive questioning is undertaken to determine what the evidence might be for where that hepatitis A was contracted. In this case, it has taken until late last month for the questions to be answered and for there to be genotyping established that shows evidence that it could be from frozen imported berries.

Hon Damien O’Connor: Why did the Minister not act and ask retailers to remove products that are possibly contaminated, as happened in Australia 9 months ago?

Hon JO GOODHEW: The answer to this question may be a little longer than normal, but I want to make it clear to the House exactly what the complete answer to the member’s question is. In Australia, some 9 months ago, there were 31 cases of hepatitis A. As is always the case when looking for evidence of where the disease may have been contracted, genotyping exists. In all 31 cases in Australia, the genotyping was the same and was able to be traced to a single product, which was able to be recalled. Here in New Zealand, three of the four cases have had the genotyping completed. The fourth is still under way. For the three cases that we have genotyping for, we know that they are from the same source—the fourth, maybe not; but maybe it is. What we know is that it is a different source to the Australian cases—[Interruption] I am giving a straight-up answer; it would pay the members to listen. [Interruption]

Mr SPEAKER: Order! A straight-up answer has been given.

Hon Damien O’Connor: Why will the Minister not name the products affected and offer consumers at least the option of identifying for themselves products that might potentially give them hepatitis A?

Hon JO GOODHEW: The answer is that we do not have evidence that it has come from one product; therefore, we want to protect all New Zealanders from the possibility of getting it from any frozen imported berries. I can advise the House that what people need to do if they have frozen imported berries, which have a 3-year shelf life, is bring them to 85 degrees for 1 minute or bring them to the boil. We do not have evidence of one product. The member is being overly simplistic in his response. That would not protect New Zealanders; we will.

Hon Damien O’Connor: Does the Minister realise that a huge number of frozen berries are never taken to 85 degrees and are, in fact, put directly into drinks around this country and that anyone consuming any one of those berry-flavoured drinks or buying products from a supermarket where frozen berries are in a bag is potentially at risk of catching hepatitis A; why will the Minister not take a precautionary approach—

Mr SPEAKER: Order! The question has been asked. The question has been asked.

Hon JO GOODHEW: This is absolutely not a revelation to anyone on this side of the House. That is why the statement was made by the director-general yesterday and why the advice has been given that a product that is processed, like ice cream with berries in it, will have been raised to heat. However, for a product that is put together in a cafe with frozen berries—in fact, the advice is there. If the member chose to read the privileged statement or chose to read the Q and A, then the member would know that we have given the advice to New Zealanders that will keep them safe. I urge the member to read the Q and A and to read the advice, rather than pretend that we have not given that advice.

Border Control, SmartGate System—Efficiency

11. DAVID BENNETT (National—Hamilton East) to the Minister of Customs: How will the Government’s investment in new SmartGate border processing technology make travel easier for passengers this Christmas?

Hon NICKY WAGNER (Minister of Customs): This Thursday is the sixth anniversary of SmartGate in New Zealand. I am looking forward to using the new next-generation SmartGates in Auckland Airport. The Government has invested $6.6 million in 29 additional new SmartGates, which will double the number of SmartGates in New Zealand airports. The first nine new SmartGates at Auckland are up and running, and they will be ready to process the increased numbers of people over Christmas.

David Bennett: How are the new SmartGates faster and more efficient than the current ones?

Hon NICKY WAGNER: The new SmartGates are a one step, integrated process, which means that you can put your passport into the scanner at the gate, which eliminates the option of having to go to the kiosk for a ticket. The New Zealand Customs Service has increased the SmartGate capacity at Auckland Airport both on arrivals and departures, and I encourage all New Zealanders to enjoy the use of them.

Richard Prosser: How will the Government’s investment in new SmartGate border processing technology improve border security this Christmas, in terms of preventing the entry of contraband items and biosecurity threats such as the Queensland fruit fly, didymo, black widow spiders, redbacked spiders, the bee parasite lotmaria passim, Chilean needle grass, noogoora burr, myrtle rust, the mountain pine beetle, needle blight—[Interruption]

Mr SPEAKER: Order! The question has been asked at the start.

Hon NICKY WAGNER: The SmartGate technology is for the use of identifying passengers with their passports. The Ministry for Primary Industries has the processing to keep our borders safe, and we have increased funding for the ministry for biosecurity.

Primary Industries, Ministry—Animal Cruelty Prosecutions

12. MOJO MATHERS (Green) to the Minister for Primary Industries: What percentage of complaints made to the Ministry for Primary Industries about animal cruelty result in prosecutions?

Hon NATHAN GUY (Minister for Primary Industries): I am advised that last year the Ministry for Primary Industries prosecuted 26 individuals, or around 5 percent of the 698 animal welfare complaints received. Every single one of these animal welfare complaints was followed up. Prosecutions are only one outcome of animal welfare complaints; for example, some complaints are unable to be substantiated, and for others, if the non-compliance was relatively minor, individuals may be issued with formal warnings and/or fines. In Budget 2015 the Government allocated $10 million over 4 years to boost the ministry’s animal welfare compliance and enforcement capability, and to develop more transparent and enforceable animal welfare regulations.

Mojo Mathers: Is the Minister confident that the Ministry for Primary Industries undertakes enough prosecutions, given that last year farm workers who stomped on and killed piglets were not prosecuted and a farmer who deliberately rammed cows with a quad bike was not prosecuted?

Hon NATHAN GUY: Indeed, the Ministry for Primary Industries has a real focus on animal welfare issues. It needs to have the evidence to bring a prosecution through the New Zealand judicial system. The member will be aware that there was a shocking case of a West Coast farmer that recently went through the court, and as a result received 4½ years’ imprisonment, and, from memory, that individual will not be able to own or be near any livestock for 10 years. The Ministry for Primary Industries does take this issue very seriously.

Mojo Mathers: Will the Minister direct the Ministry for Primary Industries to undertake more prosecutions of people who abuse animals, as a result of the publicity from the Sunday programme that showed calves being left in the hot sun, thrown into trucks, and kicked and beaten to death?

Hon NATHAN GUY: Like, I am sure, the House, I was very disappointed in that footage on the Sunday programme. The Ministry for Primary Industries stepped up the investigation on 14 September, which was the day it was provided with the video footage. The ministry will take this particular case very seriously, as it does in all other cases. Because of the investment that the Government has made in terms of Budget 2015, we now have more animal welfare compliance officers to do the job that is needed.

Mojo Mathers: How will the Minister ensure that our international reputation will not continue to be harmed by these horrific cases of animal abuse on farms, on trucks, and in slaughterhouses?

Hon NATHAN GUY: The footage that we saw on the Sunday programme, in my view, was extremely disappointing. In my view it is the action of a minority—a small number of cowboys—in the industry. As I mentioned before, the Ministry for Primary Industries will be very thorough in its investigation. The member will also know that we have brought in the new amendment Act and regulations, which we will be consulting on, which will further strengthen the overall enforceability of the Act and the code.

Hon Damien O’Connor: Has the Minister instructed the Ministry for Primary Industries to hand over the video to the police to assist them to catch and prosecute that rogue operator that has put New Zealand’s reputation at risk?

Hon NATHAN GUY: These investigations are completely separate of Ministers or the executive. These are very similar to a police investigation. I am not briefed on the detail of them. It is a decision for the ministry to make. That is a decision that I am sure the ministry will take into account when it gets more information. At the moment, instead of the member scaremongering, he should wait for the ministry to do its job. The ministry has stepped up an investigation on 14 September. Instead of the member scaremongering, let us wait for the investigation to conclude.

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