Questions & Answers – April 7

by Desk Editor on Friday, April 8, 2016 — 2:03 PM

Government Investment—Reports

1. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What reports has he received about the management of the Government’s major investment projects?

Hon BILL ENGLISH (Minister of Finance): The Government has a large pipeline of investment projects, and today we released the second performance report for the July-October 2015 quarter. This report provides an update on the 41 most complex Government projects and advises on the extent to which they are delivering on expectations. These projects are valued at $18.5 billion out of a total portfolio of a $76 billion lifetime cost of investment. This demonstrates the Government’s commitment to increase transparency and accountability. In fact, I do not think any Government before in New Zealand has introduced this kind of transparency around its major investments.

Alastair Scott: What improvements to the portfolio does this performance report show?

Hon BILL ENGLISH: These 41 projects are being delivered by 22 different agencies. They are assessed on a five-point scale. The performance of the portfolio has improved since the last period; 54 percent of the projects are now green or amber-green, compared with 42 percent in the previous period. Because the report covers the most complex and expensive investments, it is not at all surprising that there are challenges in delivering them, and that is why the ratings for the projects can change over time.

Alastair Scott: What steps has the Government taken to improve transparency and accountability around the performance of the most complex of these projects?

Hon BILL ENGLISH: This report is released three times a year. There is some delay to allow for commercial sensitivities around negotiations to pass. It complements the annual report on managing Government investment projects, which covered the $6.4 billion of annual Government spending on all 409 investments that the Government is making. So we have one project covering the 41 most complex and most challenging, and another report that covered the whole 400-plus projects, showing the size of the pipeline of Government investment and the thorough accountability for how well taxpayers’ money is spent.

Alastair Scott: How can greater transparency and accountability support the better management of the Government’s major investment projects?

Hon BILL ENGLISH: There is no doubt that the publication of assessments of the projects has helped focus the minds, particularly of officials. I want to acknowledge the efforts of hundreds of Government officials who are dealing with a range of complex projects from the Christchurch rebuild through to large-scale defence procurement, who, in my view, are performing better than pretty well any other developed country in the world in delivering large, complex projects on time and generally within budget.

Health Services—Quality of Hip and Knee Replacements

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he agree with the New Zealand Medical Journal article dated 1 April 2016 which states research undertaken shows patients undergoing primary elective total hip and knee replacements in Otago in 2014 were more severely disabled than patients between 2006 and 2010; if not, why not?

Hon Peseta SAM LOTU-IIGA (Associate Minister of Health): on behalf of the Minister of Health: I cannot say whether I agree or disagree with that article in its entirety. There are some very complex data within the article and there is an ever-increasing need for more knee and hip operations. Southern has done very well with orthopaedic surgery, with it being up 41 percent in the last 7 years—

Hon Member: How much?

Hon Peseta SAM LOTU-IIGA: —41 percent. And the number of hip and knee surgeries in the Southern District Health Board region has not decreased. In fact, it has gone up 10 percent. But, as always, they can always do better.

Hon Annette King: Does he agree with the findings from the same research, that patients currently being returned to their GP without an operation would have qualified for publicly funded surgery between 2006 and 2010; if not, why not?

Hon Peseta SAM LOTU-IIGA: Well, I cannot verify that, but from the report the problems—

Hon Annette King: It’s in the research.

Hon Peseta SAM LOTU-IIGA: From the report, Ma’am, the problems are longstanding in that in 2006 there was a well-publicised cull of patients, and that member will know that there were 30,000 patients culled nationwide.

Hon Annette King: Does he recall research published in the New Zealand Medical Journal 18 months ago that showed 36 percent of patients recommended for hip and knee replacements were referred back to their GP without surgery because of a lack of funding, and now, with this latest research, will he finally admit that the health budget is not meeting cost pressures or demand?

Mr SPEAKER: Either of those two supplementary questions—the Hon Peseta Sam Lotu-Iiga.

Hon Peseta SAM LOTU-IIGA: That member knows that health spending has gone up by over $4 billion since this National Government took the Treasury benches. She also knows that there are 50,000 more surgeries done since 2008 per year. In fact, in the southern region that member will know that hip and knee replacements are up by 10 percent, orthopaedic surgeries are up by 41 percent, and in the last 6 years—[Interruption]—listen to this—there were over 639 more surgeries done for knee and hip than in the last 6 years of the Labour Government—shameful.

Barbara Kuriger: What new initiatives has the Government announced to further improve the quality of life for people suffering muscle and bone pain?

Hon Peseta SAM LOTU-IIGA: That is a good question. As well as delivering more surgeries, we are implementing a new medical early intervention strategy named mobility action teams to help reduce suffering from muscle and bone pain. The Government has invested over $6 million during this term to set up these new mobility action teams. They will be locally driven. They will be made up of a number of health professionals, including GPs, physiotherapists, chemists, and other professionals. Seven mobility action teams have already been selected from 50 proposals, and these will be commencing shortly.

Hon Annette King: Why does he continue to make the misleading claim that there are 50,000 more operations a year being done since National came into power, by including operations performed under Labour’s last Budget, which delivered over 12,000 more in 1 year than his Government has ever achieved?

Hon Peseta SAM LOTU-IIGA: That member knows the figures, and that member knows, as I have said—I will say it again for that member, in case she did not hear it the first time—there are 50,000 more surgeries. In fact, in terms of hip and knee replacements, which that member asked about earlier, there are 2,000 more today than there ever were under the Labour Government, and she knows it.

Hon Annette King: Is the research wrong when it states that a Budget increase from 2016 onwards, which increases the number of hip and knee operations to be performed, is inadequate to match demand, and the problems identified in the study are likely to become increasingly widespread across New Zealand? Direct quotes from the research.

Mr SPEAKER: Order! That is a very long question.

Hon Peseta SAM LOTU-IIGA: It is a very long question. What I do have from the paper is that it notes—and I want to quote—that there is “excess demand in the public sector leading to some form of prioritisation”. But the paper says—and I quote—that “prioritisation is being implemented effectively”.

Hon Annette King: Is he aware of the New Zealand joint initiative that ran from 2004 to 2008, which led to a significant increase in the number of joint replacements performed nationally, meaning that fewer New Zealanders were disabled when they received their operations, and that the decline occurred when funding was no longer ring-fenced after the election of a National Government?

Hon Peseta SAM LOTU-IIGA: Well, I do not have that research to hand, and I do challenge the integrity of some of the figures that she comes up with sometimes. But I will say again that in the southern region, there was a 10 percent increase in hip and knee surgeries over the last 7 years.

Hon Annette King: I seek leave to table the research published in the New Zealand Medical Journal, entitled “Rationing of hip and knee replacement: effect on the severity of patient …”, dated 1 April. It is not widely available—

Mr SPEAKER: Order! I need no more assistance. I will put the leave. Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.

  • Document, by leave, laid on the Table of the House.

Hon Annette King: Does he think that Arthritis New Zealand might know a thing or two about patients waiting in pain and disability for hip and knee operations, and that the problem is not going to go away, as stated by its chief executive, Sandra Kirby, just 6 days ago?

Hon Peseta SAM LOTU-IIGA: Sandra Kirby is entitled to her own opinion, but, as I have said time and time again, the number of surgeries has gone up for hip and knee replacements.

Hon Annette King: I seek leave to table research published in the New Zealand Medical Journal entitled “The impact of the 6-month waiting target for elective surgery”, dated 7 November 2014. It is not widely available.

Mr SPEAKER: I will put the leave. Leave is sought to table that particular information. Is there any objection? There is none. It can be tabled.

  • Document, by leave, laid on the Table of the House.

Prime Minister—Statements

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Rt Hon Winston Peters: Why does he stand by his statement about New Zealand’s tax haven status, that it is “not an embarrassment” and that “the Government will not change any tax rules until the IRD has looked at the issue.”, given the same man—

Hon Steven Joyce: Is this a question?

Rt Hon Winston Peters: You are getting it, sunshine. You just wait.

Mr SPEAKER: Order! Just complete the question.

Rt Hon Winston Peters: —who found there was nothing to see about the wine box, namely John Nash, is again in charge of looking at the rules?

Hon BILL ENGLISH: New Zealand does not have “tax haven status”. Much as the member might want that to be the case, it simply is not. If he is worried about who is looking at the rules, the OECD is apparently going to review our rules again next year, and I expect it will give a somewhat similar opinion as it did last time, which is that our rules—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking this Minister why John Nash is the person looking at the rules. I do not want to hear about anybody else, just why John Nash is being relied upon.

Mr SPEAKER: That should well have been the supplementary question, and I could have helped the member, but that was not the supplementary question. It was a very lengthy supplementary question that gave the Minister more opportunity to answer and address the question.

Rt Hon Winston Peters: Is John Nash, the Inland Revenue Department’s (IRD) international revenue strategy manager, the same John Nash who admitted in the 1995 commission of inquiry that the IRD did not begin a serious examination of key wine-box transactions until one month after a Minister had assured this House that it had?

Hon BILL ENGLISH: I have no idea.

Rt Hon Winston Peters: How much confidence does he have in John Nash’s leading an inquiry by IRD into New Zealand’s involvement in the foreign trusts, when he never understood the wine-box fraud on the revenue and is now being put up as an expert, saying there is no fraud in the Panama Papers transactions in New Zealand; why would you trust that man?

Hon BILL ENGLISH: The IRD is a statutorily independent entity. Whatever officials it uses is really its business. But the member can be assured that there are no parallels between the foreign trusts and the Cook Islands thing that he is referring to. In this case, the concerns about tax avoidance are concerns held by the Mexican Government and the Maltese Government, not by the New Zealand Government. There is no suggestion that these trusts are used to erode New Zealand’s tax base, because we cannot tax these people.

Rt Hon Winston Peters: Why on earth is the IRD putting up John Nash as some sort of an authority that New Zealand is “a model citizen in respect of trusts and that of the nearly 12,000 trusts that have been scrutinised, few problems have been found” when his proven lack of expertise is why so many now, internationally, including the economists, think that we are a tax haven?

Hon BILL ENGLISH: It is unfortunate that the member is resorting to some of his old habits of attacking public servants in a very personal way under the protection of Parliament. I doubt very much that it will influence the expertise or the focus of the IRD in dealing with any relevant issues with respect to these trusts. But I must stress to the member, because he is giving the misleading impression that, somehow, this discussion about foreign trusts is to do with New Zealand taxes and what people pay here—it is not. It is nothing to do with the New Zealand tax base, which is among the most comprehensive and best organised in the developed world.

Rt Hon Winston Peters: Why, Minister, when the growing scandal is about our being a tax haven, is he seeking to use every other detour or road block to not answer the question?

Hon BILL ENGLISH: We are not a tax haven. It is really only the Opposition parties in New Zealand that are claiming that. And, secondly, if the member does not understand or respect the constitutional position of the IRD as independent from politicians, then he represents a real danger to future governance in New Zealand, because if he believes the Government should be fingering individual officials on the basis of what the Opposition thinks about them, then this Government has more integrity and principle than that, and will not do it.

Rt Hon Winston Peters: Seeing as he has put the issue of integrity on the table and the Prime Minister has said that the IRD has informed the Aussie authorities—

Mr SPEAKER: Order! Can I have the supplementary question please.

Rt Hon Winston Peters: Well, you are getting it!

Mr SPEAKER: Order! The member will resume his seat. He will stand and apologise for that remark. I want him to ask supplementary questions in line with the Standing Orders.

Rt Hon Winston Peters: Point of order—

Mr SPEAKER: No, the member will stand—[Interruption] Order!

Rt Hon Winston Peters: I am apologising.

Mr SPEAKER: Thank you.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest of respect, I have been here longer than you, and I know how to ask a question.

Mr SPEAKER: Order! The member will leave the Chamber.

  • Rt Hon Winston Peters withdrew from the Chamber.

Ron Mark: When the Australian banks are so donkey deep in Panama Papers, appearing 8,948 times, did the IRD share all of those appearances with the Australian tax authorities, and has this Government been aware of that?

Mr SPEAKER: Order! The Hon Bill English, on behalf of the Prime Minister, either of those two—does the member want the question again?

Hon BILL ENGLISH: A charitable description of that would be that the question was unclear. I am sure that the IRD has met its obligations to any other Government, because, ultimately, this issue is about other Governments’ policing of their tax partners. If they ask anything of the New Zealand Government and the IRD for cooperation, then my understanding is that the IRD provides them with information.

State-owned Enterprises—Kiwibank

4. JAMES SHAW (Co-Leader—Green) to the Minister of Finance: What estimates does he have of the cost to the Crown of repurchasing the New Zealand Superannuation Fund’s and ACC Fund’s shares in Kiwibank in 5 years’ time?

Hon BILL ENGLISH (Minister of Finance): There are a number of incorrect assumptions in the question, which I hope I can clarify. There is no automatic sale of the shares in 5 years’ time by the ACC or the Inland Revenue Department or the New Zealand Superannuation Fund. At some point they can exit their investment if they wish, but they cannot do so within 5 years. If they do want to sell their shares after success in growing Kiwibank and increasing its value, then of course they should be appropriately rewarded for that. But we cannot really predict at this stage how successful they will be in growing the value of the bank, nor at what stage they would feel that they wanted to sell the shares. It could be in the 2030s or 2040s, because that is how long those funds will be running.

James Shaw: So when he said yesterday that once the 5-year limitation is released if the ACC fund or Superannuation Fund did want to sell their shares back to the Government, and that he would exercise that option, did he make that commitment without any idea what the cost of that would be to the Government?

Hon BILL ENGLISH: We have some idea in that I suppose we would assume that under competent commercial management, Kiwibank would be worth more than the valuation that has been put on it today—around the $500 million mark for 45 percent. But beyond that, the undertaking by the Crown is not conditional. I mean, we are absolutely clear: if there is a right of first refusal, they do have to offer the shares to the Crown, and this Government would buy them regardless of the price.

James Shaw: Has he seen other estimates that put the likely cost of repurchasing Kiwibank at up to $1.1 billion; and if he was in that position, would he buy back Kiwibank like he promised yesterday?

Hon BILL ENGLISH: I hope the estimates turn out to underestimate the increase in value of the taxpayers’ investment in Kiwibank—the faster it grows, the better for everybody. In answer to the member’s second question, yes. We said yesterday that if the shares are offered to this Government—if we are the Government in 5 years’ time or 10 years’ time—then we will buy them and that remains the position today.

James Shaw: What discount was applied to the valuation of Kiwibank when this proposal was made to sell a stake in it?

Hon BILL ENGLISH: That is actually quite an interesting question because, in the absence of putting Kiwibank out in the commercial market, we do not really know what its commercial value truly is. So we work with the commercial valuation that was done by the board a couple years ago. The value that it is given now is less than that but, as we learnt from the electricity companies, it could be that neither of those valuations are what the market would be willing to pay. I personally suspect that the market would be willing to pay quite a lot more. The valuation for this transaction has been based on the earnings of the bank, what is happening with Australian bank share prices, and negotiation between the parties.

James Shaw: Just to be clear, is the Minister saying that the current $1.1 billion valuation does not represent Kiwibank’s full market value?

Hon BILL ENGLISH: There would be only way to find that out, which the member would find quite unacceptable, and that is to put it out in the market and see what they are willing to pay—that is the definition of market value. As I understand it, there have been previous valuations of Kiwibank at up to $1.5 billion, and this transaction is being carried out at the lower end of the valuation range.

James Shaw: If the Superannuation Fund or ACC wants to sell its shares back to the Government once the 5-year restriction has lifted, will the resale price of those shares be calculated on the same basis as the $1.1 billion valuation, or on the basis of book value, or on the basis of market value?

Hon BILL ENGLISH: As we have said, we cannot really apply market value because we do not know what that is, but we would hope for some consistency, I suppose, between how it has been valued now and how it would be valued in the future. Because ACC and the New Zealand Superannuation Fund are driven by getting high returns, naturally enough they are negotiating to try to get the current transaction price low. I imagine that if they come to sell it, and the Government exercises its right to buy, then they will try to get as much as they possibly can so that they can look good as fund managers. That is probably what is going to drive the process.

David Seymour: Has the Minister experienced any feelings of curiosity regarding what the market value might have been?

Hon BILL ENGLISH: No, none whatsoever; not the slightest bit of curiosity.

James Shaw: Why does he think that a future Government should have to buy back at least a billion dollars’ worth of shares as soon as 5 years from now, just so that he can have $300 million to $350 million today?

Hon BILL ENGLISH: The nature of this transaction is that a Government that wants to retain it in 100 percent ownership will have to do that, but, secondly, it is the Government paying itself. This is, really, a transfer within Government, and in that sense the value does not matter that much because we are doing business with ourselves and any unders or overs are balanced out by the other side of the transaction. In the long run, what will matter most is that the bank is well-run, that it has strong commercial drivers, and that it satisfies its customers’ needs. This deal is well aligned with those objectives, which will help the taxpayer in their investment and which will be good for the hundreds of thousands of customers of Kiwibank.

Grant Robertson: What organisations independent of the Government, if any, provided advice on the valuation of Kiwibank that was in the announcement yesterday?

Hon BILL ENGLISH: I cannot answer that question in detail. It has been a product of negotiation between New Zealand Post, the Superannuation Fund, and ACC. I presume they had some sort of advice, but it comes down to the price that is acceptable to the parties. It is different from the process we went through with the electricity companies, where the value was set by market demand for the shares.

Child, Youth and Family—Announcements

5. ALFRED NGARO (National) to the Minister for Social Development: What recent announcements has she made regarding Child, Youth and Family?

Hon ANNE TOLLEY (Minister for Social Development): Today I announced major reforms that will see a complete overhaul of Child, Youth and Family. I received a detailed business case from my expert advisory panel making it clear that the current system is broken and must change if we are to get better life outcomes for our most vulnerable children. The overhaul will include establishing a new operating model that intervenes earlier, provides truly effective services and support, and includes the voice of the child in decisions about their care. This is no quick fix, but it is about giving our most vulnerable young people the protection and life opportunities they deserve.

Alfred Ngaro: What will the new operating model look like?

Hon ANNE TOLLEY: The new model will focus on five core services: prevention, intensive intervention, care support, and transition support services, as well as youth justice services aimed at preventing reoffending. What is different about the model is that it will move from crisis management to focus on long-term outcomes for vulnerable children and will place their needs and voices at its heart. With funding following the child, the new model will have the ability to directly purchase vital services needed by children, their carers, or families when they need them. We need to stop simply reacting to crises and focus more on harm prevention.

Jacinda Ardern: How much will be reallocated from other Government departments to fund the activities of her proposed new entity, given that the Ministry of Health, for example, is already having to remove frontline staff to resource her struggling children’s teams?

Hon ANNE TOLLEY: As I explained to the member today when I briefed the Opposition parties, that work is part of—and the Cabinet papers explain it to be part of—a stream of work that will be undertaken this year. The panel has made some estimates in its document, which, again, has been made public, but this Government is going to take the time to work its way through exactly how much will be required from other agencies and how much new money will be needed.

Alfred Ngaro: How will direct purchasing help vulnerable children get access to the services they need?

Hon ANNE TOLLEY: Accessing the right supports and services when they are needed is vital to truly support our vulnerable children. Our staff should not have to negotiate with providers when a service is urgently required for our most vulnerable children. Much like ACC, the new model will have the ability to directly purchase services such as health, education, trauma, and counselling. These services could be purchased from district health boards, education providers, NGOs, and specialist services such as psychologists. We need a system that gets these children the help that they deserve when they need it.

Tax System—Disclosure

6. GRANT ROBERTSON (Labour—Wellington Central) to the Prime Minister: Does he stand by his statement, “We have very strict obligations when it comes to disclosure and we meet those obligations. We’re always prepared to look and enhance those obligations and change those if there are recommendations.”?

Hon MICHAEL WOODHOUSE (Minister of Immigration) on behalf of the Prime Minister: Yes.

Grant Robertson: What action did his Government take following the 2013 report from Transparency International that recommended major changes to trust law and criticised New Zealand’s trust law as an “overly permissive regime” that allowed “questionable activities” to take place?

Hon MICHAEL WOODHOUSE: I cannot say what specific actions were taken in response to that 2013 report, but there have been 13 separate initiatives embarked upon to improve disclosure and comply with the OECD guidelines on the prevention of multinational tax avoidance. New Zealand takes those responsibilities very seriously.

Grant Robertson: What was his Government’s response to the Integrity Plus 2013 New Zealand National Integrity System Assessment by Transparency International, which recommended changes to address a lack of a trust registry, weak controls on trusts that allow them to hide beneficial owners, and no transparent reporting mechanism for reporting them?

Hon MICHAEL WOODHOUSE: I cannot be sure exactly what the response was but I reject some of the claims made in the Transparency International report around the non-registration of trusts—we do. There are very clear opportunities for the disclosure of detailed information, either on request by other jurisdictions or proactively, at the instance of the Inland Revenue Department (IRD) when it believes it would be in the interests of that jurisdiction.

Grant Robertson: Is he at all concerned that Transparency International has said that our tax haven structures risk damage to New Zealanders’ well-being, as it undermines our reputation for being corruption-free?

Hon MICHAEL WOODHOUSE: The biggest risk to the reputation of New Zealand is the number of Opposition members who continue to peddle the mischief that New Zealand is a tax haven. There are two attributes to a tax haven: one is a very low or no tax rate, and the other is strict secrecy. If New Zealand was a tax haven, we would not have implemented the 13 separate initiatives to give effect to the sharing of information.

Grant Robertson: I seek leave of the House to table this graphic from the Australian Financial Review that says Mossack Fonseca operates—

Mr SPEAKER: Order! No, that information is freely available to members, if they would find it useful.

Grant Robertson: When the editorials of almost every daily newspaper in New Zealand, most commentators working in the taxation area, and international journals all say that New Zealand is now a tax haven, does he not think that he should take this issue just a little bit more seriously, or is he just that out of touch?

Hon MICHAEL WOODHOUSE: Clearly most of the commentators that are making those claims do not have the level of insight into what IRD is presently doing, and what powers it has to share information. I would suggest that the clients of some of those firms may be very unpleasantly surprised to understand what powers IRD does have.

Business Research and Development—Reports

7. PAUL FOSTER-BELL (National) to the Minister of Science and Innovation: What recent reports has he received about increased investment by businesses in research and development?

Hon STEVEN JOYCE (Minister of Science and Innovation): Yesterday Statistics New Zealand released its 2015 Business Operations Survey, which showed that more New Zealand companies are investing in research and development. Business spending on research and development grew by more than 15 percent in 1 year, from $1.25 billion in 2014 to $1.44 billion last year. Business spending on research and development is now 71 percent higher than it was in 2008. We have also seen an increase in the broader innovation rate, with those aiming to come up with better goods and services up from 46 percent in 2013 to 49 percent of companies last year. New Zealand has, historically, had low levels of research and development conducted by businesses compared with most OECD countries, but these numbers confirm that that is now changing and that we are creating a stronger and more diversified economy.

Paul Foster-Bell: How is the Government encouraging more business investment in research and development, and what feedback has he received?

Hon STEVEN JOYCE: The numbers released by Statistics New Zealand are very encouraging. They show the positive effect that we are having with our work through Callaghan Innovation, which is the new high-tech innovation hub headquartered here in Wellington. The grants programme is encouraging more investment in research and development, including by businesses—the member will be interested—here in Wellington: Tekron, specialising in providing high-precision GPS; Wipster, a video review and approval platform; and goodnature, which I visited this morning, which is a world leader in resettable pest traps. Importantly, when we came to Government, we recognised that the previous policy of research and development tax credits was not working. Rather than conducting true research and development, in many cases, businesses were simply reclassifying existing expenditure as research and development. The Government’s new approach is delivering real, tangible increases in research and development activity.

Paul Foster-Bell: Why are more businesses investing in research and development?

Hon STEVEN JOYCE: If businesses want to compete internationally, it is important that they continue to innovate by developing high-quality goods and services. We are playing our part through a suite of services including an attractive research and development grants programme, which offers co-investment of up to 20 cents in the dollar on qualifying research and development expenditure. But, fundamentally, it comes down to businesses having confidence to invest in their growth. That it is why it was pleasing to see the MYOB Business Monitor research report on Tuesday, which saw confidence in the economy strongly improving among strong and medium-sized enterprises. That is consistent with the statistics data yesterday, which showed that the fastest growth in research and development expenditure—19 percent in 1 year—was in medium-sized businesses employing 20 to 99 employees.

Earthquake Commission—Canterbury Home Repair Programme

8. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: What is the total number of complaints lodged with EQC in relation to the Canterbury Home Repair Programme, to date?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Very few, although over the 5 years, possibly a few more than the number of signatures on a petition on this matter being presented to Andrew Little tomorrow by the Christchurch Central Labour Party candidate, Dr Duncan Webb.

Dr Megan Woods: I raise a point of order, Mr Speaker. That was a primary question on notice. I asked the Minister how many complaints had been lodged to date—

Mr SPEAKER: Order! I would have thought that a better answer could be given as to the number, rather than answer “very few”, given the time the Minister has had to prepare the answer. Is the Hon Gerry Brownlee going to add to his answer?

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. I was simply pointing out that sometimes there is more to a question in the House than meets the eye. But I am happy to answer the question.

Mr SPEAKER: Order! That is not actually a helpful point of order. The question was on notice. The question asked for the number of complaints that have been lodged. I would have hoped the Minister has had time to prepare an answer to give that.

Chris Hipkins: Point of order.


Mr SPEAKER: Which will we have first? We will have the answer, then.

Hon GERRY BROWNLEE: There were 4,900 out of 167,000 in 2011; 7,312 out of 167,000 in 2012; 5,612 out of 167,000 in 2013; 3,954 out of 167,000 in 2014; 2,525 in 2015 out of 167,000; and 525 to date this year out of 167,000 claims.

Chris Hipkins: I raise a point of order, Mr Speaker. I would like you—and the Ministers, in fact—to reflect on whether when a question is put on notice, as Megan Woods has put something on notice, and the Ministers clearly have that information, as we have just demonstrated Mr Brownlee does, it is reasonable to expect that they will give that information, rather than giving a dismissive answer and then insulting the questioner.

Mr SPEAKER: I think I have addressed that matter already in that the point was raised immediately by the questioner, and quite legitimately so. I said that I did not think the answer was satisfactory. The Minister has now given that. I would certainly appreciate it if Ministers gave the information in the first place, but how they choose to answer the question is, in the first instance, their responsibility. I can only move to tidy it up once I have heard the answer; I cannot anticipate an answer to a question.

Dr Megan Woods: Does he think it is acceptable that sales of properties are falling through due to dodgy foundation repairs, and those stranded homeowners are being told by the Earthquake Commission that they will have to wait months for an appropriate team to review the issue?

Hon GERRY BROWNLEE: The member seeks an answer to what is, by the way it is presented, quite a hypothetical situation. What I can say is that the Earthquake Commission takes remedial repairs where they are required very seriously, but they are not large in number, given that there have been 167,000 built-property claims in Christchurch. There are always reasons why properties that are in the process of being sold do not progress to a sale for one reason or another.

Dr Megan Woods: I seek leave to table a file note from my office of a case where the sale of a property has fallen through this week because it failed a home inspection on a foundation repair by the Earthquake Commission.

Hon Gerry Brownlee: Names and addresses?

Dr Megan Woods: I sought leave to table the file note.

Mr SPEAKER: I will put the leave, and the House can decide. Leave is sought to table that particular file note. Is there any objection? There is none.

  • Document, by leave, laid on the Table of the House.

Dr Megan Woods: I seek leave to table an email from the Earthquake Commission telling that same homeowner they will have to wait months for a team to assess their issue.

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 Megan Woods: How many more remedial requests does the Earthquake Commission expect to receive, and how long will those claimants have to wait?

Hon GERRY BROWNLEE: I think the first point I would like to make is that the Earthquake Commission is receiving those complaints and is acting upon them. One of the reasons why we progressed to the managed repair programme was so that people would have somewhere to go when these circumstances arose. The numbers, out of 167,000 claims, are small. We would hope to get to all of those people as quickly as possible, but there is no standing army outside of the Canterbury Home Repair Programme, and as the 900 or so houses that are left in that programme are concluded, then work will progress on those other matters.

Dr Megan Woods: Does he think it is acceptable that the Earthquake Commission did not front up and tell the public the real reason thousands of drain repairs in Canterbury had to be reassessed was the initial inspections were of “variable quality”, or is that just code for “dodgy”?

Hon GERRY BROWNLEE: The member over there repeatedly uses words like that to try to discredit the Earthquake Commission. What she forgets is that this has been a long seismic event: 13,000 earthquakes, 67 over 5 on the Richter scale. An assessment done at the start of that process would be very different if done at the end of it. If the member cannot work that out, I suggest that she is a dodgy member and should not be in the House. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I am going to ask the member to withdraw the last comment about the member.

Hon GERRY BROWNLEE: I withdraw; she has certainly got every right to be in the House.

Mr SPEAKER: No. We are just going have the withdrawal of the epithet.

Hon GERRY BROWNLEE: I withdraw the full remark.

Dr Megan Woods: I raise a point of order, Mr Speaker. I asked the Minister a pretty straight question: I asked him if he thought—

Mr SPEAKER: Order! [Interruption] Order! No. The member was very lucky that I allowed the question to stand. It was a question full of innuendo; the Minister certainly addressed it, in light of the way the question was asked.

Chris Hipkins: I raise a point of order, Mr Speaker. There have been instances where members on this side of the House have been asked to withdraw and apologise and have faced a much more serious reprimand for adding additional comments at the end of that and—

Mr SPEAKER: Order! That is getting very dangerously close to being a criticism of the Speaker. I determine the remedy I will take. I determine whether I will be asking for a withdrawal. I determine whether it is a withdrawal and an apology, or I may even ask the member to leave the House. On this occasion, when the word was used by the member herself in asking the question, I took the action I did. I am quite comfortable with the action I took, and I do not expect to then be criticised by Chris Hipkins for it.

Dr Megan Woods: When there are tens of thousands of complaints, not just a few; when people are blocked from selling their houses and cannot move on with their lives because of botched repairs; and when the Earthquake Commission refuses to front up with the facts, will he finally admit that things are a mess and undertake an independent inquiry into the Earthquake Commission?

Mr SPEAKER: Before I call the Minister, if it is a political answer that is given, that will be perfectly acceptable in light of the question that was asked.

Hon GERRY BROWNLEE: Mr Speaker, I am above that sort of thing, as you know. I will give a straight answer. The member will be deeply disappointed to know that her claims of tens of thousands of complaints, etc., leave us now—because the Earthquake Commission deals with those complaints, and because the Earthquake Commission is a place to go if you have got complaints, there are only 700 or so currently open, and many of those are in a state of being repaired. The member is trying to make menace where it does not exist in order to promote the opportunities for Dr Duncan Webb, the Labour Party candidate—

Mr SPEAKER: Order! We do not need to go that far.

Prisoners, Rehabilitation and Rate of Reoffending—New Initiatives

9. KANWALJIT SINGH BAKSHI (National) to the Minister of Corrections: What initiatives has Corrections recently launched to support prisoners to lead a crime-free life on release?

Hon JUDITH COLLINS (Minister of Corrections): Yesterday I attended the launch of a new initiative, Seedlings, Grow, Cook and Eat, which will see prisoners in self-care units grow their own seasonal vegetables and use them to cook basic, nutritious meals at Spring Hill Corrections Facility. Prisoners in self-care units are nearing the end of their sentence, and do their own cooking to prepare themselves for release. The produce grown in the gardens supplements store-purchased vegetables, increasing the self-sufficiency of these units. This programme will help prisoners learn useful gardening skills as well as help them learn to cook meals nutritiously and economically. Initiatives such as this support positive life changes that can help prisoners to lead a crime-free life on release.

Kanwaljit Singh Bakshi: What other initiatives does the Department of Corrections have under way?

Hon JUDITH COLLINS: There is another new initiative in Hawke’s Bay Regional Prison’s young offenders unit, which has four beehives that serve as a teaching tool for prisoners who are enrolled in studying there for their certificate in apiculture. The hives also provide a teaching tool for the prison’s national certificate in horticulture course, which prisoners from the same unit are also studying for. Prisoners enrolled in the offender employment joinery course in the same unit assembled the hives and frames when they arrived and also painted them. Another group of young prisoners from the unit built the fence surrounding the hives under the tuition of a volunteer instructor. Almost 38 kilograms of honey was extracted from the hives when the first extraction of the season took place recently. The honey produced by bees and hives is donated to community groups in the Hastings area. This is a terrific example of giving back to the community and good for prisoners, who are learning real-life employment skills.

Mahesh Bindra: How does she square those answers with the 20 murders committed by offenders on bail between 2012 and 2014?

Mr SPEAKER: It is marginal as to whether there is a connection, but I will allow the Minister to answer.

Hon JUDITH COLLINS: Quite easily, really. We are focused on rehabilitation, and these are two new initiatives that we have undertaken.

Police, Minister—Prime Minister’s Statements

10. STUART NASH (Labour—Napier) to the Minister of Police: Does she agree with everything Prime Minister John Key has said about policing?

Hon JUDITH COLLINS (Minister of Police): Yes, and I particularly agreed with the Prime Minister when he said that he wanted me to be his Minister of Police.

Stuart Nash: Does she agree with John Key’s statement “we want more police on the beat.”; if so, why are there 568 fewer front-line general duties constables since National took office?

Hon JUDITH COLLINS: As that member well knows, just because people are called general duties constables in one particular year does not mean to say that they are not doing something in another year. We now have 600 extra police on the front line than we did when Labour left office, thankfully, at the end of 2008—600 more.

Stuart Nash: I seek leave to table an Official Information Act requested dated 25 May 2015, which actually shows 568 fewer general duties police—

Mr SPEAKER: Order! Leave is sought to table that particular Official Information Act release. Is there any objection? There is objection.

Stuart Nash: Does she agree with John Key’s statement that “We can and we must do better at reducing crime levels and keeping Kiwis safer.”; if so, why are a record 90 percent of burglaries remaining unsolved?

Mr SPEAKER: Either of those two supplementary questions, the Hon Judith Collins.

Hon JUDITH COLLINS: Well, of course I agree with the Prime Minister, and that is why I am so thrilled that we now have the lowest recorded crime rate since 1978.

Stuart Nash: Does she think John Key’s message to P dealers that “We will be ruthless in our pursuit of you and the evil drug you push.” meant anything, given that police research in 2015 reveals it is easier to get this drug than ever before?

Hon JUDITH COLLINS: Absolutely, and that is why that member should be congratulating the New Zealand police for some of the most fantastic big busts that they have done recently.

Stuart Nash: Why, after 8 years of National in Government, do 86 percent of police now think front-line officers are under-resourced, and 74 percent of constables believe front-line police numbers are too low?

Hon JUDITH COLLINS: The New Zealand Police is the most wonderful organisation full of now 600 more constables than there were when that member’s party was last in Government. Police always want to have more resources because they care about keeping New Zealand safe. There has never been a time that I can recall that police have not said that they want more resources. They always want more resources because they want to do the job so brilliantly.

Stuart Nash: I raise a point of order, Mr Speaker. I did not say “more resources”; I said “under-resourced”.

Mr SPEAKER: The question has certainly been addressed. The member might not like the answer, but it has been addressed.

Freshwater Management—Government Action

11. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: What action will the Government take to make sure there is enough clean fresh water for all New Zealanders?

Hon Dr NICK SMITH (Minister for the Environment): New Zealand has 500 trillion litres of fresh water each year flowing through our lakes, rivers, and aquifers, and we extract only 2 percent of that for human purposes. Ninety percent of our fresh water in our lakes and rivers by volume is in a pristine state. New Zealand has ample clean fresh water, but there are areas where we have shortages and water-quality problems. The actions the Government has taken include introducing compulsory metering in 2009, the national policy statement in 2011 requiring water quality to be maintained or improved, and a record investment in freshwater clean-ups. Further actions include national stock fencing requirements for all lakes and rivers, on which I am currently consulting, including holding a public meeting in the far north yesterday.

Catherine Delahunty: How will the Government ensure there is enough water for the residents of Ashburton, who have faced water restrictions for the last 4 months and, thanks to the absence of national rules, will lose 40 billion litres of their water to an offshore company?

Hon Dr NICK SMITH: If you are concerned about the sustainability of New Zealand’s water, water bottling would be the last place you would look on the basis of facts and take. Let me give the member the numbers. Of the water that is consented for takes in Canterbury, the Ashburton water bottling consent amounts not to 1 percent, not to 0.1 percent, but to 0.0012 percent—0.0012 percent. So the Green Party pretending it is concerned about sustainability of water, by focusing on bottling plants, just shows how distanced it is from the facts and the science of water-quality management.

Scott Simpson: How do water takes consented for bottling compare with water takes consented for other purposes?

Hon Dr NICK SMITH: As I said in my answer to the primary question, New Zealand has 500 trillion litres of fresh water. There is 6 trillion litres consented for irrigation. There is 2 trillion each consented for industry and for town water supplies. So although a billion litres for a water bottling plant sounds like a lot, it is actually 0.01 percent—0.01 percent—of the number of consents for irrigation, or 0.0001 percent of New Zealand’s annual freshwater flows. The idea—

Mr SPEAKER: Order! [Interruption] Order! The answer is quite long enough.

Catherine Delahunty: How can the Government justify allowing offshore companies to export billions of litres of water from places like Ashburton when local farmers cannot access their own water supplies because of drought?

Hon Dr NICK SMITH: I just stress again that we need to make our decisions on fresh water on the basis of the science and the facts. And the facts are that if you take the region of Canterbury—and let me give the member the specific figures for the Ashburton water zone. Less than 0.1 percent even in that very local area is used for water bottling plants. You could shut down every water bottling plant in New Zealand and it would just be literally a drop in the bucket of New Zealand’s huge freshwater resource. It is the last place we would go if we were serious about improving freshwater management in New Zealand.

Catherine Delahunty: We live in hope. Will the Government commit to putting a moratorium on new consents for bottled water until the sustainability and ownership rights for water are negotiated with tangata whenua and communities; if not, why not?

Hon Dr NICK SMITH: Let me explain the numbers again. New Zealand has 500 trillion litres of water—550 trillion—

Metiria Turei: I raise a point of order, Mr Speaker. This question did not ask for numbers, at all. It asked about consultation, and I would expect the Minister to address the question asked.

Mr SPEAKER: The question—I can help by rephrasing it—simply is: will the Government install a moratorium? If the Minister could just answer that, I think we will move forward.

Hon Dr NICK SMITH: It would be a nonsense—an absolute nonsense—to put a moratorium on the bottling of water and pretend that that would improve the sustainability, when the amount of water that is used for—

Mr SPEAKER: Order! The Minister has now answered the question that was asked.

Community Services—Support

12. SARAH DOWIE (National—Invercargill) to the Minister for the Community and Voluntary Sector: What recent announcements has she made regarding support for communities?

Hon JO GOODHEW (Minister for the Community and Voluntary Sector): Earlier this week I announced the opening of the 2016-17 funding round of the Community Development Scheme. The scheme helps fund projects where communities are working to become more self-reliant and resilient and to generate their own solutions to local issues. Grant recipients receive funding to employ a community development worker for 3 years. This year funding is available for a further seven communities across New Zealand, which are to be granted $80,000 each a year for the next 3 years. This will mean that a total of 32 communities are now able to be funded this year.

Sarah Dowie: How is the scheme supporting the development of stronger communities in the Invercargill region?

Hon JO GOODHEW: In Invercargill a community development worker, with support from South Alive and the Invercargill City Council, is supporting the community in rejuvenating the area and growing community identity and pride. The project is connecting sectors of the community such as youth, elderly, migrants, and the business community to develop skills and build strategic relationships.

Jonathan Young: What kind of support is provided by the scheme to community groups in the New Plymouth region?

Hon JO GOODHEW: Wait, there is more. In the Marfell community in New Plymouth, a community development worker, with support from Tu Tama Wahine o Taranaki and the Together Grow Better Communities Trust, has initiated a range of projects such as a community cafe and not-for-profit community hub, a charity shop, the Marfell Corner Project, and is developing a local walkway in consultation with the council. A wide range of events is bringing communities together in new ways and bringing pride to local areas. There are so many examples I could give, but time does not permit. This Community Development Scheme is now open, and applications close on 18 May 2016.

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