Questions & Answers – May 10

by Desk Editor on Wednesday, May 11, 2016 — 12:21 PM

Tax System—Overseas Trusts

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement, “There’s actually quite legitimate business in New Zealand for servicing foreign trusts”?

Rt Hon JOHN KEY (Prime Minister): Yes. As Michael Cullen said in 2005, when the disclosure rules were being developed: “The government has sought to develop policy that works for all concerned, one that enables New Zealand to co-operate with other tax jurisdictions while not disrupting the legitimate financial transactions of foreign trusts.”

Andrew Little: Are foreigners able to use New Zealand – based trusts to dodge tax overseas?

Rt Hon JOHN KEY: Anyone can use the New Zealand tax rules. There are obviously mismatches around the world, and we see that, potentially, with multinationals and others. But, interestingly enough, when it comes to ensuring that people are paying their tax, including foreign trusts, the House might like to know that of the Panama Papers data release, of the 500,000 times that Mossack Fonseca is linked to either a company, a trust, an individual, or a reference, 200—less than 200 are foreign trusts registered in New Zealand. And, by the way, the Inland Revenue Department (IRD) has cross-referenced them, and all of them are disclosed to ensure that they pay their fair share of tax. [Interruption]

Mr SPEAKER: Order! Before I call a further supplementary question, I just want a little less interjection from my left.

Andrew Little: How does he reconcile his claim that his close personal adviser had assured him that he had no links with Mossack Fonseca with today’s revelations that show that Mr Whitney has—[Interruption]

Mr SPEAKER: Order! I sought some further cooperation from my left. I am now asking for the same sort of cooperation—less barracking through the question as it is being delivered—from my right. Would Andrew Little like to start that question again.

Andrew Little: Thank you, Mr Speaker—

Hon Paula Bennett: Sorry, sir, for laughing at his joke.

Andrew Little: Yeah, yeah. You have got plenty to laugh at, Paula—plenty to laugh at on your side. [Interruption]

Mr SPEAKER: Order! If I do not get any assistance from my right-hand side, then I will be looking to ask a member to leave.

Andrew Little: How does he reconcile his claim that his close personal adviser had assured him that he had no links with Mossack Fonseca with today’s revelations that show that Mr Whitney has had dealings with that firm?

Rt Hon JOHN KEY: Firstly, I have got no responsibility for Mr Whitney or any other New Zealander. But I stand by the statements that I have made in relation to Mr Whitney. I think incrimination by insinuation could be a very dangerous game, because I took a moment to just look in the database, and guess who is a beneficiary of one of the trusts? Oh, Greenpeace International. And guess who else is mentioned—

Mr SPEAKER: Order! [Interruption] Order! The Prime Minister will—[Interruption] Order! The Prime Minister might think that he can go on, but when I stand to my feet he certainly cannot go on. [Interruption] Order! If I have to ask—[Interruption] Order! No, the member will resume his seat. If I have to ask either the Prime Minister or the Deputy Prime Minister to leave, I will not hesitate to do so.

Andrew Little: Does he see any issue with the people lobbying the IRD to protect foreign trusts having connections to Mossack Fonseca?

Rt Hon JOHN KEY: Firstly, I reject the last part of it. But I do not see any issue with a lobby group speaking to the Government. In fact, I am sure that the education sector and teachers speak to the education Minister. I am sure those who are interested in health and safety speak to the workplace. I am sure the Council of Trade Unions talks to the Labour Party. Here is breaking news: people who work in an industry might actually want to talk to the Government about it. If you are going to hang them for that, there are going to be a lot of hangings taking place.

Andrew Little: Did he personally push through the zero rating of tax on foreign funds in 2010 over the objection of officials from the Ministry of Economic Development or, put another way, does he recall saying: “I have told Gerry to deliver me a paper that has zero rating of funds”?

Rt Hon JOHN KEY: No.

Andrew Little: I seek leave to table a copy of an article from the New Zealand Herald of 2 December 2010—[Interruption]

Mr SPEAKER: Order! When a point of order is raised, it is to be heard in silence, and that particularly applies to noise coming from my back right-hand side. But if it is a newspaper article, then members can find it if they want.

Grant Robertson: You did it, John.

Mr SPEAKER: Order! Is Mr Robertson ready?

Andrew Little: Is he satisfied with the Government’s oversight of foreign trusts, when Mossack Fonseca used a bankrupt Elvis impersonator to provide a sham address for a player in an Iraqi bribery scandal, all without his Government noticing?

Rt Hon JOHN KEY: Yes, it is true. There is an Elvis impersonator that is named, but there is also an impersonator for the Leader of the Opposition asking questions about it.

Andrew Little: Does he oppose New Zealanders and multinationals using another country’s tax laws to dodge New Zealand tax, given that he allows foreigners to do the same thing here?

Rt Hon JOHN KEY: I cannot talk for Greenpeace, Amnesty International, and the Red Cross, but what I can say is that every country has a different tax system. There is no global tax system, and there are mismatches around the world—that is true. The Government is working on trying to resolve those issues through the OECD and we have been leading a lot of that work. And I hope we are successful in that, because that will help, actually, robustness around the world. But New Zealand’s tax laws are very well set.

Andrew Little: Why does he say that New Zealand is falling down the Corruption Perceptions Index on his watch?

Rt Hon JOHN KEY: There are a number of factors, but New Zealand is ranked extremely highly—[Interruption] We are third, I think—[Interruption]

Mr SPEAKER: Order! Prime Minister, there is no point in answering a question asked if they do not want to hear the answer.

Prime Minister—Statements

2. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes, especially the one where I was shocked, actually, to find Greenpeace International on the database.

James Shaw: Does he stand by his statement that New Zealand is not a tax haven, when the Australian Financial Review and the US Congressional Research Service have New Zealand on the map as tax havens?

Rt Hon JOHN KEY: Yes, I stand very much by the view that New Zealand is not a tax haven. In fact, New Zealand has been ranked as the most compliant in the highest category. There are four factors, actually, that would go into a country being a tax haven; the most important, of course, of which is secrecy, and New Zealand does not have that. Even prior to the Panama Papers this Government had been working towards automatic exchange not just to Australia and through the Foreign Account Tax Compliance Act but to 60 international jurisdictions.

James Shaw: Does he stand by his statement that the international media have not reported that New Zealand was a tax haven, when more than 40 different international outlets from around the world including USA Today, the Independent, The Telegraph, TheWashington Times, the Australian, the AFP, The Age, the Sydney Morning Herald, and The Guardian have reported on New Zealand’s role in the Panama Papers?

Rt Hon JOHN KEY: Yes, I stand very much by the view. If you look at the international reporting of this, New Zealand has been but a footnote. A single mention of New Zealand is not actually what has been in the news, and in Australia today what they are talking about is not New Zealand, when it comes to the Panama Papers; it is some issue in relation to Chinese money.

James Shaw: If New Zealand is not a tax haven, why would Mossack Fonseca—a company which, by its own admission, has 95 percent of its business in avoiding tax—urge its clients to use New Zealand’s foreign trust and company structures as a way of avoiding tax?

Rt Hon JOHN KEY: Two things. Firstly, there can be quite legitimate reasons why people have a foreign trust, and I suggest the member leave the House and ring Greenpeace, Amnesty International, and Red Cross because they are implicated in the papers. But, more importantly, the member should just turn around and ask his colleague—Mojo Mathers has a foreign trust. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! If it is required of me to ask someone to leave because they consistently interject, I will do so. It is not my wish, but when the barrage continues uninterrupted, particularly by a front bench Labour member, they leave me no choice.

James Shaw: Thank you Mr Speaker. In the conversation when Mr Whitney assured him that he had no links to Mossack Fonseca, did Mr Whitney mention that he was a director of two companies with connections to Mossack Fonseca?

Rt Hon JOHN KEY: I have no responsibility for that, but I stand by the statements I have made, which are that incrimination by insinuation, just because someone is mentioned—if you go into the database, the very first thing you have to do is tick a disclosure form—

James Shaw: I raise a point of order, Mr Speaker. I recognise it is a boisterous question time, Mr Speaker, but it was a fairly specific question about a conversation that he had had with Mr Whitney.

Mr SPEAKER: I allowed the question. I thought about not allowing it, because I do not think there is prime ministerial responsibility. The Prime Minister is certainly addressing the question. It is difficult to hear because of the noise, I do accept, but on this occasion, I cannot help the member unless he has a more specific question. Did the Prime Minister—

Hon David Parker: Point of order.

Mr SPEAKER: Order! I am still on my feet. To the Prime Minister, has he completed his answer to that question?

Hon David Parker: I raise a point of order, Mr Speaker. The Prime Minister, I submit, does have ministerial responsibility. He answered in this House about the reference that he made to the gentleman concerned to go to the Minister of Revenue and to the department. He referenced that conversation, which was within his role as Prime Minister. Clearly he, as Prime Minister in that conversation, came to the view that he should refer him to the Minister of Revenue. I cannot see how he can claim that he has no ministerial responsibility for what was told to him in that conversation, and therefore the question was in order.

Mr SPEAKER: I think on this occasion the member makes a reasonable point. As I said in my point of order, it was a marginal call. I decided to leave the question standing; I certainly did not rule it out. The Prime Minister then addressed it. Mr Shaw asked me whether it had been addressed to his satisfaction. On this occasion, I think it has been addressed—maybe not to the member’s satisfaction, but he can continue with a supplementary question if he wishes.

Hon David Parker: Point of order, Mr Speaker.

Mr SPEAKER: Well, just to be absolutely sure—I have ruled on that matter, so to continue to raise another point of order that is anything to do with the question that has just been asked is in itself disorderly. But if it is a fresh point of order, something dealing with another matter that has not been raised, then I can hear it. If we are just relitigating, that in itself is what is leading to disorder in this House.

Hon David Parker: Thank you, Mr Speaker. I will proceed with my point of order, if I may.

Mr SPEAKER: Yes, the member can.

Hon David Parker: I raise a point of order, Mr Speaker. Your answer did not refer to the fact that the Prime Minister declined to answer the question, saying it was not a matter of prime ministerial responsibility. That is my point of order. In fact, you have conceded that it was a matter of prime ministerial responsibility; therefore, it cannot be addressing the question to deny that it was.

Mr SPEAKER: No, the member is now just going back over old territory. I acknowledge I had some difficulty hearing the detail of the answer, simply because of the noise. I ruled then that the Prime Minister did accept the question. I ruled it in—[Interruption] Order! [Interruption] Order! My patience will not last much longer with Mr Parker.

Hon David Parker: Neither will mine.

Mr SPEAKER: Well, then the member can stand and leave the Chamber. [Interruption] The member can leave the Chamber.

  • Hon David Parker withdrew from the Chamber.

James Shaw: Will the Prime Minister now take this opportunity to broaden the review of foreign trusts into a full-scale inquiry into tax avoidance?

Rt Hon JOHN KEY: No. There are two elements, if you think about the whole issue for just a moment. One of those is in relation to disclosure and whether disclosure is adequate in New Zealand, and what is happening in relation to that is that I think we have got the finest tax mind in the country to look at that issue, and he will come up with recommendations. If they are good recommendations, the Government will implement them. The second part of it is in relation to tax treatment of trusts, and, again, the Government is working with both the OECD and with our like-minded partners to see whether there is more that we can do, because of the mismatches in the arbitrages that happen around the world. Both of those elements of what we are doing, I believe, address this issue. The third point that I would make is the point I made earlier on, which is that of all the mentions in the database, the 500,000, and the excitement that some people have brought to this issue, there are fewer than 200 trusts registered in New Zealand that have a link to Mossack Fonseca, and of those fewer than 200, in total, all of them that the Inland Revenue Department (IRD) has taken a quick look at have been disclosed—in other words, fully subject to exchange of information, fully subject to making sure that the IRD can see them, and I suspect that a great many of them are likely to be subject to the anti – money-laundering rules, because they are likely to be established by a tier-one firm that is a part of Part 1.

Mojo Mathers: I raise a point of order, Mr Speaker. I would just like to correct the statement by the Prime Minister that I have a foreign trust—I do not.

Mr SPEAKER: Order! That is not, in itself, a point of—[Interruption] Order! Is the member seeking leave to make a personal explanation? [Interruption] Order! I can assist. There are two ways forward: if the member seeks leave to make a personal explanation, I will put the leave and it is over to the House. The alternative way, if the member thinks she has been misrepresented during this question time, is that she has the ability to refer to Standing Order 359.

Hon Gerry Brownlee: Point of order.

Mr SPEAKER: I am just dealing with a point of order.

Mojo Mathers: I would like to make a personal statement, please.

Mr SPEAKER: No, you need to seek leave to make a personal—

Mojo Mathers: I would like to seek leave to make a personal statement.

Mr SPEAKER: Leave is sought to make a personal explanation, presumably—[Interruption] Order! Leave is sought to make a personal explanation in regards to a statement made by the Prime Minister. Leave is sought for that course of action. Is there any objection? There is none.

Mojo Mathers: Thank you. I would like to clarify that I am a beneficiary of a UK-based family trust. It is not a trust that I own, and it is not a foreign trust.

Mr SPEAKER: The member has—[Interruption] Order! [Interruption] Order! Mr Robertson! [Interruption] Order!

Budget 2016—Government Financial Position

3. ALASTAIR SCOTT (National—Wairarapa) to the Minister of Finance: What recent reports has he received on the state of the Crown accounts ahead of Budget 2016?

Hon BILL ENGLISH (Minister of Finance): The accounts for the 9 months to 31 March this year show a surplus of $167 million, around $330 million better than forecast. Crown revenue was higher than forecast, largely due to tax revenue being $700 million higher than forecast by Treasury in December, partially offset by lower Crown interest in dividend income. Sustained and moderate growth in the economy is underpinning Crown accounts, which are in good order ahead of the Budget 2016 later this month.

Alastair Scott: How have the Government’s books improved in recent years?

Hon BILL ENGLISH: The largest deficit during the term of this Government was $18.4 billion in 2011, and we are now on track to maintain the surplus that was achieved last year. Over the last seven Budgets the annual cost of new initiatives has averaged around $600 million, compared with the average cost of the seven Budgets of the previous Government of around $3 billion—around five times more new spending each year than under this Government—and under this Government we are achieving better results for public services.

Alastair Scott: What are the Government’s fiscal priorities, now that it has delivered on its election promise and made a surplus in 2014-15?

Hon BILL ENGLISH: The focus is now on reducing debt. The Government has borrowed significant amounts of money over the last 6 or 7 years. We have been able to get on top of debt from tax revenue windfalls in the past. To pay down debt we need to continue with tight management of our spending, and the Government will outline its plans for that in the Budget.

Alastair Scott: How is the Government using a focus on better public services as a way to keep control of Government spending?

Hon BILL ENGLISH: The Government is focused on substantial improvements to public services because that is what the consumers of those services deserve, first of all, and, secondly, it is what taxpayers, who fund the services, deserve. It turns out that spending more and more money on public services does not necessarily mean that they are better. The Government has set out to reduce the demand for public services—that is, reduce benefit dependency, for instance—and results show that there were 7,245 fewer benefit recipients in the past year, because more people are getting into work and gaining independence.

Prime Minister—Statements

4. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Ron Mark: Does he stand by his statement yesterday that: “We have disclosure regimes and disclose all information.”?

Rt Hon JOHN KEY: Yes.

Ron Mark: If our disclosure regime is seen as having the best practice, can he confirm that the Inland Revenue Department (IRD) has a centralised database on foreign trusts?

Rt Hon JOHN KEY: The member would have to ask the Minister of Revenue that question

Ron Mark: I seek leave to table a file note from 9.23 a.m. this morning of a conversation between IRD Official Information Act inquiries and New Zealand First’s research unit that confirms there is no—

Mr SPEAKER: Order! [Interruption] Order! On this occasion I will put the leave. It could be informative for members, so I will put the leave, but I just remind the member that it is not about making a political point. But in light of the answer, I will put the leave. Leave is sought to table that particular file note. Is there any objection? There is not. It can be tabled.

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

Ron Mark: Does he believe that New Zealand’s reputation is enhanced by Alberto Youssef, also known as Brazil’s black market central banker, setting up a company here that was later revealed in Brazilian court documents to be a money-laundering front?

Rt Hon JOHN KEY: I have no knowledge of the particular case, and I am not going to comment on it.

Ron Mark: How confident is he that none of the 152 companies on the New Zealand register that are owned in the Caribbean, Central America, and the Indian Ocean are not involved in organised crime, drug running, or terrorism?

Rt Hon JOHN KEY: I cannot answer that question because I simply do not know, but what I do know is that when the IRD get the full database, it will then be able to go and look through the whole of that. It does not have that. In fact, the people who control it internationally should. But what I do know is that of the fewer than 200 trusts registered in New Zealand with any link to Mossack Fonseca, all of them have been disclosed, on the advice I have had from the IRD.

Ron Mark: I seek the leave of the House to table the New Zealand First research unit analysis of companies owned in the Caribbean, Central America, and the Indian Ocean as of 10 May 2016.

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

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

Ron Mark: How can the Prime Minister maintain that “there’s nothing to see here”, when terrorists, drug runners, and money-launderers are using our lax regimes to their advantage?

Rt Hon JOHN KEY: Firstly, we would have to see that quote in the context that I gave it. I cannot recall actually saying that specifically around this issue, but I would have to see. But as the member is aware, the Government is going through an extensive review around disclosure and has actually been doing a lot of work well and truly prior to this, including the issue in relation to the tax of look-back companies, which is in the House at the moment, that is in relation to the proactive disclosure of information to over 60 regimes. I remind the member that our most recent review by the OECD had New Zealand in the most-compliant category.

Ron Mark: I seek the leave of the House to table a letter from the Rt Hon Winston Peters to the Prime Minister, dated 10 May 2015, calling for a royal commission of inquiry into New Zealand’s tax system.

Mr SPEAKER: Leave is sought to table that. Is there any objection? Thank you.

Budget 2016—Emergency Housing

5. ALFRED NGARO (National) to the Minister for Social Housing: What support will Budget 2016 provide for people in need of emergency housing?

Hon PAULA BENNETT (Minister for Social Housing): Yesterday I announced that Budget 2016 will include $41.1 million to fund 3,000 emergency housing places per year for people and families in urgent need of a roof over their heads. This is the first time that any Government has set up direct, ongoing funding for emergency housing. It will mean that there is an essential safety net for people in crisis around New Zealand. As part of our review of the sector, providers told us that accessing funding was difficult and ad hoc, and we have fixed that.

Alfred Ngaro: How will the funding work?

Hon PAULA BENNETT: The new 3,000 places will be for anyone—individuals or families—who has a genuine need for emergency accommodation. They will be provided by a range of organisations around the country. There will also be a new special-needs grant available through Work and Income for people who cannot access one of the contracted places. Unlike the grants available now, people will not have to pay them back. We think that has been unfair, and so we have fixed it.

Alfred Ngaro: Which regions will benefit from the emergency housing funding?

Hon PAULA BENNETT: In the past, funding has been directed mainly at places like Auckland, where there is the biggest need. Although Auckland will still get a decent chunk of these new places, there is need elsewhere and as such they will be available throughout the country. Regions such as the Bay of Plenty, the East Coast, Waikato, and Wellington will get around 240 places each year, and places like Northland, Taranaki, and Nelson will get around 80 a year.

Phil Twyford: How many extra homeless people could the Government be helping now, if it had not sold or demolished 2,676 State houses in the last 5 years?

Hon PAULA BENNETT: Adding to that, of course, is the more than 1,000 places that have been rebuilt, the more than 1,400 that are already in stream to do that, the more than 600 that are now housed with community housing providers, and actually us providing more houses in the right place, of the right size, and not just accepting any old houses anywhere that were not being filled anyway.

District Health Boards—Funding

6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: What is the total amount of efficiencies since 2011/12 made by the 20 district health boards and how much have they made for the February year to date?

Hon Dr JONATHAN COLEMAN (Minister of Health): The district health boards have received total funding of $55 billion over the past 5 years, and over that time, they have been asked to find efficiencies averaging around 1.2 percent, or $130 million, a year. In the year to February, they have made savings of around $80 million, or 0.7 percent. This is a bit like the automatic efficiency dividend that was required of district health boards between 1999 and 2008.

Hon Annette King: Why did he dispute on The Nation that the district health boards, as of February this year, had made only $80 million in efficiencies when they are expected to make $178 million and he had provided the answer in written question 4628?

Hon Dr JONATHAN COLEMAN: I disputed it because it was quite clear that it was a document that Mrs King had given to the interviewer, and my experience of this thing is that it pays to go and check the facts.

Hon Annette King: I raise a point of order, Mr Speaker. I want to seek your guidance in relation to that answer, and it is regarding information that is already available to members if they choose to look. The Minister, as you have just heard—

Mr SPEAKER: Order! Can I just have the point of order.

Hon Annette King: Yes, this is the point of order. The Minister has disputed the figures. I have the figures; he provided them. I wish to table them because he was saying that they were Labour Party figures.

Mr SPEAKER: Order! The figures I think the member is referring to are figures I have in front of me too. They are the result of an answer to a written question. That is available to all members. Question number—[Interruption] Well, the member needs to rise and say.

Hon Annette King: In how many Budgets since 2009-10 has core Crown health expenditure kept up with health demographics and all inflationary cost pressures?

Hon Dr JONATHAN COLEMAN: In every Budget, the total quantum of health funding has increased above the rate of inflation. Inflation has increased by 13 percent over that period; health funding has increased by 30 percent.

Hon Annette King: I raise a point of order, Mr Speaker. I asked “In how many Budgets since 2009-10 has core Crown health expenditure kept up with health demographics and all inflationary pressures?”. The Minister did not answer that question.

Mr SPEAKER: No, he clearly—to my mind, he did. He said that in all Budgets it has kept up with inflation. [Interruption] The question has been addressed.

Hon Annette King: For the 2015-16 financial year, has core Crown health expenditure kept up with all health demographic and inflationary cost pressures, including wage increase cost pressures?

Hon Dr JONATHAN COLEMAN: What I can tell the member is that last year health spending—the Vote Health went up by $400 million, which was well above the rate of inflation. The amount of money that we put in went up by 0.6 percent. That was the factor for inflation. At the end of the year inflation was 0.2 percent. So the funding was well ahead of inflation.

Hon Annette King: I raise a point of order, Mr Speaker. It was a very straight question—

Mr SPEAKER: Order! [Interruption] Order! I listened very carefully. It was certainly interrupted a lot by interjections, but in my mind, on this occasion, again, the Minister has addressed your question.

Hon Annette King: Which of his statements on The Nation regarding health funding in real terms is correct: one, “We have fully funded demographics. There’s been a lesser factor for inflation.”; two, “It’s been ahead of inflation.”; three, “We were ahead of inflation over the last year.”; or, “I need to go back and check the figures.”?

Hon Dr JONATHAN COLEMAN: They are all correct, and you always need to check—[Interruption] You always need to check the facts when Mrs King is talking.

Hon Annette King: I seek leave to table the paywalled National Business Review article from 10 May 2016 headed “Health Minister says health spending up but spins on actual figure”.

Mr SPEAKER: Order! The document has been described. On the basis that I am assured it is paywalled, I will put the leave. Leave is sought to table that particular article. Is there any objection? There is none. It can be tabled.

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

Hon Annette King: I seek leave to table the paywalled National Business Review article from the same date, which is the transcript of the interview on The Nation dated—

Mr SPEAKER: No, no. Again, anybody can go back and have a look at that programme if they so want.

Tax System—Overseas Trusts

7. JULIE ANNE GENTER (Green) to the Minister of Revenue: Does he stand by his statement, “these are the facts: there is no tax avoidance or evasion in New Zealand in respect of foreign trusts … There is no wealth hidden in New Zealand with these foreign trusts”?

Hon MICHAEL WOODHOUSE (Minister of Revenue): Yes, in the context in which that statement was provided.

Julie Anne Genter: So would he tell the House today—would he guarantee—that of the 61,000 references to New Zealand in the Mossack Fonseca papers and the 12,000 New Zealand foreign trusts, approximately, that are registered in this country, there is not a single case of tax evasion?

Hon MICHAEL WOODHOUSE: No, but the key words in the statement that informs the primary question are “in New Zealand”. A foreign trust is just that: it has foreign settlors with foreign assets, foreign income, and foreign tax obligations. There is no tax evasion or obligation in New Zealand.

Julie Anne Genter: So is he admitting that people from offshore are using New Zealand foreign trusts, in some cases, for tax evasion?

Hon MICHAEL WOODHOUSE: What I am saying is that people sometimes do exploit differences between their country’s tax laws and ours in order to minimise their tax obligations. This is the heart of the issue: to the degree that tax avoidance and tax evasion is a problem, it is a global problem, which is why we are working with the OECD, in harmony with those other countries, to fix it.

Julie Anne Genter: Since it is a problem, will he then support my Supplementary Order Paper 173 on his Taxation (Transformation: First Phase Simplification and Other Measures) Bill in the Committee later today, which would require New Zealand foreign trusts to disclose more information on the registration to the Inland Revenue Department?

Hon MICHAEL WOODHOUSE: I note that information includes things like address details and passport numbers, which one commentator has described as “barking mad”. I agree with that commentary, and the answer is no.

Julie Anne Genter: Given that that Supplementary Order Paper does not require the publication—in fact, it explicitly precludes the publication—of that information, how could it possibly hurt for the Inland Revenue Department to have more information on the beneficial owners of New Zealand foreign trusts?

Hon MICHAEL WOODHOUSE: The kindest thing I can say about that question is that it is naive. The whole point about the issues that have been raised is the challenging of the disclosure to other tax jurisdictions of certain important information. I think that Supplementary Order Paper goes too far. I am also confident that the John Shewan inquiry will provide sensible and sage advice to the Government on what disclosure requirement changes may be necessary, and I am going to wait for that.

Broadband, Ultra-Fast—Progress

8. MAUREEN PUGH (National) to the Minister for Communications: What recent announcements has she made on progress of the Government’s Ultra-Fast Broadband programme?

Hon AMY ADAMS (Minister for Communications): Today I announced that as at 31 March more than 900,000 households, businesses, and schools can connect to the ultra-fast broadband network. Uptake has increased to 21.3 percent, with almost 200,000 connections, and the build in 16 regional towns is complete. We are connecting 1.3 properties every minute of every working day, and the project is on budget and ahead of schedule.

Maureen Pugh: How are rural New Zealanders benefiting from the Government’s Rural Broadband Initiative?

Hon AMY ADAMS: Improved connectivity is critical for our rural communities. The Rural Broadband Initiative continues to extend coverage to rural areas across New Zealand, and uptake of these services by both residential and business customers has now reached more than 37 percent. We have 142 new and 338 upgraded rural broadband towers in operation, and in the last 3 months over 2 million individual mobile devices were able to access services from these towers. Combined with 1,200 cabinet upgrades, this means that around 285,000 rural New Zealanders can now access faster broadband as a result of the National-led Government’s Rural Broadband Initiative.

Job Creation and Unemployment—Statistics

9. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by his statement made in Budget 2015 that “the unemployment rate is expected to fall below 5 percent in 2016”?

Hon BILL ENGLISH (Minister of Finance): Yes. The statement was based on Treasury’s forecasts at the time, reflecting its best professional judgment. The member will be pleased to know that 60,000 jobs have been added to the economy since Budget 2015—7,000 more than the 53,000 additional jobs that I stated at the time, on the basis of the forecast by Treasury reflecting its best professional judgment.

Grant Robertson: How many more people are unemployed now than when the National Government took office in 2008 according to the latest household labour force survey?

Hon BILL ENGLISH: I know there are 200,000 more people employed, and it is possible that there are more people unemployed than there were then, because we have had a major recession since then, from which there has been a moderate recovery.

Grant Robertson: Does he consider it a sign of success when the number of young people not in education, employment, or training has increased by 26,000, or 44 percent, after nearly 8 years of a National Government; or are those young people just “pretty damned hopeless”?

Hon BILL ENGLISH: The member insists on making completely irrelevant comparisons between now and the situation just before New Zealand had a major recession. We have just come off—[Interruption] In the last couple of quarters, we have had the lowest number of young people not in education, training, or employment ever. It has bumped up a bit in this last quarter. The Government has a wide range of programmes in place to deal with that issue, and if we persist with them, we will succeed.

Grant Robertson: Does he recall declaring the global financial crisis over in 2012, and how then does he explain the fact that we have a record number of “neets”, which has increased by 44 percent under his watch?

Hon BILL ENGLISH: First of all, I would not accept all of the member’s assertions. I can remember saying that the New Zealand economy was recovering from the global financial crisis, which turned out to be almost as difficult as recovering from the previous Labour Government.

Grant Robertson: Will Budget 2016 commit to unemployment being under 5 percent?

Hon BILL ENGLISH: The member will have to wait and see. But if having low rates of unemployment was merely a matter of the commitment of politicians, then there would be no unemployment whatsoever. I mean, if you could commit to it, why commit to any unemployment? What Budget 2016 will underpin is the extensive efforts that the Government is making, particularly with our young people, across a range of programmes, from Māori and Pacific trade training through to the youth services, which have the most concentrated—and probably the most expensive—youth programmes, all designed to ensure that young people are on a pathway to work, not a pathway to welfare.

Communities of Learning—Announcements

10. BARBARA KURIGER (National—Taranaki – King Country) to the Minister of Education: What recent announcements has she made on Communities of Learning?

Hon HEKIA PARATA (Minister of Education): Good afternoon, Mr Speaker—it is New Zealand Sign Language Week this week across New Zealand. I was pleased to announce that a significant milestone has been reached in our Investing in Educational Success initiative, with more than 1,000 schools now participating. Today’s announcement that another 21 Communities of Learning have been formed takes the total number to 117, and more than 320,000 of our young people are now involved. The 21 additional communities approved are in Auckland, Waikato, Bay of Plenty, Waiariki, Taranaki, Wanganui-Manawatū, Wellington, Nelson, Marlborough, West Coast, Canterbury, and Otago-Southland. In Taranaki – King Country there are two new communities, one centred around Waitomo and the other in Stratford. Of the Communities of Learning that have already been established, 19 have had their achievement challenges endorsed, 10 have appointed their Communities of Learning leaders, and, in addition, just over 200 teachers have been appointed to new teaching roles within the Communities of Learning.

Barbara Kuriger: How will these Communities of Learning drive educational success across rural and regional New Zealand?

Hon HEKIA PARATA: Research and the direct experience of parents show that within schools the quality of teaching has the biggest influence on whether students will be successful. Investing in Educational Success promotes best practice by making it easier for teachers and principals to share expertise and resources. This is especially important in rural and regional areas, where distance presents some challenges to collaboration. In Inglewood, for instance, the Community of Learning is making great strides along the whole learning pathway of their schools, and is one of the first in the country to involve early childhood education.

Earthquake Commission—Canterbury Home Repair Programme

11. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: Has EQC’s position that it will reinstate earthquake damage to a condition substantially the same as “when new” been applied to every home repaired in the Canterbury Home Repair Programme; if so, why does the EQC customer guide state that customers’ homes will be returned to a “pre-earthquake state”?

Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission): Yes, because that is what it means.

Dr Megan Woods: Was finance and insurance expert Dr Michael Naylor wrong when he stated that “It is now generally accepted that the EQC repair process has not been up to the expected standard for approximately 10 to 20,000 homes.”?

Hon GERRY BROWNLEE: Yes, he is.

Dr Megan Woods: If an Earthquake Commission claimant who is not part of the EQC Group Action settlement believes that the repairs to their home have not been to a condition substantially the same as when new, will the Earthquake Commission agree to re-scope the repair work; if not, why not?

Hon GERRY BROWNLEE: I think it is very important that the House hears that the court action brought by that particular group started out as an attempt by a law firm to put together a class action. That was rejected—it failed. It then went to a point where it was going to be a declaratory judgment, and then there was an agreement that, actually, everything the law firm wanted—everything the claimants were trying to achieve—could actually be found on the Earthquake Commission website. There was a statement with the two parties agreeing to that. The member needs to stop encouraging these ambulance chasers, who are unreasonably taking money off people when there is no benefit to them.

Dr Megan Woods: Given the Earthquake Commission’s statement that if repairing an earthquake-damaged part of a house means that work is also required to an undamaged part of the house, the Earthquake Commission will cover the cost of this work, will claimants who have previously paid for the undamaged repairs themselves be eligible for reimbursement?

Hon GERRY BROWNLEE: The question presupposes that every case is the same and that all these matters are simple. In the case, for example, of an asbestos roof that has crashed in, or has had a chimney crash through it, the entire roof needs to be replaced because there is no asbestos material—and it would be irresponsible to use it if there was—for that replacement. But if there is an opportunity taken by a homeowner to effect a change to their property for some damage or some pre-existing condition, then that is a reasonable cost that will be applied to them.

Dr Megan Woods: Has he had any meetings with the Minister of Finance in the lead-up to the Budget regarding a potential fiscal risk to the Crown as a consequence of the Earthquake Commission settlement with EQC Group Action; if not, why not?

Hon GERRY BROWNLEE: The first point is that I regularly have meetings with the Minister of Finance, and I am sure that on 26 May the member will see what a great finance Minister he has been for New Zealand—and continues to be. Also, let me just say, too, that this was not a settlement in the court; it was an agreed statement after what, effectively, was a failed action by an ambulance-chasing group of lawyers.

Dr Megan Woods: Does he agree with the Earthquake Commission that it is time to turn off the tap, and is that why he refuses to do his job and face the facts—that the Government has completely botched the Canterbury Home Repair Programme and exposed taxpayers to massive liabilities?

Hon GERRY BROWNLEE: Working back through that question, the first point is that the Earthquake Commission repair programme is not botched. The Building Research Association of New Zealand report will tell you that the call-back rate on a brand-new home is around about 80 percent. On the repair programme run by the Earthquake Commission, it is about 8 percent. It does not indicate any great problem. Further, there was no settlement, as the member claims, and when it comes to the statement “turn off the tap”, that was an internal document used by some staff looking at the issue in the Earthquake Commission. It is not official Government policy, and it is no less valid than the Labour Party putting up on the screen yesterday at its caucus “We want to win the 2017 election.” Neither is going to be true. [Interruption]

Mr SPEAKER: Order! Question No. 12, Mahesh Bindra—[Interruption] Order!

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Listening to the—

Hon Member: Barrage.

Hon Gerry Brownlee: Well, I will not call it a barrage—the interjection from across the House, it is clear that I made a mistake. I meant their website today. However, that was this morning, and I think they will probably revise—

Mr SPEAKER: Order! No, where we are going is not going to help the order of this House at all. [Interruption] Order! I have called Mahesh Bindra.

Corrections, Department—Prisoner and Staff Safety

12. MAHESH BINDRA (NZ First) to the Minister of Corrections: Does she have confidence in the Department of Corrections’ ability to keep both staff and prisoners safe?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Corrections): Yes.

Mahesh Bindra: Is she aware that a vicious prisoner-on-prisoner assault took place just last week at Christchurch Men’s Prison, resulting in the victim nearly dying; if so, does she believe this could just as easily happen to staff?

Hon CHRISTOPHER FINLAYSON: Yes, the Minister is aware of an incident that took place at the Christchurch prison on 4 May. The corrections officer was apparently able to get assistance very quickly by using his personal alarm. I am advised that although one prisoner did receive serious injuries, they are not life-threatening.

Mahesh Bindra: Why has she allowed the staffing levels to drop to the extent where it has become impossible for staff to safely do their job of supervising prisoners and managing violent situations within prisons?

Hon CHRISTOPHER FINLAYSON: I dispute the premise of that question. The current vacancy rate for Christchurch Men’s Prison, for example, at the moment is 2.7 percent, so I do not know where the member is getting his figures from. He is wrong.

Mahesh Bindra: Why have public prisons been left short-staffed while staff from these prisons have been seconded to supervise the Serco-run Mt Eden Corrections Facility?

Hon CHRISTOPHER FINLAYSON: Again, I dispute the underlying premise of that question. There is no issue of short-staffing as the member has represented it in his question.

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