Questions & Answers – June 2

by Desk Editor on Friday, June 3, 2016 — 12:58 PM

Economic Growth—Forecast

1. JONO NAYLOR (National) to the Minister of Finance: What is Treasury’s latest forecast for economic growth, as set out in the 2016 Budget Economic and Fiscal Update?

Hon BILL ENGLISH (Minister of Finance): Treasury tells us that the outlook for the world economy is somewhat weaker but that New Zealand’s economic outlook is positive. It is forecasting real GDP growth of around 2.9 percent over the coming year and 2.8 percent on average over the 5 years to June 2020, including another 170,000 new jobs by 2020. Unemployment is expected to drop to 4.6 percent, and the average wage is forecast to rise to 63,000 a year. Of course, these forecasts are subject to the usual risks, both in the world economy and the domestic economy. But few developed economies enjoy a positive outlook.

Jono Naylor: Whatare the main drivers of the positive outlook for growth?

Hon BILL ENGLISH: Looking into the detail of this forecast, strong population growth is both an indicator of New Zealand’s economic performance and a contributor to it. However, Treasury expects migration to fall fairly sharply, from 71,000 currently to the long-run average of 12,000 per year. Similarly, the growth forecast remains robust despite rising oil prices and a wind-down of investment in Christchurch. This is because consumer spending and exports continue to drive economic growth, plus a large pipeline of construction projects and low interest rates, which should continue to stimulate investment.

Jono Naylor: What other reports has he seen that suggest New Zealand is expected to display strong growth over the next few years?

Hon BILL ENGLISH: The OECD released its forecast, which shows a similarly positive outlook for the New Zealand economy. It projects 3 percent growth in 2016 and 2.7 percent in 2017. The New Zealand Institute of Economic Research also released its forecasts, which show solid growth, more jobs, higher wages, and falling unemployment, broadly in line with Treasury’s forecasts.

Jono Naylor: What steps is the Government taking to support the growing economy?

Hon BILL ENGLISH: We are always taking steps, week by week, but it is important that the Government remains following policy that is consistent economic reform, to give business the confidence to invest and grow. The main vehicle for this is the Business Growth Agenda, which includes new free-trade agreements, reducing ACC levies, rolling out ultra-fast broadband, simplifying tax for small to medium sized enterprises, and, in Budget 2016, a large, forward-looking package—the Innovative New Zealand package—that will support scientists, entrepreneurs, and innovators.

Health, Minister—Statements

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by all his statements?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, but we should know more in about 30 seconds. [Interruption]

Mr SPEAKER: Order! Just ask the question. Supplementary question—Hon Annette King.

Hon Annette King: Does he stand by his statement yesterday that “DHBs are free to allocate part of that $568 million as they see fit” for mental health, when district health boards (DHBs) actually received $400 million in the Budget; so how much of the $400 million is available for mental health?


Hon Annette King: Which of the following statements does he stand by: “increase in core Crown health expenditure since 2009-10 covers all demographics and most, but not all, inflationary pressures” or “over the previous seven Budgets, the total injection of new money has been higher than population and cost pressures”?

Hon Dr JONATHAN COLEMAN: The member’s premise to that question is flawed. It is Vote Health; it is not core Crown health expenditure. After 30 years, she should understand the Vote structure.

Hon Annette King: I raise a point of order, Mr Speaker. Should I table the Minister’s answer from last year—

Mr SPEAKER: No, no. [Interruption] Order! The member is now trifling with the point of order. The question was asked, the answer was given, and it addressed the question.

Hon Annette King: Does he stand by his statement that the bowel-screening programme is on track to begin in 2017, when Treasury yesterday gave its implementation a red grading for delivery, which led him to attack Treasury officials in a less than manly way, because officials cannot stand up for themselves?

Hon Dr JONATHAN COLEMAN: Oh yes, officials are well capable of standing up for themselves, and I absolutely stand by what I said. Frankly, I do not agree with everything Treasury says, and on this occasion I definitely do not.

Hon Annette King: Does he stand by his statement that the age for the bowel-screening programme in New Zealand should be 60 to 74 because it is in line with most countries, when Australia, Scotland, Canada, France, and Germany start at 50, and even the Cancer Society of New Zealand recommended starting at 50?

Hon Dr JONATHAN COLEMAN: Yes, I do, and I also stand by my statement that Labour, despite announcing back in 2008 that it was going to start a programme, never did anything and did not spend a single dollar on it.

Hon Annette King: In light of his answer to Mike Hosking on radio today, what is the amount of money that DHBs will have to absorb in related costs to the bowel-screening programme, and is that money to be taken out of DHB budgets over the next 4 years?

Hon Dr JONATHAN COLEMAN: It is quite clear: there is $39.3 million over 4 years in this Budget to commence the roll-out, and that is the money that will fund that roll-out and some of the broader national costs. But it is primarily for Wairarapa and Hutt Valley, and there is a progressive roll-out over the next 3 years for the other 17 DHBs, because we are including Waitematā with the first three as well.

Hon Damien O’Connor: When the Minister told the House on Tuesday that the Grey Base Hospital build was under way, did he know that contracts for building, wiring, and construction had not been finalised—the only action was to shift a crane on to the site—and is this another of his premature pronouncements for which he is becoming well known?

Hon Dr JONATHAN COLEMAN: Well, at least I am able to make a pronouncement, rather than that member, who will not even say whether he backs the Labour-Greens deal. The clear fact is that the work has started, and the advice I have had is that the contracts have been signed. But you can see there is going to be more of this trouble coming for Labour and the Greens.

Roading, Northland—Funding

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Transport: Is he satisfied that the New Zealand Transport Agency funding in Northland is adequate to cover the cost for the Brynderwyn Hills road improvements?

Hon CRAIG FOSS (Associate Minister of Transport) on behalf of the Minister of Transport: Yes. I am satisfied that the New Zealand Transport Agency (NZTA) has sufficient funding to complete the safety upgrade of the Brynderwyn Hills road improvements, and they are well on track for completion in the summer of 2017. The project was originally funded at $16.9 million, but due to geotechnical issues the cost now is $18.9 million, but I am sure the member will welcome this additional investment by the National-led Government in Northland.

Rt Hon Winston Peters: Is it not a fact that month on month the cost of this project has blown out, and what has he or the NZTA done about it?

Hon CRAIG FOSS: No, it is not a fact, but I am sure the good people of Northland will be interested that the current member is not wanting or welcoming additional spend in his electorate.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister has not stuck to the question that I asked him. He has turned it into a personal attack, and it is a very unfortunate approach he has taken.

Mr SPEAKER: Order! The last part of the answer by the Minister was certainly not helpful to the order of the House. The first part did adequately address the question. The member can continue with supplementary questions if he wishes.

Rt Hon Winston Peters: If he has just admitted that the costs have blown out by $2 million already, by how much each month has it been blowing out, and why does he think that $18 million is the total cost now?

Hon CRAIG FOSS: We are committed to delivering this project on time. Yes, there is additional spend required to build it to the right standard. Geotechnical issues that were not apparent when the design was first planned have become apparent. There is no month-on-month additional spend. New information has created additional spend required for additional investment into Northland.

Rt Hon Winston Peters: If the NZTA is working, in its words, to “create transport solutions for all New Zealanders”, then why can it not keep contracts within the expenditure that is originally announced, such as in the Brynderwyn Hills where every month it has blown out?

Hon CRAIG FOSS: I take it from that that that member would prefer the road to be built of substandard material that is not durable or lasting for many, many years. Geotechnical issues have required an additional spend in the project. I would have thought that a good local member would welcome that.

Rt Hon Winston Peters: Is it not a fact that every million dollars overspent on this project and outside of the contract is a million dollars that cannot be spent elsewhere on desperately needed roads and two-lane bridges in Northland?

Hon CRAIG FOSS: I am sure, again, that that member may portray to the good people of Northland that he would prefer that a substandard road was built to allow spending somewhere else.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, I do not think that—

Mr SPEAKER: No, no. Order! With the greatest respect I am going to invite the member to repeat the question.

Rt Hon Winston Peters: Thank you very much; that will be most helpful. Is it not a fact that every million dollars overspent on this project is a million dollars that cannot be spent elsewhere on desperately needed roads and two-land bridge projects in Northland?

Hon CRAIG FOSS: Of course this will not stop other investment. Actually, the member may be interested to know that there is around $2 billion of funding for planning of roading investment into Northland.

Budget Economic and Fiscal Updates—Living Standards

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the statement in the Budget Economic and Fiscal Update that “growth in average income (or output) per person (i.e. GDP per capita) is what matters for achieving higher material living standards”?

Hon BILL ENGLISH (Minister of Finance): Yes, I do agree; that is a measure of material living standards. As I have explained to the member many times, right at the moment growth in per capita income or per capita GDP is a bit lower because of the surge in population growth. If the forecasts that Treasury has made come to pass and migration and population growth drop off, then I am sure that he will be severely disappointed to see per capita incomes growing faster in future years.

Grant Robertson: What is the forecast real GDP per capita in Budget 2016 for 2016 and 2017?

Hon BILL ENGLISH: I do not have that detail to hand, but I imagine it is around 0.6 or 0.7 per year, on the basis that there is 2 percent population growth, which is pretty strong—in fact, about the fastest growing population that we have had in many decades—and which we regard as a measure of success. The Government is ambitious that New Zealand be a place that people want to live and work, and we are certainly achieving that ambition for New Zealand.

Grant Robertson: Is real GDP per capita of less than 1 percent over the next 2 years going to deliver meaningful higher living standards for New Zealanders?

Hon BILL ENGLISH: Yes, and those New Zealanders will have the opportunity to be part of an economy where the population is growing at 2 percent, which we regard as successful. But they also have the reassurance of knowing that if migration drops off, these numbers will increase.

Grant Robertson: How is he delivering meaningful gains to New Zealanders’ standards of living when real GDP per capita has grown by 0.5 percent—i.e., less than 1 percent—in the period 2009 to 2015?

Hon BILL ENGLISH: It is not so much a matter of what I am doing; it is what people are doing by voting with their feet—that is, the 30,000 New Zealanders a year who used to decamp to Australia are staying here, and New Zealand is increasingly seen as a desirable, stable, growing economy, and it is attracting interest from all around the world from people who want to turn up here. We regard that as a good thing.

Rt Hon Winston Peters: If $11 billion, in the Government’s words, is required for defence in the next 10 years, where was that accounted for in his last Budget projections?

Mr SPEAKER: Order! I just cannot see how that question relates. Can I have the question read again, because it is quite a deviation from the original.

Rt Hon Winston Peters: Well, it is about forecasts.

Mr SPEAKER: No, let us have the question.

Rt Hon Winston Peters: If, in the Government’s words, $11 billion will be required on defence spending over the next decade, where was any of that accounted for in the last Budget projections?

Hon BILL ENGLISH: The member can be reassured that it is in the Budget, although not set out in quite the way that matches that description. Defence has a long-term funding track for the first time ever, which is leading to a much more efficient and focused Defence Force, and each year it gets roughly a $100 million increase in its baseline. Over 10 years, that is roughly about—that roughly adds up to a lot of money.

Grant Robertson: Why, in the face of such poor per capita GDP, did he deliver a Budget that, in the words of the Westpac economist team, has a net reduction in the allowances for new operational and capital spending over the next 4 years?

Hon BILL ENGLISH: I do not know what the Westpac people are talking about, frankly, in relation to a net reduction, because, as the finance Minister I can tell you that all the numbers are going up—some of them a bit faster than might be absolutely ideal from a finance Minister’s point of view. I do not know how many times I have to explain to the member that the low per capita income is a function of the surge in population growth. We regard the surge in population growth as a success, not a problem—as success. This is what we want to see; 30,000 New Zealanders who used to go to Australia staying home. Under a Labour-Greens coalition, I am sure they all will pick up sticks and leave, and will get—

Mr SPEAKER: Order! That part is not going to help the order of this House.

Grant Robertson: Why has he presented a Budget described as “a fiscal mirage” by Westpac and as “breathtakingly visionless” by Business and Economic Research Ltd (BERL), when what New Zealand needed was a Budget that actually invests in New Zealand’s future?

Hon BILL ENGLISH: I simply disagree with both of them. Neither BERL nor Westpac sets Government policy, and, in this case, they also happen to be wrong.

Housing Supply and Affordability—Council Requirements

5. JAMI-LEE ROSS (National—Botany) to the Minister for Building and Housing: What specific new requirements for councils are proposed in the national policy statement on urban development capacity, and how will these support the Government’s long-term work on improving housing supply and affordability?

Hon Dr NICK SMITH (Minister for Building and Housing): Councils will be required to ensure that sufficient development capacity is provided in their plans to meet projected growth. They will have to monitor and report, for the first time, on issues of housing supply and affordability. They will have to take into account the difference between theoretical capacity and that which is commercially feasible, as well as providing a 20 percent over-supply to ensure that there is genuine competition. These requirements on land supply are an important part of the Government’s work on housing affordability, because it is actually the price of the section—now averaging $450,000 in Auckland—that is at the core of New Zealand’s housing affordability problems.

Jami-Lee Ross: What background work has gone into the development of this national policy statement on urban development?

Hon Dr NICK SMITH: I have to acknowledge the work of the Productivity Commission, which produced, last September, a 380-page report that identifies this key area in which our planning system is failing. I would also draw attention to the research work on other jurisdictions, in which it was found that between Australia and the UK, our Resource Management Act systems for ensuring adequate development capacity were weaker than any of those other jurisdictions. They were also very poor in terms of the information and analytical requirements, and that is why they are included in the national policy.

Matt Doocey: What examples are there to show that increasing development capacity directly impacts on housing prices and affordability?

Hon Dr NICK SMITH: It is interesting to note yesterday that the only urban area in New Zealand that had house price inflation under 10 percent was Christchurch. In that same city, rents in the last year have dropped by 5 percent. When we look at the intervention that Mr Brownlee took 5 years ago to open up 25 years of supply of land for housing, that directly shows the link between land supply and housing affordability—

Dr Megan Woods: That’s just ridiculous!

Hon Dr NICK SMITH: —and members opposite say it is ridiculous. At the time they said there was a housing crisis in Christchurch. We have fixed it, and we are going to fix it in Auckland with the same successful methods.


DAVID CLENDON (Green): My question is to the Minister of Corrections—I can see she is looking forward to it—

Mr SPEAKER: Order! No, that does not help the order of the House. Just ask the question.

6. DAVID CLENDON (Green) to the Minister of Corrections: Does she take responsibility for the additional $41 million above baseline funding that has been earmarked for prisons in response to the rising prison population?

Hon JUDITH COLLINS (Minister of Corrections): I accept responsibility for helping to secure this funding.

David Clendon: Given the Government’s stated goal of reducing reoffending by 25 percent by 2017, what is the rationale for allocating $10 million less to rehabilitation programmes in this year’s Budget compared with the initial estimate for 2015?

Hon JUDITH COLLINS: I can tell the member, because I know he is deeply interested in it, and genuinely so, that reoffenders are, by the way, down by 25 percent at the moment. The reoffending rate, though, is 6.7 percent down. But the big focus this year is actually going to be on mental health and the provision of mental health services in prisons.

David Clendon: Does it make sense to cut $25,000 from rehabilitation programmes like Circles of Support and Accountability, which has a proven record of reducing reoffending, while increasing spending on custodial services by $41 million?

Hon JUDITH COLLINS: If fewer people would like to commit serious violent offending and methamphetamine supply offences, then we would be happy to take fewer of them into corrections. But while they continue to do that, then we will continue to house them properly.

David Clendon: What assurances can she give that the corrections scheduling regime is fit for purpose and that inmates who need rehabilitation programmes are getting access to them in a timely fashion?

Hon JUDITH COLLINS: I know that corrections is taking this very seriously to make sure that prisoners can in fact access rehabilitation when they should be, and I can assure him that I have taken the issue to the chief executive of corrections, and that is actually something that they are making sure that they do better on.

David Clendon: Is the Minister then saying that she is aware of the numerous and credible reports of inmates being unable to access rehabilitation programmes required by the Parole Board, meaning that they are serving more prison time than they need to be?

Hon JUDITH COLLINS: I am aware of many allegations, but they are not always credible. In fact, sometimes when we have looked into them it has been a prisoner who has been scheduled to undertake rehabilitation and has then gone on to commit an offence in prison itself, and therefore is no longer able to undertake that rehabilitation.

David Clendon: As corrections Minister dealing with the blowout of 700 inmates in the prison muster since last year, does she now regret any of the decisions she made as justice Minister on mandatory sentencing and bail policy—policies that have increased prison numbers with no measurable improvement in public safety?

Hon JUDITH COLLINS: Oh, I would never say that to someone who has been the victim of a serious violent offender. In fact, I would absolutely support the policies of this Government. I am very pleased to have been part of them.

David Clendon: What evidence does the Minister have for her reported assertion that the percentage increase in the prison muster is caused by longer sentences for violent offenders, rather than an increase in the remand population?

Hon JUDITH COLLINS: It is actually both, and what is really important—and I have heard from the Department of Corrections directly—is that quite a lot of that increase in the remand population is actually around family violence being treated far more seriously in the courts by police and by the courts, and repeat recidivist violent offenders in their own homes not being let free to go home and beat their children and their spouse until they end up dead, which is what we have had, by the way, in the past.

Urban Growth, Auckland—National Policy Statement on Urban Development

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: In light of his claim the Government has been systematically dismantling the urban limit, does his proposed national policy statement on urban development abolish Auckland’s urban growth limit?

Hon Dr NICK SMITH (Minister for Building and Housing): The Government has systematically dismantled Auckland’s urban limit—firstly, with the special housing areas, which allows new residential areas beyond the limit; secondly, with the fast-track process for Auckland’s new unitary plan, which will permanently replace it; and, thirdly, with today’s national policy statement, which would make it impossible to recreate. Abolishing the urban limit is the easy bit. It is what rules and plans you replace it with that matters, and that is what the independent hearings panel is doing with the unitary plan.

Phil Twyford: Why does his national policy statement endorse the approach of drip-feeding land, when doing that in Auckland clearly just feeds the rampant property speculation; and why does he not just abolish the urban growth boundary?

Hon Dr NICK SMITH: It is clear that the member has not read the Government’s national policy statement. Secondly, the member pretends that if you just whip the metropolitan urban limit away, that is all you need to do. You have to answer the question beyond that metropolitan urban limit. What are the rules if somebody wants to build an apartment building? What are the rules if somebody wants to build a factory? What are the rules if somebody wants to build a house? That is where the member continues to have sound bites rather than policies.

Phil Twyford: How does he expect Auckland ratepayers to fund the $17 billion of infrastructure needed to support Auckland’s growth when he has offered them nothing to fix that in his national policy statement?

Hon Dr NICK SMITH: The reason the national policy statement does not answer the question as to who funds the infrastructure is that that would be outside the law of what you can do in a national policy statement, and that member would be the very first to criticise me if I started breaking the law. We did make changes to the Local Government Act in 2014—interestingly, changes that the member opposed, but he has done so many flip-flops it does not surprise me. Those changes to the Local Government Act made it plain that the cost of infrastructure should be met by the developer who is selling the sections and, secondly, those changes enabled infrastructure agreements, and those infrastructure agreements allow innovative ideas like infrastructure bonds to be used.

Phil Twyford: Can he confirm that Auckland’s draft unitary plan already includes demand assessments and staged injections of land supply, and that all his huffing and puffing has come to nothing because his national policy statement is no different from what Auckland Council is already dong?

Hon Dr NICK SMITH: It may have missed the member that the draft unitary plan currently has no legal effect. It is before an independent hearings panel, and I would urge that member to not make views around whether it is a good plan or a bad plan until the independent hearings panel has finished its job. What the Government can do is make its expectations very clear, and that is what it has done, with a national policy statement that requires council to ensure there is adequate development capacity.

Phil Twyford: Why, after years of talking tough and blaming councils for expensive housing, and 8 years after he promised a national policy statement in the National Party election manifesto, is he not embarrassed and humiliated that this is all he has got to show for it?

Hon Dr NICK SMITH: The member may be interested that the first urban development national policy statement was promised by one of his colleagues in 2001—2001. I would also say to the member, when he asks me to be bold—is it not interesting that he challenges me to break the metropolitan urban limit, I bring legislation before this House with special housing areas to do just that, and he delays the legislation in the Parliament and argues against it at every stage through Parliament? That just shows that that member on housing has had every single position that the Kama Sutra could have invented. [Interruption]

Mr SPEAKER: Order! [Interruption] We now move to question—[Interruption] Order! We now move to question No. 8.

Budget 2016—Science and Innovation

8. Dr PARMJEET PARMAR (National) to the Minister of Science and Innovation: What new investment does Budget 2016 make in science and innovation?

Hon STEVEN JOYCE (Minister of Science and Innovation): Budget 2016 significantly increases the Government’s investment in science and innovation. As part of the wider $761 million Innovative New Zealand package, Budget 2016 provides a further $410 million in operating funding over the next 4 years for science and innovation. The increased funding will greatly strengthen New Zealand’s science system. It will increase investment in the sector by a further 15 percent by 2019-20, taking cross-Government investment in science to $1.6 billion annually for the first time. This very significant increase shows how committed this Government is to science-led innovation to strengthen and diversify the New Zealand economy.

Dr Parmjeet Parmar: Why is the Government making significant new investment in research, science, and innovation?

Hon STEVEN JOYCE: Investing in the work of our researchers, scientists, and innovators is hugely important for developing an innovative New Zealand with a truly diversified economy. We are doing that with initiatives like $113.8 million more over 4 years for the new Endeavour Fund, the contestable fund devoted towards longer-term, high-impact, mission-led science; $97 million over 4 years for additional health research through the Health Research Council of New Zealand; and $66 million over the next 4 years for the Marsden Fund, a boost in support for investigator-led research. These investments will fund more projects like Game of Clones, which is a study of antibiotic resistance and the global threat of that to human health—

Hon David Cunliffe: I thought it was the National caucus.

Hon STEVEN JOYCE: —and investigating destructive volcanic eruptions in “Mount Doom”, which is not about David Cunliffe but about pyroclastic flows on Mount Ngāuruhoe.

Paris Climate Change Agreement—Presentation of Parliament

9. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Does the Government intend to present the Paris Climate Change Agreement to Parliament and ratify it before the end of 2016?

Hon Dr NICK SMITH (Minister for the Environment) on behalf of the Minister for Climate Change Issues: New Zealand was a signatory to the Paris Agreement on the very first day. The next step is a national interest analysis, which will be presented with the Paris Agreement to Parliament and is subject to the treaty examination process. The timing of ratification has not yet been determined. The treaty requires 55 percent of emissions and 55 countries for the Paris Agreement to come into force.

Dr Kennedy Graham: Why is New Zealand unable to commit to ratifying the agreement in 2016, when six Pacific Island States have already ratified, and China, the US, France, Canada, Mexico, and Australia have all said that they will do it this year?

Hon Dr NICK SMITH: I find the member’s question ironic in that his party has argued that New Zealand, particularly with respect to the Trans-Pacific Partnership (TPP), needs to have a very thorough parliamentary process around the examination of treaties before ratification. I would simply say to the Green Party, it cannot demand one process on the TPP to be as slow as possible, and then a separate process around the Paris Agreement on Climate Change that is the opposite.

Dr Kennedy Graham: Given that 7 months is an entirely reasonable time to do all of what the Minister has said, and to ratify at the end of that, and given that New Zealand has only 14 years to meet the commitment it made under the Paris Agreement, why will the Minister not get on and do that, ratify it, and give business a clear signal to begin the transition to a cleaner future?

Hon Dr NICK SMITH: I know that the Minister is ambitious to move forward with ratification as quickly as is practical, but the first legal step that is required is the national interest analysis, and part of that work is in terms of requiring the legislative or regulatory changes that New Zealand needs to take to be able to ratify the agreement. I would also note that the same Minister has just put through Parliament changes to our emissions trading scheme that mean that it is one of the most comprehensive and effective emissions trading schemes anywhere in the world.

Dr Kennedy Graham: Given that all those responsibilities can indeed be cleared up in the course of calendar 2016, is not the real reason that the Minister will not commit to ratifying the Paris Agreement because the Government is holding out hope that it can still resort to international carbon trading and avoid cutting pollution in New Zealand?

Hon Dr NICK SMITH: The member is completely mistaken. Even with the process of ratification, the issue about what units from the previous Kyoto agreement will be available or not is still going to be the subject of subsequent discussions through the regular climate change forums. For instance, the Kyoto agreement took five further meetings to determine all the rules. That would equally be true of the Paris Agreement, and that is in no way any barrier to New Zealand being able to get on with ratification, which the Minister is committed to doing as quickly as practically is possible.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I understand that you will be moving on to question 10. In the interests of this Parliament’s image, how did this question get past the Speaker’s office? I mean, that is not even grammar.

Mr SPEAKER: Well, it has certainly got through. If the member is not happy with the grammar, I am afraid that is going to be his problem. It is an accepted question.

Police Targets—Drug Dealing

10. KANWALJIT SINGH BAKSHI (National) to the Minister of Police: What recent successes has Police had in targeting drug dealing?

Hon JUDITH COLLINS (Minister of Police): Police today announced the outstanding results of its annual national crime and cannabis operation. The 7-month-long operation involved nine police districts and targeted drug-dealing houses. It has resulted in 791 charges laid against 155 offenders. More than $11 million worth of property is under investigation or restraint by police. Around 900 grams of methamphetamine, 42 kilograms of cannabis plant material, and seven firearms have been seized; 46 addresses were selling methamphetamine, 70 addresses were selling cannabis, seven addresses were selling synthetic cannabis, and 25 addresses were selling both cannabis and methamphetamine.

Kanwaljit Singh Bakshi: How has this contributed to preventing social harm?

Hon JUDITH COLLINS: Police is very focused on shutting down drug-dealing operations to prevent the significant social harm they cause any community. Drug offending is often linked to other crime, and this operation is no different: gang members feature prominently among those arrested; 89 of the people charged have previously been convicted of burglary, theft, theft ex car, and receiving offences; 54 percent of those charged have previously been linked to family violence incidents; and another 44 percent have been convicted of a violence-related offence. Forty children aged between 3 weeks old and 16 years old were found in drug-dealing houses across the country and a number of referrals to Child, Youth and Family have been made.

Stuart Nash: Although I join with the Minister in congratulating the Police on its recent success, when John Key said in 2008 that “I will expect the Police to use the full force of the law to shut down the organised gangs that control the distribution of these drugs”—

Hon Steven Joyce: The question.

Stuart Nash: Just wait. Can she inform the House how many organised gangs have been shut down since this promise was made 8 long years ago?

Hon JUDITH COLLINS: Well, it is quite a long way from the primary question, but I am happy to tell that member that when we have got approximately 3,000 gang members and gang associates in jail right at the moment, he can do the maths himself. Forty-five percent of all Head Hunters members, by the way, are in jail. They are being shut down. [Interruption]

Mr SPEAKER: Order! [Interruption] Order!

Financial Markets Authority—Performance

11. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Commerce and Consumer Affairs: In light of its report on Silver Fern Farms, does he believe the Financial Markets Authority is performing its function well as a “risk-based conduct regulator” promoting and facilitating “the development of fair, efficient and transparent financial markets”; if so, how?

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): Yes; the Financial Markets Authority (FMA) is continuing the long-term task of building confidence in our critical markets, which, in turn, helps businesses raise capital efficiently so they can invest in jobs and growth.

Rt Hon Winston Peters: If the Financial Markets Authority found no problem with Silver Fern Farms understating its profit by 85.8 percent while overstating debt by up to 24 percent, what benefits are taxpayers getting from the $30 million Financial Markets Authority turning a blind eye to blatant deceit and corruption at the Silver Fern Farms shareholders’ expense?

Hon PAUL GOLDSMITH: It is not appropriate for me as Minister to second-guess an independent Government authority’s decision making. It is for the FMA, as an independent regulator, to form its judgment as to the appropriate level of investigation. No regulator applies the full force of the law every time it receives a complaint; each individual complaint is assessed on its merit.

Rt Hon Winston Peters: If it is proven, as it soon will be, that the Financial Markets Authority failed on this complaint in the same way it failed on the NZX Clear Grain Exchange case, which is now before the courts, will he demand accountability and resignations?

Hon PAUL GOLDSMITH: My expectation as Minister is that the FMA continues to act in a professional and independent manner by ensuring the market participants act according to the law. And I would expect the member, if he made a complaint to the FMA, to have put all the information before the FMA, and it will have considered it.

Rt Hon Winston Peters: I seek leave to table a letter dated 18 April 2016 to the Financial Markets Authority laying out the case that it failed to investigate.

Mr SPEAKER: Order! The letter is from, presumably, the member himself, is it?

Rt Hon Winston Peters: It is.

Mr SPEAKER: Leave is sought to table that particular letter. Is there any objection? There is none.

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

Department of Corrections, Chief Executive—Confidence

12. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections: Does she have confidence in the Chief Executive of the Department of Corrections?

Hon JUDITH COLLINS (Minister of Corrections): Yes.

Kelvin Davis: Can she guarantee the $41 million blow-out in the Department of Corrections budget will not lead to corners being cut and standards dropping even further?

Hon JUDITH COLLINS: How can it be a blowout when we have actually got $355 million extra in Budget 2016?

Kelvin Davis: Does she have any concerns about Serco’s management of Wiri Prison; if not, why not?

Hon JUDITH COLLINS: Significantly less than I have in that member’s management of his portfolio.

Kelvin Davis: How has she allowed Serco guards at Wiri Prison to allegedly smuggle contraband to prisoners on her watch?

Hon JUDITH COLLINS: If there are any allegations of bribery and corruption, then that member should take them straight to the Department of Corrections or police. If he is too scared to do so, he should bring them to me. [Interruption]

Mr SPEAKER: Order! I have not called the member.

Kelvin Davis: Why would anyone take concerns to her when she would just try to shoot the messenger and sweep the allegations under the carpet?

Hon JUDITH COLLINS: Well, let me tell that member that this morning on The Paul Henry Show I heard that member making allegations against an unnamed corrections officer. The Department of Corrections, when I spoke to its staff this morning, looked at it and sent it straight to the New Zealand Police for investigation. And, apparently, that member might have some evidence to assist police. [Interruption]

Mr SPEAKER: Order! I do not need the assistance I am getting from the right-hand side here. [Interruption] Order! Mr English.

Kelvin Davis: Does she hold Serco at Wiri Prison to the same high standards of “professionalism, safety, rehabilitation, and security” that she expected of it at Mt Eden prison; if so, does she expect Serco to fail these just as it did at Mt Eden prison?

Hon JUDITH COLLINS: Well, what a loaded question. I can tell that member, though, to give him some comfort, that since 2007 four corrections officers, previously, by the way, employed by the Department of Corrections, have actually been imprisoned for corruption and receiving bribes. We have two former officers at the moment who are in front of the courts, and I can tell that member that any such allegations will be sent straight to New Zealand police by the Department of Corrections, as they were this morning. I think that that is the appropriate action, rather than making unsubstantiated allegations based on no names and no details other than allegations.

Kelvin Davis: Supplementary—

Mr SPEAKER: No. Order! I understand that the Labour allocation of supplementary questions has been used.

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