Economy—Debt Levels and Growth

1. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Is it correct that the household debt-to-income ratio is now 165 percent, and does he agree with Westpac senior economist Satish Ranchhod’s comment in response to this record high level, “you can’t continue to grow an economy just using debt, there needs to be more to prop up activity”?

Hon BILL ENGLISH (Minister of Finance): The answer to the first question is yes, and, to the second question, no. I would reiterate previous statements I have made. Households make their own decisions about how much debt to take on, but those households that are taking on proportionately large amounts of debt at the moment should not rely on any assumption that interest rates will stay where they are for ever or that they will not increase.

Grant Robertson: Can he confirm that a household debt to income ratio of 165 percent is higher than during the global financial crisis, and has increased by 36 percent since his Government came to office and by nearly 8 percent in just the last year?

Hon BILL ENGLISH: I think those numbers are probably right. The member needs to be reminded that the Government does not decide how much money households borrow. And one of the reasons for the ongoing increase is that interest rates have continued to drop in ways that neither households nor the Government nor economists expected would occur. But people who are borrowing large amounts of money right now should not be operating on the assumption that interest rates will stay low for ever.

Brett Hudson: Does he agree with Westpac senior economist Satish Ranchhod’s comment: “it’s looking like the economy will keep trucking along for the next year or so, with a range of economic indicators pointing towards continued momentum in activity.”?

Hon BILL ENGLISH: Yes, I do. The economist who pointed out the relatively high level of household debt also pointed out that the economy is moving along pretty consistently, and figures that came out in the last week or so show that the rate of growth of the New Zealand economy is among the higher growth rates in the developed world.

Grant Robertson: Why is he claiming success for the economy when house prices have risen at seven times the rate of incomes across New Zealand under his watch?

Hon BILL ENGLISH: It is not so much a matter of whether the Government is claiming success for the economy. The member should go out and have a look around the economy and see the confidence and investment that is going on. There has been extensive discussion of house prices, and we will be keen to see the Opposition parties support Government measures, both through the Resource Management Amendment Bill and further into next year, which will help deal with the planning problems that underwrite the house price increases.

Brett Hudson: Does he agree with Westpac senior economist Satish Ranchhod’s comment: “The strengthening in economic conditions has been rippling through the household sector. Employment is up, with business surveys showing a 2.8 percent increase in the number of full-time equivalent employees over the past year, … Conditions in the housing and construction sectors are very strong.”?

Hon BILL ENGLISH: I do agree with the economist’s comments.

Grant Robertson: Why is he not being more urgent in addressing the housing crisis with housing debt estimated by Treasury to be more than $215 billion—

Hon Member: How much?

Grant Robertson: —$215 billion—given his own statement in 2012 that “high housing debt diverts money from more productive investments, contributes to New Zealand’s significant overall level of indebtedness and exposes taxpayers to growing demands for State assistance with housing costs.”?

Hon BILL ENGLISH: I do, and that is why the Government has invested some time and energy over the last 3 or 4 years—a huge amount, actually—in shifting the regulatory environment, and in particular supporting the Auckland Council, which has produced a unitary plan, which is a very big step forward in mitigating these problems. I might just point out to the member that the cost of servicing this level of household debt is nearly 40 percent lower today than was the cost in 2008 when he left office. So households have more debt, but the cost of servicing it is lower than it used to be.

Brett Hudson: How does household borrowing compare with other measures of household wealth, including bank deposits, total financial assets, and net worth?

Hon BILL ENGLISH: At the same time as debt has been rising—and, as I have said, those who are borrowing large amounts at the moment are taking risks—household bank deposits have increased almost but not quite as fast; financial assets have increased quite significantly, around about 40 percent over the last 6 or 7 years; and household wealth, including the family home, now exceeds $1 trillion. So, yes, debt has risen; so have financial assets and overall household wealth.

Grant Robertson: Why does he think Satish Ranchhod is stating so clearly that the economy is built on debt rather than productive growth, and could it be because he has been so complacent in terms of seeing debt pushed into unproductive housing speculation rather than raising productivity and growing and developing new businesses?

Hon BILL ENGLISH: I think the economist overstates the position, actually. In a growing economy, you would expect more debt. You would also expect more debt when interest rates are so low, but where we would agree with the economist is that at the margin households are borrowing large amounts of money at very low interest rates, stretching their ability to service it, and taking a risk, and if that risk eventuates I do not think there would be much sympathy for people who borrow too much when the risks were obvious.

Grant Robertson: Is it not correct that after 8 years the housing crisis is now so out of control that we have the lowest homeownership rates in more than 60 years, we have more New Zealanders homeless than ever, and we now have household debt to income ratios at record levels, and all of that falls at the feet of a Government that has completely failed on housing?

Mr SPEAKER: Order!

Hon BILL ENGLISH: No, that is not correct. As the member knows, at the core of what is going on in house prices has been two or three decades of misguided planning, which was intended to ration land and housing, and that has meant that when there is strong demand because of a strong economy and low interest rates, housing supply has not been flexible enough. That is why we are working with the councils and the Parliament to change the rules so we can get a better functioning housing market.

Economy—Performance

2. SCOTT SIMPSON (National—Coromandel) to the Minister of Finance: What impact is New Zealand’s growing economy having on trends in GDP per capita?

Hon BILL ENGLISH (Minister of Finance): Statistics New Zealand figures show that the per capita measure that has been discussed much in the House here, real gross domestic product per capita, has increased by 4.2 percent in the past 3 years, which is pretty good given that it has been a time of rapid population growth. Since 2011 real GDP per capita has increased by 8.2 percent, so it is simply wrong for any number of commentators or members of the House to say that, per capita, incomes are not rising.

Scott Simpson: What other measures of per capita income growth confirm that the benefits of a growing economy are being passed through to hard-working New Zealanders like those living in the Coromandel electorate?

Hon BILL ENGLISH: In the Coromandel they are probably tracking the real gross national disposable income per capita, and if they are following that closely they will see that it increased by 6.3 percent in the last 3 years, and that since 2011 it has increased by 10.2 percent. So it does not really matter which way you calculate per capita growth, it is consistently positive.

Scott Simpson: Apart from the rising GDP per capita, what other benefits is the growing economy delivering for all New Zealanders?

Hon BILL ENGLISH: The growing economy is particularly delivering benefits that are directly relevant to New Zealand households: wages are increasing significantly ahead of inflation, employment prospects are strong, and people are optimistic about their future. New Zealand’s economy is characterised by moderate but consistent growth.

Grant Robertson: Can the Minister confirm that real gross national disposable income on an annual average was 0.5 percent—half of 1 percent—and can he understand why New Zealanders who are living in the here and now, rather than on his trend, might feel that they are just running hard to stand still?

Hon BILL ENGLISH: As I have pointed out any number of times, you will find periods of a quarter—that is, 3 months of the year—or, the odd time, an annual average, where the number is maybe negative, or maybe a small degree positive. But any reasonable measure over any length of time is showing New Zealand incomes, both gross incomes and per capita incomes, are rising moderately and generally consistently.

Scott Simpson: Could the Minister tell us please how New Zealand’s economy is performing relative to other developed countries?

Hon BILL ENGLISH: There are any number of measures, but, by and large, New Zealand is doing better than many other developed countries. New Zealand’s growth rate is about the third fastest in the OECD. Our employment rate is the equal-second-highest in the OECD—that is, the proportion of the working-age population with jobs is about the second highest in the developed world.

Ministers—Confidence

Mr SPEAKER: Question No. 3—Ron Mark, on behalf of the Rt Hon Winston Peters.

Hon Gerry Brownlee: Who’s on holiday?

Mr SPEAKER: Order! That is the sort of interjection that leads to gross disorder.

3. RON MARK (Deputy Leader—NZ First) on behalf of Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he have confidence in all his Ministers; if so, why?

Hon BILL ENGLISH (Acting Prime Minister): Yes, and particularly the Minister who just said that the leader of New Zealand First must be away on holiday.

Mr SPEAKER: Order! [Interruption] Order! I advised Mr Brownlee when he interjected that that would lead to gross disorder. No one should refer to the absence of any member, and it is equally disorderly then for the Acting Prime Minister to do so.

Ron Mark: How can he have confidence in his Minister of Immigration when Vinod Kumar Sharma, a former Indian education agent, was able to obtain an immigration licence from the Immigration Advisers Authority despite three cases of fraud confirmed by Immigration New Zealand?

Hon BILL ENGLISH: I cannot comment on the individual cases other than to say that if anyone has broken the law, they are likely to get caught, and if they get caught, they are likely to get punished.

Ron Mark: How can he have confidence in the Minister of Immigration when he has implemented only three of the 14 recommendations from the MartinJenkins review of immigration advice, which has resulted in the Immigration Advisers Authority receiving 143 complaints this year about dodgy education agents who are based in India and are giving New Zealand immigration advice unlawfully?

Hon BILL ENGLISH: The Minister is implementing the recommendations of the review, and I think the member just needs to understand that whatever the rules are, there will be people who try to break them. The Government cannot make a set of rules that mean that no one tries to break those rules, but we can be assured that if they try to break them and succeed, they are likely to be caught and will be punished.

Ron Mark: I seek leave to table a response to an Official Information Act request from the Ministry of Business, Innovation and Employment dated 5 August, giving a summary of the total number of complaints received and the recommendations that have been implemented—

Mr SPEAKER: Order! It has been described. Leave is sought to table that particular document. Is there any objection? There is objection.

Ron Mark: How can he have confidence in the Minister of Energy and Resources, who will not use his section 18 powers to scrap the Electricity Authority’s unfair imposition of new power charges?

Hon BILL ENGLISH: That may be the member’s view about the discussion that is going on about transmission charging, but the Prime Minister has every confidence in the Minister of Energy and Resources. In fact, I cannot recall a time when consumer prices for electricity have been less contentious. In fact, I believe, under this Minister’s watch, they have been dropping to some extent, which is a pretty major achievement, and I would have thought the member would want to congratulate him on that.

Ron Mark: How can he have confidence in the Minister of Energy and Resources when the National Party’s pet pollster, David Farrar, found that Kiwis want to pay the same electricity prices from Kaitāia to Bluff and will not forgive his Government if it betrays that fundamental principle?

Hon BILL ENGLISH: Whatever discussions New Zealand First is having with some pollster, I should think it will not be top of mind for the Minister of Energy and Resources. His job is to make sure that we have an efficient market, and I must say that despite the opposition of New Zealand First, the 51 percent Government-owned companies, having been partially sold down, are contributing to that efficient market.

Ron Mark: How can hard up families in Northland deal with another $15.5 million in power charges—and, for that matter, struggling businesses in Northland?

Hon BILL ENGLISH: All participants in this discussion should take into account the impact on households and businesses—and, in particular, households and businesses in the region. And that is really the point of having what has been a quite transparent and very long, drawn-out process to discuss exactly those issues.

Ron Mark: How can the Prime Minister continue to have confidence in the Minister for the Environment, who was clearly demoted as the lead negotiator over the Kermadec Ocean Sanctuary due to his bloody-minded incompetence in dealing with the fishing industry over its property rights?

Mr SPEAKER: Order! The question is a very marginal question. I will let the Acting Prime Minister answer it the way he sees fit.

Hon BILL ENGLISH: It is a bit rich coming from New Zealand First, which cannot even get itself organised to confirm some Treaty settlements that have already been done, to then criticise the Minister over negotiations that are dealing with very complex issues of property rights for Māori. It seems completely contradictory on the part of New Zealand First.

Ron Mark: I seek the leave of the House to table the voting records at select committee that show—

Mr SPEAKER: Order! [Interruption] Order! The member is now trifling with the House with such a point of order.

Building and Housing, Minister—Statements

PHIL TWYFORD (Labour—Te Atatū): Does he stand by his statement that the evidence about—[Interruption]

Mr SPEAKER: Order! There is just too much chatter going on. Mr Mark, if you wish to carry on a conversation, do it in the lobbies. Phil Twyford, could we have the question again, please.

4. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he stand by his statement that the evidence about overseas buyers impacting the New Zealand housing market is “diddly-squat”?

Hon Dr NICK SMITH (Minister for Building and Housing): That statement was made in response to the member’s claim that 40 percent of Auckland house sales were to people with Chinese-sounding names, and, thus, foreigners. We now have data on the tax residency of the buyer and seller of every property. In the first 6 months of this year we had 102,792 transactions, of which 2,907 buyers were tax resident offshore and 2,622 sellers were tax resident offshore. This net change of 285 out of 102,000 is impacting diddly-squat of the housing market.

Phil Twyford: Does he consider the $100 million in tax lost due to tax breaks for offshore property speculators—tax that hard-working Kiwi families have to then make up for—to also be diddly-squat; and, if not, how much diddly of the tax system will it take before his Government does something about the speculators who are ripping us off?

Mr SPEAKER: In so far as there is ministerial responsibility, the Hon Dr Nick Smith.

Hon Dr NICK SMITH: The member’s figures are incorrect and also overlook two significant facts—that is, from 1 July law passed by this Government actually requires a withholding tax on all sales by non-resident taxpayers, and that, actually, given that rents are relatively flat, I think most would accept the major gains have actually been in the value of the house, rather than the rent. The second recent change is that the new loan-to-value ratio limits require a high level of deposit by investors, and that will actually reduce the amount of tax deductibility that is available on interest. The third fact the member overlooks is, actually, if you look at the data from the Inland Revenue Department, the New Zealand investors were paying less tax on their invested properties than those from overseas.

Stuart Smith: Is the Minister aware of any concerns being expressed about the targeting of ethnic Chinese in New Zealand in the debate on housing?

Hon Dr NICK SMITH: Yes, I am aware of concerns. A number of people have expressed concern to me that assuming people with Chinese-sounding names are immoral foreign speculators is unfair. I am also aware that a particular mayoral candidate for Auckland has distanced himself and apologised to the Chinese community for Labour’s racial profiling. [Interruption]

Mr SPEAKER: Order!

Phil Twyford: What is the benefit to New Zealand of negative gearing tax breaks, which last year allowed 35 percent of offshore investors to pay no tax on their rental properties?

Hon Dr NICK SMITH: Firstly, the member is incorrect in that, with the new tax law, we now require withholding tax on the sale of any properties. As I said, most of us would accept, particularly in the Auckland market, that the rents actually have not increased substantially, and the gains would actually be in re-sale. The second point I would make is that the tax working party looked at the issue of negative gearing, and concluded that there was no gain to the taxpayer from the changes that the member has advocated.

Phil Twyford: How does allowing offshore speculators to own properties in New Zealand help young Kiwi first-home buyers, when those speculators are so aggressively using negative gearing tax breaks that they are paying only half as much tax per property as local landlords do?

Hon Dr NICK SMITH: The member’s claim is incorrect. The number for overseas people was 35 percent; the number for New Zealand investors was actually 43 percent—i.e., there was a larger proportion of New Zealand investors in the property market. I also point out the fact that, actually, the level of offshore investment from overseas residents, in respect of property, is small.

Phil Twyford: When will he stop backing offshore speculators and instead start backing New Zealand first-home buyers by banning offshore speculators and shutting down negative gearing tax breaks for property speculation?

Hon Dr NICK SMITH: New Zealand tax law treats those who are offshore exactly the same, in terms of their tax liabilities in New Zealand, except with the change that we actually made on 1 July with requiring a withholding tax. I would also point out to the member—what has he got against New Zealand citizens who may be working overseas for a period, who own a property in New Zealand and rent that property out? Why should they be taxed any differently from any other investor?

Nova Energy—Application to Build Power Plant

5. JAMES SHAW (Co-Leader—Green) to the Minister for the Environment: Will he call in Nova Energy’s application to build a new gas-burning power plant, as a matter of national significance under the Resource Management Act 1991?

Hon Dr NICK SMITH (Minister for the Environment): I am yet to make a decision or give consideration to calling in the particular application. I would note that Simon Upton, the previous environment Minister, did call in the Stratford gas-fired power station in 1993, but a significant change was made in the law in 2004 by the previous Government that specifically excluded the consideration of greenhouse gas emissions, in respect of such resource consents. The last point I would make is that this Government introduced an emissions trading scheme (ETS), which currently applies a charge of $18.80 per tonne of greenhouse gas emissions. That discourages those power stations, and actually the level of greenhouse gas emissions from the electricity sector is at a 20-year low because of the effectiveness of those policies.

James Shaw: Is he aware that under section 142 of the Resource Management Act he can call in a project because of its impacts on New Zealand’s international obligations, including its commitments to reduce carbon emissions under the Paris Agreement?

Hon Dr NICK SMITH: Yes. But the member also needs to be aware of the change that was made to the Resource Management Act in 2004, which specifically said that any air discharge of carbon dioxide, in respect of climate change, is specifically excluded from consideration under the Resource Management Act, because of the fact that the emissions trading scheme imposes a cost on greenhouse gas emissions. The member also needs to note that our system of electricity does require backup for wind and hydro—and I would much rather that backup was an efficient gas-fired power station than the old Huntly power station, because their emissions are about half.

Sarah Dowie: What progress has this Government made in increasing the proportion of renewables in the electricity sector, and how does this compare with previous Governments?

Hon Dr NICK SMITH: Mr Speaker—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! To my learned colleague and Assistant Speaker, I would be grateful for less interjection.

Hon Dr NICK SMITH: I am very pleased to share with the House the progress on renewable electricity. Let me give you the numbers: in 2000, 75 percent of New Zealand’s electricity was renewable, but after 9 years that had dropped to only 65 percent. In the 8 years that we have now been in Government, it has actually improved from 65 percent to 81 percent—and is now at the highest level of renewables that our country has ever had.

Richard Prosser: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! [Interruption] Order! Is this a point—[Interruption] Order! I have a point of order from Richard Prosser.

Richard Prosser: If the Minister was quoting those figures from an official source, I would ask that he table it.

Mr SPEAKER: Was the Minister quoting from an official document?

Hon Dr NICK SMITH: They are on the net.

Mr SPEAKER: Thank you.

James Shaw: Will Nova Energy’s proposed new gas-fired power station increase or decrease New Zealand’s greenhouse gas emissions?

Hon Dr NICK SMITH: The nature of New Zealand’s electricity system, with its dependence on both hydro and wind, does require that we have thermal backup. At the moment, the bulk of that thermal backup is provided by the very old coal-fired power station at Huntly. If this new Nova station was to replace that coal backup with the latest technology of gas, it would actually halve the amount of emissions per unit of electricity. That is an issue that is incentivised by the ETS—that discourages emissions, with, actually, one of the highest ETS charges in the Western World, now at $18.80. We think that is a more efficient way to discourage greenhouse gas emissions than the blunt tool of a yes or no on a resource consent.

James Shaw: So, then, can he guarantee that if it is built, Nova’s new gas-fired power station will replace Huntly coal; and would it not be better for the environment if we were to replace Huntly coal with renewables rather than with another fossil fuel – fired power plant?

Hon Dr NICK SMITH: There is a difference of view as to whether you run a command-and-control electricity system or a market electricity system. The Government’s view is that you should have a market but that you should discourage thermal generation by imposing a charge. I note that New Zealand actually has one of the highest charges, with the ETS price now being $18.80—

James Shaw: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! [Interruption] Order! Point of order—James Shaw.

James Shaw: Thank you, Mr Speaker. My supplementary question was whether he would guarantee that one power plant would replace the other. He actually has not addressed that question.

Mr SPEAKER: No, that was the first question. The member actually asked two supplementary questions. He should have only asked one, but he asked two, and I think on this occasion the Minister addressed, very definitely, the second question that was asked.

James Shaw: Given that last month he told my office that he had not received any information or advice on the plan to build this new fossil fuel power plant, does he think that as environment Minister he is on top of all the relevant issues in his portfolio?

Hon Dr NICK SMITH: There is a strict legal process around me using those call-in powers, and that is why today, when he asked me whether I am prepared to give an instant decision on whether I will be using those powers or not—when he asked the question, no application had been lodged.

James Shaw: Given that climate change is an issue of not just national significance but international significance, should not all New Zealanders be able to have a say about the new fossil fuel power plant through a board of inquiry?

Hon Dr NICK SMITH: The member should have a chat with his new-found friends in Labour, who amended the Resource Management Act and specifically excluded the consideration of greenhouse gas emissions—discharges—in any resource consent application.

James Shaw: So if New Zealand’s international obligations under the Paris Agreement are not enough to make him call in this proposed power plant for a board of inquiry, what would be enough?

Hon Dr NICK SMITH: I will make a decision through the proper legal process on whether I will use my call-in powers on this application, or not. But I would point out to the member that in New Zealand meeting its Paris climate change obligations, the best tool to achieve that is through an effective emissions trading scheme. That is what numerous reports have stated. We can see the record, under this Government, of an increasing proportion of renewable electricity that shows that our policy approach is working. Actually, greenhouse gas emissions from the electricity sector are at the lowest level in 20 years.

Regional Economic Development—West Coast

6. MAUREEN PUGH (National) to the Minister for Economic Development: What recent announcements has the Government made about economic development on the West Coast?

Hon STEVEN JOYCE (Minister for Economic Development): Yesterday, alongside Ministers Adams, Bridges, and Flavell, and of course the local member herself, I released the Tai Poutini West Coast Regional Growth Study—a detailed report on the economy of the West Coast that outlines significant potential to attract new investment and diversify the economy of the region. After a strong economic run, the West Coast has been affected by global economic headwinds that have dropped international prices for minerals and milk powder, although they have started to recover more recently. The West Coast regional growth programme is a unique opportunity for the local community and business leaders to work alongside central government and commit to an action plan to grow the region through new investment and new industries.

Maureen Pugh: What economic opportunities for the West Coast does the report identify?

Hon STEVEN JOYCE: The report names a number of areas of strength for the West Coast and a range of new opportunities. Of course, tourism is one important industry on the Coast, with huge untapped further potential, based on the stunning scenery and cultural history. In the primary sector, although dairy is likely to remain an important part of the economy, the Coast is home to a number of food and beverage entrepreneurs exporting high-quality products like cranberries, blueberries, honey, meat and vegetables, and power cookies. The report outlines that the minerals industry on the Coast will remain important, but industries like aquaculture and ICT will also provide opportunities. Due to its distance from markets, high-quality infrastructure is critical to encourage growth on the Coast, and this Government will continue to invest in this area.

Maureen Pugh: What investment is the Government making to encourage—[Interruption]

Mr SPEAKER: Order! I am having trouble hearing the question. I want less interjection, and it is coming from right across the House.

Maureen Pugh: What investment is the Government making to encourage economic growth on the West Coast?

Hon STEVEN JOYCE: A couple of months ago I was pleased to announce that Greymouth has become New Zealand’s 12th fully fibre town, under the Government’s ultra-fast broadband (UFB) programme. In addition, four West Coast towns—Hokitika, Reefton, Rūnanga, and Westport—are on the candidate list for the next stage of UFB. We are investing more in other critical infrastructure, including the Taramakau road bridge duplication near Greymouth and the Mingha Bluff to Rough Creek realignment near Arthur’s Pass. There is new tourism development—the Old Ghost Road cycleway involving a $3 million Government investment, and our $10 million commitment to create New Zealand’s 10th Great Walk, between Blackball and Punakaiki, to commemorate the Pike 29. This Government is working hard with the West Coast, despite the derision of the House.

Mr SPEAKER: I thank the Minister.

Hon Damien O’Connor: Will this study compensate for the 5 percent annual reduction in GDP and the hundreds of jobs lost on the West Coast, after 8 years of a National Government?

Hon STEVEN JOYCE: I note for the member that, actually, employment on the Coast has grown in the last year. The issues of the dairy industry and the minerals industry have caused issues. I also note that the member too was present at the launch yesterday and was very proudly displaying his copy of the report, after the launch was released. Thank you very much, Damien, for showing your support.

Hon Damien O’Connor: Having taken the time to read the report, how comprehensive is the study when it states that “No specific opportunities have been identified for the dairy sector”, given this is the second-largest industry in our region and growing—what can we believe? [Interruption]

Mr SPEAKER: Order! I am vitally interested in the answer, so I do want to hear it.

Hon STEVEN JOYCE: Perhaps the report writers have been listening to Grant Robertson saying that we should not have anything to do with the dairy industry, but the point that they were actually making is that the dairy industry is a mature industry on the Coast. It will continue to be important, but the new industries will be adding in alongside the dairy industry that this Government is very keen to support.

Hon Damien O’Connor: I seek leave to table this report, which states on page—

Mr SPEAKER: Order! No. The report is freely available. Members can have a look at it.

Hon Gerry Brownlee: What role do iwi play in encouraging economic development in the regions?

Hon STEVEN JOYCE: A very important role, including, for example, yesterday on the West Coast, when Ngāi Tahu were making the point that they are investing tens of millions of dollars in businesses and new industries that employ thousands of New Zealanders, including on the Coast. Iwi’s role in regional development is one of the key reasons this Government is keen to progress Treaty settlements as quickly as we can, and that is why it is so disappointing—

Mr SPEAKER: Order! We do not need any more of the answer. [Interruption] Order!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You could see where that Minister was going—rather cack-handedly, but very obviously—and he should be stopped in his tracks.

Mr SPEAKER: If the member had observed, I gave the Minister a time before I could observe where he was going. When I saw where he was going, I quickly brought the answer to a conclusion.

Rt Hon Winston Peters: Thank you very much.

Mr SPEAKER: It is my pleasure, Mr Peters.

Child Poverty and Homelessness—Measurement

7. JACINDA ARDERN (Labour) to the Minister for Social Development: What is the official measure, and number, of children living in homelessness and poverty in New Zealand?

Hon ANNE TOLLEY (Minister for Social Development): In answer to all four of those questions, the Government does not believe that one measure or number can accurately define these complex issues. In terms of homelessness, there is no official measure of homelessness amongst children. There are a number of ways to measure homelessness or severe housing deprivation. In terms of poverty, the Government uses the Household Incomes Report and the companion report using non-income measures produced by the Ministry of Social Development (MSD). These reports use a multi-measure, multi-level approach to better capture trends, including material hardship measures, before-housing-costs income measures, and both anchored and moving-line after-housing-costs income measures.

Jacinda Ardern: When just a few days ago she stated that she told the United Nations “Of course we do have an official measure of poverty and children who live in homelessness.”, what official statistics was she referring to, when she in her first answer refused to give a number?

Hon ANNE TOLLEY: That member has completely misquoted me—that is the reality, but it is not unusual. However, the answer that I gave at the United Nations Committee on the Rights of the Child was very similar, but I did give them MSD’s current figures, which is one of the measures of homelessness, but I also stated that there is no measure for homeless children.

Jacinda Ardern: Will her Ministry for Vulnerable Children be required to adopt a plan to reduce child poverty?

Hon ANNE TOLLEY: The member confuses the role of the Ministry for Vulnerable Children, Oranga Tamariki, which is the correct name of the ministry, with the concept that only poor children are abused. In fact, the focus of that new ministry will be on reducing the abuse and neglect of children. That is the intent of the ministry and that is its unashamed focus—and that goes across all spectrums of society.

Jacinda Ardern: Is a child living in poverty vulnerable?

Hon ANNE TOLLEY: There are families who do not have a lot of money—and there are many in New Zealand who do not have a lot of money—who look after their children extremely well. It is difficult, but they look after their children extremely well. I find it offensive that the Opposition is suggesting that just because you are poor you beat your children.

Jacinda Ardern: If, based on her answer, her ministry will deal only with children who are being abused, is this just a rebrand of Child, Youth and Family?

Hon ANNE TOLLEY: Well, we have had a lot of discussion from the Opposition as to what it thinks this ministry should be doing. I refer the member to the statistics that were produced by the expert advisory panel on the outcomes for children who are taken into State care. I have made it very clear this is not a rebrand of Child, Youth and Family. We have had that many, many times before and children continue to be abused and neglected. This Ministry for Vulnerable Children, Oranga Tamariki, is going to focus on making sure that those children who are being beaten and abused by the very people they should be trusting to love and look after them will get better care from this Government.

Jacinda Ardern: Was the name of her department—the Ministry for Vulnerable Children, Oranga Tamariki—the only option she advocated for or presented to Cabinet?

Hon ANNE TOLLEY: Well, Cabinet decisions have Cabinet responsibility. I proposed to Cabinet the name Ministry for Vulnerable Children, Oranga Tamariki, and Cabinet agreed.

Evidence Amendment Bill—Effect on Crime Victims and Court Processes

8. KANWALJIT SINGH BAKSHI (National) to the Minister of Justice: How will the Evidence Amendment Bill passed last night help vulnerable victims through the court process?

Hon AMY ADAMS (Minister of Justice): Minimising the trauma that can result from helping to bring offenders to justice is an essential part of the Government’s commitment to supporting victims of crime. Giving evidence can be especially tough for young and vulnerable witnesses. The changes we have made through this bill will help make the court process less traumatic for those it may affect the most. For example, the bill creates a presumption that child witnesses will give their evidence through either the video of their police interview, via closed-circuit television, or from behind a screen, and that all child witnesses will be automatically entitled to have a support person with them during this process.

Kanwaljit Singh Bakshi: What protections does the bill have for sexual violence complainants?

Hon AMY ADAMS: Giving evidence in a sexual violence trial can be particularly traumatic for complainants. The new bill will mean that the judge’s permission will need to be sought before the trial begins if the defence wants to question the complainant about their sexual history with a person other than the defendant, and it ensures that strict controls are in place to protect the video records of victim statements. The changes in the bill are an important step in delivering on the Government’s commitment to improve the experience of victims.

Environmental Protection Authority—Funding and Reassessment of Use of Hazardous Substances

9. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: Does the Environmental Protection Authority have sufficient funding to reassess the use of hazardous substances that it has agreed should be reassessed as a potential risk to people and the environment?

Hon Dr NICK SMITH (Minister for the Environment): The Environmental Protection Authority (EPA) has a budget for doing reassessments and has prioritised it on the basis of those that pose the greatest risk in the New Zealand context. It is not practical to remove every potential risk, but I do have confidence in the EPA’s priority setting process.

Catherine Delahunty: Is it acceptable that even though the EPA has said there are valid reasons to reassess triclosan, a common ingredient in soap and handwash, it will be looked at only if I—the person requesting reassessment—pay $50,000 to ensure that it happens?

Hon Dr NICK SMITH: Yes, because the taxpayer and the Environmental Protection Authority prioritise the reassessment process on those things that pose the greatest risk. In respect of the particular chemical the member raises, the EPA does put a limit on the level that that chemical is allowed in products like hand sanitisers. There is no other country in the world that currently prohibits the use of that chemical. There is a question mark as to whether all of the possible tests have been done on that, and on that basis the EPA believes that there are other chemicals that pose far greater risk and so are higher priorities.

Catherine Delahunty: Given that the US Food and Drug Administration just banned this hazardous substance, triclosan, in soap due to its toxic effects and ineffectiveness as an anti-bacterial agent, will he instruct the EPA to carry out this reassessment in the public interest?

Hon Dr NICK SMITH: No, and I would note that the Australian and European authorities do not share that view. The member further overstates what the EPA has said, in that the United States Environmental Protection Authority has simply said that it does not have sufficient evidence to be reassured. The third point I would make is that the Environmental Protection Authority is reassessing a number of organophosphates because it believes they pose a greater risk. I think it is absolutely valid that the EPA make that decision on the grounds of scientific evidence, not politics.

Catherine Delahunty: Is it more in the public interest to reassess the safety of veterinary products, which the EPA says is its priority, than the triclosan in our toothpaste, deodorant, soap, and kids’ toys?

Hon Dr NICK SMITH: The Environmental Protection Authority makes its decision about what chemicals need to be reassessed on the basis of those that pose the greatest risk to New Zealand health, in the New Zealand environment. I think it would be a tragedy, actually, if politics rather than proper scientific assessment got in the way of the way in which the Environmental Protection Authority does that work.

Overseas Investment—Economic Contribution and Benefits

10. JONO NAYLOR (National) to the Minister for Land Information: How is overseas investment benefiting New Zealand and contributing to growing the economy?

Hon LOUISE UPSTON (Minister for Land Information): Overseas investment is fuelling growth in New Zealand. Regional economies are particularly benefiting from this capital, as it is used for expanding operations and helping to grow New Zealand’s exports. It means growth for our regions and for New Zealand generally. It means more New Zealand – made products are sold overseas. It means an increase in local jobs for New Zealanders, including in the construction of new facilities. Overseas investment can also bring access to new ideas, technology, or production processes that help innovation and add value to goods and services that we produce.

Jono Naylor: What examples has the Minister seen of delivering on these benefits?

Hon LOUISE UPSTON: There are many examples of benefits being delivered from this overseas investment. One is Andros, a French company, which has acquired Barker’s fruit processors in Geraldine. In only 11 months export volumes increased by 10 percent. Japanese company Daiken Corporation invested in a premium products factory in Rangiora, then spent significant amounts to increase the productivity of the plant. In addition, new technology has been introduced, such as resin producing technology to reduce formaldehyde emissions, as well as increasing the volume of timber it processed in New Zealand by 13 percent.

Jono Naylor: What does this mean for New Zealanders?

Hon LOUISE UPSTON: There are many cases in addition to economic benefits in the environment and in the community—for example, new recreational opportunities for New Zealanders, including increased access for fishing, hunting, mountain biking, and walking. As well, there are new covenants protecting natural habitats and environments. In 2014-15 land in four high country stations between Lake Wānaka and Arrowtown was placed under conservation covenants in one of New Zealand’s largest private land protection agreements. The covenant protects a wide variety of ecosystems, from wetlands, tussock grasslands, native shrub lands, alpine cushion fields, and mountain peaks.

Fisheries Policy—Commercial and Recreational Fishing

11. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister for Primary Industries: Why were bag limits for recreational fishers reduced when the Ministry for Primary Industries has ignored thousands of tonnes of fish being dumped by the commercial sector for years?

Hon NATHAN GUY (Minister for Primary Industries): I am presuming that the member is asking specifically about Snapper 1, because his question is slightly confusing. It is not correct to imply that dumping was the cause of the decrease in the recreational bag limit to do with Snapper 1. As the member should be aware, the total allowable catch of snapper actually increased by 500 tonnes, and this was all allocated to recreational fishers. However, given growth in local population, this meant a small decrease in the daily bag limit. I also refute the member’s assertion that the Ministry for Primary Industries (MPI) has ignored the thousands of tonnes of fish being dumped. The Heron report clearly shows that MPI made a flawed decision not to prosecute in the case of Achilles but that, in general, it has a robust process and professional staff, who conduct around 300 prosecutions every year.

Kelvin Davis: Why, then, did his officials say in 2013:”…the fact that we have known about these dumpings/discarding issues for many years, and would appear to have done little to combat it, would be very difficult to explain and be unpleasant at best.”?

Hon NATHAN GUY: Well, I transgressed over this point several times yesterday—[Interruption]—in the House. [Interruption]

Mr SPEAKER: Order! The important point is that—[Interruption] Order! The question has been asked, and an answer is to be given, and substantially. If I have got to start asking people, and giving final warnings and naming people, I can. The level of interjection is just too high, particularly from my left, but not only from my left. The Hon Nathan Guy is to answer the question.

Hon NATHAN GUY: What I meant to say was I traversed the answer to the questions in the House yesterday around this topic, and what I said was that since the QMS has been in, successive Governments and officials have been grappling with the dumping issue, and there is no evidence that dumping has been a determinant in reducing recreational bag limits, because 96 percent of our stocks of known value are at or above sustainability levels.

Kelvin Davis: Under his ministerial leadership, who is more likely to be prosecuted: a recreational fisher who grabs one undersized snapper, or a commercial boat that dumps thousands of fish?

Hon NATHAN GUY: We take it very seriously—to do with any issues of reporting, and to do with anything that comes to light to do with dumping or discarding or recreational fishers not adhering to their bag limits. We have about 300 prosecutions a year across recreational, customary, and commercial fishing. Also, we do about 3,000 infringements a year and about 1,000 vessel inspections. We take this very seriously, but, unfortunately, with Operation Achilles, as Queen’s Counsel Heron’s report says, it was a flawed decision, and I regret that MPI did not follow through with a prosecution.

Kelvin Davis: Given that answer, can he confirm that commercial fishers who dump thousands of fish make up less than 1 percent of all prosecutions compared with recreational fishers, who make up more than 50 percent?

Hon NATHAN GUY: It is a little bit hard to get into those numbers, because what the member needs to take into account is that there is a large volume of recreational fishers—I think about 600,000 or so; there could be 7,000 recreational fishers in the Hauraki on any one day—versus about 12,000 vessels fishing in the commercial sector. What we have done is double the number of observers so that we have more transparency in what is happening in the commercial fleet. We have also rolled out cameras, electronic reporting, and vessel monitoring systems in the Snapper 1 area, which is hugely important for recreational, customary, and commercial fishers.

Kelvin Davis: If his ministry had actually prosecuted commercial fishermen for illegal fish dumping, how many millions more fish would be available for recreational fishermen?

Hon NATHAN GUY: I have already answered that question in part by saying that there is no evidence that dumping has been a determinant in reducing recreational bag limits, but what I have told the House over the last couple of days is that the Ministry of Fisheries and MPI have been grappling with this issue to do with dumping and discarding for a long period of time. It is not only New Zealand that has been grappling with it; other countries around the world have been grappling with it. I am determined to get on top of this particular issue to do with rolling out electronic monitoring, make the changes that need to be made through the operational review, The Future of our Fisheries, and come into the House and change the law, because it is hugely important that mum, dad, and the kids can go out and catch a fish and that we protect this precious resource for everyone to enjoy in the future.

Kelvin Davis: Supplementary question?

Mr SPEAKER: No, the number of Labour supplementary questions has been used up for today.

Predator Free New Zealand—Costs

12. CLAYTON MITCHELL (NZ First) to the Minister of Conservation: What analysis has been carried out in relation to the costs involved in making New Zealand predator-free by 2050 and maintaining this status?

Hon MAGGIE BARRY (Minister of Conservation): The financial analysis that has underpinned the Government’s initial investment of $28 million over the next 4 years includes setting up a new Crown-owned entity, Predator Free 2050 Ltd, now just weeks away from being launched. We will enable businesses and philanthropists to contribute $2 for every $1 invested by the Government. We have acknowledged from the outset that we do not yet have the technology to meet our goals, so we are investing heavily in scientific research and new technologies and solutions. The Government is also taking a leadership role in setting up large-scale landscape projects, and expect an announcement on one next week.

Clayton Mitchell: Is the Minister aware that in 2013 the then Minister of Conservation, Nick Smith, announced that the 329-hectare Rakatū Island would be rid of rats in 2 to 3 years, but this island is still plagued by rats, despite having $190,000 made available to achieve it; and how does this bode for a 27 million hectare New Zealand project?

Mr SPEAKER: Either of those two supplementary questions—the Hon Maggie Barry.

Hon MAGGIE BARRY: The island the member is referring to was due to be dealt with last year but, unfortunately, because of the cyclone, that pest eradication was held up. I would point out that the Department of Conservation is very successful in ridding New Zealand of mammalian and other predators—and weeds, for that matter—and that we have successfully cleared 150 offshore islands, which are predator-free. I would draw the member’s attention to some remarkable technological advances in controlling mammalian predatorship, which we are on top of.

Clayton Mitchell: Supplementary question, Mr Speaker.

Mr SPEAKER: Order! Before I call the member, I would be grateful if the member’s colleagues would then listen to the next answer. Clayton Mitchell.

Clayton Mitchell: If the Government is truly serious about making New Zealand predator-free by 2050, why will it not introduce new legislation under urgency to stop the breeding and selling of rats in New Zealand?

Hon MAGGIE BARRY: That member and that party’s capacity to dwell in the minutiae and the fringes amaze me to this day. I would draw attention to a more successful approach, which has been achieved just last month in America, where a company called SenesTech was registered with the US Environmental Protection Agency—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister was asked why she did not, under urgency, seek to pass legislation to get rid of rats. She has not answered that, so she should sit down.

Mr SPEAKER: Order! On this occasion, I had difficulty hearing the answer because of the yelling coming from the member’s own colleague. I think, on this occasion, the answer is sufficient and we are moving on.

QUESTIONS TO MEMBERS

Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill—Purpose

1. METIRIA TUREI (Co-Leader—Green) to the Member in charge of the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill: He aha ia i tuhi hukihuki ai i te Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill?

[Why has she drafted the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill?]

CATHERINE DELAHUNTY (Member in charge of the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill): I drafted the bill because I was inspired by Patricia Grace and her whānau’s fight to protect their land from confiscation under the Public Works Act for the construction of the Kāpiti Expressway. It is one of the most recent examples of how the Public Works Act has been used, time and time again, to alienate Māori from their land, including their historic struggles for Takaparawhau—Bastion Point—and Whāingaroa, the Raglan golf course.

Metiria Turei: He aha ngā hua mō tēnei pire ki Te Iwi Māori?

[What are the benefits about this bill for Māoridom?]

CATHERINE DELAHUNTY: The connection to whenua is fundamental to—

Mr SPEAKER: Catherine Delahunty.

CATHERINE DELAHUNTY: Thank you, Mr Speaker. I am just too fast, am I not? Connection to whenua is fundamental to Māori identity, but less than 5 percent of land in Aotearoa is still held in Māori ownership. It is completely unacceptable that the Public Works Act can still be used, in the 21st century, to confiscate Māori land. The Crown has a responsibility to protect Māori land for the benefit of future generations.

Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill—Support

2. METIRIA TUREI (Co-Leader—Green) to the Member in charge of the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill: He aha ngā whakamōhio tautoko kua whiwhi i a mō te Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill?

[What indications of support has she received for the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill?]

CATHERINE DELAHUNTY (Member in charge of the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill): We have received huge support from Māori across the country for this bill. We took a petition around the motu and received almost 5,000 petition signatures, and at almost every consultation hui for the Government’s Te Ture Whenua Māori Act reforms, the impact of the Public Works Act on Māori land was raised. Māori are calling on Parliament to pass this bill and end compulsory confiscations once and for all.

Metiria Turei: Kua whai pūrongo a ia e pā ana ki te tautoko o ērā atu pāti i te pire?

[Has she received any reports from other parties about supporting the bill?]

CATHERINE DELAHUNTY: I am delighted that the Māori Party and Labour have expressed strong support for my bill. The Government still has the opportunity in the House today to ensure not one more acre of Māori land is taken without consent. I challenge it to take this opportunity and vote for my bill.