1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “we are on the cusp of something special”, given P is cheaper and easier to get, youth unemployment has risen nearly 30 percent on his watch, and the average home in Auckland now costs over $1 million?
Rt Hon JOHN KEY (Prime Minister): Yes, I do stand by that statement, and I am proud of the progress New Zealand is making. For example, the economy grew by 3.6 percent in the year to June, putting us in the four top-performing OECD countries. The average annual wage is now $58,000, an increase of 25 percent since National first came into office. More than 300,000 jobs have been created since the depths of the global financial crisis and a further 170,000 people are forecast to be in work by 2020. Cost of living increases are low: annual inflation is just 0.2 percent, well below average weekly wage increases of 2 percent in the year to June. So backed by the Government’s successful economic plan and New Zealanders’ hard work, our country is making good progress.
Andrew Little: Why did the Government approve 27,000 work visas in the last year for entry-level jobs that could have been filled by young Kiwis?
Rt Hon JOHN KEY: There can be a range of different reasons. They include that there may be a mismatch of where the skills are required vis-à-vis where the people live. It is not always easy to move people to locations and encourage them to go and work there, even if there are jobs that are available.
Andrew Little: Why did his Government issue work visas in the last year to over 2,000 retail workers and over 600 cleaners, while 70,000 young New Zealanders are not in employment, education, or training?
Rt Hon JOHN KEY: Again, there can be a variety of reasons, but I think it is worth remembering the significant changes that this Government has made to the way things work when someone goes to a Work and Income office—that is, we have changed by moving from the unemployment benefit to the jobseeker support. There is a high expectation that people will work. What, in fact, Work and Income officers do is spend a lot of time making sure that somebody transitions into a job. Ultimately, there are massive incentives for them to get employment, but sometimes the jobs are in different locations—for instance, like Queenstown—to places where they might live, like Gisborne and Northland.
Jacqui Dean: Can the Prime Minister provide further examples of how New Zealand is making good progress in dealing with social and economic challenges under this Government’s stewardship?
Rt Hon JOHN KEY: I can. There are a number of other indicators confirming that New Zealand is making good progress. For example, the manufacturing and services sector, including tourism and ICT, is growing strongly and is succeeding on the world stage. The Government has fulfilled its promise of returning to Budget surplus, which gives us choices into the future. More Kiwis are voting with their feet and coming home, as opposed to leaving for Australia by the tens of thousands as they were when we took office, and the Government is addressing some of New Zealand’s most difficult challenges, such as improving educational achievement, supporting vulnerable families, and boosting skills and employment.
Andrew Little: Is the Salvation Army wrong when it says “the balance between training and recruiting young New Zealanders and simply importing skilled and unskilled labour needs to change in favour of young New Zealanders.”?
Rt Hon JOHN KEY: In my opinion, yes, actually, the Salvation Army is wrong. If one looks at the number of people who are here on youth migration, the vast bulk of them are actually on working holidays or are international students. Yes, they work, sometimes, 20 hours a week or the like, which is, I think, a welcome change, and it allows New Zealand to be an attractive destination, for instance, for international students. But when one goes and has a look, for instance, in Christchurch—which is where I saw the Salvation Army saying there could have been more done to put people in apprenticeships, as a result of the Christchurch earthquakes—I think the Salvation Army should go and visit Christchurch Polytechnic Institute of Technology. I certainly did, and it has been training an enormous number of young people into apprenticeships.
Sarah Dowie: What were some of the biggest challenges facing New Zealand when the Government took office, and how has the Government gone about addressing them?
Rt Hon JOHN KEY: The biggest challenge facing New Zealand when the Government took office was neatly summed up in the Salvation Army’s state of the nation report in 2008. It said: “More of our children appear to be at risk of harm, more of our young people are engaged in petty crime, there is … violent crime and more people [are] in our jails. None of these trends can be seen as progress.” The Salvation Army went on to say that despite a huge increase in social spending up to 2008, it had contributed little to our social progress. Outcomes were mixed and disappointing. The Government has addressed that by measuring success by the results achieved, not by how much we spend.
Andrew Little: Moving to the year 2016, are the Reserve Bank, ANZ, the Auckland chamber of commerce, the Ministry of Business, Innovation and Employment, and now the Salvation Army all wrong in saying it is time for him to rethink his immigration strategy?
Rt Hon JOHN KEY: As the member will see, last week the Government went through its 2-yearly review process and made, at the margins, some small changes. But, for the most part, I think that migration set at the sorts of levels that we have had has served New Zealand well. It has encouraged international students to come to New Zealand. We have free-trade agreements that support working holidays. We have fast-growing sectors in industries that are doing amazingly well, and they do actually need, from time to time, to import talent. You have had plenty of people come to New Zealand who are significant investors in this country and who, as a result of their migration to New Zealand and their investment in New Zealand, have created tremendous jobs. That is one of the reasons why we have got one of the top performing economies in the OECD, and if—
Mr SPEAKER: Order! The question has definitely been answered.
Andrew Little: What is more important to him: providing cheap imported labour or providing a better future for young New Zealanders?
Rt Hon JOHN KEY: Absolutely, a better future for young New Zealanders. But I was not the one who got up at Diwali on Saturday and said “I’m with the international students.”; that was Andrew Little, who was there trying to make out he is the friend of the migrant—when he is not bagging them for having a Chinese name and he is not out there telling them that Indian chefs are not welcome in this country.
Andrew Little: Is it not true that his Government has just shut the door on 70,000 young New Zealanders not in employment, education, or training (“neets”), given that he and his Minister of Finance believe that they are either “pretty damned hopeless” or drugged and lazy, and they prefer low-skilled immigration?
Rt Hon JOHN KEY: No. In fact, the “neets” rate for 15- to 19-year-olds is almost the lowest since records began in 2004. A huge number of young New Zealanders are in apprenticeships. The economy is creating a huge number of jobs and opportunities. I think migration of people to New Zealand is a positive and good thing, but if the member wants to come into this House and say the opposite, please stop going to the events I am at with you and saying the opposite, because it has got a word. It starts with “h”, and you know what it is.
Mr SPEAKER: Order!
Economic Programme—Social Services
Mr SPEAKER: Order! [Interruption] Order! The House needs to settle. I have asked David Bennett to deliver his question.
2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What steps is the Government taking to improve early intervention in social services as part of responsible fiscal management?
Hon BILL ENGLISH (Minister of Finance): The Government believes that the effectiveness of public spending, not the size of it, is what matters for delivering New Zealanders the public services they deserve. We saw, for instance, that up to 2008, when the previous Government’s social spending increased by 70 percent in the 5 years to 2008, many social statistics were going backwards. So while we have lifted spending in health, education, and justice, we are at the same time investing in systems that measure the impact of those dollars on people’s lives. This will allow the Government to concentrate resources on interventions that change lives, particularly for the long term.
David Bennett: What reports has he received showing how targeted early intervention can make the biggest difference for at-risk youth?
Hon BILL ENGLISH: In the context of the discussion about investment and spending on further prison beds, earlier today the Ministry of Justice provided new figures on serious offending among youth. It reports that over 2 years, 1,800 14- to 16-year-olds were dealt with by police for a serious offence. On average, each child had previous contact with police six times and is expected to have contact a further eight times. Eighty-two percent of these children have been notified to Child, Youth and Family for care and protection matters, and 45 percent have already received some support for mental health issues. Our ability to now get detailed insights about individual young offenders will allow us to shape services more effectively to change the trajectories that these young New Zealanders are on, because they are negative.
David Bennett: How does the Government’s investment approach reveal the case for early intervention and help to lift the quality of public services?
Hon BILL ENGLISH: Social investment works in the first place by simply showing to the policy makers and to front-line deliverers of service what happens with people if no intervention is made. We know that for some individuals, for instance, the Government will spend over a million dollars before they turn 35. The Government has said that it is prepared to make targeted investments today to deliver better long-term social outcomes. This system depends on increased information-sharing among Government agencies, but also on changing our systems of delivering support to New Zealanders in need, because some of the ways we deliver it now makes it harder for them rather than easier.
David Bennett: What other innovations are on track to help improve public services?
Hon BILL ENGLISH: One of the important innovations is being able to understand and identify those New Zealand families who cannot find their way to our mainstream services. Most of our services are delivered through hospitals, schools, and prisons, and, actually, most of the time people are not sick, much of the time they are not at school, and too many of our most vulnerable families do not benefit from those well-funded universal services. The ability to share information among agencies is now giving us much better insight. For instance, a case I heard of the other day: what looked like a normal, fairly unfortunate family violence case turned out to be a young woman with 85 serious injury reports, and no Government agency was aware of the scale of misery and abuse in her life. Now, they can act on it.
Carmel Sepuloni: How can he reconcile his statement that the amount spent is not a factor in the effectiveness of services with Shamubeel Eaqub’s statement, in reference to National’s investment approach, that an investment approach cannot work if there is no new money, no focus on every stage of life, and it is motivated by economics-speak?
Hon BILL ENGLISH: I think I disagree with every one of those statements. I would invite him or any of the other columnists who opine on these matters to turn up at the front line and watch some of the innovations that are occurring, whether it is the family violence pilot in Christchurch, some of the fascinating changes going on in Gisborne, or the South Auckland Social Investment Board—all of which are reporting to us that better ways of working can make a huge impact. Sometimes, more money is required, but it is not the fundamental requirement.
3. RON MARK (Deputy Leader—NZ First) to the Minister of Immigration: Does he stand by all his statements; if so, how?
Ron Mark: Does he stand by his statement in March that he is working closely with Ministers Anne Tolley and Steven Joyce to “ensure that Kiwis are at the front of the queue and that immigration policy is at the end of the pipeline.”?
Hon STEVEN JOYCE: Yes. One of the things the Government is currently working on is a programme called the Sector Workforce Engagement Programme, which is working with particular industries such as the horticultural industry, the agricultural industry, the construction industry, the truck driving industry, and others to ensure that training opportunities are provided to New Zealand young people ahead of skilled migrants being sought for particular roles.
Ron Mark: If his Government is ensuring that Kiwis are at the front of the job queue, then why has his Government consistently had 75,000 young people under 25 who are unemployed, unengaged, and have no skills, and how is that working for all New Zealand?
Hon STEVEN JOYCE: That is probably a question more appropriately directed to the Minister for Tertiary Education, Skills and Employment, but, seeing as you have asked it, I am pleased to report to the member that the number of 15- to 19-year-olds who are not in education, employment, or training (“neets”) is at nearly the lowest level since the household labour force survey started right back in 2004, and in terms of the total 15- to 24-year-olds, it is back now to levels last seen before the global financial crisis. There is more we can do, but I can report for the member that we currently have 43,000 people in apprenticeships, and we are bringing that through to 50,000 people as soon as we can.
Ron Mark: Is he aware that the Salvation Army released a report today that supports New Zealand First’s stance on turning the tap down on immigration, particularly low-skilled workers, or is he of the view that this religious organisation is also xenophobic and racist?
Hon STEVEN JOYCE: I have to say I was disappointed in the Salvation Army report today. It was overly pessimistic and contained significant inaccuracies and misconceptions. But the interesting thing is that this Government does have a lower number of essential skills work visas than previously. In the last year 33,000 were granted; a decade ago it was 44,000 or 53,000. So, definitely, the young people at the front of the queue are New Zealanders, unlike when the member’s party was involved in the previous Government.
Ron Mark: Is he satisfied with his Government’s youth unemployment record, which has consistently been around 75,000, or is he content with using his Government’s appalling record on “neets” as a pathetic excuse just to bring in more low-skilled migrants instead of educating and training our own young Kiwis?
Hon STEVEN JOYCE: The member is directing the question to the wrong portfolio, but nevertheless—
Ron Mark: Oh, come on! He’s the Minister. He’s bringing them in.
Hon STEVEN JOYCE: I know you do not like it, Mr Mark, but we are at the lowest percentage of young people, 15 to 19, who are not in employment, education, or training that we have had—the lowest percentage. That does not mean we cannot do more, but it is the lowest level that we have had since the records began.
Health, Minister—Statements about Mental Health Services
4. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by Jonathan Coleman’s statement that the Government should have instigated a review of mental health services after years of evidence showing the system was failing people; if so, why is a review not needed now?
Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. These paraphrased comments from way back in 2008 reflected the general concern at the time about Labour’s management of the health system. A massive amount of work has been undertaken over the last 8 years, which has resulted in more New Zealanders gaining greater access to the mental health services that they need, in a more timely manner. There is always more to do in this complex area, and 8 years on a review is unlikely to provide any information that we do not have already.
Hon Annette King: If a review was necessary in 2008, why does he deny one now, when there are daily reports of failure, deaths in care, a nearly 50 percent increase in 111 mental health calls, six district health boards (DHBs) reporting insufficient funding to cover services, DHBs underspending through lack of staff, and NGOs reporting they have reached crisis point?
Hon Dr JONATHAN COLEMAN: I dispute that range of assertions, but the fact is that the number of people seeking mental health assistance from the system has increased from 96,000 a year a decade ago to 164,000. So there has been a big uplift. But at the same time, of course, there is more funding going in there, so it has gone up from $1.1 billion to $1.4 billion per year. We have got initiatives like the Prime Minister’s Youth Mental Health Project, the Like Minds Like Mine approach, and the Rising to the Challenge mental health strategy. There is a lot of work going on. I welcome the member’s constructive suggestions, but unfortunately I do not think she has got any.
Hon Annette King: I would like to table an Official Information Act (OIA) request from the DHB provider arm, 12 months to June 2016, showing the data that I quoted about the underspending but for lack of money.
Mr SPEAKER: The document has been described. I will put the leave. Leave is sought to table that particular OIA response. Is there any objection? There is none. It can be tabled.
Document, by leave, laid on the Table of the House.
Hon Annette King: When he said in 2007 that over 2,000 reported suicide attempts represented “measureable outcomes in mental health, and by that criteria this Government is failing”, do the over 3,000 reported suicide attempts—the latest figures available—represent his Government’s failing; if not, why not?
Hon Dr JONATHAN COLEMAN: Look, I think the member has got to do better than dig up quotes from a decade ago. The fact is this is always a complex area. The suicide rate, actually, per capita—listen to this—has dropped.
Hon David Cunliffe: Smarmy little man.
Hon Dr JONATHAN COLEMAN: Sorry?
Hon David Cunliffe: Smarmy little man.
Hon Dr JONATHAN COLEMAN: The suicide rate has dropped per capita over the last 5 years. It is a complex area but we have got to do better all the time. That is why we are putting more resources into it. That is why there is a DHB Suicide Prevention Action Plan, a revised strategy that is being worked on, and there are more and more initiatives being rolled out in this area, but it is a complex and difficult one.
Hon Annette King: When he said in 2006 that it was particularly concerning that hospitalisations for suicide for young women had rocketed from 551 to 573 under Labour, how concerned is he now, when the numbers have increased from 485 in 2008 to 726, according to the latest figures available?
Hon Dr JONATHAN COLEMAN: Actually, I dispute those figures. But the point is I think we should all be very concerned about the suicide rate. I do not think it is actually something the member should be playing politics with. She is not able to come up with a single constructive suggestion to tackle what is actually a very serious problem. So rather than just playing politics with it, I would welcome one policy from Labour, and it has not got a single one in this area.
Hon Annette King: I seek leave to table a Ministry of Health dataset on suicide self-harm, a spreadsheet showing the figures I have just given for young women as being—
Mr SPEAKER: Order! The last part is unnecessary. Leave is sought to table that particular Ministry of Health dataset. Is there any objection to it being tabled? There is none. It can be tabled.
Document, by leave, laid on the Table of the House.
Hon Annette King: How does he know that the increase in mental health funding is being spent where it is needed, when after 8 years in Government he is still reviewing the suicide prevention strategy, still developing policy, still developing action plans, and is still months away from any decision? Is this not just waffle and—
Mr SPEAKER: Order!
Hon Dr JONATHAN COLEMAN: Look, all that is incorrect. We have got a ring-fenced amount for mental health—$1.4 billion per year goes into it. We have got this—
Hon Annette King: You’re snookered.
Hon Dr JONATHAN COLEMAN: The member should read this document, Rising to the Challenge. This is the mental health plan published in 2012. The DHBs all have suicide prevention action plans. They are being updated with new initiatives. There is a whole lot of work going on, and once again I challenge the member to name one single policy response that Labour has, because there is not one, is there? No.
Hon Annette King: I’m here to ask the questions.
Mr SPEAKER: Order! No. I am here to chair the session, so it would help if we did not have that interjection.
Hon Annette King: Does he agree with the Mental Health Foundation, which said yesterday that to prevent suicide in New Zealand we need to take a hard look at the factors; if so, why will he not undertake a review and address the underlying causes, including resourcing?
Hon Dr JONATHAN COLEMAN: Look, of course we need to take a hard look at the factors, but this is a very complex area, and rather than the member continually playing politics I would welcome her constructive suggestions. But the problem is that she is intellectually bankrupt and has not got a single—
Mr SPEAKER: Order! That last comment will not help the order. [Interruption] Order! You have had your fun.
Child, Youth and Family—State Care and Support for Young People
5. MELISSA LEE (National) to the Minister for Social Development: What recent announcements has she made regarding young people in State care?
Hon ANNE TOLLEY (Minister for Social Development): This morning I announced that Cabinet has agreed to raise the age of State care. This means that young people will no longer have to leave care at 17 years and will be able to remain in, or return to, care up to the age of 21. As part of the radical overhaul of care and protection and the establishment of the new Ministry for Vulnerable Children, Oranga Tamariki, young people will also be able to receive transition support and advice up to the age of 25. This Government is committed to addressing the long-term trauma and poor life outcomes that can occur for young people who have been in State care.
Melissa Lee: Why has the Government agreed to raise the age of State care?
Hon ANNE TOLLEY: The evidence tells us that children with a care placement are more likely to end up on a benefit, have poorer educational outcomes, are more likely to get involved in the criminal justice system, and repeat this cycle with their own children unless they are well supported into adulthood. The decision to raise the age of care was based on the recommendations of the independent expert panel, and it was also informed by the views of young people who were either in care or have been in care. These young people expressed feelings of uncertainty about how they would support themselves when leaving care and described experience of struggling to meet essential needs. This cannot be allowed to continue. These young people deserve the support that they need to thrive and to go on to lead successful, independent lives.
Melissa Lee: How will the Government ensure that caregivers are supported to handle this change?
Hon ANNE TOLLEY: Of course it is essential that we have support not only for young people but also for the caregivers, who open up their lives and homes to our most vulnerable children. Financial assistance will be provided to the caregiver, particularly for pastoral care, taking into account the young person’s individual circumstances. The Government is committed to ensuring that caregivers have the support and resources they need to continue to provide a stable and loving home as these young people develop into their late teens and twenties.
International Naval Review—Weapon Status of Foreign Ships
6. Dr KENNEDY GRAHAM (Green) to the Prime Minister: Will he make public the official advice, if any, he has received on the weapon status of the American, UK, Chinese, and French military ships scheduled to visit New Zealand in November; if not, why not?
Rt Hon JOHN KEY (Prime Minister): I am advised that it has not been standard practice to release such information. However, the member, like any other member of the public, is welcome to request advice under the Official Information Act. Any request will be handled in the usual way and treated with careful consideration. I am not going to pre-empt that process today. In addition, I would note that the member’s question refers to ships visiting in November from the United States, the United Kingdom, China, and France. If the member is referring to the Royal New Zealand Navy’s 75th commemorations, I would point out that neither the United Kingdom nor France is actually sending a ship. They are contributing in other ways, which we very much welcome.
Dr Kennedy Graham: In light of the continued non-disclosure policy on nuclear weapons maintained by the United States and its likely refusal to permit boarding for inspection, does he agree that although the advice of New Zealand officials may reflect a sound, pragmatic expectation, it does not give irrefutable confirmation that no nuclear weapon is on board?
Rt Hon JOHN KEY: No, I think it does give irrefutable evidence, and that is because the advice that was prepared and given to me to enable me as Prime Minister to sign the approval declaration came not only from the Ministry of Foreign Affairs and Trade and the Minister of Foreign Affairs but also from the Attorney-General and the Department of the Prime Minister and Cabinet. They use a wide range of information sources. I notice that in this morning’s newspaper, one of the activists who had swum out in, I think, 1983 was saying that even he would not bother donning his swimming togs, because he accepted that the ship was neither nuclear-armed nor nuclear-powered.
Dr Kennedy Graham: When he cites the advice given to him by the Ministry of Foreign Affairs and Trade in respect of the US vessel scheduled for November, is he confident that he has met the requirements imposed on him by section 9(1) of the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act to “have regard to all relevant information and advice that may be available”, or does he acknowledge that there are experts outside the New Zealand Government who may have other views?
Rt Hon JOHN KEY: Firstly, I have not seen a single person who has raised a contrary view that the USS Sampson is anything other than non – nuclear powered and non – nuclear armed. If the member can point to somebody, that would be interesting. Of course, there will always be people around the world who are conspiracy theorists, and if that is the line he is pushing today, he might have to put himself in that category.
Dr Kennedy Graham: If the Prime Minister cannot categorically confirm that there are no nuclear weapons on board the US nuclear-capable vessel, why has he given clearance for the ship to visit New Zealand, despite the pride that New Zealanders have in our longstanding nuclear-free tradition?
Rt Hon JOHN KEY: The Act spells out very clearly the obligations on me as Prime Minister. I received advice in relation to the Act from the Attorney-General. I am not in the habit of signing declarations that would put me in breach of the law and that would result in my failing to fulfil the obligations required of me as Prime Minister under the Act. I am totally confident that I have met the requirements of the Act.
Dr Kennedy Graham: Does he agree with the New Zealand Prime Minister of 31 years ago that: “Nuclear weapons make us insecure. … We all of us know that it is wholly without logic or reason to possess the power to destroy ourselves many times over; and yet in spite of that knowledge the nuclear powers continue to refine their capacity to inflict destruction on each other and all the rest of us.”; if so, will he follow that lead and stand up for a nuclear-free New Zealand?
Rt Hon JOHN KEY: Yes. I should remind the member that at the invitation of President Obama, I have been to a number of the nuclear security summits that he has held, and that is reflecting the credentials of New Zealand. One of the very, very first statements I made a decade ago when I became the leader of the National Party—in Opposition, in 2006—was that we would be observing New Zealand’s nuclear-free status.
Tax Avoidance—Multinational Enterprises
7. FLETCHER TABUTEAU (NZ First) to the Minister of Finance: Does he think it is acceptable that 20 multinational companies paid just $1.8 million in income tax in 2014, despite recording nearly $10 billion in annual sales in New Zealand?
Hon BILL ENGLISH (Minister of Finance): As I think the member is aware, we do not tax turnover in New Zealand, so it is a bit hard to know. It is possible that the levels of tax are lower than they should be. We expect multinationals to pay their fair share of tax and be good corporate citizens. Most companies play by the rules, but the Government is continuing to tighten up the rules around transfer pricing and interest deductibility. New Zealand continues—most importantly, in my view—to work with other OECD countries to strengthen international tax settings, because, in some respects, what is most concerning about some multinationals is that they do not appear to pay much tax anywhere. We need to work with other countries to make sure that they pay their fair share as appropriate to each country’s rules.
Fletcher Tabuteau: Given that he just stated that he believes in a fair and equitable tax system, does he think it right that MasterCard New Zealand declared revenue in New Zealand of just $4.5 million, and paid tax of only $71,000 in its latest figures, despite sharing evenly in $40 billion of annual credit card billings?
Hon BILL ENGLISH: I would have just the same questions as the member. In the first case, we need to ensure that MasterCard follows New Zealand law, because if it does not, it would be subject to sanctions. Secondly, we need to ensure that New Zealand law is structured in a way that maximises the reasonable tax take. Probably most importantly, we need to work with other countries to ensure that MasterCard pays its fair share of tax wherever it goes. The fact is, to the extent that New Zealand acts alone, companies are free to just shift their tax burdens to other places and it does not make much difference.
Fletcher Tabuteau: Given his answer, does he think it right that Visa New Zealand shared in the same pool of credit card billings of $40 billion, and it declared only $3.2 million of revenue and paid only $185,000 in tax in its latest figures?
Hon BILL ENGLISH: Can I say to the member that outrage does not fix the problem. This is a matter of New Zealand tax law and how it interfaces with international tax law. The way we proceed on that needs to keep in mind one factor the member has not mentioned, and that is that if a very successful New Zealand company, like Xero for instance, has hundreds of millions of dollars’ worth of sales in Australia but has no taxable profit, we do not actually want the Australian Government just arbitrarily deciding to tax them. So we have to keep in mind that whatever treatment we applied here will be applied to New Zealand companies overseas. That is why we work with other countries to try to make it fair.
Fletcher Tabuteau: Does he agree that the Government should make applications from major offshore investors buying New Zealand assets or investing here explicitly conditional on paying their fair share of tax?
Hon BILL ENGLISH: That is the requirement of New Zealand—
Hon Member: But it worked with other countries, though.
Hon BILL ENGLISH: Well, you could put it in, but it is actually the requirement of New Zealand law. If they operate here—[Interruption—well, even if they do not think it is fair they have to pay the tax obliged for them to pay by New Zealand law. So we either change the law, which the Government—[Interruption]
Mr SPEAKER: Order! There is little point—[Interruption] Order! I am sorry to interrupt the Minister, but there is little point continuing with an answer, with that sort of behaviour from New Zealand First.
Ron Mark: I raise a point of order, Mr Speaker. We were applauding the Minister’s wonderful statement, and we would like to hear the end of it.
Mr SPEAKER: Order! I am not interested in hearing any more. This is question time. It is not about behaviour you would see at a rugby stadium.
Fletcher Tabuteau: Supplementary question, Mr Speaker.
Mr SPEAKER: Has the member got a further supplementary question?
Fletcher Tabuteau: I do indeed.
Mr SPEAKER: Well, I hope this time your own caucus colleagues will respect the answer that is given.
Fletcher Tabuteau: How will the Minister help many New Zealand companies, which have said that they have missed out on investments here at home because overseas competitors are abusing the tax system here in New Zealand, giving them an unfair advantage over Kiwi firms?
Hon BILL ENGLISH: The way we would help those firms is if they have any knowledge that would indicate that overseas firms are not complying with New Zealand tax law, then those companies will be pursued and if they have not kept the law, they will be prosecuted. The way the member can help those companies is to support the Government measures to deal with the complex issues of international tax where we are tightening up, for instance, transfer pricing, interest deductibility rules, and the use of hybrid financing instruments. I would expect New Zealand First to support those measures because they are all aimed at just the problem that the member and I believe can be mitigated to some extent.
Building and Construction Industry—Labour Productivity and Government Response
8. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Is the construction sector report released today correct that labour productivity in the sector has increased only 1 percent since 2012; if so, will he back the industry’s call for more Government involvement in the building sector including procuring houses at scale?
Hon Dr NICK SMITH (Minister for Building and Housing): Statistics New Zealand figures on labour productivity in the construction sector actually show a 7.6 percent increase over the last 3 years. So, no, I do not think the figures are correct. The same Statistics New Zealand figures show an increase of 11.1 percent since we became the Government, and, actually, also show a decline of 2.7 percent in productivity under the 9 years of the former Government. The Government has been involved in scale procurement on sites like Awatea, Welles Street, and Colombo Street in Christchurch, and, Tāmaki, Hobsonville, McLennan, and Moire Road in Auckland. I will be announcing further projects later this year, and where it makes sense for scale procurement, the Government will pursue it.
Phil Twyford: I raise a point of order, Mr Speaker. The Minister answered a number of questions but not my one, and it was laid down. It was specifically about labour productivity since 2012. He answered on two other periods but not the period that I asked about.
Mr SPEAKER: I will hear from the Hon Dr Nick Smith.
Hon Dr NICK SMITH: Mr Speaker, in the start of my answer I very specifically addressed the Statistics New Zealand construction labour productivity figures—they are on the public record—and pointed out what they were for the last 3 years: 7.6 percent.
Mr SPEAKER: The difficulty is, in fact, that it is a different period. The member specifically asked for figures from 2012. The Minister in his answer refers to the last 3 years, which I would take to be from 2013. [Interruption] I do not need much assistance. Certainly, it was then disputed, the fact of the 1 percent, by saying it was in fact a 7.6 percent increase. I am unable to determine whether the question has been answered correctly, because it may have been, although in the way it is answered it is not clear. The best way forward is we will accept that that question has been addressed by the Minister and I will allow the member now an additional supplementary question.
Phil Twyford: Is not the obvious way to smooth out the boom-and-bust cycle that the construction sector report talks about through a Government-backed building programme like KiwiBuild, which over 10 years would deliver 100,000 affordable homes for first-home buyers?
Hon Dr NICK SMITH: I just saw a pig flying through the House—because anybody who believes that Labour, with the minuscule amount of money that it has budgeted, can build 100,000 houses also believes in the tooth fairy and Father Christmas.
Stuart Smith: Have any difficulties arisen in the productivity gains in house prefabrication offshore; if so, what steps are being taken to resolve these?
Hon Dr NICK SMITH: Yes, some companies have chosen to prefabricate homes offshore. The Government, through my ministry, issued a determination that councils were correct in granting building consents for such homes. But I am disappointed that the Auckland Council has challenged that decision in the court. That is a difficulty because, actually, the competition from prefabrication offshore is actually one of the answers to improving both the supply and the competitiveness in the building industry; that is an issue that the Government will be joining in those court proceedings and vigorously defending the need for additional competition and productivity improvements.
Phil Twyford: Does he agree that the shortage of labour that is preventing the industry scaling up to meet demand in Auckland, driving up prices, and causing the epidemic of shoddy building—
Hon Steven Joyce: But you want to stop migration.
Phil Twyford: Be careful because you might be the housing Minister next.
Mr SPEAKER: Order! Just stick to the question.
Phil Twyford: Does he agree—[Interruption]
Mr SPEAKER: Order! That is certainly what happens when we get interjections initiated by my right-hand side, to which the member then responds, with some justification. If we could now have the supplementary question without any further assistance from the Hon Steven Joyce, I would be grateful.
Phil Twyford: Does he agree that the shortage of labour that is preventing the industry scaling up to meet demand in Auckland, driving up house prices, and causing the epidemic of shoddy building is largely a result of the boom-and-bust cycle, because so many skilled tradespeople were lost to the industry at the time of the global financial crisis?
Hon Dr NICK SMITH: It is correct that in 2007 and 2008 the number of homes being constructed in New Zealand plummeted to the lowest levels in 40 years. It is also true that over the last 5 years the number of homes being constructed in New Zealand has gone from 12,000 a year to over 29,000 a year. It is a little bit inconsistent for the member, in one breath, to say that there are labour shortages and, in the next breath, to say that there are not any new houses being built. I would note that my colleague Steven Joyce has substantially increased the investment in skills training so that we now have more apprenticeships in the construction industry than at any time in the last 25 years.
Phil Twyford: Given that his officials have advised him that the industry is still building 8,000 fewer homes than Auckland needs each year just to keep up with demand, is it not clear that the Government needs to be a more active player, using procurement and boosting apprenticeships far beyond the current level to support a sustained expansion of the industry?
Hon Dr NICK SMITH: In this term of Parliament we are going to build in Auckland the number of houses that there are in Whangarei. In the next term of Parliament that is to occur again. We have got the strongest building boom with over $12 billion of residential investment. In Auckland we have seen the number of houses constructed grow from 4,000 per year to over 9,800 a year. I also note, for the member’s information, that in the last year Government agencies have completed over 1,000 houses, and that too is more than in 25 years.
Phil Twyford: Does he accept that in an undersupplied market developers will always build high-end homes to maximise their profits, so surely the role of Government is to build enough homes priced so that most people can afford them?
Hon Dr NICK SMITH: The primary reason that the building industry—and in the last decade as well as this decade—has built mainly expensive homes in a market like Auckland is that the section price has become ridiculously high under planning policies. The key changes such as the Resource Management Act changes, the changes in the national policy statement, and the changes in the unitary plan that the member opposite has opposed are pivotal to getting reasonable land prices, and with that will go reasonable house prices. No; members on this side of the House do not agree that the only way to have houses being built is to have them built by the Government.
Phil Twyford: Will he listen to the construction industry when it says, after 8 years of little progress and little Government support for productivity reforms, it is not time for a Government-backed building programme that would smooth out the boom and bust cycle and allow the industry to sustain growth and lift productivity?
Hon Dr NICK SMITH: I have noted that member has promised that Labour would remove any of the boom-bust cycle. Well, he has got a greater chance than King Canute. The reality is that there always will be business cycles and I do know of any Government in the world that has completely removed those. When the member says the Government has made no progress, I simply point out the fact that there were 4,000 homes being built in Auckland per year and there are now nearly 10,000 homes being built per year in Auckland.
9. MATT DOOCEY (National—Waimakariri) to the Minister of Education: What recent announcements has the Government made about investment in education infrastructure in Christchurch?
Hon HEKIA PARATA (Minister of Education): Yesterday I announced that $750,000 will be invested to build two new classrooms at Fernside School in Canterbury. This is part of a second round of investments in new classrooms under Budget 2016, which provides $882.5 million for school property, including 480 new classrooms to meet roll growth across the country. The first round of investments was announced in May and June this year, and that saw 21 new roll growth classrooms for Canterbury schools. Today’s investment, on top of that announced earlier in the year, recognises that schools in Canterbury are experiencing roll growth as the local population grows or shifts.
Matt Doocey: What investment in schooling infrastructure is already under way in Christchurch?
Hon HEKIA PARATA: Since June of this year, Minister Kaye and I have announced over $67 million in projects to build new schools and classrooms in Christchurch. This spending is part of the $276 million being invested in Canterbury school infrastructure. The total investment package is made up of around $168 million towards Christchurch schools rebuild programme, at least $100 million to build two new schools and deliver two relocated and rebuilt schools, around $8 million for new roll growth classrooms, and, in addition, $6 million for a seismic strengthening fund for integrated schools.
Rt Hon John Key: Does she agree with me that she has been an outstanding Minister and she will be sadly missed?
Mr SPEAKER: It seems the Minister does not—
Hon HEKIA PARATA: Can I say that I think the Prime Minister is a magnificent decision maker.
10. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?
James Shaw: Does he stand by his statement in relation to agriculture and climate change that “science will deal with the issues as long as we keep investing.”?
Rt Hon JOHN KEY: Definitely.
James Shaw: Is he concerned that the Parliamentary Commissioner for the Environment’s report on agricultural emissions, out today, says: “there is no silver bullet on the horizon.”?
Rt Hon JOHN KEY: No, I am not concerned, but I did not need to read the report to know that. But what I do know is that the Global Research Alliance on Agricultural Greenhouse Gases, which New Zealand has been an inaugural member of, is well on its way, I believe, to finding solutions over time—scientific solutions—to the issue of agricultural emissions.
James Shaw: Why did he announce another $20 million of agricultural emissions research when Treasury said that there was no analysis behind the number and no evidence that extra funding would improve research outcomes?
Rt Hon JOHN KEY: I think it is plainly obvious for the world to see that with a growing global population, more food is going to be required. It is also known that New Zealand agriculture has a low carbon footprint relative to other countries in the world, so if the option is destocking and then not increasing that supply in other parts of the world—
James Shaw: I raise a point of order, Mr Speaker. My question was in relation to Treasury advice, rather than a general theory of agricultural emissions.
Mr SPEAKER: The question mentioned Treasury advice. It asked, specifically, why the Prime Minister was making an announcement of an additional $20 million to such research in light of the Treasury announcement. The Prime Minister is now addressing that question.
Rt Hon JOHN KEY: Before I was interrupted, the point I was simply making is that the world does not have an option of credibly destocking in a major way. It certainly would not be in New Zealand’s interests to do that, because that production would be moved to a less carbon-friendly environment offshore. On the basis that that is the case, the world actually does need to find scientific solutions, and I would have thought that as the co-leader of the Green Party and as someone who sometimes talks about science and innovation, he would support that.
James Shaw: Does he accept advice from the Ministry for the Environment that “Any significant reduction in agricultural emissions, even in the long term, would require trade-offs against plans to grow the economy through the export of ruminant animal products.”?
Rt Hon JOHN KEY: No, I do not accept that advice. I think, over time, there will be scientific solutions that will allow us to combat that, and I think it will be eminently possible that New Zealand will be able to increase its production and lower its carbon footprint from agriculture.
James Shaw: I seek leave to table advice from the Ministry for the Environment received under the Official Information Act (OIA).
Mr SPEAKER: Leave is sought to table that particular advice. Is there any objection? There is none.
Document, by leave, laid on the Table of the House.
James Shaw: If his Government’s research fails to find a silver bullet to cut agricultural emissions, does he have a plan B?
Rt Hon JOHN KEY: I think the member is taking a pretty narrow perspective on it. We are part of the Global Research Alliance on Agricultural Greenhouse Gases, in which there are over 40 countries investing. With such an enormous amount of scientific research, brainpower, and effort going in, what is the probability that there will not be solutions found? We actually already know that there were some solutions found in this area. There were other issues around dicyandiamide and the like that were side effects of that, and we need to go and deal with those issues, but the point is that progress is being made. You would have to be the most unambitious, most unoptimistic person in the world to not believe that we are going to find some solutions to these issues through science.
Dr Megan Woods: Will his Government do as Simon Upton has suggested and put a price on agricultural emissions, or is he happy to put farmers and the economy at risk by continuing to ignore advice?
Rt Hon JOHN KEY: Firstly, we would have to check the veracity of that statement. Secondly, farmers already have a price on some of their inputs for agriculture, and, further, we have one of the very few sets of farmers in the world who operate on a completely unsubsidised basis. Putting an additional tax on them that no other farmers face is, I think, grossly unfair. I know the member comes from a party that hates farmers, but over here we actually like them.
Mr SPEAKER: Order!
James Shaw: I seek leave to table Treasury advice obtained under the Official Information Act that says it is unclear what additional benefits New Zealand will obtain from the additional $20 million of agricultural emissions research.
Mr SPEAKER: Has the member bothered to check whether such advice is also now freely available on the internet?
James Shaw: I received it under the Official Information Act.
Mr SPEAKER: I will put the leave, but in the future I am likely to ask whether it is available via the website. I would be grateful if members would check that fact first, but on this occasion I will put the leave. Leave is sought to table that particular advice received under the OIA from Treasury. Is there any objection to it being tabled? There is none. It can be tabled.
Document, by leave, laid on the Table of the House.
Hon Dr Nick Smith: I seek leave of the House to table the speech that the Rt Hon Simon Upton did give on this issue, in which he advocated a different approach to agricultural and other emissions—
Mr SPEAKER: Order! No. I thank the member, but, again, that is a speech that is very easily available for members to obtain. I remind members that the point of tabling documents is to inform the House, not to make a political point.
11. STUART NASH (Labour—Napier) to the Minister of Police: Does she agree with the new Police Association President Chris Cahill, who described the front line as being at “crisis point”?
Hon JUDITH COLLINS (Minister of Police): What a well-timed question from that member. I have just today met with Mr Cahill and can confirm that I agree with him on many things—in particular, that police will, in the future, need more resources. However, I do not agree that police are in any kind of crisis. In fact, I think our police are doing excellent, world-leading work. Although that member may not agree with that view, I am not the only one who holds it. Just today, New Zealand Police has won an international award from the International Association of Chiefs of Police for its outstanding work on the investigation into threats to poison infant formula with 1080. Well done, New Zealand Police. [Interruption]
Mr SPEAKER: Order! If I need to ask the member again to stop interrupting, I will name her, and if I need to go further, I will ask her to leave.
Stuart Nash: Why did she fail to secure anything in Budget 2016 to specifically increase police numbers, despite the fact that crime was already apparently on the rise at that point?
Hon JUDITH COLLINS: I do not think I would have ever suggested that—I think it was $297 million extra that police got in Budget 2016. That member might think that that is nothing—a bit of paltry money—but, actually, that is a lot of money and police were very grateful for it.
Stuart Nash: Does the Minister specifically remember what 94 percent of that $297 million was earmarked for; if so, can she enlighten the House?
Hon JUDITH COLLINS: I certainly can. In answer to the second question, yes, of course—that is, in fact, to pay the increases in wages that police have been given under this Government.
Stuart Nash: Does she believe that the Prime Minister has lived up to his 2007 promise to the New Zealand Police Association that National would “improve the ratio of police to population beyond 1:500”, given that under National the ratio has ballooned to 1:526.
Hon JUDITH COLLINS: Of course, the Prime Minister did live up to his commitment. We did, in fact, increase policing by funding an extra 600 front-line police officers. As for that member, his Government had ratios far in excess of what we have at this stage.
Stuart Nash: Who is right: the Salvation Army when it stated yesterday that “There is an increasing use in methamphetamine.”, or the Prime Minister, who said that usage is declining?
Hon JUDITH COLLINS: As much as I am very fond of the Salvation Army, I agree with the Prime Minister.
Stuart Nash: When a burglar in New Zealand has a 90 percent chance of getting away with it under National, is it because there are not enough police on the front line?
Hon JUDITH COLLINS: I do not think so at all. In fact, what I am really proud of the New Zealand Police for this year is that it has stopped talking about burglary as a volume crime and understands it is a priority crime. I would like that member to support the New Zealand Police in taking burglaries seriously.
Erosion Control Funding Programme—Funding
12. IAN McKELVIE (National—Rangitīkei) to the Associate Minister for Primary Industries: What recent announcements has she made regarding erosion-prone land?
Hon JO GOODHEW (Associate Minister for Primary Industries): Last week the Ministry for Primary Industries announced the results of the latest round of the Erosion Control Funding Programme (ECFP) to reduce the serious erosion issues faced by the Gisborne district. I am pleased to report to the House that 1,438 hectares of land will be treated through $2.39 million worth of projects. The programme will bring environmental benefits to the region’s infrastructure, waterways, hill country farms, and higher quality floodplain land through reducing sediment runoff and improving the resilience of the land to severe weather.
Ian McKelvie: How has the increasing uptake of the programme benefited the rural East Coast?
Hon JO GOODHEW: The ECFP is focused on reducing the severe erosion problem facing the Gisborne district, where 26 percent of all land is severely erosion prone, causing long-term damage to the productivity of rural land. Doubling the number of applications in the area approved for treatment compared with last year is a fantastic sign for the ECFP, in addition to the positive environmental outcomes. Having a dedicated staff member on the ground in Gisborne and working in partnership with the Gisborne District Council and Te Rūnanganui o Ngati Porou has been a real benefit and shows that this Government is committed to regional development that delivers.
QUESTIONS TO MEMBERS
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Reasons
1. FLETCHER TABUTEAU (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: Why did he introduce the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): There is currently, under this administration, no easy or accurate way to measure the amount of land under the control of foreign nationals. This is due to the fact that, unlike in other jurisdictions, there is no official database of foreign ownership in New Zealand. That is what this bill is going to fix up.
Fletcher Tabuteau: What other jurisdictions have registers of land ownership?
Rt Hon WINSTON PETERS: A very insightful question—a number of countries do, and the Australians have discovered, with some consternation, that Australian land equivalent to the size of two New Zealands is in foreign ownership, including 2.5 million hectares in the past 3 years. If 13 percent of Australia’s farmland is in foreign hands, what percentage of ours is also foreign-owned? We are going to find out.
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Purpose
2. BARBARA STEWART (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: What is the intention of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): I want to thank that member for endeavouring to enlighten those who across over here. This bill will deliver a comprehensive register of all foreign-owned New Zealand land that will include names and nationalities, the amount and the value of the land involved, as well as the regions in which the land is situated.
Hon Gerry Brownlee: Blah, blah, blah.
Rt Hon WINSTON PETERS: This is about—something very foreign to Gerry—transparency—
Mr SPEAKER: Order!
Barbara Stewart: What types of land will be covered by the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS: It will apply to all land as it is defined in section 2 of the Land Transfer Act 1952. Such land includes “messuages, tenements, and hereditaments, corporeal and incorporeal, of every kind and description,” and even if it is owned by Russians.
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Reasons to Advance
3. DARROCH BALL (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: Why is it necessary for the Land Transfer (Foreign Ownership of Land Register) Amendment Bill to be advanced at this time?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): Another brilliant question. Good policy needs good data, just as bad policy lacks data. In 2007 the Reserve Bank estimated foreign landownership at 5 percent. In 2014 the housing Minister Nick Smith and Treasury estimated foreign-owned homes at 11 percent. Then in 2016 the Minister for Land Information embarrassed herself with the discredited figure of 3 percent, which now resembles Swiss cheese. We intend to fix that.
Darroch Ball: What is the potential cost of a foreign ownership of land register?
Rt Hon WINSTON PETERS: Australia’s land register had a regulatory cost of $186,000. Then again, its system involves application fees that are funding a dedicated compliance and enforcement unit to detect breaches and enforce compliance—something we do not have in this country, and deliberately so because the Government does not want to know about it.
Mr SPEAKER: Order!
Pita Paraone: Supplementary.
Mr SPEAKER: No. The member can ask a primary question. Does the member wish to ask his primary question?
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Proposed Register Information
4. PITA PARAONE (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: What information will the register collect?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): The register will record each registered proprietor who is an overseas person, including the person’s name and nationality, the amount and value of the land involved, and the district or districts in which the land is situated.
Pita Paraone: How much will it cost people to access the foreign ownership of land register?
Rt Hon WINSTON PETERS: Anyone will obtain read-only access to the register without having to pay a single cent. That is about openness.
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Proposed Sanctions
5. CLAYTON MITCHELL (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: What sanctions are available if a person or persons breach the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): If a person knowingly fails to comply, they will be liable on conviction to a fine of up to 25 percent of the value of the land involved. We need to get serious because, as Mark Twain once observed: “Buy land, they’re not making it any more.”
Clayton Mitchell: What other reporting measures does the Land Transfer (Foreign Ownership of Land Register) Amendment Bill propose?
Rt Hon WINSTON PETERS: The people will be delighted to know that Land Information New Zealand will need to report in its annual report the number of registered proprietors in the register at the end of each financial year, as well as the total amount and value of land involved.
Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Support
6. RICHARD PROSSER (NZ First) to the Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill: What indications of support has he received for the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS (Member in charge of the Land Transfer (Foreign Ownership of Land Register) Amendment Bill): In 2013, then Federated Farmers president Bruce Wills asked the Government to establish a foreign land register. This has been repeated by current Federated Farmers president Dr William Rolleston. It is no secret that other organisations agree with New Zealand First on what is important in this bill. Now I am going to give them some action.
Richard Prosser: What objections has he received to the Land Transfer (Foreign Ownership of Land Register) Amendment Bill?
Rt Hon WINSTON PETERS: None that make any sense. If 930 years ago William the Conqueror could undertake a detailed stocktake of medieval England using parchment and horsepower, then in the 21st century New Zealand should be able to easily figure out how much land—our land—is owned by foreigners.