Questions for Oral Answer
Questions to Ministers
Economy—Economic and Regional Growth

1. JILL PETTIS (Labour—Whanganui) to the Minister for Economic Development: Has he received any recent reports on economic and regional growth; if so, what do these indicate?

Hon JIM ANDERTON (Minister for Economic Development): Yes. The latest reports on economic development in New Zealand show that the New Zealand economy is among the best-performing in the world. Year-on-year growth to June, as reported by the latest National Bank regional trends survey, is at 4.3 percent. Regions like the member’s region of Wanganui-Manawatu, and others like Otago and Southland, which suffered negative growth under the previous National-led coalition, are now averaging over 5 percent year-on-year growth. All regions in New Zealand are in positive growth mode under this Labour-Progressive Government.

Jill Pettis: Do these reports suggest to him that economic development in New Zealand has meant that our economy is standing on the edge of a slippery slope, as reported in Australia last week?

Hon JIM ANDERTON: I cannot possibly imagine who might have tried to mislead our Australian cousins in such a way. No reports based on fact could possibly suggest that conclusion. New Zealand’s annual economic growth has outstripped both Australia’s growth rate and the OECD average over the last 5 years of this coalition Government. To suggest otherwise would be to mislead our Australian cousins. Whoever is trying to malign New Zealand in Australia should, I suggest, give some real growth comparisons, such as the fact that in the last 5 years New Zealand’s GDP capita has increased by a cumulative 14 percent, in comparison to 11.3 percent in Australia. In the previous 5 years of the National-led Government the figures were 16.9 percent for Australia and only 9.9 percent for New Zealand. I suggest that Mr Brash quit while he is behind.

Refugees—Benefit Reliance

2. Hon TONY RYALL (National—Bay Of Plenty) to the Minister of Immigration: Does the Government have any plans to review refugee numbers in light of evidence that nine out of 10 refugees are still dependent on a benefit after 2 years, and that after 5 years eight out of 10 are benefit-reliant; if so, what are they?

Hon PAUL SWAIN (Minister of Immigration): No. The Government has no plans to review the number of refugees accepted into New Zealand each year under the refugee quota programme. New Zealand takes up to 750 refugees each year as part of its contribution to being a good international citizen. However, the Government recently announced the National Immigration Settlement Strategy, which has dedicated $62 million over 4 years to the settlement of migrants and refugees. Ensuring that refugees and migrants are able to obtain employment appropriate to their qualifications and skills is one of the three goals that the Budget package initially focuses on.

Hon Tony Ryall: Is it not the problem with this Government’s policy that the Government is bringing in more and more refugees who go on a benefit and are then able to bring in more and more of their family members who go on a benefit and who, after a few years, bring in more of their family members who go on a benefit, so the cycle carries on and the taxpayers pay for it, when the answer would be a cut in the number of refugees and to get them into a job?

Hon PAUL SWAIN: No. Most New Zealanders would be proud of the fact that we take, as part of our international responsibilities, people who come from dreadful situations overseas—the fear and trauma of camps, which is something that the member—[Interruption]

Mr SPEAKER: There is too much shouting and too much comment. I want to hear the answer. A bit of interjection is all right, but this is getting silly. There is one member in particular who is shouting the whole time.

Hon PAUL SWAIN: We take our obligations seriously. The fact is that we take people from places around the world where there is fear and trauma, and where children are involved in circumstances that they should not be involved in. We are proud to do that as part of being an international citizen. However, I should say that, even though the interviews for the recent report were completed last September, the latest figures I have state that since September 2003—as a result of good work from my colleague the Minister for Social Development and Employment—364 refugees have been placed into employment, 158 refugees have achieved stable employment, and there has been a 33.6 percent reduction in the migrant and refugee unemployment register. That was a result of funding from the Budget last year, and it is clearly working.

Georgina Beyer: What other services are available to newly arrived refugees?

Hon PAUL SWAIN: Like all other New Zealanders, newly arrived refugees can access Government-funded health, housing, and employment assistance. In addition, the settlement package includes an extra $6 million over 4 years specifically for the Refugee and Migrant Service to help refugees to settle well in New Zealand. This Government is proud of its international obligations and of the way that it carries them out. It seems that the National Party, although it used to proud of them, is not any more and would prefer to leave people in camps where it knows terrible things happen, particularly to children.

Peter Brown: Could the Minister, noting the answers that he has just given, inform the House what the cost has been to the taxpayer for refugees and illegal immigrants on an annual basis since Labour became the Government?

Hon PAUL SWAIN: I do not have those figures in front of me. [Interruption] Well, he also mentions illegal immigrants. I am happy to break the figures down when I can get them, and to provide the member with that information. But I need to point out to the member, for his information, that there is a difference between refugees and illegal immigrants.

Mr SPEAKER: Supplementary question, Keith Locke.

Peter Brown: Mr Speaker—

Mr SPEAKER: I have called only Mr Locke. [Interruption] No, no. The member will get a supplementary question eventually. We do the rounds. The member has been here now for all the time that I have been here—[Interruption] Oh, no, he has not. For all the time I have been the Speaker, the member has been in the House, and he knows that we do the rounds of the other parties first. He can have a second, and even a tenth, go if he wants.

Keith Locke: Will the Minister consider increasing the $6 million for refugee settlement that he just referred to, in the light of a much more serious situation disclosed in the report just released and in other reports—particularly in the area of increased English-language teaching for refugees and of work amongst employers to reduce the discrimination that refugees find when trying to get a job?

Hon PAUL SWAIN: In response to that, I firstly want to say—and the member has referred to the report—that it is a good report. It highlights some of the difficulties that refugees who have come out of very difficult circumstances have in settling in New Zealand. The Government has put quite considerable funding into things like English-language courses, as well as into employment matching. But the issues involved here are the kinds of things that I and the officials are working on, in order to see whether it is appropriate to go back, as part of the Budget round, and look at whether we need to make some improvements in this area. It is a very good report, and I commend it to all members of the House.

Dr Muriel Newman: As there are over 20 million refugees in the world, many of whom are highly skilled, why does this Government insist on taking unskilled refugees who are destined for the dead-end of welfare? [Interruption]

Mr SPEAKER: Now, this is the one warning I am giving each day: there will be no interjection during questions. It is the democratic right of all members to ask their questions in silence, and I will uphold that right very strongly. During answers there can be a bit of interjection, but I was displeased with that interruption. I will ask Dr Newman to read her question again.

Dr Muriel Newman: As there are over 20 million refugees in the world, many of whom are highly skilled, why does this Government insist on taking unskilled refugees who are destined for the dead-end of welfare?

Hon PAUL SWAIN: It is extremely frustrating to have to answer a question like that, and I suggest that if the member reads the book, she will get some understanding of that. The reality is that a large number of the refugees who come here are well skilled, and the document points out the difficulty that those people have in finding employment. That is nothing to do, necessarily, with their skills, but is to do with the issues of their trying to get into work in New Zealand. I suggest that the member reads the publication, so she may understand the refugee problem a little better, and that she gets off her ACT hobby horse, from which she seems always to be attacking people who are in worse conditions than herself

Hon Tony Ryall: Why did the Minister tell the House that New Zealanders would be proud of the Labour Government’s record on refugees, when 90 percent of refugees are on welfare after being in the country for 2 years, and 80 percent of them are still on benefits after 5 years; why would we be proud of that?

Hon PAUL SWAIN: For a start, of course, the member does not understand the figures. This is a report of a sample of interviews with 400 people, and it is really important to see that not only—[Interruption] It did not just talk about that; it talked about the fact that they were pleased to come to New Zealand, where people were friendly and welcoming, and where it was democratic. I suggest that instead of that National Party bagging refugees, its members should try to help those people to get jobs. That would be a responsible thing for the National Party to do, and I think it should be ashamed of backing away from the international contributions that we have made over a long period of time.

Peter Brown: Will the Minister consider introducing reforms to the immigration system to tackle the fiscal burden that the appeals decision process for refugees and asylum seekers places on the New Zealand taxpayer—yes or no?

Hon PAUL SWAIN: Yes.

Hon Richard Prebble: I wonder whether the Minister would now answer the question that Muriel Newman put to him, which was this: there are 20 million refugees in the world, according to the official UN refugee agency, many of whom are highly skilled, able to speak English, and would fit into New Zealand society, but this Government insists on taking illiterate Afghani camel drivers and bringing them into this country; what is the point of that?

Mr SPEAKER: There was not actually a question there, but I presume the member is asking the Minister to comment.

Hon Richard Prebble: I think I did ask a question. I asked why the Government is insisting on taking—[Interruption] The member who said that shows, obviously, that he does not do any constituency work. I can assure him that I have had many refugees coming to see me who could not speak English, who had no education at all, and who had no chance of ever getting a job in this country.

Hon PAUL SWAIN: For a start, many refugees cannot speak English because some of the really terrible spots in the world do not happen to be in English-speaking countries. I hope the member will acknowledge that. Secondly, the selection criteria do look at a whole range of things, but it is important that we do not close our doors to people who have been in traumatic situations, who have been living in camps, and who then find the opportunity to come to a welcoming country, start again, and bring up their families with confidence, surrounded by people who care.

Hon Tony Ryall: Is the Minister aware that 14 boys who were refugees from the MV Tampa have reportedly been able to bring at least 109 family members into the country, and that—based on the Government’s own report—most of those people will be dependent on welfare and neglected by this Government for at least the next 5 years?

Hon PAUL SWAIN: I do not know the actual numbers, but it is fair to say that people who do come here are able to bring in some family members. [Interruption] They have always been able to. For 9 years under the previous National Government, that policy was in place. It was no different then, and why is it still in place? It is because we think that if we bring some people here and they want to bring some family members, that helps the settlement programme, and there should be nothing wrong with that. The reality is the important thing about the report is that it states that while people like being here, they have difficulty getting into employment, and we have to do better to help them do that—and we are.

Hon Dr Michael Cullen: Is any thought being given to training an illiterate Afghani camel driver for the vacant position of Leader of the Opposition?

Mr SPEAKER: No, that question is out of order. While we can inject a little humour into the situation, I think that went a bit too far, and I ask the member to withdraw and apologise.

Hon Dr Michael Cullen: I withdraw and apologise.

Gas—Offshore Exploration

3. CLAYTON COSGROVE (Labour—Waimakariri) to the Minister of Revenue: What steps, if any, has the Government taken to encourage offshore gas exploration?

Hon Dr MICHAEL CULLEN (Minister of Revenue): The conditions of the package were announced on 14 June. I have announced today that the Government is removing the 183-day tax obstacle to gas exploration in New Zealand. That means that non-resident offshore rig operators will not be liable for tax until after the end of 2009.

Clayton Cosgrove: How will those actions assist gas exploration?

Hon Dr MICHAEL CULLEN: Currently, non-resident offshore rig operators become liable for taxation if they are resident for more than 183 days. Of course, what that tends to mean is they leave New Zealand within 6 months, and drilling is delayed. So removing that obstacle will mean our interests our served by keeping the oil rigs drilling.

John Key: If the Government is so confident that those measures will be successful, why has it been necessary for taxpayers to provide a financial guarantee to the bankers of the State-owned enterprise Genesis Energy for the proposed combined-cycle power plant at Huntly, in the event that it is unable to get gas supply in 2012?

Hon Dr MICHAEL CULLEN: The member is incorrect. No financial guarantees have been given to the bankers backing the investment.

Police—Offence Report, Auckland

4. RON MARK (NZ First) to the Minister of Police: Did the police respond to a call from 8 Rocky Nook Avenue, Auckland on 12 September 2002; if so, what was the nature of the offence reported?

Hon GEORGE HAWKINS (Minister of Police): Yes. I am advised that the nature of the incident was burglary.

Ron Mark: What investigative actions did police take as a consequence of that call, and did those investigations identify Phillip Layton Edwards as the prime suspect for an alleged aggravated burglary?

Hon GEORGE HAWKINS: The police did identify Phillip Layton Edwards as the person they were interested in.

Ron Mark: Did the police discuss the incident at 8 Rocky Nook Avenue prior to their deciding not to prosecute Edwards on this count with the Minister’s office, the Attorney-General’s office, the Minister of Justice’s office, or the Prime Minister’s office?

Hon GEORGE HAWKINS: No.

Ron Mark: Why did the prosecution not use the sure Edwards incident in the trial when it so clearly could have rebutted the defence case by establishing a modus operandi and clinched a murder conviction?

Hon GEORGE HAWKINS: As the matter is still before the court, awaiting sentence, it would be improper for me to comment on that.

Ron Mark: I raise a point of order, Mr Speaker. I ask for your clarification. There has already been a conviction in this case. The court now has all the evidence that this alludes to at its call. The defendant is just awaiting sentencing. I did not find that an acceptable answer. I think the Minister can answer.

Mr SPEAKER: The member may not have found it an acceptable answer, but it addressed the question and I did find it acceptable in terms of the Standing Orders of this House.

Hon Richard Prebble: I raise a point of order, Mr Speaker. I am not disputing what you have just said, but I think you might be of assistance to the Minister, because if he believes that the Standing Orders prevent him from answering the question, I think he is mistaken. The court would clearly not be influenced because a conviction has already been entered, and it cannot possibly affect the sentence. The reason we have a rule about not commenting on court cases is in order to make sure that there is not an injustice. I do not know anything about this case, but it would appear there is no possibility of that. The question is really about the conduct of the police, not of the defendant.

Mr SPEAKER: The member is absolutely correct.

Schools—Deficits

5. BERNIE OGILVY (United Future) to the Minister of Education: Can he confirm that the total combined deficit incurred by schools doubled from $14 million in 1995 to $29 million last year, with the average secondary school deficit increasing by 70 percent from $55,624 to $94,631 in that time; if so, why?

Hon STEVE MAHAREY (Acting Minister of Education): Yes, but I can also confirm that the overall financial position of schools has been improving under the Labour-led Government. The collective surplus generated by primary schools has increased from 1.1 percent in 2001 to 1.8 percent in 2003. The surplus generated by secondary schools in the same period increased from 0.8 percent to 1.2 percent. Over the past 3 years, the total number of schools operating a deficit in excess of $60,000 has actually decreased from 153 in 2001 to 137 in 2003. The percentage of schools in deficit went down from 43 percent in 2002 to 39 percent in 2003.

Bernie Ogilvy: Were some of those deficits incurred to pay for the 3,797 teachers employed directly by schools without Government funding, or does he think that additional teaching staff are a luxury that is most appropriately funded by schools raising half a billion dollars themselves through foreign students, selling chocolate, or even buying and selling cattle as reported in this morning’s Christchurch Press?

Hon STEVE MAHAREY: The answer to the first question is no. The answer to the second question is no, I do not think that it is a luxury. The answer to the third series of questions, around schools and fund-raising, is that of course fund-raising has always been part of what schools do, but the people in Canterbury who say that they are raising money to employ teachers through selling cattle for schools, of course, are not being accurate in saying that. Schools are supplied right throughout Canterbury with a large number of new teachers as part of this Government’s policy.

Lynne Pillay: Why may schools record a deficit?

Hon STEVE MAHAREY: Schools may have money in the bank but still record a deficit for the year. It may be planned. For example, a board of trustees may decide that it has more money in the bank than it needs, so it will spend it on something like new equipment. It may also be the result of major, unforeseen problems like an employment dispute or an equipment failure. Those sorts of deficits are obviously concerning to a school, but in general, schools can cover any unplanned costs out of their savings and they will return to a surplus in the following year.

Simon Power: Does the Minister agree with Chris France, the head of the School Trustees Association, and Don McLeod, chairman of the Principals Council, that an array of hidden costs imposed on schools by this Government, including health and safety requirements, holiday entitlements, collective agreement provisions, and support staff costs, have pushed more than a third of schools into a position where they simply cannot balance their budgets?

Hon STEVE MAHAREY: No, I do not. What I would agree with is that school operations grant funding has increased by over 26 percent since 1999. When adjusted for inflation and roll growth, that amounts to an increase per pupil in real terms of 10 percent. The Government has also greatly increased the amount of “in kind” support it provides to schools, such as free software licences, and laptops for principals and teachers. That “in kind” support amounts to $346 million per year—equivalent to 34 percent of additional operational funding—which is more than the National Government did in the 9 years when it had a chance to do something.

Hon Brian Donnelly: Is it not true that since the current Minister has been the Minister of Education, schools’ operational funding, with the exception of the redistributed bulk-funding moneys, has increased by no more than the rate of inflation, meaning that purchasing power has remained static and deficits have continued?

Hon STEVE MAHAREY: The figures that I have here show that when adjusted for inflation and roll growth, the increase amounts, per pupil in real terms, to just over 10 percent. That is in the operations grant alone. It does not count the $346 million per year that comes in kind in various ways.

Bernie Ogilvy: Does the Minister accept that if schools did not take on foreign fee-paying students, many more schools would be reporting funding deficits; if not, why not?

Hon STEVE MAHAREY: Many schools choose to take on a small number of overseas pupils, but I remind the member that since this Government has been in power we have had an increase of over 26 percent in the operations grant alone.

Bernie Ogilvy: Why has the number of secondary schools with deficits of over $100,000 doubled from 21 to 42 since 1995, and does the fact that those schools range from deciles 1 to 10 indicate that the current equity funding system is not working?

Hon STEVE MAHAREY: That is, of course, a small number of schools amongst a large number we have in the country, and what happens whenever a school is in that kind of deficit is that it receives individual treatment from the ministry until it is in the position of being back in the black.

Bernie Ogilvy: Does the Minister accept that the need for schools to hire teaching staff out of their own pockets is a problem of the Government’s own making, since it has guaranteed non-contact hours in its agreement with the teachers’ unions but clearly has not stumped up with the money to cover them; if not, why not?

Hon STEVE MAHAREY: No, I do not. I want to give one example of how many teachers are being put into the system. If I take, for example, Simon Power’s Rangitikei electorate, more than 52 extra teachers and an extra 42 management units have been provided by this Government. That gives the schools there the flexibility to pay teachers more for recruitment and retention purposes, and to recognise extra responsibilities. That is what this Government has done.

Domestic Purposes Benefit—Paternity

6. KATHERINE RICH (National) to the Minister for Social Development and Employment: How many sole parents receive a reduced benefit because they refuse to name the father of their children or refuse to fill out a child support application?

Hon STEVE MAHAREY (Minister for Social Development and Employment): Currently, 19,443 sole parents receive a reduced benefit under section 70A of the Social Security Act because they refuse to identify the other parent, they do not apply for child support, or they fail or refuse to testify on the matter as required under section 122 of the Child Support Act. The penalty under section 70A of the Social Security Act reduces the benefit by $22 in respect of each dependent child. Section 70A penalties should not be applied in cases of incest or rape, but this can occur only if victims of crimes are able to tell Work and Income about their circumstances.

Katherine Rich: Can the Minister explain why on his watch the number of sole parent beneficiaries who will not officially name the father of their children has increased from over 13 percent in 2000 to 15 percent in 2002, and close to 18 percent as at July 2004, over a period when the total number of sole parents has remained largely static?

Hon STEVE MAHAREY: By my calculations the number of section 70A penalties doubled under the National Government to reach 15,000 by 1999. Since doubling under National, the number of section 70A penalties has risen by about 1,000 a year, but I point out that 1,500 of those were established during a sweep through penalties when we became the Government to clean up the administration left by the member’s Government.

Moana Mackey: What has the Government done to encourage more sole parents on benefits to fulfil their obligation to apply for child support?

Hon STEVE MAHAREY: The Government has introduced a range of new activities to encourage sole parents who are on a benefit to apply for child support. For example, we reviewed old sole parent cases where no liable parent contribution and no section 70A penalty applied. These were left to us by the previous Government and we found 1,500 of them. We introduced one-on-one targeted interviews with sole parent beneficiaries subject to the penalty to ensure they were aware why the penalty applies and what their obligations are. We changed the forms so that the applicants had to state whether they had a private child-support agreement—

Hon Tony Ryall: Changed the form!

Hon STEVE MAHAREY: I will just repeat that for Mr Ryall. We changed the forms so applicants have to tell us whether they have a private child-support agreement. We will send letters to all section 70A clients. In the last Budget we introduced a range of measures, including increasing the penalty under section 70A of the Social Security Act. I am looking forward to Mr Ryall’s support on that very matter.

Dr Muriel Newman: Would the Minister please reconcile his refusal to force mothers to name the father of their child when they claim the domestic purposes benefit, with his support of the Human Assisted Reproductive Technology Bill, which is to be debated this afternoon, that requires the naming and racial profiling of all sperm donors; where is the consistency?

Hon STEVE MAHAREY: This Government will never force all mothers, some of whom have been raped or have been part of incest, to tell us the name of the father. We will do more than the National Party, however, to get people who should front up to their obligations to do so. That is what we will do on that matter of section 70A of the Social Security Act.

Katherine Rich: Incest, rape, and domestic violence aside, can the Minister explain why his Government accepts a situation where 21 percent of all sole-parent beneficiaries who receive a reduced benefit have the name of their children’s father stated clearly on the Work and Income file, and still his Government will not allow the collection of child support from those dads?

Hon Steve Maharey: We do not like it; that is why we are changing the law, and I hope the member will support it.

Heather Roy: When will he admit that this is just a rort so that fathers can dodge child support, and why should taxpayers always have to pick up the bill?

Hon STEVE MAHAREY: It is a rort, and I have said time and time again in this Parliament that fathers must front up to their obligations, and we will make sure they do, as much as we can.

Katherine Rich: Can the Minister explain why, on his watch, the proportion of Auckland’s sole-parent beneficiaries aged between 16 and 24 years who will not officially name the father of their children, so that child support can be collected, has risen from approximately one in five beneficiaries to one in three?

Hon STEVE MAHAREY: I cannot explain why the number doubled under the National Government. Under this Government we have cleaned up the records, and that has brought more people into the pool. We have changed the rules—we are doing something about the problem; they did nothing.

New Zealand Flag—Referendum

7. ROD DONALD (Co-Leader—Green) to the Prime Minister: Will she give thorough consideration to holding a referendum at the next general election to give the people of New Zealand the opportunity to decide whether or not they want to change the official New Zealand flag?

Rt Hon HELEN CLARK (Prime Minister): I am aware that a group is pursuing a citizens initiated referendum on the subject. I am not presently convinced that it is possible or desirable to address the issue in the time frame suggested by the member.

Rod Donald: Does she agree with the New Zealand Chef de Mission in Athens, Dave Currie, that “our uniforms identify who we are, but our flag doesn’t”, and is she concerned that it was hard for overseas Olympic watchers to distinguish between the New Zealand and Australian flags behind Sarah Ulmer, and that only the Union Jack was clearly visible behind the Evers-Swindell twins when they were presented with their medals?

Rt Hon HELEN CLARK: The flag, of course, would be only one of three elements at such a ceremony that state which country the athletes represented. The national anthem would be played, and it clearly is a New Zealand national anthem. The athletes would be dressed in a distinctive New Zealand uniform. Then there is also the flag, which, of course, bears marked resemblance to the Australian one, but none the less, with the colour configuration, is distinctively New Zealand.

Rod Donald: What have been the significant societal and constitutional developments in New Zealand since our flag, which incorporates the Union Jack, was adopted in 1902, particularly with regard to our relationship to Great Britain?

Rt Hon HELEN CLARK: In 1902 New Zealand would probably have been correctly described as a compliant, if not somewhat subservient, Dominion. Today we would regard ourselves as proudly independent—at least, this Government would.

Rod Donald: Does the Prime Minister agree that a country’s flag is a potent symbol of its national identity, and would she like to see New Zealand adopt a new flag that is as distinctive and iconic as the Canadian flag introduced there 40 years ago?

Rt Hon HELEN CLARK: The flag is certainly a symbol of identity; whether it is potent is a matter of opinion. I welcome debate about the flag, and, as I said at my press conference on Monday, no doubt the time will come for formal consideration of whether the flag we have represents the contemporary reality of New Zealand. The Union Jack in the corner, of course, relates to our past; it does not particularly relate to the future, and at some point that needs to be addressed.

Roading—Investment

8. RODNEY HIDE (Leader—ACT) to the Minister of Finance: Does he accept that investing $2.4 billion on our roading network will increase GDP by $1 billion a year by 2012, as found by the Allen Consulting Group; if not, why not?

Hon Dr MICHAEL CULLEN (Minister of Finance): I have received no report to this point on the accuracy of the modelling undertaken, so I really cannot comment on that particular aspect. The general proposition that roading will increase GDP is clearly common sense, which is why the Government has announced an $18.7 billion investment over 10 years to improve land transport.

Rodney Hide: Given the common sense of increasing investment in our roading network, will the Minister commit to increasing the investment in roads to the average of what it was in the 1990s as a percentage of GDP; if not, why not?

Hon Dr MICHAEL CULLEN: I do note that between 1993 and 1999 the value of our roads as a proportion of GDP declined by over 19 percent. This has increased by some 9 percent.

Hon Maurice Williamson: When the Minister has familiarised himself with the energy substitution social accounting matrix methodology that has been used by Allen Consulting, which shows benefits all round in terms of GDP, increased tax, reduction of life on our roads, as well as being environmentally friendly, and if he has assured himself that the findings are correct, will he immediately authorise the fast tracking of those projects so that New Zealand can receive the benefits?

Hon Dr MICHAEL CULLEN: Of course, there is an enormous difference between arguing for a general connection and arguing for a specific connection in terms of specific roading projects. I am aware of particular projects that probably do not meet a national interest test in that respect.

Hon Maurice Williamson: I raise a point of order, Mr Speaker.

Mr SPEAKER: I think perhaps the Minister could just add a little bit more.

Hon Maurice Williamson: Maybe the Minister does know that four very detailed specific projects are recommended in the report. I am asking: if he believes in the validity, will he authorise them?

Hon Dr MICHAEL CULLEN: The Minister of Finance does not make decisions about specific roads.

Peter Brown: Does the Minister share the New Zealand First view that it is an absolute disgrace, as identified by the Allen report, that for the past 11 years the total revenue collected on road-related taxes and user-charges has exceeded the spending on roading by a massive 42 percent, and as a consequence, this country has suffered immeasurably?

Hon Dr MICHAEL CULLEN: Briefly, no. To expand, as no doubt the member might invite me, the fact is that the cost of the roading system overall to the economy exceeds just the cost of building roads. That is often missed out in terms of the equation the member refers to.

Jeanette Fitzsimons: Will the Minister be seeking any analysis of the effects of peak oil and resulting fuel crises on the economic projections in the Allen group’s report, and is he concerned that by 2012 those new roads could be largely empty as people turn to more cost-effective alternatives?

Hon Dr MICHAEL CULLEN: Certainly, I would expect to get a report, and no doubt that will include sensitivity analysis around some of the assumptions. But even if we all take to bicycles, we will still need roads to go on.

Deborah Coddington: If his Government is as committed to road safety as it claims, will he give back road users more of what he takes away from them, and invest just $213 million in rural passing lanes, an investment that this report shows will return nearly $900 million in benefits to road users?

Hon Dr MICHAEL CULLEN: In general terms, the priorities are not set by the Minister of Finance. There is a whole process around national land transport strategy and the implementation of that by the Government’s implementation agencies. So it is not for me to comment in that specific sense.

Peter Brown: Is the Minister aware that the report has identified four proposed road infrastructure packages and that it asserts that the Tauranga strategic roading network package will result in the greatest net benefit, ahead of the Auckland package; if so—if he has read that—will he give more consideration to helping the Tauranga community, which contains New Zealand’s No. 1 export port?

Hon Dr MICHAEL CULLEN: On the last point, a great deal of what makes Tauranga New Zealand’s No. 1 export port actually arrives by rail rather than by road, and I certainly have no intention of getting in the middle of a Tauranga-versus-Auckland argument over roading priorities.

Jeanette Fitzsimons: Is the Government commissioning a parallel study to that of the Automobile Association’s lobbying document into whether even more wealth would be generated by completing Auckland’s public transport infrastructure and improving and extending rail infrastructure and services for both passengers and freight?

Hon Dr MICHAEL CULLEN: I am not anticipating another specific report, but, as I have said many times, those are not exclusive alternatives in Auckland. It needs public transport and it needs new roads, as well. Particularly given the limited geographical spread of the rail network within Auckland, a great deal of transport will have to go by non-rail means.

Keith Locke: Can the Minister see more effective ways of spending the $1.5 billion of public money associated with the eastern highway—the severely pruned eastern highway—as announced today by the outgoing Auckland mayor, John Banks?

Hon Dr MICHAEL CULLEN: I am always wise enough to leave those kinds of decisions to the voters.

Tertiary Education—Initiatives

9. Dr ASHRAF CHOUDHARY (Labour) to the Associate Minister of Education (Tertiary Education): What is the Government doing to support major initiatives in the tertiary education sector?

Hon STEVE MAHAREY (Minister responsible for the Tertiary Education Commission): Yesterday at the University of Auckland, the Prime Minister announced up to $10 million for the Starpath student mentoring scheme, and $10 million for a $32 million Institute for Innovation in Biotechnology. These latest initiatives from the Tertiary Education Commission’s successful Partnerships for Excellence programme join a range of other strategic initiatives across the nation’s universities, polytechnics, and industry training organisations that the Tertiary Education Commission has funded over the past 12 months. Applications for the next Partnerships for Excellence round will be called shortly, but I doubt whether the National Party can, or should, apply.

Dr Ashraf Choudhary: Is this indicative of a general approach of targeting funding towards specific initiatives rather than just funding enrolments, and is there broad support for this approach?

Hon STEVE MAHAREY: Yes. We have already targeted industry training funding and Modern Apprenticeships. We have targeted the Performance-based Research Fund. We have targeted research centres, innovation, and e-learning. We have focused on links with business and a range of other quite specific funds. We are now profiling all funders, which will allow us to better target that funding for student tuition. This has received widespread backing throughout the community, including the express support of the very talented Hon. Maurice Williamson, who was, unfortunately, viciously attacked in the House for that support yesterday by Bill English.

Simon Power: Why should taxpayers trust the funding initiatives of the Tertiary Education Commission, when it approved funding of $15.3 million to run a computer course at Christchurch Polytechnic that only 3 percent of students completed; and why should we trust the Minister to sort out this mess, when he has failed to make good on his promise that the Tertiary Education Commission would be accountable for retrieving the money that it paid for these dubious enrolments?

Hon STEVE MAHAREY: If I can just explain to the member, who I think was National’s education spokesperson, that courses such as this are approved by the council of the institution. Luckily, we have the Tertiary Education Commission, which is now beginning to be able to get a hold of this kind of funding—and that is something that simply did not exist under the National Government. Thank goodness it does now.

Hon Brian Donnelly: What is the Associate Minister doing to ensure inexpensive legal mechanisms for students who have been short-changed by tertiary institutions, such as those at Southland Institute of Technology, to gain refunds of costs for programmes that have been misrepresented or inadequately delivered?

Hon STEVE MAHAREY: Following consultation with the entire tertiary sector, the Ombudsman was given the task of providing that kind of complaints mechanism for students. The member will know that in the case of Southland Institute of Technology, the Ombudsman reported that the $21,000 that students paid in fees should be returned to them. I agree with that absolutely. I have met with the Ombudsman. He has given me advice on what steps he thinks should be taken, and I certainly intend to consult the whole sector to ensure we have integrity around his decisions.

Schools—Funding Formula

10. SIMON POWER (National—Rangitikei) to the Minister of Education: Is he satisfied that the Government’s funding formula for schools is providing enough money and flexibility to provide the standard of education expected by parents and caregivers; if so, why?

Hon STEVE MAHAREY (Acting Minister of Education): Yes, this Government continues to be committed to ensuring that schools are resourced adequately. School boards have the flexibility to allocate their staffing and operational funding as they wish, which enables them to focus on the educational priorities of their particular students.

Simon Power: If the current funding arrangements are so satisfactory, why do public schools throughout the country engage in community fund-raising and other money-making ventures in order to finance 3,800 extra teachers?

Hon STEVE MAHAREY: I do not know why they do that. I will quote somebody whom the member will know, who said in answer to the question about whether schools should be fund-raising, that they were “awash with cash, and we do not think throwing more money at these schools is going to solve the problem.” Bill English said that.

Helen Duncan: How does the Government support schools financially?

Hon STEVE MAHAREY: Since 2001, schools have been provided with nearly 2,100 extra full-time teacher equivalents, at an annual cost of $127 million, over and above the number of teachers required for roll growth. In addition, operational funding has been increased by 10 percent per student, in real terms—that is over and above inflation—since 1999, and discretionary funding for which schools are eligible to apply has also increased considerably in recent years. The Government has increased funding of in-kind support to the tune of about $346 million per year, which is equivalent to 34 percent additional operational funding.

Simon Power: If he believes that State funding is sufficient to provide for all educational needs, why do Ministry of Education figures show that almost half a billion dollars of school revenue is garnered from local funds, including from international students’ school fees, and fund-raising efforts?

Hon STEVE MAHAREY: The member knows that fund-raising has always been a part of the school scene. In his own electorate he is enjoying 52 extra teachers above roll growth. There are 42 extra management units in his own electorate. He should be on his knees, grateful that he has a Labour-led Government.

Simon Power: I ask the Minister—[Interruption] Members have had their last warning. [Interruption]

Mr SPEAKER: The member has finally absolutely exhausted my patience. The member will stand, withdraw, and apologise for making a comment that was a deliberate attempt to influence me.

Hon Dr Nick Smith: I withdraw and apologise.

Simon Power: Why does he expect parents to support the use of education funding to pay union members $500 in hush money for signing a new collective agreement, when those very same parents are having to delve into their own pockets in order to ensure schools have enough teachers to begin with?

Hon STEVE MAHAREY: This is not hush money. If it occurs, it will be part of the settlement. Parents want settled schools, which they will get. Once again, that member should be on his knees—grateful that his schools will settle and get on with teaching kids.

Small Business Advisory Group—Reports

11. MARK PECK (Labour—Invercargill) to the Minister for Small Business: What recent reports has he received from the Small Business Advisory Group?

Hon JOHN TAMIHERE (Minister for Small Business): This morning the Small Business Advisory Group released its first annual report. Drawing on the members’ experience as small-business owners and advisers, and information provided by business people at the series of 24 regional small-business days, the advisory group has provided the Government with recommendations that it believes could genuinely enhance small-business growth in New Zealand.

Mark Peck: Does the Minister see this report as an important contribution to small-business development in New Zealand?

Hon JOHN TAMIHERE: Absolutely. This Government is committed to engaging directly with the engine room of this economy. We do not presume that we, or the self-appointed lobbyists, know best. That is why we have engaged in such an open, transparent manner with the sector.

Lindsay Tisch: Is the Minister “up for it” to measure and publish the accumulative costs of compliance with regulations passed by this Government in the last 6 months, as recommended by the Small Business Advisory Group, given his press statement: “I will be proud to take this report to my Cabinet colleagues and to enlist their support for its recommendations”; if not, why not?

Hon JOHN TAMIHERE: I am delighted to have received 19 very good recommendations from the Small Business Advisory Group. It has given me 12 months to report back to it, and there is a wide range of work going on to achieve that.

Peter Brown: Is the Minister aware of any other reports, informal or otherwise, that affect small business that illustrate its concerns about aspects of the Holidays Act, for example, and its downright nervousness of the Employment Relations Amendment Bill; if he is aware of such reports, what does he intend to do about them?

Hon JOHN TAMIHERE: I am not aware of such reports.

Environment Court—Resource Management Act

12. Hon Dr NICK SMITH (National—Nelson) to the Minister for the Environment: How did her Government’s decision to amend the Resource Management Act 1991 last year by removing the Environment Court’s power to grant security for costs help reduce the problem of frivolous and vexatious objectors?

Hon MARIAN HOBBS (Minister for the Environment): The removal of the Environment Court’s ability to award security for costs was designed to eliminate the barrier to worthwhile appeals proceeding to court in the public interest; it was not about frivolous and vexatious objections. We have taken other action to reduce that problem, such as properly resourcing the Environment Court, which was so badly neglected by the National Government.

Hon Dr Nick Smith: Has the Minister read the analysis by the Ministry for the Environment stating that 10 parties out of 26 had not paid the costs awarded by the court—one for $424,000—and, given that advice, does she now accept that her amendment to ban security of cost orders was another of her legislative boo-boos?

Hon MARIAN HOBBS: Not only did I read the paragraph that the member read but I read the third paragraph following that, which noted that there were better alternatives in order to meet both goals than security of costs: the need for community participation, and the need to limit vexatious and frivolous objections.

David Parker: What reports has the Minister seen about outcomes from public interest groups raising environmental concerns?

Hon MARIAN HOBBS: The Taieri Plains environmental protection society was given funding to raise issues at the Environment Court about possible environmental damage. The court upheld the society’s submissions. In spite of that, Katherine Rich wants to abolish the fund so that groups like that cannot raise legitimate environmental concerns. That is more evidence of National’s policy of development at any cost, and of hearing only one argument at a time.

Jeanette Fitzsimons: Is the Minister concerned that, prior to the amendment, applicants were threatening legitimate participants that if they took part in the process at all, they would have to put up $30,000 as security before the case even started, and that public interest groups that could have brought useful information to the process were being scared off?

Hon MARIAN HOBBS: Yes, we did have those concerns, which is why we removed the Environment Court’s ability to award security for costs. As various Environment Court judges have noted, the process for deciding resource consents is better when others can make submissions. But, in spite of that, the National Party wants to cut the public out of decision making.

Gerrard Eckhoff: Is the Minister concerned that the Resource Management Act is being used to extort money from developers and, indeed, even State-owned enterprises; if she is not concerned, why is she not?

Hon MARIAN HOBBS: I would be concerned if I had proof of that.

Gordon Copeland: Would the problem of frivolous and vexatious objections be reduced by the addition of another layer of bureaucracy in the resource management process, such as the expansion of the Environmental Risk Management Authority to create a new environmental protection authority; and has the Minister seen any media reports on how business reacted to that idea when it was proposed by the National Party spokesperson on the environment?

Hon MARIAN HOBBS: No, it would not solve the problem, and, yes, I have seen a report from Simon Carlaw of Business New Zealand in which he said that turning the Environmental Risk Management Authority into an environmental protection agency, as promoted by Nick Smith, is a daft idea.

Hon Dr Nick Smith: How can the Minister claim that the ministry’s advice was in support of the removal of security of costs, when in fact the ministry said: “The awarding of costs is therefore not a deterrent to following good practice during court proceedings.”, and further said: “Security for costs upfront would go some way to prevent failure to pay costs.”; does not that quite explicitly say the Minister got it wrong?

Hon MARIAN HOBBS: The paragraph below that, which I draw to the attention of the Hon Nick Smith, says that the alternative to including the ability to seek security for costs is to leave it—the Environment Court—to use case management to limit vexatious and litigious participants. That could occur with the court’s new case-tracking systems, the new, higher, filing fees and daily hearing fees, together with its ability to award costs post hearing. It is also possible that setting a scale for cost awards would assist to defeat the problem.

Hon Dr Nick Smith: My having noted that the same paper specifically says: “Some Ministers have specifically requested that the proposal for security of costs to be awarded in the Environment Court be put back on the table.”, which Ministers were being referred to, and does the Minister now accept that those Ministers disagree with their dopey decision last year to amend the Resource Management Act in that way?

Hon MARIAN HOBBS: I raise a point of order, Mr Speaker. I object to ad hominem arguments.

Mr SPEAKER: I think that is—[Interruption] If I were to rule out every such comment, I would be ruling out quite a few. I do, however, think the word “dopey” was a silly thing to say in the context of the question, because it did not add to, but subtracted from, the question.

Hon MARIAN HOBBS: The questioner would acknowledge that I am not going to reveal what took place in robust debates inside committees, except to reveal that the arguments prevailed about which was the most effective way to deal with vexatious and frivolous objections.

Preventive Health Care—Health Research

13. JUDY TURNER (United Future) to the Minister of Health: Is she satisfied that the Government’s investment in health research is consistent with its concomitant commitment to preventative health care?

Hon ANNETTE KING (Minister of Health): Generally, yes, but we continue to strive to do better.

Judy Turner: Why is the Government abandoning a full trial of the “polypill”, which has been tipped to have a greater impact on the prevention of disease in the Western World than any other single intervention, and does she agree that when a pill is calculated to prevent up to 88 percent of heart attacks and 80 percent of strokes, the Government’s inaction is totally inconsistent with its apparent commitment to preventing heart disease; if not, why not?

Hon ANNETTE KING: In relation to the health portfolio, Pharmac will fund medicines only once they are approved by Medsafe. At the present moment the “polypill” is not approved by Medsafe, and should such a pill be approved for use in New Zealand, then Pharmac would consider funding it on the same basis as every other medicine. But I need to tell the member that the five components in the proposed “polypill” are already available in their individual forms, fully funded in New Zealand.

Steve Chadwick: Does the Government continue to invest in new medicines?

Hon ANNETTE KING: Yes. Considerable investment is being made in new medicines. We spend more than half a billion dollars a year on subsidised medicines, and that amount is set to grow over the next 3 years. Pharmac this year alone will be adding nine new medicines to the subsidised list, and I am pleased to tell the House that today Pharmac has announced it will be funding a new medicine to treat type 2 diabetes.

Sue Kedgley: Given the dramatic increases in the breast cancer rate over the past 20 years, why is the Government not investing in health research that looks at the underlying causes of cancer—in particular, whether there is a link between breast cancer and the prevalence of oestrogen-mimicking chemicals in our food, our houses, and our environment?

Hon ANNETTE KING: It is not necessary for New Zealand to carry out all research, and we must use the money we have to target the areas that are of the most use to us. A lot of international research is carried out, and we have the benefit of that, as well.

Judy Turner: What specific instructions has the Minister given to the Minister of Research, Science and Technology to ensure that the Health Research Council prioritises research on preventive health therapies, such as the “polypill”, in line with the Government’s $1.7 billion commitment to primary health care?

Hon ANNETTE KING: I do not give instructions to my colleague. I work with my colleague and with the Health Research Council to ensure that the priorities and terms of health research relate to the priorities in the New Zealand Health Strategy.

Judy Turner: Is the Minister aware that the Australian Expert Group in Industry Studies report has found that: “The level of funding available for health research in New Zealand has decreased over the past decade, is now well below international standards, and is in serious danger of falling below a level necessary to sustain a functioning health research system.”; if so, as a Minister in a Government that boasts of a commitment to biotechnology, will she be lobbying the Minister of Research, Science and Technology for the estimated $34.3 million needed to bring health research up to the level of other OECD countries?

Hon ANNETTE KING: Yes, but I need to say that report does not take account of funding that comes through the New Economy Research Fund, the Marsden Fund, various foundations, and the funding that comes from the Ministry of Health itself.

End of Questions for Oral Answer

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