(uncorrected transcript—subject to correction and further editing)

WEDNESDAY, 2 JUNE 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Budget 2010—Tax Package Benefits

1. AMY ADAMS (National—Selwyn) to the Minister of Revenue: What benefits did the Budget 2010 tax package deliver for New Zealanders and the economy?

Hon PETER DUNNE (Minister of Revenue): First and foremost, the Budget tax package helps tilt the economy in favour of productive investment, savings, and exports, and away from consumption, borrowing, and unsustainable Government spending. That is essential to create the jobs, the higher incomes, and the opportunities for Kiwi families to get ahead here in New Zealand. Furthermore, the tax package rewards effort, it will help to attract and retain skilled people in New Zealand, and it makes the tax system considerably fairer.

Amy Adams: How does the Budget tax package make the tax system fairer?

Hon PETER DUNNE: Firstly, at all taxable levels the income tax cuts more than offset the increase in GST. Let me give the House three very quick examples of how the package works. Two-thirds of the income tax cuts go towards reducing the bottom two marginal tax rates: the rate for annual income of up to $14,000 is reduced from 12.5 percent to 10.5 percent, and the rate for income of up to $48,000 is reduced from 21 percent to 17.5 percent. Second, the tax changes mean that 73 percent of New Zealand income earners will now have a top statutory rate of 17.5 percent or less. Third, it is worth noting that a working family with two children will now pay effectively no tax at all until it earns $50,000 a year, and those who earn below that level will actually receive a net payment under Working for Families.

Amy Adams: How have tax changes over the past 15 years made the income tax system more progressive?

Hon PETER DUNNE: That is an interesting point. If we take together all the changes made since 1996, the group that has benefited the most is those earning between $30,000 and $50,000 a year, which is broadly the gap between the current minimum wage and the average wage. People in this income band are now paying between 40 percent and 50 percent less tax than they were in 1996. In fact, people earning just below the average wage of about $48,000, who will now pay tax of 17.5 percent, will pay almost half of what they were paying 2 years ago. By comparison, people earning $100,000 a year will pay 20 percent less than they were in 1996.

Amy Adams: Which groups will bear most of the cost of the Budget 2010 tax changes?

Hon PETER DUNNE: The Budget tax changes are obviously not a lolly scramble; every dollar we provide in income tax cuts has to be found from other revenue. Most of those extra costs will be borne by property owners, large foreign companies with interests in New Zealand, and people who use trusts to reduce their taxable income and to gain access to Working for Families. At the same time, we are also providing the Inland Revenue Department with another $120 million over 4 years

for it to increase tax compliance measures and police the existing rules. That will raise an estimated further $750 million. It is all part of creating a fairer tax system for all New Zealanders.

Stuart Nash: Why does he consider that the tax package benefits New Zealanders fairly and sustainably, considering that the top 5 percent of taxpayers receive 31 percent of the money yet 76 percent of taxpayers earn less than $40,000?

Hon PETER DUNNE: I think I answered that question very clearly earlier on. People who are earning $48,000 or less will now pay a top marginal rate of just 17.5c in the dollar. That is half of what they would have paid 2 years ago. They are the major beneficiaries of this package.

Finance, Minister—Recent Statements

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: Does he agree with all recent statements by his Minister of Finance; if so, why?

Hon JOHN KEY (Prime Minister): I am not aware of all of the Minister’s recent statements. However, I agree with his statement: “It is important to rebalance the economy because of the damage done by the mismanagement of the previous Government, which left behind an economy where the tradable sector had shrunk by 15 percent …”.

Hon Annette King: Dids he agree with the Minister of Finance when he said that the gap between the rich and the poor in New Zealand is about the same after this year’s Budget; if so, was it his intention, after 18 months as Prime Minister, not to honour his commitment to tackle the problem faced by the underclass, as he has described some New Zealanders—the people who he said were his priority when he was in Opposition?

Hon JOHN KEY: I remind the member that the Minister of Finance went on to talk about the real changes the Budget had delivered for narrowing the gap between those who are rich and those who are poor, which included better incentives for people in the tax system, better incentives and greater ability to own homes, better incentives to save, and the 170,000 jobs that were generated in the economy. I think it is refreshing to have in office a Government that wants to narrow the gap between the rich and the poor by making the poor wealthier, as opposed to the last 9 years when the only policy was to make the rich poorer.

Hon Annette King: Did the Minister of Finance make it clear to him that the online Budget calculator, which he claims confirms that virtually all New Zealanders will be better off, fails to tell people that as a result of the same Budget they will face a raft of additional costs, including an increase in their rent of up to $20 a week, interest rate hikes, an increase of at least $5 a week in their power bills, an increase in their doctors bills, an increase in their phone bills, an increase in the price of all their food items, and an increase in their rates—to name just some—and will the public who use this calculator think that he was being straight up with them when they find the costs that they are going to face?

Hon JOHN KEY: There was so much wrong with that question I am not quite sure where to start, but I will take a few points from it. Interest rates were far higher under a Labour Government than they have been in the term that National has been in office. The cost of electricity rose by about 70 or 80 percent in the 9 years that Labour was in office. Rents, on average, increased double under a Labour Government what they are expected to under this Government. If New Zealanders go to www.taxguide.govt.nz they will find that the vast bulk of them are financially better off under a National Government.

Hon Annette King: I raise a point of order, Mr Speaker. I know that you were listening very carefully to my question. You will know that my question related to the calculator and whether the Government had told New Zealanders about the other cost increases. The Prime Minister’s answer was about what a Labour Government did. We wanted to hear his comments on this Government’s policy, not the previous Government’s.

Mr SPEAKER: I understand the member’s concern but I invite her to go back to the question she asked. The member included in her question a number of statements about how she saw costs

might go in the future. Strictly, the Standing Orders do not permit a range of statements like that to be put into a question, but I do not want to prevent members from doing so. But when members do that, they invite the Minister answering the question to dispute those statements, and that is exactly what the Prime Minister did. He disputed that range of statements. I cannot prevent Ministers from doing that. I think that he answered the question in a reasonable way.

Hon Annette King: I raise a point of order, Mr Speaker. You might recall that yesterday I attempted to table in the House a document from the Property Investors Federation setting out the increase in rents that it said would take place following this Budget, but the National members denied that leave. So I was able to show—and I can show—where these facts and figures come from.

Mr SPEAKER: That point of order does not assist the situation. The House is at liberty to permit a member to table a document or not—that is not the Speaker’s decision; it is the decision of the House. Yesterday the House, for whatever reasons, chose not to permit that tabling. But regardless of how much the member believes the statements in a question might be correct, a Minister is at liberty to dispute them. The Minister disputed them and disputed them pretty robustly, and I do not believe that I can stop him from doing that.

Hon Annette King: Did he know that the Minister of Finance was going to raise the issue of asset sales—in particular, the sale of Kiwibank—the day after the Budget; if so, why did he allow the Minister to bring up such a controversial issue, which New Zealanders have rejected for the past seven elections, unless it was part of a process to soften up Kiwis for the next round of asset sales?

Hon JOHN KEY: I remind the member that the Minister of Finance is a Minister of the Crown and not a toddler. I do not force him to ask me what questions he is allowed to answer in public. If he gets asked a question I expect him to answer it.

Hon Annette King: Did the Minister of Finance advise him that the Secretary to the Treasury was going to appear on television last Sunday and would be saying that increasing GST to 15 percent was “a first step,”; and has his Minister briefed him on the work that Treasury is doing on increasing GST even further?

Hon JOHN KEY: In relation to the first question, yes—I was aware that John Whitehead was going on Q+A. In relation to the last question, I am not aware of any work on increasing GST, and that is because it will not be going up further from 15 percent.

Hon Annette King: Mr Speaker—[Interruption]

Mr SPEAKER: I have called the members’ colleague. [Interruption] I say to both front benches that I have called the Hon Annette King.

Hon Annette King: Was Bill English correct when he said that John Key just bounces from one cloud to another; and does that account for the international media reporting his antics in the odd spots of the newspapers, including his comments about being eaten by Tūhoe, his vasectomy, his stand-up routine on The Late Show with David Letterman, and his waterbed policy?

Hon JOHN KEY: Yes, I am sure the Minister of Finance was right. He was also right when he said to me yesterday: “Gosh! Annette King is struggling as much as her leader is.”

Question Time

TE URUROA FLAVELL (Māori Party—Waiariki): He take whakatau, e te Mana Whakawā. He paku pātai ki a koe, kaua mō tēnei rangi tonu engari mō ngā rā kei mua i te aroaro, mō ngā pātai kua tuhia i te reo Māori; me pānui te kaituku pātai i te reo Māori me te reo Pākehā, me waiho te reo Pākehā rānei? [I raise a point of order, Mr Speaker. It is just a small question to you, not for today but for the future, in respect of questions written in Māori: should the person asking the question read out the Māori and the English, or leave out the English?]

Mr SPEAKER: I say to the honourable Te Ururoa Flavell that I regret having to confess that I believe that it is helpful to members to provide both the Māori and the English when the question is

in Māori. I say “regret” because if we were bilingual as a people the member would not have to do that. I believe that it assists members to understand the question when the English translation is provided as well as the Māori. It is not the member’s fault; I accept that many of us are not as bilingual as the honourable member himself is.

Schools—Teaching of History Curriculum

3. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister of Education: He aha ngā pūrongo, mēnā rā kua whiwhi i a ia ki te whakahē i tā te amorangi o te Kura Māori o te Whare Wānanga o Wikitoria, a Peter Adds, i kōrero nei, kei te taumaha te nohotahi o te iwi nātemea, kei te hē te aronga o te hītori e whakaakongia nei i rō kura; ā, hei tāna hoki, kāore te whakatikatika o te marautanga ina tata nei i paku whakatika i te tino raru; ā, he aha te kōrero o aua pūrongo? [What reports, if any, has she received to dispute claims from the head of Victoria University’s school of Māori studies, Peter Adds, that the way New Zealand history is taught in schools is hurting race relations and that recent changes to the curriculum had not fixed the fundamental problem; and what was the content of those reports?]

Mr SPEAKER: I apologise to the member. I did not understand the member’s previous point of order. I did not realise he was asking whether he needed to read both versions, and he does not need to read both versions. I apologise for that. I thought the member was asking whether both versions needed to appear on the question sheet, so I do apologise to the honourable member. It is not necessary to read the question in English. Members will have heard the interpretation.

Hon ANNE TOLLEY (Minister of Education): I have not received or asked for any reports on the comments referred to by the member.

Te Ururoa Flavell: Kia āwhina atu i te reo Pākehā, [To assist the English language,] what implications does she see from the fact that New Zealanders have for generations received perhaps a one-sided view of the country’s history—from the Crown perspective—and are ill-equipped to understand why Māori feel the way they do, especially regarding the capacity of today’s decision makers to shape the long-term history of our nation?

Hon ANNE TOLLEY: I cannot speak for the rights and wrongs of the education system in the past, but I think that it is important that in the New Zealand curriculum of today, through the social sciences learning areas, students explore the unique bicultural nature of New Zealand society that derives from the Treaty of Waitangi. From my travels around the education system, I am satisfied that many schools are looking to give their students meaningful insights into local history, particularly the bicultural nature of our local history.

Te Ururoa Flavell: What efforts have been made to address the findings of two separate surveys—one conducted by the New Zealand history teachers association, and the other by academic Richard Manning—which indicated that Māori content was often sidestepped, and that that had major educational and political implications for Māori and for Aotearoa New Zealand?

Hon ANNE TOLLEY: I am satisfied that the New Zealand curriculum encourages and facilitates the development of knowledge about our bicultural history, including the perspective of Māori. The New Zealand curriculum requires teachers of history to make professional decisions about resources and learning experiences to help students understand the impact today of past events. The curriculum also requires that teachers help students understand that there is a variety of perceptions and that they differ. Students need to know that one-sided views are not the whole story.

State-owned Assets—Government Policy on Sale

4. Hon JIM ANDERTON (Leader—Progressive) to the Prime Minister: Is it Government policy not to sell State-owned assets in the future?

Hon JOHN KEY (Prime Minister): No. Government departments, Crown entities, and Stateowned enterprises regularly buy and sell assets, and that practice will continue. As Trevor Mallard said: “Every State-owned enterprise sells non-core assets, many of them on a weekly basis.”

Hon Jim Anderton: Is it the policy of the Prime Minister and his Government to keep this pledge he made in the Dominion Post on October 22, 2008, 2 weeks before the general election, in answer to a reader’s written question: “I am ruling out selling Kiwibank at any point in the future.”?

Hon JOHN KEY: Our policy is not to sell any assets in this term. What happens in future terms is something we will have to consider as we go into future elections.

Hon Jim Anderton: Is the Prime Minister bound by the pledge he made during the TV3 interview in the leaders’ debate on November 3, 2008, 5 days before the general election, that “National would not sell Kiwibank at any stage, ever. We have ruled it out.”?

Hon JOHN KEY: The Government’s policy is that we will not be selling assets in this term. We will come back in the second term with our policy then.

Hon Jim Anderton: Can the Prime Minister tell the House whether the current policy of the Government is the same as the policy of November 3, 2008—I am sorry, Mr Speaker. That was the question I have just asked.

Hon Members: It’s Alzheimer’s!

Hon Jim Anderton: Well, at least—

Mr SPEAKER: We will not have the member using his open microphone, and members need to be reasonable with their interjections.

Hon Jim Anderton: At least they are my own questions. When the Prime Minister says “We’ll let you know about the sale of State-owned assets if the National Party is elected for a second term.”, does he accept that this is a different position from his repeated pledges before the last election that he would never sell Kiwibank, ever?

Hon JOHN KEY: No, I do not.

Prisoners—Literacy and Numeracy Skills

5. Dr CAM CALDER (National) to the Minister of Corrections: Has she received any progress reports on the Government’s commitment to boost the literacy and numeracy skills of prisoners?

Hon JUDITH COLLINS (Minister of Corrections): It is simply not good enough that up to 90 percent of prisoners cannot read and write well, and 80 percent have difficulty with basic maths. Our Government is committed to improving the educational skills of prisoners. We know that those who find jobs when they released are less likely to reoffend. I am pleased to advise significant progress on this commitment. Over the past financial year 23,000 hours of literacy and numeracy tuition have been provided to prisoners, and that is an impressive increase of 10,000 hours over the same period in the previous year.

Dr Cam Calder: Can she outline what else is being done to improve the educational skills of prisoners?

Hon JUDITH COLLINS: The Department of Corrections has run a pilot project to train its own prison industry instructors to deliver literacy and numeracy instruction to prisoners while they are on the job. The pilot has been extremely successful. Since December 2009, 99 prisoners have been supported in this way. A further 56 prison industry instructors will now be trained to deliver on-thejob instruction over the next 2 years. New contracts are also being negotiated with external providers to further expand numeracy and literacy education in our prisons over the next 3 years. It is such a shame that Labour never did a thing.

Budget 2010—Projections for Wage Growth

6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by his statement to the House yesterday that the Budget projects wages to grow faster than inflation; if so, how does he explain the table on page 160 of Budget documents B.2 and B.3?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The Minister absolutely stands by that statement. The table in question shows Treasury’s projections of pre-tax wage growth and inflation out to 2014. During this period wages are projected to grow by over 14 percent—somewhat higher than inflation. This table does not take personal tax reductions into account. The growth in after-tax wages will be larger in 2010-11 because of the income tax cuts. That is why the same table shows real private consumption expenditure rising by almost 3 percent in that year. In fact, over the 4 years to 2014 Treasury’s projections show household disposable incomes from all sources and after tax increasing by over 25 percent. That is consistent with the projections that show 170,000 net new jobs being created.

Hon David Cunliffe: Given that inflation in the next year is 5.9 percent and wage growth only 2.4 percent, can he confirm that it will take until 2014 for wage growth to keep up with inflation?

Hon STEVEN JOYCE: I do not accept the premise in the member’s question, because he fails to take into account the effect of personal tax reductions on 1 October this year. One cannot just sit there and say that CPI inflation goes up at this rate and wage rises go up at this rate, and ignore the effect of personal tax reductions.

Hon David Cunliffe: I raise a point of order, Mr Speaker. I seek your guidance on whether it is possible for the Minister, instead of answering the question, to simply reject it although it was in the same terms as the primary question set down on notice, which was absolutely—

Mr SPEAKER: I listened very carefully and in my view the Minister answered the question perfectly fairly. He pointed out that there was information that had not been included in the information the member asking the question had put forward, and he is perfectly at liberty to do that.

Hon David Cunliffe: How does he square his assurance to the House yesterday that wages will outstrip inflation with the Minister of State Services’ statement made the same day: “it is pleasing to see that the Government’s expectations of restraint are being heard.”?

Hon STEVEN JOYCE: I think the member will find that the Minister of State Services was referring to public sector wage inflation, which of course has in recent times been considerably higher than private sector wage inflation.

Peseta Sam Lotu-Iiga: Talofa lava, Mr Speaker. How will Budget 2010 improve the incomes of New Zealanders?

Hon STEVEN JOYCE: The sustained lift in real disposable incomes that I mentioned will see the average household about $7,000 a year better off. This comes from a range of sources. Some of it comes from the Budget measures, which mean that taxpayers at all income levels will receive a tax cut larger than the extra GST they will pay. Some of it comes from the cut in the company tax rate, which will allow businesses to invest more and pay greater dividends. But most of it comes from getting the economy growing again, creating those 170,000 jobs, and getting New Zealand back to work.

Hon David Cunliffe: Why should New Zealanders trust the Minister of Finance’s word, when he has now admitted that his tax calculator understated inflation, that he has misled them on wages and prices, and that he has broken his promise not to borrow additional funds for high-income tax cuts?

Hon Rodney Hide: I raise a point of order, Mr Speaker. I listened most carefully to the member’s question. I think that everyone in the country appreciates, Mr Speaker, your requiring Ministers to answer questions properly when they have been put clearly. But there is a quid pro quo, which is that questions should also meet a standard. We have just seen the tactic of a member of Parliament standing up to ask a question and stating what the Minister has admitted, none of which,

I can assure you—my having sat here and not being an interested party—any Minister has admitted at all. I would say, Mr Speaker, that if you are to hold Ministers to account to provide a high standard of answer, you also have to hold members of Parliament to account to provide a high standard of question.

Mr SPEAKER: I do not need assistance on this. The member has raised a perfectly fair point of order—I absolutely accept that. The member is right, in that questions often do not conform with the Standing Orders in the way that perhaps could be expected. But rather than inject the Speaker too much into question time, the view I have taken is that where a member asks a question that is pretty marginal in respect of the Standing Orders, the Minister has license to answer it in the way the Minister sees fit. To my mind, that is the discipline on the person asking the question; questioners may get answers they do not like if they ask that kind of question. I could intervene endlessly and say that, no, that bit of a question is out order, but I would rather not do that. I think it is better to leave it to the Ministers. Ministers know; they see every day that questions being asked are pretty marginal in respect of the Standing Orders. I will not pull up Ministers on the way that they answer such questions.

Hon STEVEN JOYCE: I dimly recall three questions in that question. I would like to point out two things to the member, which I think will address his questions. Firstly, the website obviously factors in the tax changes on 1 October, and does not address forecast wage increases, falling unemployment, or possible consumer price changes. But Treasury expects, as per the table the member originally cited in his primary question, that wage increases over the next 4 years will outstrip price increases, even including the impact of the GST change. The personal tax deductions are on top of that, and the member needs to understand that.

Israel—Gaza Blockade

7. KEITH LOCKE (Green) to the Minister of Foreign Affairs: Will the Government call for the immediate lifting of Israel’s economic blockade of Gaza; if not, why not?

Hon MURRAY McCULLY (Minister of Foreign Affairs): The New Zealand Government has consistently called for humanitarian and other essential supplies to be given free access to Gaza. I reiterated that to the Israeli Ambassador yesterday. We have also made it clear that the substantive solution to the Gaza conflict is for Hamas to guarantee the cessation of attacks on Israel and for Israel to lift the blockade.

Keith Locke: Why will the Minister not go beyond what he has just said about granting more access to essential supplies, and support the call made by both the European Parliament and the European Union in the last couple of days for the immediate—and I stress the word “immediate”— lifting of the economic blockade?

Hon MURRAY McCULLY: It is very clear that the reason for the blockade being in place in the first place is that Israel has concerns about its security. The obvious way forward has always been for Hamas to guarantee the cessation of attacks and for Israel to lift the blockade.

Keith Locke: What security is there for either Israelis or the Palestinian people when Richard Falk, UN special rapporteur for Palestine, describes it as “a massive form of collective punishment” and thus a crime against humanity under Geneva conventions? Does the Minister agree with Mr Falk; if not, in what way does he disagree with that statement?

Hon MURRAY McCULLY: As I said yesterday, the events of the last few days—tragic as they are—underline the unsustainability of the current situation in Gaza. Clearly we need to see an intensification of international efforts to find a solution. It has been apparent for some time that for that solution to be durable it must involve Hamas guaranteeing the security of Israel, and Israel in return lifting the blockade.

Keith Locke: Is the Minister, as he appears to be from his answer, justifying the continued existence of the blockade? Why does he not agree with the president of the European Council, Herman Van Rompuy, who said that the blockade is “unacceptable and counter-productive”?

Hon MURRAY McCULLY: I am not necessarily disagreeing that the blockade is unnecessary and counter-productive. The fact is that for the international community to succeed in its efforts to get the blockade lifted, it will have to address the security issues that brought the blockade into existence in the first place. This issue cries out for further intensification of international efforts to find a solution. Those efforts will simply not succeed without addressing both sides of that equation.

Keith Locke: In the meantime, does he think it is OK to starve a whole population, deny them the necessities of life, and virtually close down their entire economy; if he does not think it is OK to do that to the 1.5 million people of Gaza, why will he not support an immediate end to the economic blockade?

Hon MURRAY McCULLY: I agree absolutely with the member’s assessment of the implications of the blockade, and I share his strong desire to see it removed. However, we have to ask ourselves whether we will achieve that objective by making lofty and meaningless speeches, or whether we should devote ourselves to getting some movement in this area by ensuring that we deal with the root cause. The root cause of this issue is that Israel has put in place a blockade because it has security concerns. The obvious solution has always been to see those security concerns addressed at the same time as the lifting of the blockade.

Keith Locke: On the question of the attack itself, does he agree with the president of the European Parliament, Jerzy Buzek, that the Israeli operation of a couple of days ago was an “unjustified attack” and an “unacceptable breach of international law”; if he does not, in what way does he disagree with those statements?

Hon MURRAY McCULLY: The Government supports the United Nations Security Council’s call for “a prompt, impartial, credible and transparent investigation conforming to international standards.” In supporting such an investigation, I suggest to the member that it is best to wait for that investigation to occur before making its findings available. In other words, if we are going to have the investigation, let us at least wait for the conclusions before we make the findings ourselves.

Keith Locke: Does the Minister not accept that the basic facts of the situation—that there was an illegal attack in international waters by the Israeli troops on a peaceful aid flotilla—are already at hand, and that he should at least criticise that, along with the rest of the world, while rightly supporting a further investigation?

Hon MURRAY McCULLY: The Government was very clear in condemning the violence, and, in particular, condemning the loss of life that has occurred off the shores of Gaza. That member, along with others, has called for a full investigation, but simultaneously announced what the findings of that investigation should be. The Government believes that completing the investigation before declaring a verdict is an approach that might engender greater international respect and credibility.

Hon Chris Carter: Does he stand by the statement he made on 25 February, just prior to his visit to Israel and Palestine, that New Zealand takes a principled and balanced approach to the key issues in the Middle East; if so, did he request permission from the Israeli authorities to visit Gaza and see the situation personally, as part of our balanced approach; if not, why not?

Hon MURRAY McCULLY: Yes, I did make that statement. Yes, I did seek from the Israeli authorities and others the opportunity to go to Gaza, but for reasons that I am happy to explain at greater length, I was not permitted to go.

Keith Locke: I seek leave to table three documents. The first is from European Voice, where the EU spokesperson calls for an immediate end to the blockade.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Keith Locke: The second document is an article by Richard Falk, the UN special rapporteur on Palestine, talking in Countercurrents about the blockade being a massive form of collective punishment.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Keith Locke: The third document is a press release from the European Parliament of 1 June, talking about forcing Israel to lift the siege on the people of Gaza immediately.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Ministers—Conflicts of Interest and Blind Trusts

8. Hon PETE HODGSON (Labour—Dunedin North) to the Prime Minister: Does he believe that blind trusts are a legitimate way for Ministers to manage real or perceived conflicts of interest because they ensure that a Minister cannot know what assets they own at any point in time?

Hon JOHN KEY (Prime Minister): The use of blind trusts as a means of managing any conflict between a Minister’s portfolio responsibilities and personal interests is one of the options available to Ministers, as set out in the Cabinet Manual. Although the Minister may know what investments go into a blind trust when it is first established, after that point the trustees have full authority to deal with those investments as they see fit, without reference to the trust’s beneficiaries.

Hon Pete Hodgson: Can he confirm that Whitechapel Ltd, the legal owner of Aldgate Trust’s assets, contains only three assets, being shares in Dairy Investment Fund, Highwater Vineyard Ltd, and Earl of Auckland Ltd, and can he further confirm that he once owned shares in those same three companies?

Hon JOHN KEY: I raise a point of order, Mr Speaker. I have no responsibility, ministerial or otherwise, for Whitechapel Ltd.

Mr SPEAKER: There will be no further interjections. The Prime Minister is absolutely right. He does not have any responsibility as Prime Minister for that company.

Hon Pete Hodgson: When he advised the House yesterday that Whitechapel may or may not act as a trustee for other trusts, did he take into account in his answer that in its 18 months of life so far it has acted as a trustee only for assets he used to own?

Hon JOHN KEY: I have no responsibility for Whitechapel in a ministerial or personal context.

Hon Pete Hodgson: I raise a point of order, Mr Speaker. It seemed perfectly fine for the Prime Minister to speak at length about Whitechapel Trust yesterday, but he is not at all able to give us any information today. That strikes me as not consistent.

Mr SPEAKER: I think we have to accept the Prime Minister’s word. On the face of it, it seemed perfectly proper. The Prime Minister declared that he has no interest as Prime Minister, or even a personal interest, in Whitechapel Trust, and that is the end of that matter.

Hon Trevor Mallard: What changes have there been with his relationship with Whitechapel Trust since yesterday?

Hon JOHN KEY: I raise a point of order, Mr Speaker. I have no responsibility, ministerial or otherwise, for Whitechapel Trust.

Hon Trevor Mallard: Yesterday the Prime Minister indicated that he was prepared to answer questions on this. If he was responsible yesterday and was prepared to answer questions, and he has no responsibility today, something had to change. That—

Mr SPEAKER: I have heard enough. I say to the member nice try, but—[Interruption] I am on my feet, and the deputy Leader of the Opposition knows that. The fact that the Prime Minister

might have referred to that matter in an answer yesterday is irrelevant to today’s question. Had the Prime Minister answered about Whitechapel Trust today, I would have ruled that it was valid for him to be questioned on it, but he has not. In answer to today’s questions, the Prime Minister has pointed out that he has no responsibility as Prime Minister, or any interests in it. That is where the matter must lie today.

Hon Pete Hodgson: Can he confirm that Aldgate Trust, a blind trust listed in his register of pecuniary interests, is legally owned by Whitechapel Ltd, and can he accept that the legal owner of his blind trust can own other people’s assets in theory but does not own other people’s assets in practice, so why does he persist with the fiction that he could theoretically be wrapped in a cloak of anonymity with many others, when it is rather plain that he is in Whitechapel all by himself?

Hon JOHN KEY: I raise a point of order, Mr Speaker. I have no responsibility, ministerial or otherwise, for Aldgate Trust, either.

Hon Rodney Hide: This goes back to my earlier point about a series of questions that to me are clearly out of order. The Prime Minister has no responsibility for the issues that the member is trying to ask about. You are allowing questions that are out of order to be answered; therefore, an allegation is being put to the House. I do not think those questions can be allowed under the Standing Orders.

Hon Trevor Mallard: The Cabinet Manual is very clear; the Prime Minister is the person responsible for the implementation of that manual for himself and for all other Ministers. It is his area of responsibility and if there is a conflict or even a perceived conflict, he has a responsibility to answer for that in this House.

Mr SPEAKER: Let me come back to the point raised by the Hon Rodney Hide. The dilemma I have as Speaker is that it is best for Ministers to determine whether they have any ministerial responsibility. If the question included an outlandish allegation, then the Speaker would rule it out, but I think it is better for Ministers to tell the House where they have no responsibility, rather than the Speaker intervene too much. On this occasion, the Prime Minister made it very clear that he has no responsibility for either Whitechapel Trust or Aldgate Trust. As far as the House is concerned, that is the end of the matter. The Prime Minister’s word must be taken on that. I think that is better than the Speaker trying to make such judgements, unless the question contained an outlandish assertion.

Hon Pete Hodgson: I seek leave to table today’s lists of assets held by Whitechapel Ltd, and to table the movement of those assets, each of them, from—

Mr SPEAKER: The member is not making a speech; he is seeking leave to table some documents. I just want to know where the documents have come from.

Hon Pete Hodgson: The first document comes from the Companies Office today. The second document derived from the Companies Office over several months.

Mr SPEAKER: Leave is sought to table those documents. Is there any objection? There is no objection. Documents, by leave, laid on the Table of the House.

Hon JOHN KEY: I seek leave to table legal advice provided on 28 May 2010 from Taylor Grant Tesiram, which makes it quite clear that Whitechapel may act as a trustee for a number of trusts. [Interruption]

Mr SPEAKER: I am on my feet. There will be silence. I say to the Hon Trevor Mallard that he provoked that unruliness by an absolutely unnecessary interjection. Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

John Boscawen: Have any Ministers with trusts declared a conflict of interest at Cabinet discussions on the emissions trading scheme, which will pay out $1.1 billion to foresters in the coming year, and would he expect Ministers who have forestry interests to do so?

Hon JOHN KEY: It has been a longstanding practice of this Government and previous Governments not to declare conflicts of interest discussed around the Cabinet table or that are registered by Ministers, and that is a policy I intend to continue with.

John Boscawen: How many Ministers does he believe have forest interests in trusts that will benefit from that $1.1 billion in credits paid for by all New Zealand households through increases in their electricity bills?

Hon JOHN KEY: I simply cannot answer the member’s question about how many Ministers have trusts that might include forestry assets. If he wants to put that question down in writing to me, I can refer it to the Cabinet Office.

John Boscawen: I seek leave to table a draft letter from Contact Energy to its customers advising of an increase in electricity prices on account of the emissions trading scheme from 1 July.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Drug-driving—Reports

9. MICHAEL WOODHOUSE (National) to the Minister of Transport: What reports has he received updating him on the early results of the anti - drugged driving legislation passed last year?

Hon STEVEN JOYCE (Minister of Transport): I received preliminary figures showing that the recently passed, anti - drug-driving law is working well and as intended. The police have carried out 182 physical impairment tests and have collected a further 17 blood samples from hospitalised drivers who were unable to undergo a physical impairment test. Of the 169 blood samples analysed so far, the vast majority—153—have had drugs or alcohol detected, and the remaining 16 have detected nothing.

Michael Woodhouse: How many drivers have been charged with drug-driving in the last 7 months?

Hon STEVEN JOYCE: So far 111 drivers have been charged with drug-driving. This has resulted in 47 convictions, with 54 cases still waiting to be heard. The fact that the majority of drivers who failed the physical impairment test have drugs in their blood stream shows the testing regime is working as it was intended. Combating drug-driving is a high priority for the Government and an important part of our road safety effort.

Health Services—Home Support

10. Hon RUTH DYSON (Labour—Port Hills) to the Minister of Health: Does he stand by his statement “No one will be left unsafe or unable to manage on their own as a result of the changes”?

Hon TONY RYALL (Minister of Health): Yes, that is what I have been advised by district health boards in relation to home support. District health boards are spending more on home support this year than they did last year, and they will spend more again next year. Around 75,000 people receive home support at some time each year, and around 15,000 people come on, and 15,000 people go off, home support each year. I ask any member with concerns about any person being left vulnerable to let me know about that.

Hon Ruth Dyson: Can he guarantee that people with mental illness in the Wellington region will be safe when Capital and Coast District Health Board, a board that is already sending staff home to save money, reports in its board minutes that the only option to make savings in mental health is to cut the number of staff?

Hon TONY RYALL: I am not aware of that report in the board’s papers. What I am aware of is that Capital and Coast District Health Board is getting an extra $24 million this year, and that we will be spending an extra $174 million on mental health in the next 4 years.

Hon Ruth Dyson: Can he guarantee—[Interruption]

Mr SPEAKER: I ask members to show some courtesy to the Hon Ruth Dyson.

Hon Ruth Dyson: Can he guarantee that people with mental illness in Golden Bay will be safe when, according to the Nelson Evening Mail, the Nelson Marlborough District Health Board has cut $1.5 million from mental health services in its district, and Te Whare Mahana, the only mental health service in Golden Bay, has had 30 percent of its funding cut?

Hon TONY RYALL: I am aware of the Golden Bay situation, which apparently has 60 clients and about 30 staff working on a part-time or a full-time basis. In the Nelson Marlborough District Health Board area, I can advise the member that that board has received an increase in funding for next year, totalling a very significant $10 million.

Dr Paul Hutchison: What reports has he received on his recent statements?

Hon TONY RYALL: I have seen reports that members of the Opposition have criticised aspects of the way that district health boards are managing home support. That includes a criticism that some recipients’ needs have been assessed by telephone. In fact, this system of assessment was trialled in 2004, approved in 2007, and funded in 2008 by the previous Labour Government. I am advised that the process was started under the specific oversight of the then Associate Minister of Health, one Ruth Dyson. Further, in terms of ongoing reassessment, at the same time that the previous Government brought in telephone assessments, it changed or stopped home support for hundreds of people, including around 300 in Wanganui and hundreds more in Otago-Southland.

Hon Ruth Dyson: Can he guarantee that patients in Nelson Hospital will be safe, given reports in the Nelson Evening Mail that nurses at the hospital told Golden Bay resident Victoria Davis that they were too busy to give her mother the care that she needed in hospital and suggested that she hire a private nurse?

Hon TONY RYALL: In my view, that would be unacceptable behaviour. The district health board did not know that a private nurse was being paid. It would not approve of that, and it is not aware of that happening before.

Hon Ruth Dyson: Can he guarantee that people in Wanganui will be safe, given the statement today by his former colleague Mayor Michael Laws—

Hon Trevor Mallard: Friend and colleague.

Hon Ruth Dyson: —friend and colleague—that his requirements of Whanganui District Health Board “represent the gravest danger to health services in the region, and a threat to Wanganui’s quality of life”?

Hon TONY RYALL: Yes, I have seen those reports, which come 6 months before the local body elections.

Hon Ruth Dyson: I seek leave to table Mayor Michael Laws’ statement of 1.54 p.m. today, which states: “There will be job cuts and there will be service cuts”—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Leaky Homes—Progress on Proposed Package

11. NIKKI KAYE (National—Auckland Central) to the Minister for Building and

Construction: What progress has been made on the Government’s leaky homes package?

Hon MAURICE WILLIAMSON (Minister for Building and Construction): There is yet more good news. Yesterday I—[Interruption] Members need to hear this. Yesterday I was formally advised by Local Government New Zealand that it was “delighted to confirm” that all eight councils of the most directly affected communities had agreed to support the Government’s leaky homes package. Collectively, those councils represent about 90 percent of current active leaky home claims, which Local Government New Zealand has described as “a resounding

endorsement of the Government’s proposal”. A further 13 local councils have also agreed to support it, bringing the number now to 21. That means that we have received enough critical mass from councils to proceed with the package, and during the remainder of this year we will be working on developing details for the package to be implemented at the beginning of the new year.

Nikki Kaye: What feedback has he received from homeowners on the proposed leaky home package?

Hon MAURICE WILLIAMSON: I have received a number of emails regarding the proposed leaky homes package. One affected homeowner said: “At long last, someone has at least done something to assist in relieving the cost and stress of having a leaky home.” I have also seen a letter to the editor in the New Zealand Herald from an affected homeowner, who said that he had been charged in excess of $250,000 in legal fees for litigation, which recovered only less than 30 percent of the cost of his house. That person said that he would gladly have settled for 50 percent and no legal fees. I can only but paraphrase the old Tremeloes song: under National, even the bad times are good.

Phil Twyford: Mr Speaker—[Interruption]

Mr SPEAKER: I apologise to the honourable member.

Phil Twyford: What progress has been made with the banking sector in order to reconcile the Government’s guarantee in his leaky homes rescue package with the banks’ requirement that loans be made on fully commercial terms?

Hon MAURICE WILLIAMSON: There is good news on that front. We have had the chief executives of the banks come in. They have engaged in the process. They have committed to working with the Government. The details of the arrangements between the Government and the banks will be worked out over the next few months and will be in place by the time that the first of the schemes comes into action.

Hon Rodney Hide: I raise a point of order, Mr Speaker. That was so good, I seek leave for Phil Twyford to ask another patsy question of the Government.

Mr SPEAKER: I am not sure whether leave can be sought on behalf of another member. The member himself is at liberty to seek leave to ask a further supplementary question, should he wish.

Phil Twyford: I seek leave to ask an additional question of the Government.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is no objection.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise to the member, but he probably has not realised that we have some special guests in the gallery, and I think it is traditional that we greet them. Are you going to do that?

Hon Maurice Williamson: We have special guests in the gallery, and I was delighted to have entertained them in my office during the lunch break. These are the ladies who are the contestants in the Miss Universe contest here in New Zealand. I am delighted that they are here, and I want to tell the House that New Zealand’s only Miss Universe came from Pakuranga—Miss Lorraine Downes from Pakuranga College.

Hon Darren Hughes: Can I just assure—[Interruption]

Mr SPEAKER: Members may have their own views about why the member wants to speak to the point of order, but he is entitled to do so.

Hon Darren Hughes: I just wanted to assure the guests in the gallery that Labour, too, believes in world peace and will be joining their crusade in that particular regard.

Mr SPEAKER: I call the Hon Gerry Brownlee—[Interruption] I apologise to the honourable member. There will be silence for the point of order.

Hon Gerry Brownlee: I feel it is important that I point out that the last contribution to the point of order was made by Parliament’s most eligible bachelor.

Mr SPEAKER: I thank honourable members for their interventions, and I thank our guests for visiting, but Phil Twyford has been granted permission to ask a supplementary question.

Phil Twyford: What is the projected cost of the Government guarantee, and does it include bailing out homeowners who cannot service their loans?

Hon MAURICE WILLIAMSON: The total cost of the entire package, assuming 70 percent of the known leaky home owners take the package up, including the 25 percent commitment and what we think is the realistic amount for the Government to guarantee, comes to just over $1 billion over a 5-year period.

Education, Minister—Statements

12. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: Does she stand by all her statements on education?

Hon ANNE TOLLEY (Minister of Education): Yes, including the statement that Budget 2010 delivers a substantial boost to education in a very difficult economic environment, with an additional investment of $1.4 billion over the next 4 years into early childhood education and schooling.

Sue Moroney: Talofa lava. Does she stand by her statement to the Education and Science Committee this morning that she did not receive advice indicating the likely extra dollar cost to parents of her cuts to funding for high-quality early childhood education centres?

Hon ANNE TOLLEY: As I said to the member this morning, it is very difficult for the Government to anticipate the changes and the increases in fees that individual businesses might make. That is the difficulty. The early childhood centres are all individual businesses and they have a number of choices to make.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although the general area was the fees that parents pay, it was a very specific question about whether the Minister stood by the advice she gave to the select committee this morning that she did not receive advice on the dollar amount. I cannot tell from that answer whether she stands by that advice.

Mr SPEAKER: I accept that there was no political statement or anything like that in the supplementary question. I invite Sue Moroney to repeat her question so that everyone can hear it and be absolutely clear as to what was asked.

Sue Moroney: Does she stand by her statement to the Education and Science Committee this morning that she did not receive advice indicating the likely extra dollar cost to parents of her cuts to funding for high-quality early childhood education centres?

Hon ANNE TOLLEY: As I said to the member this morning, I received advice on the changes to subsidies that the ministry would be paying to early childhood centres, and on a number of choices that the centres could individually make, which may include increasing fees to parents. But the actual amounts of the fees that those centres charge parents is an individual decision that they make. Therefore, the Government has no idea what their decisions may be.

Hon Trevor Mallard: Did the papers she received show any range of possible fee increases to parents?

Hon ANNE TOLLEY: I do not have the papers in front of me but they may well show some increases anticipated if those centres did not make other decisions such as changing the profile of their staffing, changing their hours, and making—[Interruption] Those centres can make a range of choices, but they are individual businesses and they are their decisions to make.

Allan Peachey: Does the Minister stand by her statement that the Government will invest $14.7 million over 4 years to align staffing in area schools for year 7 and year 8 students?

Hon ANNE TOLLEY: Yes, I stand by that statement, as per the primary question. Schools are required to provide classroom release time in line with their collective agreements, and area schools have struggled to meet these requirements for quite some time. This Government supports front-line services, and we have made this change to funding to allow those schools to meet their commitments.

Sue Moroney: Does she accept the word of the Māngere Living and Learning Family Centre that its fees will increase by $20 to $25 per child per week; if so, what effect does she believe that increase will have on the Māngere families referred to in that letter, who have up to four children each in that centre?

Hon ANNE TOLLEY: I have no reason to doubt the costings of the centre in Māngere, but I say again that this Government is facing extremely difficult economic circumstances. The amount spent on early childhood education has almost trebled over the last 5 years without a commensurate increase in participation. These are individual businesses and they can make the decisions about how to implement these changes in discussions with parents.

Sue Moroney: What is the funding cut per 40-hour week for a child for whom the subsidy is cut by $1.51 per hour?

Hon ANNE TOLLEY: Given that the primary question was very broad, I am happy to answer that question if that member would care to put it in writing. [Interruption]

Mr SPEAKER: That is a perfectly fair answer.

Hon Trevor Mallard: Is the Minister seriously telling the House that she cannot multiply $1.51 by 40?

Hon ANNE TOLLEY: I am happy to answer that question in writing if the member puts it in writing.

Hon Trevor Mallard: How can it be fair for a Māngere family to have their childcare fees go up by $100 a week when her salary went up by the same amount and caused that cost?

Hon ANNE TOLLEY: I say at the beginning that I have no responsibility for the decisions that that centre makes. However, I suggest that the parents of children at that centre talk to the centre about what they want. This is a service that is provided to parents. That business can make a number of choices. Staff turnover is 20 percent to 25 percent. The centre does not have to employ 100 percent teachers, it can change staff hours, and it can change the types of services that the centre provides. What is more, it has almost 9 months in which to make those changes.

ENDS

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