(uncorrected transcript—subject to correction and further editing)

WEDNESDAY, 28 JULY 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Income Gap—Parity with Australia

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he agree with his Minister of Economic Development’s statement yesterday that the current weekly income gap between New Zealand and Australian full-time workers “is certainly a lot less than it was when Labour was in office”?

Hon JOHN KEY (Prime Minister): Yes, and I thank the member for asking. I am advised that the gap between gross average weekly earnings in Australia and New Zealand, adjusted for purchasing power parity, is currently $160.25. That is certainly a lot less than it was in 2005, when it was $187.60.

Hon Phil Goff: Why are he and his Minister for Economic Development spreading that misinformation when, since the election, the Australian Bureau of Statistics and Statistics New Zealand show that the gap between average weekly earnings in Australia and New Zealand has grown by more than $50 a week in Australia’s favour?

Hon JOHN KEY: Because it is not a straightforward matter, and one can use a number of data series, depending on which one someone wants to use. But if I refer to the data series that I am using, which the most comparable one between Australia and New Zealand’s gross average weekly earnings, I might add that not only is the wage gap smaller now than it was in 2003 but it is smaller than it was in 2004, 2005, 2006, and 2007. Thank goodness that we have a Government with an economic plan to keep closing that gap.

Hon Phil Goff: Point of order.

Mr SPEAKER: Before I call the honourable member, I ask for the noise to be a little more reasonable on both sides. While the Prime Minister was answering the question, I was struggling to hear the answer. Since the question has been asked, I am sure that the answer is important. Likewise, the members on the Government side need to be a little more reasonable, too.

Hon Phil Goff: I seek leave of the House to table a compilation of figures from the Australian Bureau of Statistics and Statistics New Zealand, showing that the wage gap for average weekly earnings has blown out by more than $50 a week.

Hon Gerry Brownlee: A compilation—what’s that?

Hon Phil Goff: To clarify that for the Minister, I tell him this was prepared by the New Zealand Parliamentary Library.

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.

Hon Phil Goff: If the Prime Minister is so confident in his own figures, why has he moved from saying before the election that the fundamental purpose of his Government would be to close the wage gap to more recently describing that goal as simply aspirational?

Hon JOHN KEY: They are one and the same thing. Now that the member has asked me that question, I will run through one or two things that form part of the economic plan that will close the gap with Australia.

Hon Phil Goff: I raise a point of order, Mr Speaker.

Hon JOHN KEY: Resource Management Act reforms, tax cuts—

Mr SPEAKER: There is a point of order.

Hon Phil Goff: The Prime Minister has clearly signalled that he is not going to answer the question but rather will go off on his own tangent. I ask you to bring him back to answering the question.

Mr SPEAKER: The House is a bit excited over this issue, and I can understand that, but members must obey the Standing Orders. I think, in fairness, that the question did not really invite the Prime Minister to go through the list of policies that he believes will close the gap. I invite the honourable Leader of the Opposition, who has another supplementary question, to ask it.

Hon Phil Goff: I raise a point of order, Mr Speaker. I am still waiting to hear the answer to the last question, which you said the Prime Minister had not answered.

Mr SPEAKER: I thought the Prime Minister answered it, but then went on to give further information. I cannot ask him to answer it in exactly the way that the Leader of the Opposition may like it to be answered. I think, having stopped the Prime Minister from giving further information, a further question is now required.

Hon Phil Goff: What does the Prime Minister say to his predecessor and former National leader Don Brash, who said on The Nation last weekend that New Zealand would not catch up with Australia on the National Government’s “present track”, and what would he say to Alan Bollard, the Governor of the Reserve Bank, who said National’s posturing in this way is unrealistic?

Hon JOHN KEY: I would say National has an economic plan. It involves cutting taxes, building more infrastructure, lifting skills, reforming the Resource Management Act, allocating more money for science and innovation, expanding our free-trade policy, getting on top of the size of the Government, focusing on front-line services, looking at labour-market reform, and having an absolutely brilliant Minister of Finance to guide us through it. All of that will help us to catch up with Australia.

Hon Phil Goff: Why would average New Zealand workers believe that they are going to be better off, when the statistics show clearly that on average weekly earnings the gap with Australia has blown out by $50 week; when from 1 October they will be paying 50 percent more on their consumption tax because he has pushed up GST, contrary to his promise; and when workers on the average wage and below will still be paying more income tax than their Australian equivalents?

Hon JOHN KEY: I say exactly the same thing. If the Labour Party wants to reverse the $4 billion worth of personal tax cuts that will come in and help New Zealanders on 1 October, it should go ahead and campaign on that.

Hon Phil Goff: I raise a point of order, Mr Speaker. I invite you to examine the Prime Minister’s answer and whether he made any attempt to answer that question. [Interruption]

Mr SPEAKER: There will not be any comments while the Speaker is on his feet. The honourable Leader of the Opposition should go back over the question he asked. Certainly he asked a question, but then he added a number of statements, one of which the Prime Minister picked up on. One of his statements related to people not being better off because of the tax changes. The Prime Minister picked up on that part of the question and answered it, which he is entitled to do.

Hon Phil Goff: How does he account for the fact that not only since November 2008 has the wage gap for those on average earnings increased by more than $50 a week, but the same statistics

from the Australian Bureau of Statistics and Statistics New Zealand show that for the last quarter the rise in Australian wages was five times that of New Zealand workers?

Hon JOHN KEY: As I said earlier, that is one data series, and to see whether it is right we would have to go and look at it. But on the data series that I am looking at, the wage gap has narrowed, not only compared with the gap in 2003 but compared with the gaps of 2004, 2005, 2006, and 2007. It took 9 years for Labour to make a complete and utter mess of the economy; it might take a bit longer than that for us to sort it out.

Hon Sir Roger Douglas: Is the Prime Minister concerned that New Zealand’s labour productivity growth of 3 percent between 1992 and 2000, which exceeded Australia’s, then fell under the period of the Labour-led Government to a mere 0.9 percent, well below Australia’s; if so, is it not the lesson we should learn from this that if we destroy incentives by high taxes, poorly designed expenditure policies, excessive regulation, and ever-larger Government spending, then we undermine the very basis of higher incomes for working New Zealanders?

Hon JOHN KEY: I think the member makes a very good point that if we want to have higher wages in New Zealand, then fundamentally we have to have greater levels of productivity. That is one of the reasons why the Government is very focused on moving New Zealand into higher levels of income production, so that we can earn more. I might also add that after 9 years of a National Government the gap in wages between New Zealand and Australia was $117 a week, and by 2005 it was $187 a week, which just shows us how much damage the previous Government did when it was in office for 9 years, and what poor economic managers its members were.

Hon Phil Goff: Why does the Prime Minister not simply come clean and admit to New Zealanders that far from closing the wage gap with Australia, he has actually made it worse?

Hon JOHN KEY: Firstly, I have not. Secondly, at least I understand what I am doing. That member does not know whether he is raising GST, lowering GST, or taking GST off everything from healthy food to hamburgers. That member has not come up with one policy in the entire time that he has been the Leader of the Opposition.

Hon Sir Roger Douglas: Does the Prime Minister—

Mr SPEAKER: I ask both front benches, please, to cease making that noise.

Hon Sir Roger Douglas: I am happy to stand here, Mr Speaker.

Mr SPEAKER: But I am not, and the House will come to a little order.

Hon Sir Roger Douglas: Does the Prime Minister agree that in order to lift productivity and increase New Zealand incomes, we need to reverse many of the policy decisions taken by the previous Government, such as free student loans and the purchase of KiwiRail; and does he agree that it would be worth taking the recommendation of the next report of the 2025 Taskforce seriously, if we really want to make some progress in lifting New Zealand incomes?

Hon JOHN KEY: In relation to certain parts of that question, no; in relation to the latter part of the question, yes, we will be taking it seriously. But one of the reasons why the Government is investing billions of dollars into KiwiRail is that despite the previous Government’s paying $1 billion for it, we could not give it away, let alone sell it.

Hon Phil Goff: I raise a point of order, Mr Speaker. I ask you whether the Prime Minister, when quoting statistics in his reply to my question, was quoting from an official document and, if so, whether he can table those figures.

Mr SPEAKER: The Prime Minister appears to be happy to table the document, so I take it that the Prime Minister will do that. I would appreciate that.

Overseas Investment Rules—Sale of Land

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does he agree with the Prime Minister’s concerns, in relation to foreign ownership of New Zealand land, that “there is so much wealth out there that they could literally buy New Zealand’s productive base”; if so, will he be tightening current foreign ownership rules around the sale of land?

Hon BILL ENGLISH (Minister of Finance): Yes, I do agree with the Prime Minister. New Zealand is a small country with a small asset base compared with any number of other countries or even very large overseas investors. In respect of the current rules about the sale of land, there is a significant number of tests in the Act itself. The Overseas Investment Office tests incoming investment against about 20 factors in relation to sensitive land—and that was a piece of legislation, I think, that was supported by the Green Party and passed by the previous Government. In respect of our review, members will just have to wait and see.

Dr Russel Norman: Does he see any contradiction between the Prime Minister’s concerns about a foreign buy-up of New Zealand land and his meeting earlier this year with the lawyer for the Chinese company trying to buy the Crafar farms—a meeting where the Minister was seeking advice from the lawyer on changing our foreign investment rules?

Hon BILL ENGLISH: No, and the member has tried many times to make a conspiracy out of that particular discussion. The Government has been quite open about the fact that it was looking at whether there were ways of speeding up and reducing the cost of the approval process. We have made some gains in that respect, but that was in the context of a review where we quite openly said we want to ensure that this is a process that can work for investors at the same time as addressing the valid concerns New Zealanders have about foreign investment.

Dr Russel Norman: In the light of the Minister’s openness on this issue, will he consider widening the list of advisers on the review of the Overseas Investment Act beyond the technical reference group given that this group is stacked with lawyers working on behalf of firms such as China’s Natural Dairy, which is trying to buy the Crafar farms?

Hon BILL ENGLISH: The problem with the member’s position is that he objects to the Government talking to anyone who actually uses the Act. It would be ridiculous to review the Act without talking to the people who use it. That involves lawyers, investors, and, I might also point out, a large number of New Zealanders who sell their assets to foreign owners and do so voluntarily. We have consulted a whole range of people who use the Act.

Dr Russel Norman: Can he provide us with the names of people he has consulted with who wish to strengthen the Overseas Investment Regulations rather than weaken them?

Hon BILL ENGLISH: I have spoken with a lot of people who want to strengthen the Act—so many that I could not give the member a list of names.

Dr Russel Norman: Does he agree that if we sign trade deals with countries such as China to get access for our dairy products into the Chinese market and then sell all our dairy farms to Chinese interests we are mugs?

Hon BILL ENGLISH: That is hypothetical. As far as I know, New Zealand has not sold all of its dairy farms to the Chinese Government.

Economy—Reports

3. TODD McCLAY (National—Rotorua) to the Minister of Finance: What reports has he received showing progress in turning around the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): I have received a number of reports. It is important to remember that in 2008 the Government inherited an economy that was already in recession from early 2008, before the rest of the world, then had a further deepening of that recession because of the global financial crisis. In the 3 years to 2008, per capita incomes in New Zealand dropped by 0.5 percent per year. By comparison, other economies similar to ours—such as the Australian and US economies—saw per capita incomes rise. We have a very substantial turnround job to do to lift incomes in New Zealand and to rebalance this economy towards exporting and earning rather than spending, consumption, and excessive Government spending.

Todd McClay: How has the economy performed over the past year, and how is this reflected in per capita income?

Hon BILL ENGLISH: We would not expect a rapid turn-round after so much damage was done in the previous decade of economic management. Statistics New Zealand states that annual GDP growth has now reached 1.9 percent; per capita, GDP increased 0.6 percent in the latest March quarter, compared with a year earlier. That is a 0.6 percent increase, compared with the 0.5 percent decrease that we saw for 3 years in a row from 2005 to 2008. It is also worth pointing out that average wages in New Zealand were distorted through the latter period of the Labour Government by very substantial increases in public sector wages. Those kinds of big annual increases are clearly unsustainable. We will now have to lift incomes with real increases in wealth through our export sector, not through pumping up Government spending.

Hon David Cunliffe: Which of his reports suggests that he supports the Prime Minister’s expectation that New Zealand would grow aggressively out of the recession, or does he now think that that prediction was wrong, given that New Zealanders’ incomes are falling further behind Australia’s?

Hon BILL ENGLISH: There is a rather different situation in the two countries because of the mismanagement of the previous Government. New Zealand had a recession and Australia did not, and we are now trying to repair the significant damage done by a recession and a fall in per capita incomes engineered by the previous Labour Government. As the Prime Minister said, I suspect that that will take some time.

Hon David Cunliffe: Does he agree with Business Week that the likely increase in the official cash rate tomorrow results in part from his policies to raise GST, which will flow through to price and wage expectations?

Hon BILL ENGLISH: No, I do not, because the Governor of the Reserve Bank has been quite explicit that the Reserve Bank has the power to look through one-off pressures on inflation, like the increase in GST. Of course, New Zealanders will be better off, because the reduction in their income tax rates from 1 October is significantly larger than the increase in GST.

Todd McClay: How will the Government’s tax package on 1 October further improve the takehome income of New Zealanders?

Hon BILL ENGLISH: The tax package will leave someone on the average wage about $15 a week better off after taking account of the increase in GST, and an average family will be about $25 a week better off after taking account of GST. Under the changes on 1 October, 73 percent of all New Zealand earners will face a top statutory tax rate of 17.5 percent—that is, everyone who earns up to $48,000 will have a statutory tax rate of 17.5 percent. We believe that this is vital to the incentives for New Zealanders to get ahead, because, after all, many New Zealanders are aspirational and would like to raise their incomes. They have a Government that recognises that.

Todd McClay: What impact will the tax package have on New Zealand’s competitiveness with Australia?

Hon BILL ENGLISH: There are any number of ways of measuring competitiveness with Australia. Before this tax package, on a straight dollar-for-dollar basis, all Australians earning up to $228,000 a year were paying less tax than New Zealanders on comparable incomes. From 1 October that figure reduces to about $55,000. In other words, all New Zealanders earning more than $55,000 a year will be paying less tax than Australians pay on the same income. Our company tax rate will also be more competitive because our 28 percent tax rate, which takes effect from the 2011-12 year, will be 2c lower than Australia’s for 2 years, and then 1c lower permanently, depending on the Australian Government’s maintaining the position it has currently taken on company tax.

Question No. 2 to Minister

Dr RUSSEL NORMAN (Co-Leader—Green): I seek leave to table two documents regarding the links between Bill English’s office and the Crafar farms. The first is an email from the Overseas Investment Office dated 5 February—

Hon Bill English: I raise a point of order, Mr Speaker—

Mr SPEAKER: Well, a point of order is actually being heard. I invite the member to wait a moment and I will hear what Dr Russel Norman is seeking leave to do, and then I will hear the Hon Bill English.

Dr RUSSEL NORMAN: It is with regard to the previous question. I should have tabled it at the end of the previous question, but that was an oversight on my behalf. It is an email from the Overseas Investment Office dated 5 February of this year to Bill English’s office, identifying who the lawyers are for Natural Dairy.

Mr SPEAKER: Does the member wish to seek a point of order before I seek for that document to be tabled?

Hon Bill English: I raise a point of order, Mr Speaker. My point of order is that the member can seek leave to table documents, but he cannot seek leave to make false statements like that.

Mr SPEAKER: I guess I made the rod for my own back there. The member should not be saying that under a point of order, but I understand the point he is making. I just ask the member, in describing the next document that he seeks leave to table, to be careful how he describes it. Leave is sought to table that particular email. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Dr RUSSEL NORMAN: I seek leave to table a further email about communication from the lawyers for Natural Dairy to Mr English’s office, dated 5 February, about their intention to purchase the Crafar farms.

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

Overseas Investment—Minister’s Statements

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by all his recent statements on foreign direct investment?

Hon BILL ENGLISH (Minister of Finance): Yes. New Zealand’s economy needs a certain level of foreign investment in order to grow. The figures currently are that New Zealanders are foreign investors to the extent of $55 billion in other countries, and other countries have investments of around $65 billion in New Zealand.

Hon David Cunliffe: Who was correct about the current review of the overseas investment regime: this Minister, who wanted to make the sale of farmland easier, or John Key, who said the review was to stop the sell-off of large tracts of land to foreign buyers?

Hon BILL ENGLISH: Both of those representations are incorrect. We made it clear from the start of the overseas investment review that we wanted to facilitate the flow of investment into New Zealand at the same time as protecting those things that are important to New Zealanders. That has not changed.

Aaron Gilmore: What has been achieved by the first stage of the Government’s review of the Overseas Investment Act?

Hon BILL ENGLISH: The Government is focused on administrative and regulatory changes in order to reduce the time and the cost of getting decisions because that is in the interests of both New Zealand asset owners and investors who are looking for certainty. I am pleased to say that those changes have simplified the process and played a role in reducing the average application time from 63 days in August 2009 to just 38 days over the last 10 months. We need to keep in mind that we have to strike the right balance between access to overseas investment, which is critical to the creation of jobs and the payment of wages in New Zealand, and making sure we protect those things that New Zealanders value about our country and our landscape.

Hon David Cunliffe: When he said: “We don’t want to get overly concerned about it”—the sale of farmland—“if it’s just another cycle.”, did he mean he had no objection to “New Zealanders becoming tenants in their own country.”?

Hon BILL ENGLISH: No, I meant what I said. The fact is that New Zealand has always had an inflow of overseas investment into land in New Zealand, and it continued in the 9 years under the previous Labour Government. I was making the observation that sometimes we get a wave of overseas investment. People realise they cannot make money out of farming in New Zealand, and if they do not live it and love it, they end up selling and going away.

Hon David Cunliffe: When making decisions about overseas investment rules, which does he consider more important: official advice from Treasury, polling data from Crosby/Textor, or public statements by John Key?

Hon BILL ENGLISH: What is most important is the common sense of a pragmatic and moderate National Government that has had pretty good support from the public to tidy up this economy, get their incomes up, provide them with secure jobs, and protect those aspects of New Zealand that they hold dear.

Hon David Cunliffe: Does he share the Prime Minister’s lack of concern over the sale of individual farms; if so, can he explain the difference between an overseas investor buying 16 Crafar farms in one transaction and buying the farms in 16 different transactions?

Hon BILL ENGLISH: The Act that that member’s Government wrote deals only with applications, whether it is for one farm or 10 farms, and it applies a range of tests, including character tests and tests of benefit to New Zealand. The member was administering the Act himself; he should know how it works.

Western Ring Route, Auckland—Progress

5. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Transport: What progress has been made on the western ring route Road of National Significance?

Hon STEVEN JOYCE (Minister of Transport): I am pleased to report that yesterday morning the $230 million duplicate Manukau Harbour Crossing opened to traffic 7 months early. Realising the benefits of this harbour crossing project sooner will come as a huge relief to the 80,000 motorists using the route to travel between central and south Auckland and the airport everyday. I was pleased to have the opportunity to open the bridge on Sunday with the Prime Minister, where we had the opportunity to thank the workers for a job well done.

Peseta Sam Lotu-Iiga: What effect has the Government’s funding policy had on completing projects like the Manukau Harbour Crossing?

Hon STEVEN JOYCE: The Government’s $10.7 billion commitment to State highway building over 10 years has provided a secure funding pipeline that has given contractors the confidence to continue investing in people and machinery, which helps complete projects more quickly. The Manukau Harbour Crossing project will now finish 7 months ahead of schedule. The contractors have achieved this by using innovative construction techniques and improving their planning methods. The acceleration mirrors the southbound part of the $215 million Newmarket viaduct project, which, the Transport Agency announced this month, would be open 6 months earlier than planned in early 2011.

Peseta Sam Lotu-Iiga: What benefits will the western ring route bring to Auckland’s economy?

Hon STEVEN JOYCE: The western ring route will provide a 48-kilometre alternative to State Highway 1 between Albany and Manukau City. It will bypass the city to the west and link Manukau, Auckland, Waitakere, and the North Shore. Completing the route is critical to Auckland’s economic transformation. It will improve growth and productivity through more efficient movement of freight and people, and its effects will be felt beyond its immediate route, right into the central motorway junction. The Government’s funding plan will allow it to be achieved well ahead of time, and to the benefit of Auckland.

Income Gap—Parity with Australia, December 2008 to March 2010

6. Hon DAVID PARKER (Labour) to the Minister for Economic Development: What was the gap, expressed in New Zealand dollars, between the average gross weekly wage or salary paid to an adult full-time worker in Australia compared with New Zealand in December 2008, and what was the gap in March 2010?

Hon GERRY BROWNLEE (Minister for Economic Development): I start by acknowledging the very specific nature of the member’s question, and its attempt to cherry-pick the measures relative to wage movements between our two countries. In making this calculation, we are reliant on a number of factors, so I will set out in detail the calculation for the benefit of the House. Advice from Statistics New Zealand is that the two most comparable statistical series are, first, for New Zealand the Statistics New Zealand quarterly employment survey, or QES, which shows that the total average weekly earning series rose from NZ$914.05 in November 2008 to NZ$959.13 in March 2010. For Australia, the most appropriate measure is the Australian Bureau of Statistics total average weekly earnings for full-time earners series, which shows that earnings rose from A$1,210.80 in December 2008 to A$1,290.70 in March 2010. To equate the Australian series into New Zealand dollars for comparison, using the relevant purchasing power parity factor of 1.0226, we can make a conversion to New Zealand dollars. The purchasing power parity figure for March 2010 is not yet available, but to be fair to the member, we have decided to provide an approximate answer, and we have used the same purchasing power parity adjustment figure. It should also be noted that these are gross figures, which do not relate to what the average worker would receive as take-home pay. I can inform the House that the Australian figure equates to NZ$1,228.16 in December 2008 and NZ$1,319.86 in March 2010. This represents a fall in the relative position of the New Zealand worker of approximately 1.1 percent, compared with an Australian worker over the same period of time. This means that the gap measured by these particular series on this particular cherry-picked number has gone from NZ$314.11 to $360.73. The Government has a comprehensive economic programme to address that gap. [Interruption]

Mr SPEAKER: There will not be more. The answer was quite long enough.

Hon David Parker: Is he confirming that the gap grew by more than $50 a week?

Hon GERRY BROWNLEE: That would entirely depend on which series the member wants me to answer from. If he would like to be specific about the series, I will give him a specific answer. I gave him a long answer before because I know that he spent the morning poring over the spreadsheets, celebrating New Zealand workers earning less than Australians.

Hon David Parker: Is he denying that the gap grew by more than $50 a week?

Hon GERRY BROWNLEE: When the member makes it clear which series of numbers he wants me to comment on, I will give him an appropriate comment. I have given him a very full answer. If he could not work out from that exactly what the picture is, I cannot help him.

Hon David Parker: Does the Minister agree with the Prime Minister that the document that the Prime Minister tabled today shows that the wage gap, adjusted for purchase price parity, has narrowed since the election, or has the Minister read that document properly and seen that even on those numbers the gap has grown wider?

Hon GERRY BROWNLEE: I find it difficult for the member to make that claim, when in fact the gap was $117.07 a week in 1999, had risen to $187.60 a week in 2005, and now, in 2010, sits at $160.25 a week. The difference between $187.60 and $160.25 is a narrowing of the gap.

Hon Phil Goff: Can the Minister confirm that in the massaged figures tabled by the Prime Minister himself, the gap has actually increased from $137 a week when Labour left office to $160 a week now—a widening of the gap of about 14 percent, on the Prime Minister’s own massaged figures?

Hon GERRY BROWNLEE: No, because we are talking about a series of figures. If members want to cherry-pick and say the best that Labour ever did while in Government was get the gap to

the figure he just mentioned, that would be a sad indictment on that Government’s ambition for New Zealanders.

Amy Adams: What impact will the Government’s 1 October income tax cuts have on relative after-tax incomes between New Zealand and Australia?

Hon GERRY BROWNLEE: When the—

Hon Member: Oh, it’s a series now, is it?

Hon GERRY BROWNLEE: That is the problem that we have. We get a simple question about money going into people’s pockets, and the Opposition wants to talk about—

Mr SPEAKER: The Minister was asked a question, and he does not need to go into talking about problems with regard to the question. The questioner was his own colleague, and I am sure that he can answer her.

Hon GERRY BROWNLEE: It is not surprising that the Opposition does not want to hear the answer, because when our tax cuts kick in on 1 October, the gap between after-tax wages in New Zealand and Australia will have narrowed since 2008. In December 2008 an adult full-time worker in New Zealand received a net $726 per week, compared with $964 in Australia—a gap of $238. That is net, after tax. As at March 2010 these figures were $774 for a New Zealand worker and $1,021 for an Australian worker, which is a gap of $247. The tax cuts will shift these figures to NZ$803 and A$1,030, reducing the net pay gap by more than $20 per week, to $227.

Hon David Parker: Which of the Government’s economic development initiatives contributed most to the widening of the wage gap: the cycleway, the Job Summit, the financial services hub, Chinese broadband investment, or mining in national parks?

Hon GERRY BROWNLEE: If the member had listened, he would know that his question was ridiculous. But I can tell him that the wage gap will narrow, because the Government has a comprehensive programme that includes Resource Management Act reform, tax cuts, massive investment in infrastructure, considerable investment in skills and education, science and innovation investment not seen in this country before, free-trade agreements by the score, a trade focus from our agencies such as there has never been before, a focus on front-line services, labour-market reform, and a reduction in the size of the Government. The list could go on and on. Those are all positive initiatives, and they are reasons why the wage gap between Australia and New Zealand will continue to narrow.

Hon David Parker: How much more will the wage gap grow before his Government admits that it is failing to meet its election promise?

Hon GERRY BROWNLEE: The information is all there for members to see. It is now in Hansard; there has been information tabled. The proposition being put by Mr Parker is completely wrong. He is starting to look like Don Quixote running outside and looking for a windmill.

Mr SPEAKER: That last bit was unnecessary.

Hon David Parker: Which is widening faster: the ever-widening wage gap with Australia, or his Government’s credibility?

Hon GERRY BROWNLEE: I seek leave of the House to table poll results later today to show also how preposterous that question was.

Hon David Parker: I raise a point of order, Mr Speaker. I would be most interested to see the National—

Mr SPEAKER: That is not a point of order. [Interruption]

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker.

Mr SPEAKER: The member will resume his seat. We will deal with the Hon David Parker first. The member was under no doubt that the Speaker was on his feet, and he just continued, regardless of that. I realise that members have had quite a robust exchange over this issue, and I realise that the way that figures are treated can make a difference to how they are seen, but when I am on my feet the member will resume his seat. If he wishes to raise a point of order, I will hear it, but I will not tolerate that kind of behaviour again.

Hon David Parker: I raise a point of order, Mr Speaker. I was seeking clarification as to the poll that he wanted to table. [Interruption]

Mr SPEAKER: Order! That is not a point of order, because the member did not seek leave to table any particular document, at all.

Hon Ruth Dyson: He did.

Mr SPEAKER: The member did not raise a point of order and get my approval to seek leave to table a document, so no leave has been sought to table a document. The Minister, as I heard him, was answering the Hon David Parker’s question, and I was weighing up in my mind whether what the Minister said could in any shape or form be considered to be an answer. I reflected on the question asked by the Hon David Parker, and I felt that, given the question, maybe it could be considered to be an answer. I think that is where I will leave it.

Alcohol Outlets—Zero-Tolerance Policy

7. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Minister of Justice: Will the Government adopt a zero-tolerance policy to liquor outlets selling to under-age minors, in line with the zero-tolerance policy it intends to adopt towards youth drink-drivers; if not, why not?

Hon SIMON POWER (Minister of Justice): No final decisions have been made on the Government’s response to the Law Commission’s report on alcohol. However, good progress has been made and I expect to be able to report back to Parliament shortly. I note that tougher penalties for offences under the Sale of Liquor Act, including sale to minors, were specifically contemplated in the commission’s report. In the meantime the Government is focused on effective enforcement of existing law, and I am advised that the number of premises visited in controlled-purchase operations, such as the one in Porirua over the weekend of 24 to 25 July, has increased from 991 in 2005-06 to 1,547 in 2008-09. Greater enforcement has led to a corresponding drop in the number of outlets selling alcohol to minors.

Rahui Katene: Does he agree that the endless creation of liquor stores makes alcohol more accessible and will only add to the binge-drinking culture amongst young people, and what advice has he received from the Minister of Youth Affairs about this issue?

Hon SIMON POWER: Broadly, yes, it has that potential. In respect of the matter relating to the Minister of Youth Affairs, I have received some advice that supports moves to limit alcohol outlets because of the impact it has on younger people.

Rahui Katene: Has he read the comments of Tokoroa Community Ministries manager Colin Bridle that the town is “awash in liquor” and that every day he gets to “pick up the pieces” of the binge-drinking culture, and what power can communities such as Tokoroa call on to prevent yet another liquor store opening in their areas?

Hon SIMON POWER: I have not seen the specific comments, but the Law Commission report made specific recommendations about local communities being able to have a much greater say on the granting of liquor licences and, indeed, on the grounds for objection against liquor licences. I can tell the House today that the Government is looking very closely at that particular recommendation.

Student Loans—Prime Minister’s Statements

8. GRANT ROBERTSON (Labour—Wellington Central) to the Prime Minister: Does he stand by his statement about the student loan scheme that “economically, it doesn’t really stack up”; if so, what, if anything, is he going to do to make the scheme “stack up”?

Hon JOHN KEY (Prime Minister): Yes. Yesterday I was referring to the fact that the Government’s student loan book is now $11 billion, but for every dollar we lend we collect just 53c back. In the Budget the Minister for Tertiary Education, Steven Joyce, announced changes to the system to make it fairer for both the taxpayers who fund it and the students who access it. The changes included requiring students to pass 50 percent or more of their full-time courses over 2

years to be able to keep borrowing, a lifetime limit on access to student loans, preventing permanent residents and Australians from accessing a student loan until they have lived in this country for at least 2 years, and increasing the StudyLink student loan administration fee. To help students get out of debt sooner we have introduced an early repayment bonus, and we have a highly successful voluntary bonding scheme available for doctors, nurses, midwives, veterinarians, and, of course, teachers.

Grant Robertson: When he told Victoria University students yesterday that “there has to be a better way of doing it” in relation to interest-free student loans, what better way did he have in mind?

Hon JOHN KEY: Firstly, all the initiatives that were announced in the Budget; and, secondly, the Minister for Tertiary Education is looking at ways to improve collection of loans from overseasbased borrowers.

Grant Robertson: Can he guarantee that his Government will not reintroduce interest on student loans?

Hon JOHN KEY: It is my intention to keep interest-free student loans.

Grant Robertson: Does he stand by his statement in this House that interest-free student loans were an unaffordable and irresponsible cost to this country; if so, will his Government be reintroducing interest on student loans?

Hon JOHN KEY: No, to the latter, and yes to the former, and the reason is that it is factually correct. When Labour was in Government it had the audacity to go out and tell the New Zealand public it would cost $100 million in the first year for interest-free student loans, rising to a total of $300 million a year. I am advised that the current cost is $408 million and potentially rising.

Methamphetamine—Border Seizures

9. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Customs: What reports has he received on seizures of pure methamphetamine at the border?

Hon MAURICE WILLIAMSON (Minister of Customs): In operations for the first 6 months of this year, the Customs Service reports that it intercepted approximately 14 kilograms of pure methamphetamine or P at the border, involving 14 incidents. That compares with just under 200 grams for the same time period last year, involving only three incidents. For all of 2009, the Customs Service intercepted just under 11 kilograms of P involving 12 incidents.

Shane Ardern: What reports has he received on seizures of methamphetamine precursors at the border?

Hon MAURICE WILLIAMSON: The situation in respect of precursors is even better. For the first 6 months of this year, the Customs Service reports that it seized 630 kilograms of methamphetamine or P precursor at the border. That amount of precursor would produce up to 178 kilograms of P, with a street value of around $178 million, and cause around $72 million worth of harm to the community. Last year the Customs Service intercepted a record amount of 1.2 tonnes of the precursor, strangling the supply to those who would peddle the P scourge to our communities.

Employment, Sick Leave Policy Changes—Unreasonable Grounds

10. DARIEN FENTON (Labour) to the Minister of Labour: Does she stand by her statement in relation to the proposed sick leave changes, “we do not insist on unreasonable grounds for anything”; if so, does she understand the difference between insisting on and allowing unreasonable grounds?

Hon KATE WILKINSON (Minister of Labour): Yes and yes.

Darien Fenton: When she said that removing the need for employers to have reasonable grounds for requiring proof of sickness was “clarifying the law”, did she mean to clarify the law so that employers will not have to have any reasonable grounds whatsoever to suspect sick leave is not genuine?

Hon KATE WILKINSON: What I meant was that the proposal is meant to clarify the law, making it much simpler to understand and to implement. The requirement of reasonable grounds does not offer any assistance as to what it actually means, as it is a matter of interpretation. In practice, although I do not expect this provision to be used much more than it currently is, it is a small change merely to clarify the existing law.

Darien Fenton: Has she read the research conducted by Southern Cross Healthcare last year, which found that the majority of cost incurred by employers for sickness was not from sick leave but from lost productivity from those who go to work when they are sick; if so, why is she proposing to exacerbate that problem with this policy?

Hon KATE WILKINSON: I do not accept that this exacerbates that problem. All this does is clarify; it is a simple change to clarify the current law, making it simpler and easier to understand and to implement.

Darien Fenton: Is she aware that New Zealand workers are already entitled to fewer sick leave days than nearly every other comparable country, including Australia; if so, how does this Government expect to stop our best and brightest from leaving for Australia, where they offer both better wages and better leave?

Hon KATE WILKINSON: They will stop leaving New Zealand to go to Australia because we have the best Government we have had in 10 years and the very best Prime Minister we have had in 10 years.

Rheumatic Fever—Cost to New Zealand

11. KEVIN HAGUE (Green) to the Associate Minister of Health: What advice has she received about the cost to New Zealand of rheumatic fever, for which New Zealand has rates 14 times the OECD average?

Hon TARIANA TURIA (Associate Minister of Health): Tēnā koe e te Rangatira. The Ministry of Health has advised that rheumatic fever hospitalisation costs are approximately $10 million per annum. The ministry is co-funding an economic analysis of cost-effective strategies for managing rheumatic fever. Those results are expected in October 2010.

Kevin Hague: Does she regard her Government’s plan for dealing with rheumatic fever, as outlined by Minister Ryall in this House on 16 June, as adequate; if not, what has been added to the plan since then, especially as there is no immunisation programme for rheumatic fever even though immunisation was a crucial part of the plan that Mr Ryall outlined?

Hon TARIANA TURIA: My understanding is that the streptococci infection that causes rheumatic fever has a number of strains, and this is the reason why a vaccination programme has not taken place in New Zealand at this time.

Kevin Hague: I raise a point of order, Mr Speaker. I asked whether she regarded the Government’s plan as adequate, and if it was not, what had been added to the programme since then. I do not believe that the answer addressed that question.

Mr SPEAKER: But I seem to recollect the member including in his question something specifically about vaccination programmes. I seem to recollect his including that in his question. That is the piece the Minister answered.

Kevin Hague: What does her Government intend to do to address overcrowding and poverty, the main contributing factors to this disease?

Hon TARIANA TURIA: The Ministry of Health is already beginning to work across the range of Government agencies because we know that the health system alone cannot address the significant issues that impact on families who have children with rheumatic fever.

Hon Ruth Dyson: How will the increase in GST, which will put further pressure on family budgets, and the significant cut in the public health budget—both measures that were in the Budget this year, which was supported by the Associate Minister’s party—help address issues such as our rheumatic fever rates?

Hon TARIANA TURIA: The ministry’s programme is comprehensive and seeks to address the determinants and to boost primary prevention and secondary treatment, which are both important planks in managing rheumatic fever. The ministry’s programme includes providing leadership across the health and rheumatic fever sector, looking for evidence and accountability, looking at prevention by collaboration across Government agencies and local government to address determinants, and communicating and working with communities and health professionals to improve health literacy and recognition of rheumatic fever. The ministry is rolling out the checking of throats—making it important. In all areas where we have high incidence of rheumatic fever, those things are being carried out.

Kevin Hague: I seek leave to table a document entitled “Why we still need to think of rheumatic fever”. It was published by the Best Practice Journal in May 2008, and sets out the problems with rheumatic fever and some successful approaches to it.

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.

Museums, Regional—Support

12. CHRIS TREMAIN (National—Napier) to the Minister for Arts, Culture and Heritage: What recent announcements has the Government made about support for regional museums?

Hon CHRISTOPHER FINLAYSON (Minister for Arts, Culture and Heritage): The Government has announced a grant of $6 million for the redevelopment of the Hawke’s Bay Museum and Art Gallery, and that comes after an announcement of funding for the New Zealand Portrait Gallery to help secure permanent premises for its collection of nationally significant works. The Hawke’s Bay redevelopment project involves multiple existing buildings and the construction of a new wing, as well as refurbishment of the museum’s main 1936 building. I acknowledge the outstanding work of local MPs Craig Foss and Chris Tremain in advocating for the region’s interests.

Chris Tremain: How will the grant support the people and communities of Hawke’s Bay?

Hon CHRISTOPHER FINLAYSON: Funding for the Hawke’s Bay Museum and Art Gallery will ensure that visitors to Hawke’s Bay and its residents have much better access to its nationally significant collections, which include taonga Māori, New Zealand design, and fine art. [Interruption] Oh, yes, I will go. The people of Hawke’s Bay have a real sense of ownership of their museum and art gallery—[Interruption]—and I am very sorry that the chief Opposition whip is sneering at that. Families have donated objects for generations, local fund-raising has been particularly effective, and this grant gives their treasures the setting they deserve. I note for the record that the deputy leader of the Labour Party was sneering as well.

Hon Steve Chadwick: What assurances can the Minister give that the Labour-established Regional Museums Fund will continue once current funding has been fully allocated and spent?

Hon CHRISTOPHER FINLAYSON: The scheme is a very good scheme, and more would have been available this year had not Helen Clark forward committed huge sums of money.

ENDS

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