Questions and Answers - 13 October 2010

(uncorrected transcript—subject to correction and further editing)

WEDNESDAY, 13 OCTOBER 2010

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

South Canterbury Finance—Recapitalisation Offer

1. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: What was the net present value at Crown cost of capital of any offer presented to the Crown in respect of the recapitalisation of South Canterbury Finance, either on or following 31 August 2010?

Hon BILL ENGLISH (Minister of Finance): I first congratulate the member on getting to question No. 1 so soon. I do not intend to comment on commercial details of bids or transactions that may be still under negotiation. I refer the member to my ministerial statement of 8 September 2010, which addressed this issue. I repeat that no option was available that did not involve considerable cost and risk to the Crown. Treasury was in close contact with all the parties involved at the time, and no option put to us was recommended by Treasury. We accepted Treasury’s advice.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has essentially declined to answer the substantive question on, I believe, public policy grounds, but I seek to clarify through you, Mr Speaker, whether he is invoking the public policy ground for not releasing any further information about the net present value of those offers.

Mr SPEAKER: I take it that the Minister is declining to provide the specific information asked for because he believes it is not in the public interest to do so. I think he has made that fairly clear.

Hon David Cunliffe: Using the Crown cost of capital, what was the net present value of the offer presented to the receiver on 31 August 2010, of which the receiver said in a memorandum to staff on 3 September: “After careful consideration and consultation with the appropriate parties, including both the trustee and the Treasury, this offer was not accepted.”?

Hon BILL ENGLISH: I could not be exactly sure which offer the member is talking about. There has been quite a bit of speculation in the public arena about offers that may or may not have been made. Some of the speculation I have seen is clearly wrong, and some of it may just be from bidders who felt that Treasury or the receiver should have accepted their bid but did not.

Hon David Cunliffe: I seek leave to table the memorandum to all staff from the receivers, Kerryn Downey and William Black of McGrathNicol, dated 3 September 2010, which notes consultation with Treasury and that the offer made in respect of South Canterbury Finance was not accepted.

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

Hon Simon Power: He should do it at the end.

Mr SPEAKER: No, the member has sought leave to table it. I take it that there is no objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon David Cunliffe: I raise a point of order, Mr Speaker. As the receivers’ memorandum makes it clear that the offer presented on that date, 31 August, was not accepted, I submit to you that there can be no commercial confidentiality ground around that offer that would prevent the Minister from answering the primary question and the subsequent supplementary question.

Hon Simon Power: It’s a debatable point.

Mr SPEAKER: The Minister should not be interjecting. The member raises an interesting issue. The dilemma for the Speaker is that the Speaker cannot judge whether divulging information is or is not in the public interest. On this occasion the Minister has made it pretty clear that in his view to say any more about these particular matters is not in the public interest. I have to take the Minister’s judgment on that. The member can question the Minister about that through further supplementary questions, but I cannot tell a Minister that he or she is wrong if the Minister believes that it is not in the public interest to divulge something.

Hon David Cunliffe: Further to the point of order, Mr Speaker, I totally respect your judgment on that matter, but I draw your attention to the fact that the Minister used a specific rationale for declining to answer the primary question in the public interest, and that was commercial confidentiality around an ongoing matter. It is clear from the document that has been tabled that it is not an ongoing matter, at least in respect of the offer of 31 August, because that offer has been rejected already by the receivers. I guess it stands for the Minister then either to specify a new public policy ground or to answer the primary question.

Mr SPEAKER: I have to stress that the public interest is a matter for the Minister to judge, not for the Speaker. Given the answer the Minister has given, I believe that the member can challenge the Minister with further supplementary questions on why he has that view.

Hon David Cunliffe: What advice did he receive from Treasury in respect of the offer for recapitalisation of South Canterbury Finance dated 31 August, and what response did he or his colleagues make to that advice?

Hon BILL ENGLISH: As I have said, I do not intend to speculate on any particular offer. The member is referring to one dated 31 August. There was any amount of discussion going on around that time that some people may have thought consisted of making offers and some did not think were offers. The fact is that the Government now has the obligation to recover the value of those assets, and it is certainly our intention to preserve the commercial processes around that. It simply will not work if anyone who makes some kind of offer to the Crown finds that that offer is discussed in detail in Parliament, when it was made in the context of commercial confidentiality. It may be that the offer he is referring to came from people who are bidding again as we speak, because the Government is open to offers all the time for the assets of South Canterbury Finance. It is not a matter of trying to be evasive; it is just a matter of trying to preserve a process that is designed to get maximum value for the taxpayer. We do not want to scare away bidders as a result of the fact that we are willing to discuss their offers at any time in the public arena.

Hon David Cunliffe: I raise a point of order, Mr Speaker. In noting that the Minister has declined to answer the substantive question, which asked what advice he had received and what his response was, I note that that advice pertained to a past offer that has already been rejected. Further, it is my understanding that the parties involved are not currently in negotiation for the assets of that company, as the Minister may have alluded to. I cannot see—and perhaps you may clarify this with the Minister—what the public interest ground is upon which he is refusing to answer the question.

Mr SPEAKER: On these matters the Speaker has to be guided by the Minister. The issue of public interest is a matter for the Minister. As Speaker I cannot judge that. I should not judge that, and I must not try to. Where it is a matter of public interest not to divulge certain information, and where the Minister is alleging that is the case, those are important matters. I must not interfere in that. I think that is a very important, fundamental issue, especially where it has commercial implications. As the Minister has pointed out, even though the member might be referring to a past

offer, it does not mean to say the party involved may not be still involved in negotiations. So I have to be guided by the Minister on an issue like that.

Chris Tremain: What steps is the Government taking to ensure that the workings of the Crown Retail Deposit Guarantee Scheme are fully transparent?

Mr SPEAKER: Well, I suppose the deposit guarantee scheme was the reason why the Crown had—I shall allow the question, even though it is a fair stretch from the primary question.

Hon BILL ENGLISH: Clearly some parts of the process will occur without total transparency. For instance, if bidders are making offers and they are turned down, or if they want to change those bids or come back again later in the process, the Crown wants to make sure that opportunity is available. However, it is appropriate that, given the amount of public funds spent on this scheme, it is independently scrutinised. That is why yesterday I welcomed the news that the Auditor-General will complete a performance audit of the deposit guarantee scheme. In addition, this week Treasury will make an initial release of over 100 documents relating to the scheme, including documents relating to South Canterbury Finance’s participation in it. That will demonstrate that the Government and officials have worked towards our objectives of providing depositors with certainty, and minimising the costs to taxpayers and disruption to the economy.

Hon David Cunliffe: What was the net present value, at Crown cost of capital, of the revised offer presented to the receivers on 13 September 2010 by Kensington Swan on behalf of Permanent Investments Ltd, and acknowledged in a letter from the receiver dated 14 September; and can the Minister confirm that the potential participants in that recapitalisation included the New Zealand Superannuation Fund and Ngāi Tahu?

Hon BILL ENGLISH: It is not my role to confirm or otherwise any of the details of that matter. That would be up to those organisations. I stress to the member that it is vital the Government recovers as much as it can of the $1.6 billion that it is in the process of paying out. We intend to conduct a process whereby Treasury is overseeing and working alongside the receivers to ensure we get the maximum value for those assets. Regular parliamentary discussion and speculation about who made which bids is the role of the Opposition, but it is not a game that the Government will get into, because it will destroy value and prevent us from recouping as much of that $1.6 billion as we can.

Hon David Cunliffe: Can the Minister confirm that Ministers did provide guidance or advice to officials on those offers, given that he was quoted in the Dominion Post on 1 September saying that he would be “a close adviser” to the receivers, and that the Prime Minister was quoted in the Dominion Post on 1 September saying that the Government had assumed sole rights in respect of South Canterbury Finance because “without that we would be in the position of being the 800- pound gorilla who would have to take marching orders from a mouse.”?

Hon BILL ENGLISH: The Government has been running a process where it takes advice from Treasury. Prior to the receivers being in place, that advice from Treasury would have been based on information coming from the company itself, and after the receivers were in place on information that came from the receivers. I might say, though, that the business of whether there were offers around at that time has been subject to a lot of speculation. I will repeat to the member that some of that speculation, from what I have seen, is simply wrong. Otherwise, the Government does not intend to get into discussing the details of offers, and in many cases we would not have been fully aware of all the dimensions of those offers.

Hon David Cunliffe: I seek leave to table a printout of a Dominion Post article dated 1 September that verified the quotations that I have just used.

Mr SPEAKER: We are not going to seek leave to table recent press releases.

Hon David Cunliffe: I raise a point of order Mr Speaker. We have got ourselves into an interesting situation. I submit to you that the Minister has quoted public interest grounds for refusing to provide any substantive answers whatever to the Opposition’s questions on this matter. Mr Speaker, I further submit that that is inappropriate, because the evidence suggests that the

Government has deliberately—as verified by those quotations—left hundreds of millions of dollars of taxpayer money—

Mr SPEAKER: No, no. The member will resume his seat. The member is now starting to argue the substance of the matter. The reason why I am not putting leave to the House to table a clipping from a newspaper is that the member has already referred to the quotes in his question. Anyone can look them up in the newspaper; we are not going to waste the time of the House by tabling clippings from recent newspaper articles.

Hon David Cunliffe: If Ministers had decided to accept another outcome from the receivership than that presented in the office on 31 August or 13 September, can the Minister confirm whether this alternative outcome will have a greater or lesser net present value than the $1.3 billion contained in the offer of 31 August?

Hon BILL ENGLISH: The Government is taking the steps that it believes are required to maximise the value of the sale of the assets. With South Canterbury Finance having gone into receivership, the Government said at the time it was not interested in a fire sale, and we do not believe that a considered and value-creating process should be knocked over by an aggrieved bidder. If the member has an aggrieved bidder who thinks that he or she missed out, well, that is interesting. I am sure that he will get more of them, because in the end there will be people who try to buy these assets cheaply from the Government, where the Government does not agree to sell the assets to them.

Hon David Cunliffe: If there were considerations other than protecting taxpayer value—which the Prime Minister set out as the Government’s primary objective—that informed this Minister’s decision not to accept either of the offers of 31 August and 13 September, what were those considerations, and why did they outweigh the Government’s goal of protecting taxpayer funds, when it would appear from documents that up to half a billion dollars of taxpayers’ money has been wasted by this secretive and mismanaged bail-out?

Hon BILL ENGLISH: All I would say to that member is that I am sure he will find, as his experience increases, that aggrieved bidders will try to use political means—

Hon David Cunliffe: I raise a point of order, Mr Speaker. Given that it is the Minister who appears to have wasted half a billion dollars on this matter—

Mr SPEAKER: Order!

Hon David Cunliffe: —how about he answers the question—

Mr SPEAKER: When I get to my feet the member will resume his seat immediately, if he wishes to stay in the House. The member asked a question in which he made an assertion towards the end of it about the amount of money he claimed the Government had wasted. The Minister, faced with a question like that, will have a fair bit of licence in answering it.

Hon BILL ENGLISH: As the member becomes more experienced in these matters, I think he will realise that aggrieved bidders—if that is what he has—are not necessarily the most reliable sources of information or judgment on whether they should have got the assets. I am sure that having raised the matter in this way, he will attract further aggrieved bidders who do not meet our objectives.

Dr Russel Norman: Will he rule out the sale of South Canterbury Finance’s land assets to overseas buyers?

Hon BILL ENGLISH: Well, I cannot rule that out, simply because that would be a show of bad faith, given that we have an Overseas Investment Act in place. The member will be familiar with the changes that the Government has announced to that Act, which will be in place by 1 December, and anyone who seeks to buy those land assets would have to follow that process. For the House’s information, South Canterbury Finance is a one-third shareholder in the land assets, and it would be possible for the holders of the other share in those assets to perhaps buy South Canterbury’s. But that is yet to be seen.

Economy—Reports

2. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What recent reports has he received on the economy?

Hon BILL ENGLISH (Minister of Finance): I have received reports showing that the economy is in better shape than it was 2 years ago. The economy has grown for five consecutive quarters, following an extended recession that began in early 2008, well before the global financial crisis. The 1.7 percent economic growth in the last 9 months exceeds the 1 percent growth posted over the entire 4 years up to the beginning of 2010. I have also seen reports that households and businesses are moving away from excessive spending and borrowing, which were features of our lopsided economy in the past decade. Instead, they are paying down debt and being careful with their spending. This change is welcome, but it is happening faster than we expected.

John Hayes: What roles is the Government’s tax package playing in helping to rebalance the economy?

Hon BILL ENGLISH: The economy needs to rebalance from an excessive reliance on Government spending on borrowing and housing, towards exports and investment in savings. That is what the tax package is designed to do, to push in the direction that people are already going. The increase in GST will discourage excessive consumption, the increase in the effective tax rate on property will in effect discourage speculative investment in property, and the reduction in income tax reduces the tax on savings, jobs, exports, and investment.

Hon David Cunliffe: Has he received reports that the price of fruit and vegetables has gone up, and although the increase of 2.6 percent in September may be down to winter, the further price increases since then are all because of National’s increase in GST, inflicting greater costs on hardworking Kiwis who are struggling to make ends meet?

Hon BILL ENGLISH: The member may care to take note of the Governor of the Reserve Bank’s comments from the annual report yesterday. He said that the inflation risk from GST is, as he describes it, muted so far.

Hon David Cunliffe: That’s only because the economy is collapsing.

Hon BILL ENGLISH: Well, it is a very competitive market out there and retailers have to be careful about putting their prices up. However, people are guaranteed to get their income tax cut. When they look at their after-tax pay over the next few weeks, they will realise just how far $4 billion of income tax goes. In respect of vegetables—and there are 17 of them in the Labour caucus—in the 2 years to September 2008 they went up 21 percent under Labour. In the 2 years to September 2010 they went down 6 percent.

John Hayes: What other contributions is the Government making to helping New Zealanders through this adjustment and setting the economy on a faster growth path?

Hon BILL ENGLISH: I think the most significant contribution the Government is making is to absorb the shock of this recession on the Government’s books. This fiscal year the Government will run a cash deficit of $13 billion—that is, the Government is borrowing $13 billion over the next 12 months to continue with an infrastructure investment programme to maintain transfers and to ensure that Government services remain in place at a time of stress. This is supporting New Zealanders through the adjustment process, but it cannot last for ever and the Government will have to tighten up on its spending in order to bring those deficits back to a surplus.

John Hayes: What economic policies would damage New Zealand’s economic prospects and leave the vast majority of Kiwis worse off?

Hon BILL ENGLISH: The policies that will do that are policies that create more borrowing, larger deficits, more Government debt, and higher cost of living increases. They are also policies that repeat the mistakes of the last Labour Government when it reduced the incentive to work and to save and to invest. I understand that Labour will be announcing details of policies going in that direction this week—

Hon Darren Hughes: I raise a point of order, Mr Speaker. I have been listening to the answer the Minister is giving. He is not responsible for policies that are being developed by the Opposition, no matter how frightened he might be by them.

Mr SPEAKER: The member is quite right that the last part of the answer was really out of order; fortunately it was mercifully brief. But the member was absolutely right with his point of order.

Marine and Coastal Area (Takutai Moana) Bill—Access Under Customary Title

3. Hon SHANE JONES (Labour) to the Attorney-General: Does he agree with ACT leader Rodney Hide’s statement on Radio New Zealand this morning in relation to ACT’s amendment to the Marine and Coastal Area (Takutai Moana) Bill to explicitly prohibit Māori with customary title from charging fees for access to coastal areas: “I have an e-mail here from the Attorney-General’s office saying that they would support such a provision in the bill—that is to say I’ve got that in writing”?

Hon CHRISTOPHER FINLAYSON (Attorney-General): I have not seen ACT’s amendment so I can neither agree nor disagree, but I can say that although the bill does not enable charging for public access, for the sake of absolute certainty I am prepared to promote an amendment to the bill to provide that public access is free public access. This accords with the Government’s and the Māori Party’s long held bottom line of guaranteed public access and should satisfy the ACT Party’s concerns. Such an amendment would apply to all New Zealanders equally and would apply to all the common and marine and coastal areas, which excludes those areas held in private title.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I am not sure that the Attorney- General has gone as far as he needs in order to answer the question. The authenticated quote that the member has put in to support his question refers to a provision in the bill—in other words, an amendment—and it asks whether the Minister agrees with an assertion made by another Minister in respect of that amendment. The Attorney-General did start off by saying that he is not in a position to agree or disagree, because he said he had not seen the amendment, but the authenticated quote implies that he has seen the provision of the bill. If his answer could clarify both legs of the primary question, as is allowed by the Standing Orders, then I think that would be a fuller answer.

Hon CHRISTOPHER FINLAYSON: There is a difference between a general provision and the particular amendment, and that is the point I am making. The statement in the question related to the particular amendment.

Mr SPEAKER: It is an interesting point that has been raised. As I understand it, the question asked was a very simple question. It asked the Attorney-General whether he agreed with the statement made by Rodney Hide. It did not ask anything about an amendment. It asked whether he agreed with a statement on Radio New Zealand: “I have an e-mail here from the Attorney-General’s office saying that they would support such a provision in the bill—that is to say I’ve got that in writing”. That was what the question asked the Attorney-General—whether he agreed with that statement. I cannot insist on too specific an answer but as I listened to the answer given, the Attorney-General referred to a different issue. The Attorney-General referred to the provisions of the proposed amendment, but that is not what the question asked. It asked whether he agreed with the statement that begins “I have an e-mail here from the Attorney-General’s office…”, and I invite the Attorney-General to answer that question.

Hon CHRISTOPHER FINLAYSON: I am not questioning you, but it says “in relation to” the amendment, and that is what I addressed.

Mr SPEAKER: With respect, this is a primary question on notice. The point of the question is asking the Attorney-General whether he agrees, and there is no precise answer to whether he agrees with the Hon Rodney Hide. But the particular issue he is being asked whether he agrees with is the statement “I have an e-mail here from the Attorney-General’s office saying that they would support such a provision in the bill—that is to say I’ve got that in writing”. The question asked whether he

agrees that the Hon Rodney Hide has such a thing in writing. There is no specific answer to that but that is what the question asks. Since it is a primary question I invite the Attorney-General to address that.

Hon CHRISTOPHER FINLAYSON: In relation to a particular amendment, the answer is no. In relation to the general question of charging for public access, the answer is yes.

Mr SPEAKER: I appreciate the answer.

Hon Shane Jones: Can the Minister confirm that his current stance reflects greater affection for Rodney Hide’s view about race relations than his views about the Māori Party’s view of race relations in respect of the seabed and foreshore?

Hon CHRISTOPHER FINLAYSON: I have great respect and affection for both the Māori Party and the ACT Party, with whom I enjoy working on a variety of issues and having vigorous exchanges without getting into personalities.

Hon Shane Jones: Does the Minister agree with the prevailing Māori view coming from a number of iwi that there will now be a hierarchy of property rights, where Māori property rights can be diluted but no such restrictions will apply to those of others who might enjoy subsisting interests in the seabed and foreshore?

Hon CHRISTOPHER FINLAYSON: Well, the Speaker was sedulous with me and perhaps a bit more generous in allowing that question. Let me say that a clear distinction needs to be made between customary title and freehold title, and my answer to Mr Jones is this. One has to distinguish between the two concepts, and the fact that freehold title is different from customary title does not mean it is inferior. So the answer to the question is, no, I reject those comments.

Mr SPEAKER: Before I call the honourable member, I just point out to the Attorney-General that although he may be grumpy with the Speaker’s ruling, he should not then comment on it.

Hon Shane Jones: “Assiduous” rather than “sedulous”, I think, would have been—

Mr SPEAKER: Order!

Hon Shane Jones: Does the Minister agree with the Māori Party co-leader Dr Pita Sharples that Rodney Hide’s premature claim is mischievous and that the only reason ACT is going to do this is that it needs some wins, and are we likely to see many other wins to the detriment of the Māori Party?

Hon CHRISTOPHER FINLAYSON: Well no, it should be “sedulous”, actually. But I think the better approach is this. I am privileged to have two strong coalition partners, and they will express different views, honestly and genuinely, on the one hand. But the bottom line is this. I think everyone agrees—certainly, the Māori Party does, National does, and the ACT Party does—that there needs to be guaranteed public access and an understanding that that should be free.

Hon Shane Jones: I raise a point of order, Mr Speaker. I invite the Minister to table the Oxford—

Mr SPEAKER: The member has been in this House a while—

Hon Annette King: So has the Minister.

Mr SPEAKER: —Order!—and knows that he should wait until he is called if he is raising a point of order. What is more, he knows that that was not a point of order, at all. I think both members have transgressed probably to a similar extent, so we will consider that a draw. I think the Speaker may have lost in that exchange, but never mind.

Hon Rodney Hide: Is the Attorney-General saying that he will support an amendment to the marine and coastal area bill prohibiting the charging for public access to the beach?

Hon CHRISTOPHER FINLAYSON: The answer is that I will be very keen to promote such an amendment. My name is not Stalin, unlike when Helen Clark was Prime Minister; I do not have it within the power to—

Hon David Parker: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: A point of order has been called.

Hon David Parker: That sort of reference is unnecessary and brings this House into disrepute.

Mr SPEAKER: I have to apologise to the honourable member. My hearing is somewhat impaired again at the moment, and I did not actually hear what on earth the Attorney-General said. It is difficult for me to judge. I do not want the member to repeat it if it was ungenerous. I ask whether the member is prepared to withdraw the comment he made.

Hon CHRISTOPHER FINLAYSON: I withdraw.

Mr SPEAKER: I appreciate that.

Hon CHRISTOPHER FINLAYSON: I am prepared to—

Mr SPEAKER: Is the member now wishing to answer further?

Hon CHRISTOPHER FINLAYSON: No, I want to answer the question.

Mr SPEAKER: The Hon Chris Finlayson, answering the question.

Hon CHRISTOPHER FINLAYSON: I want to answer the question because, yes, I am prepared to promote an amendment. But the key point is that the devil is in the detail and in the wording. For example, section 40(2) of the 2004 Act contains a prohibition on charging for use and occupation. It does not refer to access. It is important to get the wording right, and that is what I will be doing as I undertake my duties sedulously.

Hilary Calvert: Does the Attorney-General agree that iwi customary marine title holders will be able to charge a fee for new mussel farms over the foreshore and seabed for which they have title, via a veto that his bill gives them through the planning process?

Hon CHRISTOPHER FINLAYSON: No, because all existing use rights are maintained, and that point is clear.

Hilary Calvert: I raise a point of order, Mr Speaker. We said “a fee for new mussel farms”.

Hon Member: Supposed to be brainy.

Mr SPEAKER: The House has become a little disorderly now, and these interjections are not helpful when a point of order has been called; members know that. The member has raised a point of order to try to further clarify her question. She cannot do that. The member asked a question, and the Minister answered it. He disagreed with the basic assertion contained in the member’s question. There is no facility for members to further clarify their questions. The ACT Party has used its two questions today and if questions are unclear, that is not the Minister’s fault.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I am not contesting your ruling. It was not clarification. The question asked about title holders and new mussel farms. The Minister said “No”, because it does not affect existing mussel farms. The point that Hilary Calvert was making was that the question was about new mussel farms. It was not changing the question; it was exactly the question.

Mr SPEAKER: What I will do on this occasion, to clarify, is invite the member, as she is a new member, to repeat her question so that the House can hear exactly the wording of it and I will ask the Minister to answer it again.

Hilary Calvert: Does the Attorney-General agree that iwi customary marine title holders will be able to charge a fee for new mussel farms over the foreshore and seabed for which they have title, via a veto that his bill gives them through the planning process?

Hon CHRISTOPHER FINLAYSON: The answer is that they could well be, but it is not because of the veto.

Environmental and Resource Management Policies—Progress

4. NIKKI KAYE (National—Auckland Central) to the Minister for the Environment: What progress has the Government made on its key environment and resource management policies?

Hon Dr NICK SMITH (Minister for the Environment): The Government completed its first phase of resource management reforms in simplifying and streamlining the Act last year. We are making good progress on the second phase of reforms, with bills on aquaculture, heritage, and the Environmental Protection Authority currently being drafted, with introduction planned for next month. Last night I launched, with the new Mayor-elect, Len Brown, a further set of proposals for

reform on urban design and infrastructure. I am encouraged by the comments of the new Auckland mayor and his commitment to work with the Government on ensuring these reforms work for Auckland.

Nikki Kaye: What are the important changes recommended by the two technical advisory groups on improving urban design and infrastructure provisions?

Hon Dr NICK SMITH: First, they propose fewer plans. Current regulations require Auckland to have a regional policy statement, a regional plan, a regional land transport strategy, a long-term community plan, and a city or district plan. These planning documents currently top over 1 metre in height. We are proposing fewer and more focused plans, with the new spatial plan consolidating the existing regional policy statement and the regional land transport strategy in a more integrated document. I note Mayor Len Brown’s commitment to advance this work as quickly as possible. More than 50 changes are recommended in terms of strengthening the way in which we plan, as part of this Government’s commitment to building Auckland into a competitive city internationally.

Nikki Kaye: What steps has the Government taken to ensure New Zealand’s clean, green brand is reinforced during the hosting of the Rugby World Cup 2011?

Hon Dr NICK SMITH: Today I announced a $2 million recycling programme, which will see more than 700 Love NZ recycling facilities installed at stadiums, fan zones, main streets, airports, railway stations, bus terminals, and popular tourist attractions. They will divert more than 8,000 tonnes of Rugby World Cup waste and ensure that the 85,000 visitors and 2,500 international media have an experience that is consistent with New Zealand’s “100% Pure New Zealand” brand.

Public Transport—Economic Benefits of Rail Projects

5. GARETH HUGHES (Green) to the Minister of Transport: Can he confirm that the largest portion of economic benefit coming from rail projects, such as the Auckland network electrification and the Onehunga branch line, are time savings for road users?

Hon STEVEN JOYCE (Minister of Transport): Yes, that is usually the case for large urban transport projects, whether road or rail. In the case of the Auckland rail network upgrade, 44 percent of the economic benefits go to road users through time savings.

Gareth Hughes: Which will do more to reduce congestion in Auckland: increasing rail patronage by expanding the network with the central business district rail loop or spending $2 billion on the Pūhoi to Wellsford “Holiday Highway”?

Hon STEVEN JOYCE: Well, I think that I will have to give the member a geography lesson, because the Pūhoi to Wellsford highway is not in the Auckland urban area; it is north of the Auckland urban area, linking Auckland with Northland. In terms of comparisons with other big urban transport projects, there are some other examples, as well—for example, the $430 million Victoria Park tunnel will provide about $900 million in travel time savings, which shows that all projects provide some savings, some more than others.

Gareth Hughes: I raise a point of order, Mr Speaker. I did not need a geography lesson; my question was specific. I said—

Mr SPEAKER: For goodness’ sake, I ask members to reflect on the questions they ask. The Minister’s answer was perfectly reasonable, because, as he pointed out, the Pūhoi-Wellsford highway is some distance from Auckland city proper.

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was very specific. It was about whether one project reduces congestion more than another project. It is fine for the Minister to have his view about the geographical relationship, but it was a question about which one reduces congestion more; he can answer the question.

Mr SPEAKER: In my judgment, the Minister answered the question.

Gareth Hughes: Is it smart economics to use money from the National Land Transport Fund on projects that will reduce congestion for motorists, such as Auckland’s central business district rail loop?

Hon STEVEN JOYCE: Of course. Road users through the National Land Transport Fund make very big contributions to public transport for exactly those reasons. For example, over the current 3- year period, roughly $633 million of the National Land Transport Fund is being spent on public transport services for entirely those reasons.

Gareth Hughes: Why is the Pūhoi to Wellsford “Holiday Highway” receiving 100 percent funding from the National Land Transport Fund, but the central business district rail loop would receive none, even though it would benefit many more motorists in Auckland?

Hon STEVEN JOYCE: The member presumes a number of things. The reality is that the National Land Transport Fund is paid in for by road users. They get benefits from different projects, and those projects are supported by the fund at different times. The main method by which the National Land Transport Fund contributes to public transport is the subsidy of services, which the fund does a huge amount of, including both bus services and rail services.

Gareth Hughes: Why, then, is the Transmission Gully motorway receiving 100 percent funding from the National Land Transport Fund, but Wellington’s new light rail proposal would receive none, even though it would benefit more motorists in the Wellington region?

Hon STEVEN JOYCE: I think there are some very big assumptions there. First, we have no idea what a light rail project in Wellington will cost anybody at this point, so those numbers are not even known, nor has any sort of business case been done or anything like that. So I think we will have to wait and see how those projects develop over time to assess the contributions that they may or may not make. But, again, we have to make a distinction between urban highways and the roads that connect different parts of the country. Obviously, the Levin to Wellington road of national significance links the whole of the lower North Island to Wellington City.

Sue Kedgley: Will he listen to the message from Wellington, having elected its first Green mayor who campaigned on a light rail platform, and investigate the light rail option and increasing the frequency and reliability of peak-time commuter rail in Wellington rather than fully funding and fast tracking the billion-dollar, uneconomic Transmission Gully motorway?

Hon STEVEN JOYCE: The reality is that the Government’s job is to invest the National Land Transport Fund for the whole of the country’s benefit. Obviously, the Mayor of Wellington has views and I look forward to having discussions with her about such projects. But how the member could even ask anybody in this House to compare the benefits of a particular project with the benefits of another one when she has no idea what it would cost to operate, to build, or anything else is, frankly, astounding.

Health Services—Minister’s Statement

6. Hon RUTH DYSON (Labour—Port Hills) to the Minister of Health: Does he stand by his statement in relation to health funding that “the important thing is not how much extra money they’re getting—it’s what extra services you are getting as a taxpayer”?

Hon TONY RYALL (Minister of Health): Every district health board provides several hundred different services each year to meet the changing needs of its population. Under this Government front-line services overall are increasing as has the budget, by $512 million this year. So I do stand by that statement.

Hon Ruth Dyson: Does he agree that taxpayers see the services of an overnight supervisor in an IHC home as a front-line service?

Hon TONY RYALL: Yes. There is no doubt that taxpayers would see the provision of frontline services in an IHC home as being important. The issues that have been raised by the current court action are quite significant for New Zealand, and those matters are being dealt with presently.

Hon Ruth Dyson: Will he put the extra money in to support those front-line workers in the health and disability sector to ensure that people with intellectual disabilities will not have to return to live in the large institutions of the past, or will he continue to refuse to provide the funding to pay those staff the minimum wage?

Hon TONY RYALL: I can tell the member that when her party was in Government it was briefed on this matter and no action was taken. The case has very significant implications for the rest of the economy and the liability, in fact, rests with the provider. A few days ago the Labour Party promised $270 million—

Hon Annette King: I raise a point of order, Mr Speaker.

Hon TONY RYALL: —to remove GST from fruit—

Mr SPEAKER: A point of order has been called.

Hon TONY RYALL: —and now it is promising—

Mr SPEAKER: Order!

Hon TONY RYALL: —$500 million of back-pay.

Mr SPEAKER: The Minister took absolutely no notice of the Speaker on his feet. That is not acceptable.

Hon Annette King: I listened very carefully to my colleague’s question and then I listened carefully to the answer, and the Minister immediately went into a description of Labour’s policy. The member asked a very straight question about what the Government—this Government—would do. We did not hear an answer.

Mr SPEAKER: I think the first part of the Minister’s answer was acceptable in that he did not refer to Labour Party policy but to what the previous Government had done. Ministers can report what the previous Government has done. However, when the member got to her feet on a point of order, he then started to go into what the Labour Party may have said or done recently. That is not a matter of ministerial responsibility. I invite the Hon Ruth Dyson to repeat her question so that we can all hear exactly what the question is, and I invite the Minister to answer it again.

Hon Ruth Dyson: Will he put in the extra money needed to support front-line workers in the health and disability sector to ensure that people with intellectual disabilities will not have to return to live in the large institutions of the past; or will he continue to refuse to provide the funding to pay those staff the minimum wage?

Hon TONY RYALL: I am advised that the member’s Government was briefed on this matter and took no action whatsoever—hence the court case. The case has very significant implications for the rest of the economy, and the Government is clear that the back-pay liability rests with the provider. Once the court case has been completed, the Government will review its options going forward, but the liability rests with the provider, even though the Labour Party has promised to pay the $500 million in back-pay. [Interruption]

Mr SPEAKER: I ask the House to show a little respect. I have called Dr Paul Hutchison.

Dr Paul Hutchison: What reports has he received recently on increased front-line services?

Hon TONY RYALL: In recent months the Government has announced that the number of patients receiving elective surgery in the past year increased by over 8,000—more than four times the average achieved under the previous Government. Today I can inform the member that as well as this very large increase in elective surgery, the number of people benefiting from urgent or acute surgery has increased by nearly 4,000. This means that in the last financial year over 12,000 more patients have benefited from additional surgery, both acute and elective, which is yet another example of improved front-line services under the National-led Government.

Hon Ruth Dyson: Has the Prime Minister expressed any concern about the Minister’s refusal to pay the IHC caregivers the minimum wage?

Hon TONY RYALL: The Prime Minister has expressed to me his view that the liability lies with the provider. It is extraordinary that within a week of promising to spend $270 million to take GST off fruit and vegetables, Labour is promising another $500 million for back-pay, and another $80 million ongoing.

Hon Darren Hughes: I raise a point of order, Mr Speaker. My point of order is in support of the earlier one raised by the deputy leader of the Labour Party. As a diversionary tactic Ministers are

not allowed to refer to the policies of the Opposition party; they have to be responsible for their own policies and what they are doing, and speak about those with some conviction.

Mr SPEAKER: I accept the point of order the member is making, but he knows it is a long practice in this House that Ministers make passing references. In all my 26 years in the House, to me the important issue is that the Minister should answer a question before making any such reference at all. If I try to stop Ministers making any such reference, I think I would be departing a fair way from previous practice—as long as it is no more than just in passing. I believe that the Minister made that reference in passing. But Ministers should be careful how much they assert that any other parties in this House have certain policies, because they are not responsible for those policies, at all. The member is quite right.

Hon Ruth Dyson: How long is he prepared to leave the IHC caregivers in limbo before he decides whether their employers, who are now in statutory management, are given the funding to fulfil the contract determined by the Employment Court last year under his watch?

Hon TONY RYALL: As the member would know, that contract was signed under the previous Government. I can tell that member that we will await the outcome of the court case, but unlike the party opposite we will not be paying the $500 million back-pay, which is a liability that rests with the provider. If that party opposite thinks it has $500 million to spare on that matter, then it should explain where it is coming from.

Crime, Proceeds—Seizures

7. JONATHAN YOUNG (National—New Plymouth) to the Minister of Police: What progress has been made by police following the introduction of new legislation allowing them to seize the proceeds of crime?

Hon JUDITH COLLINS (Minister of Police): I am pleased to report that the new powers this Government has given to the police to allow them to investigate and seize the assets of criminals are producing great results. The latest figures, as at 30 September, show that $29.7 million worth of assets have been restrained since the Criminal Proceeds (Recovery) Act was passed by this Parliament. These assets are now in the hands of the official assignee, awaiting further legal proceedings and orders. Since the Act was passed an estimated $30.6 million worth of assets have been investigated as a result of methamphetamine offending.

Jonathan Young: What other reports has she received from police in relation to the targeting of organised crime?

Hon JUDITH COLLINS: I am also pleased to report that nationally coordinated investigations into organised crime have resulted in increased busts of clan-labs. So far this year 93 labs have been closed down throughout the country. In August a record 23 labs were busted, including six in Auckland, five in the Waikato, four in the Bay of Plenty, and three in Counties-Manukau. Police are to be congratulated on a 17 percent increase in the apprehension of methamphetamine offenders this year, along with an astounding 140 percent increase this year in methamphetamine seizures. Our Government is backing the police to get out there and make life a misery for New Zealand’s criminal underbelly.

Hon Clayton Cosgrove: Given that the Minister is so fond of taking responsibility for and confirming so-called good news, is she also prepared to confirm that the highest murder rate in 13 years has occurred under her watch, as noted by the New Zealand Police in the official crime statistics released on 1 October?

Hon JUDITH COLLINS: The fact is that there was a big increase—a spike—in murders in August 2009, and I am surprised the member has taken so long to catch up with that. However, murders are committed by offenders, not by the police.

Overseas Investment Rules—Purchases of Farm Land

8. Hon DAVID PARKER (Labour) to the Minister for Land Information: Will the changes to overseas investment rules mean he will decline more overseas purchases of New Zealand farm land?

Hon MAURICE WILLIAMSON (Minister for Land Information): It is not actually possible for me to answer this question, on the grounds that it would require me to be clairvoyant on two matters. First of all, I would have to predict the future as to how many applications we would receive; secondly, I would have to predict the future as to the quality of those applications. But I think I can make one bold prediction: that land sold to foreigners under this Government, which to date is about 8,500 hectares for the year, will be way less than that sold in the heady days under the Labour Government. For example, in 2006, 385,000 hectares of land were sold to foreigners.

Hon David Parker: How many farm sales to overseas purchasers has the Minister declined since he became the Minister?

Hon MAURICE WILLIAMSON: I do not have that specific information available to me, but I can confirm that up until now I have processed them under the same rules and the same criteria as the Labour Government did. However, the Hon Bill English has announced that National thinks those rules are too loose, and that we will put two new criteria in place—an economic interest test and a mitigating factors test—that I think will give Ministers more scope and powers to decide on the merits of an application in the future.

Hon David Parker: I raise a point of order, Mr Speaker. My primary question asked whether the Minister will decline more overseas purchases. The Minister should have prepared, and to be able to judge whether it will be more, he has to know how many he has already declined.

Mr SPEAKER: That is not a point of order. The Minister said he did not have the information. That is an answer to the question.

Hon David Parker: Does he recall declining even one sale since he has become the Minister?

Hon MAURICE WILLIAMSON: Not off the top of my head, no.

Hon David Parker: Why does he pretend that a change in the rules will make any difference to the number of farms he approves for overseas sale, when the current law already gives him wide discretion to decline farm sales? He just will not do it!

Hon MAURICE WILLIAMSON: I think the two new tests—the economic interest test and the mitigating factors test—will be significant elements to the decision. But I tell the member—because I do get very concerned about this—that I have probably used the same processing as Labour did, and have declined about the same number of applications as Labour did as a percentage, so why it is of interest—

Hon Ruth Dyson: How do you know that?

Hon MAURICE WILLIAMSON: Actually, I cannot remember the exact number.

Hon Damien O’Connor: Does the Minister accept that overseas purchases of New Zealand dairy land occur only when overseas buyers pay more than a New Zealander can afford?

Hon MAURICE WILLIAMSON: I am not sure that I have any ministerial responsibility for the transaction of the sale. I am responsible for whether the overseas investor meets the criteria the Government has set in the Act.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. My question was very, very clear, and I am sure that the Minister can answer it. Can I repeat my question: it asked—

Mr SPEAKER: I have not invited the member to repeat his question at all. The member’s question asked whether the Minister accepted a statement that sales to an overseas buyer occurred only if the price being offered by the overseas purchaser was higher than what New Zealanders could afford to pay. I think that was the guts of the member’s question. The Minister pointed out that he does not have responsibility for the details surrounding such transactions. Such matters, I think he was pointing out, are not for the Minister’s consideration, because it is only where land is

proposed to be sold that it comes into the Minister’s area of responsibility. I think the Minister did answer the question, because he does not have responsibility for that matter.

Hon Damien O’Connor: If he cannot answer that one, perhaps he can try this one.

Mr SPEAKER: Order!

Hon Damien O’Connor: Did his approval last week of the sale of one of New Zealand’s largest dairy farms—in fact, the largest ever dairy farm sale to an overseas interest in both size and price, at $34 million—make it easier or more difficult for New Zealanders to afford to purchase farmland in their own country?

Hon MAURICE WILLIAMSON: I need to get the member to understand the role that I play. I am not told what all the bidders are bidding. I do not know about any other bidder. All I am given is advice from the Overseas Investment Office about the specific foreign application and whether it meets the criteria of the Act, and I have to make a decision whether to approve it on those grounds. I know nothing of any other commercial offers for the properties.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. It was a very simple question. I was just asking the Minister whether he thinks about these things.

Hon Simon Power: That is ridiculous.

Mr SPEAKER: A point of order is being considered and there will not be interjection. The member was a Minister in this House for some time, and he knows that there is no point in raising a point of order with the Speaker to seek a particular answer when a member asks that kind of question. Seeking an opinion of a Minister—especially with the particular question asked—means the Minister has licence to say almost anything in relation to that kind of question. The member has been in this House long enough to know that if he expects a specific answer, he has to be a bit more precise than that.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. The Minister himself referred to greater ministerial discretion in this area of decision making. What I am trying to establish is what criteria, in thinking about the applications, the Minister does, in fact, consider.

Mr SPEAKER: It is a shame the member did not ask that question. Instead of asking the rather convoluted question about a matter for which the Minister had no responsibility, the member should have asked exactly the kind of question he has alluded to just now. I invite members to think more carefully about their questions. I am very happy to help them hold Ministers to account. I have demonstrated that—even today I demonstrated that. But I cannot help members if their questioning is too convoluted and puts in statements about matters that Ministers are not responsible for, or statements that Ministers can challenge, because that just lets Ministers off the hook.

Children, State Care—Children in Care Report Recommendations

9. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister for Social

Development and Employment: Does she agree with the Office of the Children’s Commissioner’s recent report into Children in Care, that priority should be given to research focused on the needs of Māori tamariki and rangatahi in the care system; and, if so, what action is she intending to take to implement the report’s recommendations?

Hon JUDITH COLLINS (Acting Minister for Social Development and Employment): Yes; a work programme is being developed on the issue of children in care. What is clear is that outcomes for children who have to be taken into care are far from ideal, whether they are Māori or non-Māori. As I am sure the member will agree, the State should be the parent of last resort.

Te Ururoa Flavell: What will she do to remedy the report’s findings that approximately half of Māori children in the care population are not currently living with whānau, a fact that undermines current policy and legislation, which has a very strong emphasis on whānau, hapū, and iwi connection?

Hon JUDITH COLLINS: First off, the best scenario for children is that their parents and whānau do not harm them. However, where children are not safe and we have to intervene, the first

priority is finding them a safe and secure place to live. Ideally, and in many cases, that is with family or whānau, but it is a sobering reality that that is not possible for all of the 4,200 children and young people in Child, Youth and Family care, especially those in short-term care.

Rahui Katene: How will the Minister respond to the finding that when kin placements are not investigated, some Māori and Pasifika children continue to be placed with Pākehā foster parents, which the report concludes is a source of tension, especially when short-term placements drift into long term?

Hon JUDITH COLLINS: Child, Youth and Family is always seeking to do better, in very difficult situations. However, it is important to note that that covers a range of circumstances, which can make it very difficult for Child, Youth and Family. For instance, some parents refuse to give details to whānau, and sometimes children have to be uplifted urgently at short notice in very serious situations. We are working alongside iwi to make sure that Māori children are in families, not State care, wherever possible.

Tim Macindoe: What is the Government doing to improve outcomes for children in State care?

Hon JUDITH COLLINS: We recognise that the best outcomes for children in care result from being part of a safe, secure, and permanent family. That is why in August we announced the Home for Life programme to get children and young people out of care and into families. We are developing programmes specifically to help iwi find safe, secure family homes for Māori children in care, such as whānau finders, and extended marae-based family group conferences.

Housing, Community—Deregistration of Queenstown Lakes Community Housing Trust

10. MOANA MACKEY (Labour) to the Minister of Housing: What reports or advice has he requested on the impact on New Zealand’s community housing sector of the Charities Commission’s decision to deregister the Queenstown Lakes Community Housing Trust from September this year, and what does he believe that impact will be?

Hon PHIL HEATLEY (Minister of Housing): I have requested advice on this matter from the Department of Building and Housing, and I am advised that the Queenstown Lakes Community Housing Trust has appealed the Charities Commission’s decision to the High Court. Injunctive relief from deregistration until the appeal has been heard next year has, in fact, been granted.

Moana Mackey: I raise a point of order, Mr Speaker. I asked about the impact on the New Zealand community housing sector, not the impact on one housing trust.

Mr SPEAKER: The member asked what the Minister believed the impact will be—what does he believe that impact will be? When a member puts what Ministers believe into a question, it is not much use asking the Speaker to intervene when the Minister answers. I thought the Minister did answer.

Hon PHIL HEATLEY: Mr Speaker—

Mr SPEAKER: Well, I will hear the member if he wants to speak to the point of order.

Hon PHIL HEATLEY: She says, as written on the sheet, that she is asking what the impact will be on the Queenstown Lakes Community Housing Trust, not on the community housing sector.

Mr SPEAKER: Well, I appreciate the contribution of the member. I am ruling that the last part of the question is so vague, in terms of asking what the Minister believes that impact will be, that I cannot intervene in respect of the answer that was given.

Moana Mackey: Why has he not acted quickly to convince Cabinet to amend the Charities Act to ensure that the Queenstown Lakes Community Housing Trust keeps its charitable status, instead of its having to spend large amounts of money, which should be spent on housing, on legal fees to fight the change in the courts?

Hon PHIL HEATLEY: I am not the Minister in charge of the Charities Act, and this decision actually does not affect my decisions or the decisions of the Department of Building and Housing in terms of giving grants to this particular trust. In fact, we gave $1.4 million to the trust last year. It

has put in a very good application this year, and we will not be viewing it any differently from previously.

Moana Mackey: Did he know in June this year, when he announced with great fanfare that the Queenstown trust would receive $1 million in funding from the Housing Innovation Fund, that it faced having to hand back more than $1.25 million to the Government in tax?

Hon PHIL HEATLEY: I believe that the grant it acquired last year through the housing vote was actually $1.4 million; it has put another application in this year that looks pretty good. We do not decide in the Department of Building and Housing what the Charities Commission does. That is a matter for another Minister, not me.

Moana Mackey: Has he seen reports that Charities Commission chief executive Trevor Garrett, in publicly defending the decision, made claims that the trust had been helping households with incomes of over $200,000 per year, a claim that has no basis in fact, whatsoever; and what has he done, as the Minister of Housing, to ensure that this public slur against the Queenstown Lakes Community Housing Trust is retracted and corrected?

Hon PHIL HEATLEY: I am not, as the Minister of Housing, in charge of the Charities Commission. I cannot tell off its chief executive. I do not meet with the chief executive; I am not the Minister responsible for that chief executive.

Moana Mackey: What impact does he think the Charities Commission’s decision will have on his expectation that the community housing sector will take a lead role in providing his Gateway affordable housing scheme, given that to do so will lose it its charitable status?

Hon PHIL HEATLEY: That matter is to go before the courts. There has been an interim injunctive relief from deregistration for this particular community housing group. I do not see that the decision has any particular impact on the work that we are doing.

Moana Mackey: I raise a point of order Mr Speaker. I did not ask the Minister for his opinion on the court ruling, because to do that would be inappropriate. I asked him about the impact of that decision on an announcement that the Minister made this week.

Hon Darren Hughes: On his expectation in his portfolio.

Mr SPEAKER: A point of order is being heard.

Hon Darren Hughes: Sorry.

Mr SPEAKER: The member is normally very well behaved. What I will do on this occasion is to invite the member to repeat her question, because I have to be honest: when I listened to it, I could not understand it. Now, how do I judge whether a Minister has answered a question, when I cannot understand it? So I apologise, and I accept that to some extent it is a matter of my hearing. I invite the member to repeat her question.

Moana Mackey: What impact does he think the Charities Commission’s decision will have on his expectation that the community housing sector will take a lead role in providing his Gateway affordable housing scheme, given that to do so would lose the sector its charitable status?

Hon PHIL HEATLEY: In the interim, the Charities Commission’s decision has been reversed by the court, so it is having no effect. I do not expect that it will have any effect, but I guess we will have to wait and see.

Methamphetamine—Border Seizures

11. KANWALJIT SINGH BAKSHI (National) to the Minister of Customs: What reports has he received on seizures Customs has made of methamphetamine being imported into New Zealand?

Hon MAURICE WILLIAMSON (Minister of Customs): Excellent, intelligent work by the Customs Service recently led to the seizure of what is believed to be the country’s single biggest drug concealment inside human bodies. Three men arriving in Auckland via Thailand were targeted as potential drug smugglers by customs staff at the border. They were detained, and scans revealed they were carrying large quantities of P internally. The astute work by customs officials resulted in

the seizure of 2.5 kilograms of crystal methamphetamine, with a street value of approximately $2.5 million.

Kanwaljit Singh Bakshi: What reports has he received on the seizure of methamphetamine precursor at the border?

Hon MAURICE WILLIAMSON: Up to the end of September this year the Customs Service seized 821 kilograms of methamphetamine precursor at the border. This amount of precursor would produce up to 232 kilograms of methamphetamine and cause about $93 million worth of harm. Once that precursor was converted to methamphetamine, its street value would have been about $232 million. Last year the Customs Service had an all-time record intercept of 1.2 tonnes of precursor, and we are hoping that this year, based on the 821 kilograms to date, we may beat even our own outstanding record.

Tax System Changes and GST Increase—Effect on New Zealanders

12. Hon JIM ANDERTON (Leader—Progressive) to the Minister of Revenue: When the Government introduced legislation to increase GST to 15 percent on 1 October 2010, and tax cuts to take effect from that date, was it the Government’s intention that increased costs would be matched by lower taxes and/or other forms of compensation?

Hon PETER DUNNE (Minister of Revenue): Yes, and that is why the Budget 2010 tax package provided compensation, for the vast majority of taxpayers, for the pricing effects of the GST increase. For taxpayers that was achieved through a cut in income tax rates. For those receiving main benefits, Working for Families tax credits, and New Zealand superannuation, compensation was provided through increased entitlements. I suggest that if any people are in doubt about their entitlements, they should go to www.taxguide.govt.nz to see for themselves how they benefit from the Budget tax package.

Hon Jim Anderton: Did the Minister or any of his ministerial colleagues advise State-owned trading enterprises that they had the ability to exercise flexibility over the rate of GST charged on goods and services provided during September and billed in early October so that GST of 12.5 percent was added to invoice statements for that period, rather than GST at the rate of 15 percent?

Hon PETER DUNNE: This answer may take a little longer than usual, but it is a very important issue. The short answer is yes. In fact, based on a recommendation that we received from the GST Advisory Panel, the Goods and Services Tax Act was amended to allow suppliers to issue invoices up until 11 October in respect of supplies made prior to 1 October but to charge GST at the old rate. It is up to the supplier to elect to use the transitional concession. In so doing, they need to be aware that they would have to account for the GST earlier than if the invoice were dated on or after 1 October. I have become aware in the last few days that some power and utilities companies are not using the transitional provision, and, as a consequence, customers are being charged the new rate of GST for services that were supplied during the month of September. My strong advice to them is to take that up directly with those supplying companies, because, as I said, the Act was amended specifically to give a transitional arrangement that meant that those charges need not be made at that higher rate.

Hon Jim Anderton: Is the Government concerned to learn that the State-owned energy company Meridian has chosen to impose 15 percent GST on the power it supplied to its Christchurch customers during September, one of the coldest months of the year, which included a 7.1 earthquake and 1300 to 1400 aftershocks so far, rather than exercise the lawful flexibility it had to impose GST at 12.5 percent?

Hon PETER DUNNE: Yes, and the point I made was that because that situation was predicted to be likely to occur, the Act was amended to ensure that there was a mechanism by which that additional charge could be avoided until 11 October. In the event that companies did not follow that, I say it is for the people who have been adversely affected—and I have become aware of a

number of them—to take that up directly with the companies concerned, because I am aware of instances where those charges have been reversed.

Hon Jim Anderton: Is the Minister aware that the overseas-owned Fairfax media company, owner of the Christchurch Press, decided to add GST at only 12.5 percent on invoice statements for services given up to 30 September, and is he willing to take up with his ministerial colleagues of State-owned enterprises and finance the question as to why a State-owned enterprise, Meridian, chose not to do the same thing and instead charged people 15 percent GST for services rendered in September?

Hon PETER DUNNE: There is a difference between the Fairfax case and the case the member referred to, simply because the Fairfax case relates to items that are supplied on particular days. I come back to the point that the law was amended to ensure that there was a transitional provision. I am concerned that that transitional provision has not been acted on, and I have indicated today that we will be looking into it.

Hon Jim Anderton: Is the Minister seriously suggesting to the House that electricity supplied in September was not supplied on particular days, because I would have thought it definitely was; and the question then is: does it reflect well on the Government he supports that Christchurch citizens are being subject to this rip-off by a State-owned enterprise energy company?

Hon PETER DUNNE: The point I was making in respect of newspapers was that the supply of a newspaper occurs at a particular time. The same newspaper cannot be supplied day after day; it is a different article. Power and other utilities—[Interruption] I raise a point of order, Mr Speaker. The member has raised a serious question and I am trying to give him the courtesy of a serious answer. I cannot make myself heard over some of the din opposite.

Mr SPEAKER: The member’s point is reasonable. I ask members to be more reasonable with the level of interjection.

Hon PETER DUNNE: The point I was making is that the supply of a particular newspaper on a particular day constitutes a particular supply. Electricity and other utility services do not come into that category. That is why the law was amended to allow for that transitional provision. That is the point I am making. If companies have chosen not to exercise that provision, then it is for consumers who have been adversely affected to take that matter up directly with them.

Stuart Nash: Regarding recent GST and income tax legislation, what does the Minister say to those in the Napier electorate when they ask why the 650 New Zealanders earning $1,000,000 a year or more have just received a tax cut of $1,000 a week whereas the 50 percent of Napier residents on or below the median wage get around $3 or less per week?

Hon PETER DUNNE: What I say to the member, to members of the Napier electorate, and to others who may have a similar view is that when we have a progressive tax system and we make changes based on the level of income tax that people pay, obviously those people who pay more will get a bigger cut and those people who pay less will not get as big a cut. At the same time, those people are also likely to be receiving other benefits such as Working for Families and other entitlements that boost their income.

Hon Jim Anderton: I seek leave to table an invoice from Meridian that shows it charged 15 percent GST for electricity delivered in September.

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 Jim Anderton: I seek leave to table a document from Consumer New Zealand that says that the Inland Revenue Department has issued special rules that enable energy companies in particular to charge their customers 12.5 percent GST for September services.

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 Jim Anderton: I seek leave to table a document from Fairfax that points out exactly the way in which it is charging its customers only 12.5 percent GST for September services.

Mr SPEAKER: For the House’s benefit, can I inquire whether it is a newspaper clipping or an actual administrative document?

Hon Jim Anderton: It is an administrative document.

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.

ENDS