Questions and Answers - March 22

QUESTIONS TO MINISTERS

Hon Dr Nick Smith—Actions as Minister for ACC

1. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Will he agree to the requests of former Minister Hon Dr. Nick Smith and others for an inquiry about the Minister’s role in the ACC case of Bronwyn Pullar and surrounding issues; if not, why not?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: No; first, the Prime Minister has accepted Dr Smith’s resignation because of his errors of judgment, which deals with those matters; and, secondly, there are independent investigations under way by both the Privacy Commissioner and the police into other related matters.

Grant Robertson: Will the inquiry being undertaken by the Privacy Commissioner look at whether any of the following had an influence on how Bronwyn Pullar’s case was handled: Nick Smith’s letter on her behalf; her connections to other National Party MPs; her connection to the former National Party president; her connection to board members of ACC; and if not, is not an independent inquiry necessary?

Hon BILL ENGLISH: That would be a question best directed to the Privacy Commissioner about what matters she is covering. The member can get answers to the other questions by asking ACC or asking Ms Pullar.

Grant Robertson: Will the inquiry being undertaken by the Privacy Commissioner address the issue of why two senior ACC managers attended the meeting in December 2011 with Bronwyn Pullar and former National Party president Michelle Boag, well before any privacy issues had arisen; and if not, is not an independent inquiry necessary?

Hon BILL ENGLISH: I do not think that meeting warrants an inquiry. For those of us who are familiar with constituents who persist over many years with particular complaints, I am not surprised to hear that ACC sent a senior manager to a meeting with someone who clearly had been corresponding with it over issues for many years.

Grant Robertson: Will the inquiry being undertaken by the Privacy Commissioner look at the role of a board member in setting up a meeting between two senior ACC managers with Michelle Boag and Bronwyn Pullar, and whether those senior managers were aware of the Minister’s letters about, and interest in, her case, and if not, is not an independent inquiry necessary?

Hon BILL ENGLISH: The matter before the Prime Minister was the issue of conflicts of interest for a Minister. It was established that those conflicts had not been dealt with appropriately, and the Minister involved has paid a heavy price for it. That matter does not warrant further inquiries.

Grant Robertson: Why will the Prime Minister not accept that an independent inquiry is necessary to restore the public trust and confidence in the processes of ACC and the transparency and accountability of his Government?

Hon BILL ENGLISH: The transparency and the accountability of this Government have been well established by the fact that a Minister was demonstrated not to have dealt with a conflict of interest appropriately and has now resigned as a Minister. In respect of the ACC, actually the irony here is that it is Ms Pullar who has got a lot of interest in how the ACC works and has, over a number of years, proven to be a persistent litigant with ACC.

Grant Robertson: Even if he does not accept any of the other reasons for an independent inquiry, does he not think he owes it to his former ministerial colleague Nick Smith to hold the independent inquiry that he is asking for?

Hon BILL ENGLISH: No, for the reasons that I set out on behalf of the Prime Minister earlier. Dr Smith has now resigned because of his errors of judgment, and, secondly, independent investigations are under way by both the Privacy Commissioner and the police into any related matters.

Rt Hon Winston Peters: If the Privacy Commissioner is restrained to issues of confidentiality and the police are restrained to issues of criminality, why is he trying to flannel this Parliament by saying that is a good enough inquiry on the issues of political impropriety?

Hon BILL ENGLISH: The matter of political impropriety has been dealt with swiftly and with serious accountability, in contrast to how those matters used to be dealt with by the previous Government.

Kevin Hague: What advice has he taken on whether the Privacy Commissioner has the legal power to consider ministerial responsibility and interference in ACC claims, and what was that advice?

Hon BILL ENGLISH: The issue of ministerial responsibility is fundamentally one to be dealt with by the Prime Minister, not the Privacy Commissioner, and the Opposition is carrying on as though no action has been taken. In fact, a Minister stood in this House yesterday and took the most serious punishment a Minister can take, and that is resignation from the executive and from his portfolios because of his acknowledged errors of judgment. That is how the issue of ministerial responsibility has been dealt with.

Kevin Hague: I raise a point of order, Mr Speaker. The Prime Minister’s answer did not address the issue of what advice had been sought.

Mr SPEAKER: I accept the fundamental point the member made, although his question went on to what advice had been sought in respect of, and the final part of the question related to matters of political—

Kevin Hague: The final part of the question asked what the advice had been, if there had been any.

Mr SPEAKER: In case of doubt, I invite the member to repeat his question.

Kevin Hague: What advice has he taken on whether the Privacy Commissioner has the legal power to consider ministerial responsibility and interference in ACC claims, and what was that advice?

Hon BILL ENGLISH: I cannot answer that question on behalf of the Prime Minister for sure. I cannot actually say whether he has taken advice on that matter, but it is quite likely that any advice asked for on that matter would tell us what we already know, and that is that responsibility for how Ministers behave fundamentally lies with the Prime Minister, not the Privacy Commissioner, and the Prime Minister has dealt with the issue. The Opposition may not have realised that the Minister was resigning yesterday, but that is what happened.

Kevin Hague: Is the Prime Minister confirming that there will be no Government-ordered independent investigation into the conduct of Dr Smith in respect of ACC claims?

Hon BILL ENGLISH: The Prime Minister has conducted his inquiry into the conduct of Dr Smith, and the result of that inquiry is that Dr Smith resigned from his portfolios and resigned from the executive. There are no other measures that can be taken in respect of ministerial responsibility. They have been taken.

Kevin Hague: How can the public have confidence that ACC claims will be administered in a politically neutral way, when there has been no investigation into the extent of political interference in claims?

Hon BILL ENGLISH: The Prime Minister has considered the circumstances around Dr Smith’s actions. Dr Smith has considered those actions, and that has led to the resignation of the Minister because a conflict of interest was not handled appropriately. I note that Ms Pullar’s public statements indicate that she remains deeply dissatisfied with her treatment by ACC, despite, I think, 3 years of communication with the Minister.

Hon Trevor Mallard: In light of the Prime Minister’s description of Nick Smith’s letter as improper, inappropriate, and in error, which resulted in his resignation, how does the Prime Minister differentiate that from the affidavit given to the Supreme Court by the Attorney-General in support of his friend Bill Wilson?

Mr SPEAKER: The Hon Bill English—in so far as the Minister can answer that. It is a fair way from the primary question.

Hon BILL ENGLISH: That is right. It is unlikely that the member’s question bears much resemblance to reality.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The Prime Minister has dealt with the matter of the Attorney-General’s support of his friend Bill Wilson—

Mr SPEAKER: Order! The member will resume his seat. It is not that difficult to read the primary question and see that the primary question has nothing to do with the Attorney-General and nothing to do with Bill Wilson. The member asked a supplementary question that was so far away from the primary question that I could have ruled it out, but I did not. Maybe I should have ruled it out; that would have avoided the answer, which was perhaps unhelpful. The question is too far from the primary question. If it helps deal with the situation, I think the Minister’s answer perhaps could be ruled out and the question could be ruled out, because I think the question was out of order.

Hon Trevor Mallard: If you have ruled it out, I will go back to scratch. Why is the treatment of Nick Smith fair if he has to resign for providing a letter of support in an ACC case but the Attorney- General does not have to resign for providing an affidavit for his friend in the Supreme Court?

Hon BILL ENGLISH: I am advised that the assertions made in that question are incorrect.

Economic Performance—Reports

2. KANWALJIT SINGH BAKSHI (National) to the Minister of Finance: What recent reports has he received about the economy’s performance?

Hon BILL ENGLISH (Minister of Finance): The GDP result for the December quarter was published today, showing that the New Zealand economy grew 0.3 percent in the quarter and 1.8 percent in the calendar year 2000. Although the quarterly result was below market expectations, the annual growth of 1.8 percent compares favourably with that of many other countries. We do not focus on quarterly numbers too much, because they move around. The September quarter was better than forecast, the December quarter was a bit lower than forecast, but the economy has grown for 10 of the last 11 quarters, and we are on track for around 2 percent growth.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Taking the first opportunity, I have just been informed that the document I referred to in my supplementary question in question No. 1 was a statement and not an affidavit. I correct that and I apologise to the House if I misled—

Mr SPEAKER: Order! There is no provision under the Standing Orders to correct a question like that. The member could have sought leave of the House. With the leave of the House the member can do anything, but he cannot do that by way of a point of order. There is no way to correct a question. The member has got away with it, and I guess I am best to leave the matter there, but he, as an experienced member, should know that.

Kanwaljit Singh Bakshi: What were the main contributors to economic growth in the latest figures?

Hon BILL ENGLISH: From quarter to quarter the contribution to growth can shift around a bit, but there is something of a recent trend where the economy is benefiting from an increase in exports and investment, and this of course will help New Zealand rebalance over the longer term. Households continue to save a bit more and are careful with their spending. The Government is focused on the longer-term issues, and that is improving the competitiveness of our business environment, because the only way we get growth in the long run is when we earn more from the rest of the world and when businesses choose to invest more capital and employ more people.

Hon David Parker: Is it correct that during this, the fourth year of his Government, the reports he has received about the economy’s performance show that in the last quarter, growth was just a third of his already modest growth projection at the time of the election; that the current account deficit is projected to increase every year, causing New Zealand’s overseas debt to get worse by $50 billion over the next 4 years; and that the only statistic showing strong growth is the record number of people moving to Australia?

Hon BILL ENGLISH: Well, some of that may be included in the reports the member is talking about, but the economy is basically on track for what we know is moderate growth—more moderate than we would of course like, but compared with the rest of the world we are in reasonable shape. Employment will continue to grow, investment is starting to pick up, and we look forward to more contribution from stronger exports and the Christchurch rebuild.

Kanwaljit Singh Bakshi: How did New Zealand’s economy grow in 2011 compared with the growth in other countries?

Hon BILL ENGLISH: Despite global uncertainty and significant disruptions from the earthquake, it does perform reasonably well. For example, our 1.8 percent annual growth in GDP was better than 1.6 percent in the US, minus 0.6 percent in Japan, 0.7 percent in the euro area, and 0.7 percent in the UK—

Hon Phil Goff: And 9 percent in China.

Hon BILL ENGLISH: —and, of course, our new friends of China are pointing out that China grew faster, but I note that they are very keen to make sure that the Chinese do not invest here to help us with growth.

Kanwaljit Singh Bakshi: What is the outlook for the economy over the next 3 years?

Hon BILL ENGLISH: The economy will continue to expand as it has for 10 of the last 11 quarters. Over the next 2 years we would expect that to be maintained or improved by the rebuilding of Christchurch, and of course the momentum we can get from our two largest trading partners, Australia and China, which continue to grow at a reasonable speed even if China is slowing down. Our terms of trade remain quite elevated. We will continue to focus on competitiveness for New Zealand businesses, because that is something we can influence. We cannot influence the growth of our trading partners.

Foreign Affairs and Trade, Chief Executive—Confidence

3. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: Does he have confidence in the Chief Executive of the Ministry of Foreign Affairs and Trade?

Hon MURRAY McCULLY (Minister of Foreign Affairs): Yes.

Hon Phil Goff: Does he accept responsibility for a botched restructuring process, described by media commentators yesterday as being a complete mess, and which he in his letter of yesterday to John Allen said has damaged confidence, professionalism, and morale in the ministry; or is that all John Allen’s fault?

Hon MURRAY McCULLY: The quote from the member is taken slightly out of context. What I will say is that the proposals advanced by the ministry leadership had some very positive features that will be profoundly important for the future of the ministry, and some other features that caused me concern. I conveyed my views in both respects at the time, before the commencement of the consultation process, and yesterday, the consultation process having finished, I set out those views

in a four-page letter in a very transparent way. I take responsibility for the views that I expressed in that letter and also in the communications I made prior to the consultation process starting.

Hon Phil Goff: When the Minister told this House yesterday that the proposal that had been circulated from the ministry staff “comes from ministry management, and not from me”, is it correct, as the ministry spokeswoman said today, that he has been involved in these restructuring proposals “throughout the process”, that he appointed Mr Allen from the private sector with instructions to radically restructure the Ministry of Foreign Affairs, and that the Public Finance Act makes the $40 million in cuts it is expected to make his responsibility?

Hon MURRAY McCULLY: Mr Speaker, I am not sure which of those questions you would like me to answer—[Interruption]

Mr SPEAKER: Order! The Minister needs to answer only one.

Hon MURRAY McCULLY: I want to make it very clear that the proposals advanced for change within the ministry were developed by change teams established under the direction of the chief executive of the Ministry of Foreign Affairs and Trade, as is required by the State Sector Act.

Mr SPEAKER: Before I call the Rt Hon Winston Peters—I apologise to the member—I tell members that this sniping across the House will stop. There was some unacceptable sniping earlier on from my right, and that was unacceptable interjection from my left. I will draw the line there. Any further sniping or interjection is out of order and members will be in some trouble.

Rt Hon Winston Peters: Can the Minister tell us who will be attending the current Budget round, chief executive Allen or him, so that the country can learn how this previously appropriately funded ministry has been sold down the drain?

Hon MURRAY McCULLY: If I understand the member’s question correctly, I should perhaps put it this way. In 2008 an additional $212 million a year in current Budget terms was allocated to the Ministry of Foreign Affairs and Trade. In my first year in this portfolio we took $115 million of that off the table, and a further $20 million in subsequent years. If the $25 million proposed for further savings was to be taken, there would still be in excess of $60 million of the so-called stepchange funding held by the ministry.

Hon Phil Goff: Was John Allen telling the truth when, in his briefing to the Minister as the incoming Minister of Foreign Affairs, he said that the Government requires operating savings of $40 million a year from the Ministry of Foreign Affairs and Trade, which represents, I understand, about 10 percent of its total budget?

Hon MURRAY McCULLY: As I have told the House previously, the communication from the Government to Mr Allen was in the form of a letter from the chief executive of Treasury and the State Services Commissioner, and the savings sought in that letter were $24 million.

Hon Phil Goff: I raise a point of order, Mr Speaker. My question was: “Was Mr Allen telling the truth in his briefing to the Minister that he had to find operating savings of $40 million?”. That question was not answered.

Mr SPEAKER: Order! I thought I heard the Minister answer very clearly. He said the Government actually, in a letter to the Ministry of Foreign Affairs and Trade, had stated that it required $24 million of savings. That seems to be a very precise answer to the member’s question.

Hon Phil Goff: Why would Mr Allen as chief executive tell the Minister that he was required to find $40 million a year in savings if that is not the truth?

Hon MURRAY McCULLY: If the member had listened to some of the previous responses given by Mr Allen he would know that in addition to the $24 million sought by the chief executive of Treasury and the State Services Commissioner, Mr Allen and the management team of the ministry formed the view that they would need to make some additional savings so that they could reprioritise expenditure within the ministry, because budgets going into the future were flat-lined. He has publicly given that explanation himself before.

Hon Phil Goff: I seek leave of the House to table Mr Allen’s statement in the briefing paper that operating savings of $40 million a year were to meet Government requirements.

Mr SPEAKER: Leave is sought to table that statement from the briefing paper of the incoming Government. Is there any objection to that course of action? There is no objection. Document, by leave, laid on the Table of the House.

Venture Capital Funding—Technology Companies

4. KATRINA SHANKS (National) to the Minister for Economic Development: How is the Government helping New Zealand technology companies access the capital and expertise they need to grow?

Hon STEVEN JOYCE (Minister for Economic Development): I am pleased to announce to the House—[Interruption]

Mr SPEAKER: Order! I cannot hear the answer.

Hon STEVEN JOYCE: There’s a bit of ham acting over there. I am pleased to announce that the New Zealand Venture Investment Fund has partnered with American investor Peter Thiel and other New Zealand investors to establish the $40 million Valar Ventures Fund. This fund will help New Zealand technology companies wanting to expand into large offshore markets. These companies need not only capital but also access to the right offshore networks in those markets, and to build their customer base. International investors like Peter Thiel, who founded PayPal and was an early investor in Facebook, bring capital but also considerable expertise in building companies from start-up stages through to world-leading enterprises.

Katrina Shanks: Why is access to capital and expertise so important for young technology companies in New Zealand?

Hon STEVEN JOYCE: The small size of our domestic market means most businesses need to access world markets a lot earlier than similar companies in other countries. Valar Ventures’ market networks and access to capital could help reduce the scale of that challenge in the companies in which it invests. Gaining better access to capital for our companies to lift their productivity and grow their exports is part of the Government’s comprehensive business growth agenda. This is a great example for positive foreign direct investment in New Zealand, and the fact that an investor with Peter Thiel’s track record sees investment opportunities in this country’s technology companies is, I believe, a positive sign of confidence in our country’s innovation, entrepreneurship, and leadership.

Hon David Cunliffe: I seek leave to table a document from the Parliamentary Library showing the departure of New Zealanders for Australia to have reached an all-time high of over 1,000 a week—no doubt the optimism the Minister quotes—

Mr SPEAKER: Order! I wonder how the member possibly saw that last statement to be within the Standing Orders. It is an abuse of the House. The member is perfectly at liberty to seek leave to table a document, but not to make some comment about the Minister. Leave is sought to table that document. Is there any objection? There is objection.

Earthquakes, Canterbury and Christchurch—Offer on Red Zone Properties

5. Hon LIANNE DALZIEL (Labour—Christchurch East) to the Minister for Canterbury

Earthquake Recovery: Does he stand by the Prime Minister’s statement that the Government’s offer to insured residential homeowners, whose properties had been red-zoned by the Government, is “incredibly fair”; if so, why?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Yes. Those valuations were higher than likely market valuations in 2010.

Hon Lianne Dalziel: Does he share the Prime Minister’s concerns that some residents will be out of pocket by more than $150,000 and will be pointing the finger at the insurers, and if so, what steps has he taken to ensure that people are treated incredibly fairly by their insurers?

Hon GERRY BROWNLEE: The relationship between any policyholders and their insurers is one that can have an arbitration done through the Insurance and Savings Ombudsman. Also, I think as time passes the incentive for insurers to settle those accounts is going to go greater. I raise a point of order, Mr Speaker. I am deeply troubled by this question being raised in the House by this member. My reasons for that is that this member raised in her Address in Reply speech on 15 February a personal concern about how much she was being paid—

Mr SPEAKER: Order! I have heard sufficient of the point of order. An issue in respect of order in the House would be one as to whether the question is in order. This is question time and the only relevant issue is whether questions are in order. This question is in order. Every member has a right to ask questions that are in order. There may be matters that Ministers wish to include in replies, but what the member was just raising is not a matter for point of order, because the question is in order. The only issue that could be raised could be to suggest that the Speaker had been in error in accepting a question on the Order Paper that was not in order. It is my view as Speaker that the question is in order, and I will uphold the rights of all members to ask questions that are in order.

Hon Lianne Dalziel: I seek the leave of the House to make a personal explanation in respect of my personal situation being a resident in a red zone in Christchurch.

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

Hon Lianne Dalziel: I have made no secret to this House or to the public that I am affected by the residential red zone decision made by the Cabinet on 23 June last year. That decision has placed in me in a personally difficult position, but I do not believe that it is a conflict of interest for me to raise questions in the House, because I am not the only person who is affected in the way that I have been affected. I am more than happy to table in this House the Government offer to me. I am more than happy to table in the House the offer that the insurance company gave to me last week—well, to me and my husband; it does belong to my husband as well. I am also very happy to explain to people that I have got only 8 weeks left to choose one of the Government’s voluntary offers or they will be withdrawn from me, in a situation where I got my offer from my insurance company only last week, which puts us in a position where we can negotiate with them for the first time for a financial settlement. So the discussion around these issues with respect to a 9-month offer being made to people in the residential red zone has actually stepped into a framework where people do need to understand that not everybody has been given 9 months.

Mr SPEAKER: I thank the honourable member.

Hon Lianne Dalziel: Does he consider the offer is incredibly fair to the Cairns family in Kaiapoi, who would be out of pocket to the tune of $200,000 if they tried to replace what they have now with option 1, and if so, why?

Hon GERRY BROWNLEE: With all due respect to that family, what they have now is an exceptionally damaged property on land that cannot be rebuilt on. That is fair.

Hon Lianne Dalziel: Is he aware that insurance companies have advised residents in the red zone that their properties can be repaired despite having previously advised that their properties were rebuilds, thereby limiting their offers to ones of indemnity, and what sort of pressure does he think this has placed on people who have been told by the Government that it will give them even less if they do not accept those offers?

Hon GERRY BROWNLEE: So far, more than 3,000 people have accepted a Government offer and been settled. Further, many of those are in a far better position than they would have been in normal circumstances. There will be variations—that is clear. When you are dealing with 7,000 damaged properties and the Government is making an offer that allows people to make some choices, then I think that is fair. In the member’s case, we know the difficulty. She is being offered $87,200 for her land; she wants $200,000. She made that clear at the Local Government and Environment Committee, but it is not easy just to put a hand in the taxpayers’ pocket and pay it out to members of Parliament who are grumpy about the money being offered to them.

Hon Lianne Dalziel: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I am on my feet. Order! These matters are sensitive matters. I have upheld the member’s right to ask questions, and I will watch Ministers’ answers. The member sought to make a personal explanation and brought into the House her personal situation. It has been talked about at a select committee; the Minister referred to that. I will be watching matters very carefully, but I want the House to come back to order.

Hon Lianne Dalziel: Can the Minister confirm that three-quarters of those who have accepted the red zone offer have accepted the land-only offer, and that that means that they will accept the bulk of their settlements from their insurers? Is he aware that some red zone residents have not yet been able to resolve their disputes with their insurance companies, and will he therefore consider leaving the options open to enable residents to make an informed decision on the voluntary offer?

Hon GERRY BROWNLEE: To the first question, yes, and that indicates that people are making sensible choices for their future.

Question No. 1 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): I seek leave, pursuant to an earlier supplementary question, to table four documents. The first document is a document showing that the Attorney-General intervened in the matter of Bill Wilson in the Supreme Court.

Mr SPEAKER: The document shows that? What is the source of this document?

Hon TREVOR MALLARD: It is a Official Information Act request, that particular one, from the Prime Minister.

Mr SPEAKER: Leave is sought to table a document that was an Official Information Act request from the Prime Minister. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon TREVOR MALLARD: The second document is a similar document, which shows that the Attorney-General claimed to be a close friend—

Mr SPEAKER: Order! I want to know exactly the source of the document.

Hon TREVOR MALLARD: It is an Official Information Act request again, from the Prime Minister—

Mr SPEAKER: So the document is from the Prime Minister’s office?

Hon TREVOR MALLARD: I think, in fact, it is a memorandum to the Prime Minister, but—

Mr SPEAKER: I need to know for the House the source of the document.

Hon TREVOR MALLARD: The source of the document is an Official Information Act request from the Prime Minister.

Mr SPEAKER: An Official Information Act request from the Prime Minister? The Prime Minister would not be making Official Information Act requests.

Hon TREVOR MALLARD: It is an Official Information Act request to the Prime Minister. The document came from that set of documents.

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

Hon TREVOR MALLARD: The next document is from the Prime Minister, which shows that after concerns were raised about the Attorney-General being a close friend, the matter was transferred to Judith Collins.

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

Hon TREVOR MALLARD: The fourth document is a document that shows that the Attorney- General’s friend—

Mr SPEAKER: Order! I want to know the source of the document before we hear what the document might show.

Hon TREVOR MALLARD: In this particular case it is a press clipping, showing the—

Mr SPEAKER: No, we are not going there. [Interruption] That will be enough. This is a point of order, and we have had sufficient.

Unemployment, Canterbury—Working InZone

MARK MITCHELL (National—Rodney) to the Minister for Social Development: How is the Government providing beneficiaries opportunities for work in Canterbury? [Interruption]

Mr SPEAKER: Order! I ask the Attorney-General to stop interjecting, because the Minister to whom this question is being addressed is sitting on his immediate right, and I doubt she can hear the question, because I cannot. I call Mark Mitchell again, please, for question No. 6

Unemployment, Canterbury—Working InZone

6. MARK MITCHELL (National—Rodney) to the Minister for Social Development: How is the Government providing beneficiaries opportunities for work in Canterbury?

Hon PAULA BENNETT (Minister for Social Development): I am delighted that Minister Brownlee and I were able to announce a new joint scheme called Working InZone, which will see 100 unemployed Cantabrians employed to clean up, maintain, and secure Government-owned residential properties in the red zone. Working InZone is a partnership between Work and Income, the Canterbury Earthquake Recovery Authority, City Care in Christchurch, and the Waimakariri District Council.

Mark Mitchell: Can the Minister give more details about how the Working InZone scheme works?

Hon PAULA BENNETT: We have provided $770,000 to supplement wages, and to pay for mentors and supervisors, equipment, and on-the-job training. After 6 months they will come out with first aid and site-safety training, help with literacy and numeracy, and driver’s licence upgrades if needed, and they will be able to link their new qualifications to the New Zealand Qualifications Authority framework. On top of that, they will have new skills, real work experience, and 6 months’ wages in their pockets.

Mark Mitchell: Has the Minister seen any reports on unemployment in Christchurch?

Hon PAULA BENNETT: Yes. I have seen many reports on unemployment in Christchurch. Some I have seen predicted there would be 20,000 more people on the unemployment benefit after the Christchurch earthquake. I then saw reports that there would be 24,000 more people on the unemployment benefit after the earthquake. Of course, there were about 5,082 people on the unemployment benefit in February, and that was down by 298 on the same time last year. Those reports, of course, came from Clayton Cosgrove, who is probably the Ken Ring of the Labour Party—his predictions are so off.

Schools, Class Sizes—Treasury Advice

7. CATHERINE DELAHUNTY (Green) to the Minister of Education: Does she agree with Treasury that increasing class sizes will assist educational outcomes for students; if so, why?

Hon CRAIG FOSS (Associate Minister of Education) on behalf of the Minister of

Education: Treasury never made the claim, but the Minister of Education does agree with Treasury in its independent observations when it said “it is the quality of teaching that ultimately matters most to lifting student achievement.”

Catherine Delahunty: How does the Minister propose to meet the Government’s goal of reducing underachievement when all the evidence says that a smaller class size is required for struggling children?

Hon CRAIG FOSS: I am proud that this Government has open and transparent goals for 85 percent of New Zealanders to achieve National Certificate of Educational Achievement level 2. That is somewhat of an increase on the current outcomes, which tends to imply that the current system, the current ratios perhaps, are not working for a huge proportion of our young.

Catherine Delahunty: Have the parents of this country asked her to increase class sizes to assist their children’s learning?

Hon CRAIG FOSS: I am not aware of parents having done that, but I do note that the parents of many New Zealanders—in fact, about 47 percent of all New Zealanders—voted for this National Government and the policies it put out for a brighter future for education at the last election.

Catherine Delahunty: How many teachers and principals have asked her to increase class sizes to assist them in teaching those children who are struggling to learn?

Hon CRAIG FOSS: Again, I cannot directly answer that one, but I am somewhat interested in the member’s fixation on ratios, which—

Mr SPEAKER: Order! The Minister said he could not answer the question, and that is an answer. We do not need to go on to other extraneous matters.

Hon Nanaia Mahuta: Will she rule out increasing class sizes for new entrants, given the weight of evidence that shows that smaller class sizes improve achievement in early years, or does she believe there is no correlation between class size and educational achievement?

Hon CRAIG FOSS: There are all sorts of documents and inquiries. Professor Hattie has recently had information in that space. Once again, there is a fixation on absolute ratios, be they for new entrants or right through the school. We are concentrating on the educational outcomes for all New Zealanders.

Catherine Delahunty: Has she read the results of the Picking up the Pace literacy project in South Auckland in 2002, which found “a significant relationship between class sizes for new entrants and the gains made in their achievement levels”, and would she agree with one of the teachers involved in the study that reducing junior class sizes from 28 pupils to 15 had an amazing impact on her pupils’ learning?

Hon CRAIG FOSS: I am sorry, I cannot answer on whether the Minister has read that one or not.

Hon Nanaia Mahuta: Has she read Treasury’s other report, written in 2001, on class sizes, based on a longitudinal study undertaken in New Zealand, which found that smaller class sizes significantly improved test score growth as well as early adult outcomes, and if so, does she then agree that increasing class sizes would be detrimental to student achievement?

Hon CRAIG FOSS: Once again, ratios are but one input of all those things that help a child or a young New Zealander to learn. There is teacher quality, the environment the child came from, as well as one of the other inputs being ratios.

Catherine Delahunty: Is the Minister aware that increasing class sizes by just two students would reduce secondary school teacher numbers by about 2,000, and does she intend to make cuts to teacher staffing numbers as per Treasury’s advice?

Hon CRAIG FOSS: I am not quite sure that that is the actual advice in that report. Remember, it was an independent report from the Secretary to the Treasury. But, once again, one, two, or three extra students, or fewer students, per classroom—if it does deliver a better educational outcome, then we should look at that. All advice is to be considered.

Catherine Delahunty: Rather than listening to Treasury, which is not the expert, and increasing class sizes, is the Minister prepared to listen to parents, teachers, and principals, who all want smaller class sizes for their most vulnerable learners?

Hon CRAIG FOSS: I am quite sure the Minister is listening very carefully to the loud shout of New Zealanders who are not satisfied and are not happy with the educational outcomes of so many New Zealanders. That is why this Government is focused on their outcomes.

Catherine Delahunty: I seek leave to table the report of the secondary schools staffing group that addresses class sizes, which was released on the Ministry of Education’s website.

Mr SPEAKER: It is a document that is already on the website. Members have got access to that.

Hon Nanaia Mahuta: I seek leave to table a Treasury report that shows that class sizes do have an impact on learning outcomes.

Mr SPEAKER: What Treasury report is this?

Hon Nanaia Mahuta: This Treasury report is a 2001 report.

Mr SPEAKER: Leave is sought to table that document from 2001. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Gareth Hughes: I raise a point of order, Mr Speaker. I am sorry to return to Catherine Delahunty’s request to table a document. This often comes up in the House. We table an official report, be it from the OECD or whatever, but it is on a website. The fact that it is on a website should not rule it out of being tabled as information to this House.

Mr SPEAKER: The member makes a fair point, but the particular document being referred to is readily available. The document that the Hon Nanaia Mahuta sought to table would be less readily available, I suspect, being an older document. That is why I checked on the publication date of the document. The purpose of tabling documents is not to try to score political points. The purpose of tabling documents is to provide to the House information that members would not otherwise have available to them, and members should remember that.

Urewera Four Case—Cost to Crown

8. HONE HARAWIRA (Leader—Mana) to the Attorney-General: What is the likely total cost of the “Urewera Four” case to the Crown, from the start of surveillance of suspects to the close of the trial on Tuesday, including all of the different Government departments that were involved?

Hon CHRISTOPHER FINLAYSON (Attorney-General): I am advised that the costs for New Zealand Police excluding salaries as at September 2011 were $500,462. I am further advised that police projected total costs are difficult to predict at this time. Crown Law records that the total cost of prosecutions, which involved hearings and appeals on a series of interlocutory applications as well as substantive trial matters, totalled $322,412.35 between 2009 and 17 February 2012. Crown Law does not yet have information on the cost of the most recent hearing, which ended on Tuesday, but expects to be advised of this shortly by the Crown solicitor in Auckland.

Hone Harawira: Kia ora. Will the Government’s eventual costs include the estimated $12.5 million spent on the surveillance activities of Government agencies such as the Security Intelligence Service, the Government Communications Security Bureau, the Special Tactics Group, the special investigation group, and other agencies whose costs are not required to be made public as are costs such as legal aid?

Hon CHRISTOPHER FINLAYSON: Yes, I imagine—they are costs to the Crown.

Hone Harawira: What compensation will the Government offer to the people of Tūhoe for the human rights violations that they suffered at the hands of the Crown, and will that compensation include the return of Te Urewera to Tūhoe; if not, why not?

Hon CHRISTOPHER FINLAYSON: The whole question of historical redress for grievances suffered by Tūhoe over the years is the subject of negotiations being conducted on behalf of the Crown by the Minister for Treaty of Waitangi Negotiations and Tūhoe, and the results of that will be made known in due course.

New Zealand Air Force—Upgrades

9. Dr CAM CALDER (National) to the Minister of Defence: What reports has he received on recent upgrades to Royal New Zealand Air Force capabilities?

Hon Dr JONATHAN COLEMAN (Minister of Defence): I have received a report that last Friday the Royal New Zealand Air Force received the first of the five P3K2 Orion aircraft being upgraded by Safe Air Ltd in Blenheim. The upgraded aircraft boast state of the art technology, including a new long-range surveillance radar system and long-range infrared imaging equipment.

This is great news for the air force, and shows that the New Zealand Defence Force savings plan is enabling the delivery of front-line capabilities.

Dr Cam Calder: What benefits will these upgraded aircraft bring to the Royal New Zealand Air Force and other Government agencies?

Hon Dr JONATHAN COLEMAN: The upgrade improves the Royal New Zealand Air Force long-range and mid-range maritime patrol capabilities, and enables the air force to deliver enhanced support to military operations in keeping with the “one force” approach set out in the defence white paper. The upgrade also improves the Orions’ capabilities to participate in search and rescue, customs, police, and maritime safety operations.

Hon Phil Goff: I raise a point of order, Mr Speaker. It seems the Minister might be quoting from an official document prior to 2008, and I wonder whether he could table it.

Mr SPEAKER: Let me check with the Minister. Is the Minister quoting from an official document?

Hon Dr JONATHAN COLEMAN: No, I am actually quoting from my answers. [Interruption] Let me rephrase that: I am quoting from the material that my office has prepared—

Mr SPEAKER: Order! [Interruption] The members may have forgotten that their own colleague called the point of order and they should be silent. I am now on my feet, and they should be even more silent. The Minister does not have to table the material prepared to answer a question.

Hon Dr Nick Smith—Actions as Minister for ACC

10. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: What was so vastly different in the contents of the first and second letters from Hon Dr Nick Smith to ACC regarding Bronwyn Pullar that finally made him decide to accept Dr Smith’s resignation?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: The Prime Minister saw the contents of the second letter yesterday morning. It was the combination of the two letters that led to his decision to accept the resignation.

Rt Hon Winston Peters: Why did he again express confidence in Mr Smith yesterday morning, even after being made aware of the March 2010 letter to National MP Sam Lotu-Iiga?

Hon BILL ENGLISH: I cannot answer that directly on behalf of the Prime Minister other than to say that these are matters that any Prime Minister would consider.

Rt Hon Winston Peters: When did he first know of Miss Pullar’s correspondence with Mr Smith and various other members of the National Party caucus asking for assistance in dealing with ACC, and what action did he take on receipt of this knowledge?

Hon BILL ENGLISH: I think the Prime Minister answered those questions in the House yesterday.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking the question today. The Prime Minister did not answer that question yesterday, at all. He particularly avoided answering the question.

Mr SPEAKER: We have a Minister answering on behalf of the Prime Minister. I do recollect that question being asked yesterday, and I do remember the Prime Minister answering that question yesterday. I believe that he even gave a day when he understood he was first made aware of the issue. I cannot expect the Minister, answering on behalf of another Minister, to necessarily have that date. The risk is that he might inadvertently mislead the House, which would not be a good thing. I think that the Minister has, under those circumstances, given a reasonable answer.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The reason why I am asking the question today is that the Prime Minister did not answer that question yesterday, otherwise I would not be asking the question today. I am asking the question today because when it came to that particular question he did not answer it, and the Hansard will show it. So to say that the Prime Minister answered the question yesterday—when he did not—even though this Minister is not the actual Prime Minister, does not mean that he escapes some responsibility here.

Mr SPEAKER: I have to accept the Minister’s answer. The Minister has said that the Prime Minister answered that question yesterday. If the answer from a Minister is absolutely outrageous in terms of its impossibility of being accurate maybe the Speaker could do something, but under these circumstances the Minister has said on behalf of the Prime Minister that the Prime Minister answered that question yesterday, and I have to take the Minister’s word for that.

Hon David Parker: I think it is permissible for a member to ask the same question day after day and still expect an answer. If the Minister does not know—and it is quite possible that the Minister answering on behalf of the Prime Minister may not know, and that is no criticism of him—he should say that. If, on the other hand, he wants—

Mr SPEAKER: Order! No, the member is now getting to the point of suggesting how a Minister should answer the question. The Minister has given a perfectly reasonable answer. He said in his view, answering on behalf of the Prime Minister, that the Prime Minister answered that question yesterday.

Hon David Parker: It’s not an answer to the question.

Mr SPEAKER: Order! I am on my feet. As the Hon David Parker has pointed out, any member is entitled to ask the same question on successive days. There is nothing out of order about that whatsoever. The Rt Hon Winston Peters has done that and the Minister has answered, on behalf of the Prime Minister, that he answered that question yesterday. Now, I cannot take that matter any further. I have to accept the Minister’s answer. It seems reasonable to me because I thought I heard that answer yesterday.

Hon David Parker: I raise a point of order, Mr Speaker. With respect, Mr Speaker, the problem is that the answer is not an answer to the question; it is an answer as to whether the question was answered yesterday, and that was not Mr Peters’ question.

Mr SPEAKER: Order! The member is now disputing the Speaker’s ruling, which is not helpful, and he should desist from that. It is a perfectly acceptable answer, where the Minister has said on behalf of the Prime Minister that he answered that question yesterday, and I have to accept that. If it was clearly outrageous I could do something about it, but it is not. It seems a perfectly reasonable answer under the circumstances because I am certain I heard the Prime Minister yesterday indicate when he first was made aware of this issue. As far as I am concerned that is a reasonable answer to the question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am not wanting to contend what you are saying, but the point is this question was not asked this way yesterday. That is the first thing. The second thing is that it turns on this very important chronological matter, because it becomes clear, if you look at the Hansard, and also at the Prime Minister’s comments in the media, that the date of his knowledge of that second letter is critical to the question. All I am asking is when did he actually learn about that second letter, because if he is expressing confidence after having read the letter, then—

Mr SPEAKER: The member is now getting into the detail of the matter. The remedy is perfectly within the member’s hand to follow because clearly there are going to be further question times next week. If that question is such an important question, if the member puts it down as a primary question then an answer is given or a statement made in the House in a situation of some formality, and there is a real responsibility on Ministers when answering a primary question to be very careful they give the House correct information. An answer to a supplementary question is not such a situation of formality as a primary question, and if the member feels this is a particularly important issue—and I make no comment on that whatsoever—then a primary question would make sure that a Minister is answering in a situation of some formality and has to be very careful about the information they give the House.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Can I ask you this. Does that mean he can rise in the House on the next sitting day and when I ask this same question as the

primary question say: “Well, that answer was given last Wednesday.” and sit down? Where is this House going to be—

Mr SPEAKER: Order! If that was put down as a primary question I think I would expect a more complete answer to a primary question than that.

Rt Hon Winston Peters: Was the Prime Minister not aware before Monday evening that Ms Pullar, a former National Party official, sent a tonne of emails, to use the media expression, to Nick Smith, which is the real reason he was removed from the ACC portfolio, and is it true that his successor to the ACC portfolio was privately briefed over this controversial situation?

Hon BILL ENGLISH: Oh, you would need to ask the other Minister. What I can say is that the Prime Minister has been more comfortable dealing with this issue than a previous Prime Minister was in dealing with that member when he had—

Mr SPEAKER: Order! I think it is going to lead to serious disorder in the House if I allow the Minister to go down that track. The member asked a question, and it has been answered. People can judge the question without the Minister going down that track.

Question No. 11 to Minister

Dr DAVID CLARK (Labour—Dunedin North): I seek the leave of the House to hold over my question until the Minister of Revenue is in the Chamber and able to answer it.

Mr SPEAKER: Leave is sought for that purpose. Is there any objection? There is objection.

Tax System Changes—Fiscal Neutrality

11. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Revenue: Given the evidence presented by IRD officials in their briefing for the incoming Minister that significant tax reforms enacted since 2008 have reduced the tax to GDP ratio and that “about 2.5 percentage points of this decline is attributable to policy changes” does he agree with the Minister of Finance that the Government’s tax changes have been “broadly fiscally neutral”; if so, why?

Hon BILL ENGLISH (Minister of Finance) on behalf of the Minister of Revenue: Yes, because the Minister of Finance is usually right about these things. The Minister of Revenue is advised that the tax reforms that the Inland Revenue Department refers to in its briefing to the incoming Minister include the fiscally negative tax cut in the company tax rate under Labour in April 2008, the fiscally negative cut in personal taxes under Labour in October 2008, and all the tax changes that have happened under the National-led Government, which as a package have been broadly fiscally neutral. So if the member is looking for someone to blame for a reduction in the tax to GDP ratio, he should look to the Labour Party.

Dr David Clark: To the nearest $1 billion, how much of the $12 billion Government deficit this year is attributable to the decrease in revenue that resulted from the 2010 tax changes?

Hon BILL ENGLISH: I cannot give him a number for exactly the 2010 tax changes. What I can tell the member is that if one adds up all the policy changes made by the incoming National Government, including cancelling two significant tranches of tax cuts early in 2009, then in 2011- 12 the National Government is actually collecting more tax than would have been the case if it had done no tax packages.

Dr David Clark: Given that both he and the Minister of Finance continue to assert that the 2010 tax package was broadly fiscally neutral, can he at least tell us, to the nearest $2 billion, how much of the $12 billion Government deficit this year is attributable to the decrease in revenue that resulted from the 2010 tax changes?

Hon BILL ENGLISH: I think the member has answered his own question. The 2010 tax package was broadly fiscally neutral. We published numbers that showed that in the early years it did cost something, and that then rose to a fiscal benefit from the tax package, because we put GST up, we put property taxes up, and we cut income taxes. But I will repeat for the member’s benefit that the combination of all the decisions made by the National Government has been fiscally

neutral. The previous Labour Government did two tax cuts that were fiscally negative, and we are still paying for it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise to my colleague Dr David Clark. It was a relatively simple question, asking whether the Minister of Revenue could give an estimate to the closest $2 billion. The core of the question was not addressed.

Mr SPEAKER: I beg to differ, because the Minister of Finance, on behalf of the Minister of Revenue, said that the particular tax cuts in question—2010, was it—were broadly fiscally neutral, and pointed out where the revenue losses had occurred in previous tax cuts.

Dr David Clark: How can he expect the public to accept the Government’s assertion that the tax switch was broadly fiscally neutral, when the deficit has grown to $12 billion and he cannot even tell us to the nearest $2 billion how much of it was caused by his unaffordable tax switch?

Hon BILL ENGLISH: Well, I can expect the public to listen to the Government’s argument, because they know that Labour’s story about this is nonsense—Labour’s story being that there have been big tax cuts, which have created deficits. That is simply wrong. What actually happened was that Labour’s tax cuts in 2008 were fiscally negative. All our tax decisions have been roughly fiscally neutral. So if he is looking for tax cuts that affected the deficit, he should look to the Labour Party, not to this Government. [Interruption]

Mr SPEAKER: Order! I want to hear Dr David Clark’s question.

Dr David Clark: Does he have plans to raise extra revenue to cover the nearly $100 million a year of net revenue loss from asset sales, or will that hole be filled with more borrowing and more cuts to vital Government services?

Hon BILL ENGLISH: This Government is not making cuts to vital Government services; what we are doing is getting them reorganised to provide efficient public services at less cost. And, actually, we are making progress, because the previous Government pumped endless money in, for no better results. We are going to get better results, although we do not have endless money to pump into public services.

Earthquakes, Canterbury and Christchurch—Sporting Facilities

12. NICKY WAGNER (National—Christchurch Central) to the Minister for Canterbury

Earthquake Recovery: What support has the Government provided in restoring sporting facilities in Christchurch since the Canterbury earthquakes?

Hon AMY ADAMS (Associate Minister for Canterbury Earthquake Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: The Canterbury earthquakes caused severe damage to many sporting facilities in the Canterbury region. I am pleased to announce that the new Christchurch Stadium in Addington will open this weekend on schedule, with the Crusaders playing the Cheetahs in the Super Rugby competition. This is the first game of Super Rugby that the seventimes- champion Crusaders will play in Christchurch since May of 2010. The facility is available for use for a wide range of sports, entertainment, and cultural activities in what is, without doubt, New Zealand’s leading sporting province. The stadium is also an important part of the economic redevelopment of Christchurch.

Nicky Wagner: How did the Government support the development of this stadium?

Hon AMY ADAMS: The Government provided funding and an underwrite for the stadium, and officials worked tirelessly to bring the stadium into being. The Christchurch Earthquake Appeal Trust, the New Zealand Rugby Union, and the Christchurch City Council have also supported this ambitious project. I would like to pay tribute to the committed and passionate workforce who have literally worked through the night to deliver this stadium for the people of Canterbury on time in less than 100 days. This is yet another commitment from the election that the National-led Government has already delivered on.

Question No. 10 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. I wonder whether I could prevail upon you to give us a considered written opinion about the points of order that were raised during question No. 10 today. I have been thinking about your answers, and, frankly, I would like you to give me the logic and the reason behind them, because it would be rather worrying if a Minister could avoid answering questions that way.

Mr SPEAKER: I tell the member I will look at the matter. I will deliver a considered ruling only if I consider that the matter merits it, because I do not do considered rulings on matters that clearly do not have merit. I am not prejudging that.

Hon BILL ENGLISH (Deputy Prime Minister): Speaking to the point of order, Mr Speaker.

Mr SPEAKER: I will take a new point of order. I have ruled on that.

Hon BILL ENGLISH: I raise a point of order, Mr Speaker. In those considerations you are likely, I suppose, to take account of the advice you actually gave the House, which was that in the end the House cannot say how an answer should be given. If the question is in order, it is asked; if an answer is in order, it is given. Whether people like the answer is an entirely different matter.

Mr SPEAKER: I accept what the member—

Hon Trevor Mallard: Mr Speaker—

Mr SPEAKER: I am not going to take this matter any further.

Hon Trevor Mallard: Well, Mr Speaker, you have—

Mr SPEAKER: Order! No, I am not. I have heard from the Rt Hon Winston Peters, I have heard from the other member involved in the question exchange, and I will be looking exactly at that. The points made are perfectly reasonable points. As Speaker I need to be careful to make sure that questions are answered, because Standing Order 383 requires Ministers to answer questions. But as the Hon Bill English points out, it is not up to the Speaker to judge the quality of an answer or to prescribe how a Minister should answer. That is why I am not saying that I will give a considered ruling at all. If the matter is absolutely within the normal Standing Orders provisions and Speakers’ rulings, then I do not intend to give a considered ruling, because what I have ruled today is perfectly consistent, if that is the case on my further examination.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I know I am testing you a little bit on this. My suggestion is that you look at some previous replies to similar questions where Ministers say they stand by an answer from yesterday, as opposed to that the question was answered yesterday. That, then, addresses and answers the question.

Mr SPEAKER: I can assure the honourable member that I will be looking at a number of matters relating to the conduct of the House today—for example, the use of points of order when they are not points of order. I am conscious that things have been tense today, and I want to make sure that my rulings have been appropriate. If there is a matter for me to give a considered ruling on, I will do that, but I am not undertaking to do so if there is no reason to do so.

ENDS