(uncorrected transcript—subject to correction and further editing)

WEDNESDAY, 27 JUNE 2012

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Family/Whānau Violence Prevention—Family-centred Services Fund

1. Rt Hon WINSTON PETERS (Leader—NZ First) to the Associate Minister for Social

Development: Is she confident that all providers contracted through the Family-Centred Services Fund are meeting the appropriate financial and governance standards?

Hon PAULA BENNETT (Minister for Social Development) on behalf of the Hon Tariana

Turia (Associate Minister for Social Development): Mr Speaker—

Rt Hon Winston Peters: No, the associate.

Hon PAULA BENNETT: Nice to see you. I am confident that the Ministry of Social Development* has good financial and contract management systems in place, and that any problems would be identified and dealt with appropriately.

Rt Hon Winston Peters: If she became aware of a provider not meeting the appropriate financial and governance standards, and making a loss of $109,000, for example, would she direct her officials to undertake a full and thorough inquiry before advancing any further moneys* to that provider?

Hon PAULA BENNETT: The Ministry of Social Development contracts to over 2,300 providers across New Zealand, which is equivalent to about 4,300 contracts. I am confident that the systems are in place to accurately monitor that. Occasionally, we find things that have gone wrong, and where that is I expect it to take appropriate action.

Rt Hon Winston Peters: If the Minister was aware that a provider was guilty of fraud, financial mismanagement, and personal rorts, then why did **Te Roopu Whakaruruhau o ngā Wāhine Māori Inc. of Palmerston North have its $80,000 contract with the Ministry of Social Development renewed for a further 3 years until June 2015?

Hon PAULA BENNETT: I am not aware of the funding of that particular organisation, but what I can say is that when there are cases of alleged fraud, the ministry goes in, it audits, and it seeks out the best advice that it can. Actually, situations change over time, but we do expect high standards and we expect the ministry to hold organisations to high standards.

Rt Hon Winston Peters: How can any of that hold true when the auditor of that provider submitted an audit alleging fraud, financial mismanagement, and personal rorts; why, then, did she as Minister not step in and stop this contract, instead of extending it for a further 3 years, until 2015?

Hon PAULA BENNETT: I certainly have not seen evidence of fraud that is coming through from that organisation. There may be other information that I am not aware of at this time that might have come through. But, actually, extending contracts in general out by 3 years has been a very positive step for those organisations, and one that has been embraced, because it has meant that they can continue to do the work that they do with families when they need to.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise to the *right honourable gentleman for interrupting. As the Minister is answering on behalf of another Minister, can we just ask her to be absolutely clear that when she says “I have not seen such documents.” she is saying that Tariana Turia has not seen such documents?

Mr SPEAKER: The member makes a perfectly valid point that the Minister is answering on behalf of the *Associate Minister, and that should be made clear in the answers. If the Minister wishes to clarify anything, she is welcome to.

Hon PAULA BENNETT: Thank you, Mr Speaker, and thank you to the Opposition; I think that is a really fair point. To the best of, certainly, the Associate Minister’s knowledge, she has not seen anything—nothing that I was briefed on in the time to get ready for this question.

Rt Hon Winston Peters: Why should the hard-earning and *taxpaying public believe anything they have just heard from the Minister, in respect of her National and Māori Party defence of Whānau Ora as an approach, on the projected expenditure of $174 million of hard-earned taxpayers’ money—some of which is in this audit here—when many providers are using it to porkbarrel, and rort, and commit fraud, without delivering services to the people in need?

Hon PAULA BENNETT: In all fairness, if I sound a little hesitant, it is because at times I struggle to believe some of the things that the member is saying. [Interruption] Well, no, he—

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. Let me politely suggest to the Minister answering the question: the Minister has told the House that she does not have the information to be able to answer the right honourable gentleman’s questions with certainty; if she does not have the information to answer with certainty, she should not then turn round and abuse the questioner. That is not on. Certainly, if a Minister has the information and can refute what the questioner is asking, then no problem at all. But if, on the one hand, a Minister is saying “I don’t have the information to be able to answer that question with clarity.”, then is alleging that the member has got things wrong, that is not on. If the Minister knows sufficient to do that, she should answer the question. You cannot have it both ways.

Hon PAULA BENNETT: Well, it was just the way that the member started his question was “Why should anyone believe …”, and I was merely reflecting that back to the member. What I am saying is that, at the end of the day, I would need to see evidence of that fraud, and if I do, then I will expect the department to take the appropriate action.

Rt Hon Winston Peters: Why did the Minister cast aspersions on a questioner who is holding an old audit report from December last year into this provider, which apparently she has not seen, yet under the National - Māori Party Whānau Ora approach a so-called Māori women’s refuge in Palmerston North failed to even take in women over Christmas and New Year—last Christmas and New Year, that is—and referred them down the road to a non-Māori provider of women’s refuge services? Why is she defending that?

Hon PAULA BENNETT: I am not defending that. I would be interested in seeing what that information is, so that we can get it to the department so that appropriate action can be taken, if necessary.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is this a point of order?

Rt Hon Winston Peters: It is a point of order. And I will say it slowly, for the *Dominion Post: it is a point of order.

Mr SPEAKER: Order!

Rt Hon Winston Peters: I seek leave, in the interests of justice and knowledge, to table the audit from the auditor on this collective, also the application from the Family-centred Services Fund that says it got the money to the June 2015 year, and also a contract mapping that says it got the money hitherto, which justifies everything said in the question. Thank you very much.

Mr SPEAKER: Leave is sought to table those three documents. Is there any objection? There is no objection.

Documents, by leave, laid on the Table of the House.

Prime Minister—Statements

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he stand by his statement when asked last night how to stop Kiwi mums and dads on-selling their shares to foreign investors that “The answer to that question is you can’t or wouldn’t want to stop them.”; if so, why does he not think it is important to have Kiwis rather than foreigners owning shares?

Rt Hon JOHN KEY: Yes.

David Shearer: Given his statement “yes, we will lose the dividend flow, but the dividend flow is pretty equal to that borrowing cost ...”, has he read the Treasury advice that shows that New Zealand will be *worse off by selling assets by about $100 million in lost dividend flow, and does he think that is insignificant?

Rt Hon JOHN KEY: Yes.

David Shearer: What is the current 10-year bond rate to the nearest percent?

Rt Hon JOHN KEY: I have not looked at it recently, but it would be in the order of about 4 or 5 percent.

David Shearer: When, if ever, did the New Zealand Government borrow at a rate of about 20 percent?

Rt Hon JOHN KEY: Under Labour, probably, and there would have been times when it could never borrow, because I have seen times when the bond market was closed to the New Zealand Government.

David Shearer: I wish to table a document stating that the current 10-year bond rate is actually 3.38 percent. This is from the *Reserve Bank, dated yesterday.

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.

David Shearer: Is he aware that the number of Contact Energy* shareholders has reduced from 225,000 to just 78,000 since its sale, and that now just 0.03 percent of shareholders—that is, about 20—own 75 percent of the shares; and why did he say last night that those retail investors who bought shares when it was sold for the most part held on to their shares?

Rt Hon JOHN KEY: I have great news for the member. Fifty-one percent of all shares in the mixed-ownership model will be held by one investor, which is called the New Zealand Government, so it is a vastly different proposition. Secondly, the retail component involved people directly buying relatively small parcels, and there was some slight consolidation of the very small parcels some years on. For the purpose of the member’s education, let me read from *Pattrick Smellie: “One of the least defensible criticisms of the Key Government’s partial privatisation plans have been regular references to Contact Energy as an example of a privatised company which lost control to foreigners. Yet nothing could be further from the truth. The reality of the Contact share register is it remains possibly the most widely held share by domestic New Zealand investors, 11 years on from the float. In fact, Contact’s shareholders have shown a high degree of loyalty to the Company, to the extent that EME’s attempts to take 100% were roundly rebuffed in the early 2000s. What it shows is that many small-scale investors have piled into privatised companies …”—

Mr SPEAKER: Order! I think the House has been quite patient in allowing a fairly lengthy answer.

David Shearer: Is this the same Pattrick Smellie who worked as a public relations consultant for Contact Energy?

Rt Hon JOHN KEY: I do not know that, but now, I think, he works for Fairfax*, and that seems to be the source of the only decent question that the Leader of the Opposition could ever ask.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Is it the same Pattrick Smellie who worked for Roger Douglas—

Mr SPEAKER: Order! The member knows that is not a point of order, but I blame myself for allowing things to get to where they did. I let one answer go on for too long, and then I let the Prime Minister say too much in that last answer. So let us now call this one-all, and we will move on.

Michael Woodhouse: Has he seen any reports on the merits or otherwise of a *citizens initiated referendum on the mixed-ownership model?

Rt Hon JOHN KEY: Not directly in terms of that, but I have seen in terms of citizens initiated referenda the following comments. Grant Robertson, when he was asked whether they should be legally binding, said: “No because governments can’t take issues one at a time. You always have to balance the issues together. … We have a representative democracy—people can choose ...”. Kevin Hague said, when he was asked whether they should be legally binding, “Almost all of the outcomes for citizens-initiated referenda in New Zealand have been hard to interpret because the questions were ‘loaded, confusing or misleading’ …”—

Mr SPEAKER: Order!

Better Public Services—Programme

3. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What are the benefits of getting better results from public services?

Hon BILL ENGLISH (Minister of Finance): The Government has set targets across 10 results for the Public Service to achieve over the next 5 years. These focus on difficult issues like reducing crime, reducing long-term welfare dependency, and reducing educational *underachievement. The benefits of getting better results are that we get a community that is safer, with better education and less dependency, and the Government saves money. But I might say that focusing on getting better results is relatively new for the New Zealand Government, because the last Government was focused on spending money, not on getting results.

David Bennett: How does getting better public service results benefit individuals?

Hon BILL ENGLISH: Despite tight Budgets, this Government has been determined to continue to improve the lives of New Zealanders through better public services. That means that when we spend billions on education, we actually expect more children to reach reasonable levels of achievement. When we spend billions on law and order, we expect a safer community with less crime, and we expect less reoffending among former prisoners. We do not think it is adequate simply to spend billions and tell the country that we care; we want to get real results for the community and for individuals.

David Bennett: How does getting better public service results benefit taxpayers?

Hon BILL ENGLISH: Taxpayers have been rightly concerned that under the previous Government billions more was spent on public services yet our intractable social problems remained unresolved. Despite the fact that they know money is tight, they are backing this Nationalled Government to spend about the same money on community and public services as the previous Government did—in some cases less—but at the same time to get much better results, because this Government is about getting results, not getting more money.

Rt Hon Winston Peters: I seek leave of the House that David Bennett be given odium money for asking those questions.

Mr SPEAKER: Order! [Interruption] Order! The right honourable gentleman knows that is not a point of order.

David Bennett: Supplementary question. How does getting better public service results benefit—

Mr SPEAKER: Order! The Speaker is still on his feet. He was about to say that although it was not a point of order, he had a smidgen of sympathy with the member.

David Bennett: How does getting better public service results benefit the economy?

Hon BILL ENGLISH: I am not surprised at the Opposition’s reaction, given that earlier this week it said that achieving things like less welfare dependency and lower crime rates was all “meaningless stuff”, whereas we take it seriously. The public sector makes up about a quarter of the economy, so any improvement in productivity of public services flows through to the wider economy. But the economy also benefits because, for instance, if more of our young people achieve *National Certificate of Educational Achievement (NCEA) level 2, they have the basic competence to go on to further training, thereby lifting our skill levels and the potential value added in our economy. We are determined to lift, for instance, the number of young New Zealanders who do achieve NCEA level 2.

State-owned Assets, Sales—Onselling Shares to Foreign Investors

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his statement that “you can’t and wouldn’t want to” stop retail investors on-selling shares to foreign buyers under his asset sales policy?

Rt Hon JOHN KEY (Prime Minister): Yes. Shares are freely traded every day between New Zealanders and people of other nationalities. That is actually very much to New Zealand’s benefit. In terms of portfolio share investment, New Zealanders currently own $47 billion of shares in overseas companies, while foreigners have $12 billion of shares in New Zealand companies.

Dr Russel Norman: Is he aware that the number of shareholders in *Contact Energy has declined by two-thirds since it was privatised and that those remaining shareholders account for only 2 percent of the New Zealand population, and that if his privatisation follows that path, then we will lose control of these companies?

Rt Hon JOHN KEY: I will give that member an absolutely cast-iron guarantee here in the House today that it will not go on that path—one shareholder will own 51 percent majority control.

Dr Russel Norman: Is he aware that in the recent privatisation of *Queensland Rail, two-thirds of retail investors had sold their holdings within a year, despite an extensive share giveaway programme run by the Queensland Government?

Rt Hon JOHN KEY: No, but I am confident that retail shareholders in New Zealand will not sell within a year.

Dr Russel Norman: Given that Treasury documents show that only about 7 percent of New Zealanders are expected to buy shares in these companies, does he think it is more likely to be the 7 percent who got massive tax cuts under his Government, the 7 percent with zero or negative net wealth, or the 7 percent who are unemployed under his Government?

Rt Hon JOHN KEY: Within the rules that govern the *Financial Markets Authority legislation, let me say that the Government is moving ahead with the mixed-ownership model, which will present opportunities for all New Zealanders, if they wish to, to purchase those shares. There are 1.8 million *KiwiSaver accounts, which currently hold $12 billion worth of investments. What that member is saying to those 1.8 million KiwiSaver account holders with the $12 billion is that they should go to Australia and buy shares in its energy companies. If the member took just one moment to go and have a look at the share registry owned by the *New Zealand Superannuation Fund he would see that they own pretty much most of the listed electricity companies and energy companies in Australia. I, for one, personally would rather see them investing in New Zealand than in Australia. If the member has a different view, well, he is welcome to go and put that to New Zealanders.

Dr Russel Norman: Does he think it is fair that the vast majority of Kiwi mums and dads who currently own these companies will lose the ownership of these companies, so that a handful of New Zealanders who have the money, and foreign buyers, can profit from their power bills?

Rt Hon JOHN KEY: There are so many parts of that question that are wrong, it is basically not funny. But let us start with power bills. They went up 72 percent under Labour, when these Stateowned enterprises were 100 percent owned by the Government. So what happens to your power bill bears no correlation to the owner; it bears directly on the effects of the *Resource Management Act and the capacity to bring new generation *on stream. In terms of foreign owners, the companies will be 51 percent New Zealand - owned*. New Zealand investors will be at the front of the queue. In terms of selling assets, that has been the biggest fictitious argument put up through this whole debate, because, guess what, we are going to go and buy $7 billion worth of other assets. At the end of this process, New Zealand’s balance sheet will be larger, not smaller.

Better Public Services Targets—Reducing Number of Assaults on Children

5. ALFRED NGARO (National) to the Minister for Social Development: What commitments has the Government made to reduce the number of child assaults in New Zealand?

Hon PAULA BENNETT (Minister for Social Development): Since 2004 the number of child assault substantiated physical abuse has risen from 1,820 to 3,086 in 2011. Assaults against children are simply unacceptable. Under our *Better Public Services targets we have committed to not only stopping the continued growth in child assaults but also reducing the current number by 5 percent. This is an ambitious target, reducing this number to below 3,000 when it is projected to reach 4,000, but one we simply must achieve.

Alfred Ngaro: Given that this target is ambitious, what actions will the Government take to achieve this?

Hon PAULA BENNETT: These Better Public Services targets set clear, focused goals, ensuring a whole-of-Government response, with agencies really working together. I think that is a big part of the change that we are seeing. We are already seeing a difference made in, for example, more social workers in schools, as well as workshops teaching health and education professionals to better detect physical abuse, and a multi-agency response to those children who are leaving hospitals. But there is no doubt about it that we have a lot of work to do.

Jacinda Ardern: Will she develop a target specifically on reducing child poverty, including for those in the homes of the working poor; if not, why not?

Hon PAULA BENNETT: I do not think that living in poverty is an excuse to assault your child. Although we are working on bringing the number of child assaults down, I think to say that fixing child poverty would fix child assaults is, simply, wrong.

Jacinda Ardern: I raise a point of order, Mr Speaker. I made sure that my question was very straight and quite tightly confined.

Mr SPEAKER: Order! A point of order is being raised.

Jacinda Ardern: I did not make any of the *implications that the Minister has assumed. I simply asked whether she was working to develop a target on reducing child poverty.

Hon PAULA BENNETT: Because the main question is quite specific on the commitments this Government has made to reduce the number of child assaults, I linked it to that main question on child assaults and answered appropriately. [Interruption]

Mr SPEAKER: Order! In fairness, that was not an unreasonable conclusion for the Minister to come to, because the primary question is very much about the Government’s commitment to reduce the number of child assaults. For the Minister to interpret the member’s question in relation to child assaults, therefore, was not unreasonable. I do not think I can ask the Minister to—because she clearly, in answering, indicated that the Government would not be having targets around reducing child poverty. So the answer seemed reasonable to me.

Question No. 6 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I am not going to dispute the fact that this question has been transferred, and the fact there are some good

Speakers’ rulings, including 152/1, on that subject. But I would like to refer you to Speaker’s ruling 152/5* as to the question of textual changes. The wording that was used from here around the wage gap with Australia being the fundamental purpose of “his” Government relates to a comment from the Prime Minister. The question I have is whether “his” Government can then be part of the question to the Minister of Finance, the Minister of Broadcasting, or any of the other junior Ministers. I know there is implicit criticism of you here, because it is your office that is responsible for it, but should it have been “the Prime Minister’s” Government?

Mr SPEAKER: The member raises a perfectly fair point that in the transfer of questions between Ministers it is important to try to make sure the text is adjusted accordingly. My office does endeavour to try to do that correctly, and every now and then, as the member points out right now, it is arguable that has not been achieved with this question. I apologise to the member for that, but I think the question does have to be asked the way it is now. But every care will be taken in the future to try to make sure that does not happen.

Income Gap, Parity with Australia—Government Policy Statements

6. Hon DAVID PARKER (Labour) to the Minister of Finance: Is narrowing the wage gap with Australia the fundamental purpose of his Government, if so, where is the specific target in National’s 120-point action plan, National’s revised six-point Brighter Future plan or his more recent ten results for New Zealanders?

Hon BILL ENGLISH (Minister of Finance): Yes, it is a fundamental purpose of the Government, as the Prime Minister has pointed out, and the target has been well articulated. That is why the member is asking us questions about it, and he can monitor it any day of the week. I note that after-tax wages have grown a bit faster in New Zealand than in Australia, since we became the Government.

Hon Member: Yeah, right!

Hon BILL ENGLISH: Well, they have. But we accept that in the light of the commodities boom in Australia, closing that gap is a real challenge, and we aim to do so by 2025.

Hon David Parker: Has the gap in gross wages, on the purchase-price parity basis he favours, increased from $122 per week in December 2008 to $144 per week in March this year?

Hon BILL ENGLISH: Well, that may be the case; I have not looked at those numbers in detail. But I think the member will understand that we are aiming to close that gap. In the last few years that has been quite a challenge, because Australia has had a once-in-a-100-year commodity boom. That has pushed its wages up in parts of Australia, and it is difficult to compete with that. But we are pressing on with our plan for a stronger economy, and we believe that if we stick to that plan, we can close that gap.

Hon David Parker: Excluding the top 10 percent of income earners who received approximately 40 percent of his income tax cuts, has the after-tax wage gap with Australia, as he calculates it, closed or widened for the other 90 percent?

Hon BILL ENGLISH: The member’s representation of the tax package is of course wrong. The impact of the reductions in income tax, combined with the increase in GST and significant increases in property taxes, means that most New Zealanders were in about the same position after that tax package as they were before. [Interruption] Well, that is true. We have not done the measurement that the member asked about.

Hon David Parker: Is the Minister willing to calculate whether the after-tax wage gap with Australia for 90 percent of wage earners in New Zealand is larger now than it was when he took office?

Hon BILL ENGLISH: Well, we can do any calculation that the member likes. The fact is we are getting on with dealing on planet Earth, rather than *“Planet Labour”. We are dealing with the real challenges that the New Zealand economy faces, particularly in respect of Australia, and that is

to make ourselves more competitive so that our businesses can grow, and that means not following the policies of that Government of higher taxes—

Mr SPEAKER: Order! The question was actually fairly simple and did not really need quite that long an answer—especially ending up with a negative comment about the questioner’s party. [Interruption] Order! I am on my feet. The question actually asked whether the Minister of Finance would be prepared to calculate the after-tax income gap for the 90 percent, if the top 10 percent are excluded. I am not 100 percent sure what the answer to the question was. I do not know whether the Minister of Finance is prepared to enlighten the House on that.

Hon BILL ENGLISH: My answer to the question was that you can do any calculation you like, and then went on to—

Mr SPEAKER: Order! But that was not the question. The question did not ask whether the Minister was prepared to do any calculation. The question asked whether he was prepared to do that calculation, and that is what question time is about. Members ask questions, and Ministers are meant to answer them. I acknowledge that it is not exactly a huge issue. But it was a simple question and to avoid it totally is not reasonable. I invite the Minister to answer the question. Does he intend to do that one, or not?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I have just listened to what you said, and you have come, I think, very, very close to suggesting that Ministers could be required to give yes and no answers. You will find in Speakers’ Rulings a number of references to the fact that that is not a necessary response from Ministers, and that Ministers are the ones who judge what is appropriate for an answer to a question, and that when questions are answered that have a degree of *catch-22 to them, Ministers have a right to be able to explore that particular possibility in the answers that they give. The assumption that you seem to be making is that any question asked by the Opposition is in fact factually based and reasonable, and it may not be.

Mr SPEAKER: Order! The question contained no fact in it at all. It just asked a question. It contained no assertion whatsoever. It just asked whether the Minister of Finance was prepared to do a particular calculation.

Hon Gerry Brownlee: For what reason?

Mr SPEAKER: There does not have to be a reason, and the member should not be interjecting. What is more, Ministers can certainly choose not to answer a question if they invoke the public interest. If they invoke the public interest, they do not need to answer a question. But unless the question is totally unreasonable, I expect an answer. That is not unreasonable. The Standing Order requires that an answer that seeks to address the question asked must be given, so long as it can be given consistently with the public interest. It is not the end of the world. I would not have even raised the matter if the Minister had not gone on to be critical of the questioner’s party. But where Ministers choose to be a bit vague in answers, they should then not choose to be critical of the questioner’s party. It is a matter of being reasonable and sensible in all of this. I do not see why it is such a huge issue for the Minister to need to avoid that question, because the question was a straight question. If the Minister is not avoiding it, if I recollect, the question was very simply whether the Minister was prepared to calculate the after-tax income gap between Australia and New Zealand, excluding the top 10 percent of income earners. If it has not been avoided, I am interested in hearing the answer.

Hon BILL ENGLISH: No.

Hon David Parker: Why should anyone accept his promises on the economy when his Government will not even set targets for closing the wage gap or reducing New Zealand’s net international liabilities?

Hon BILL ENGLISH: I do not think it is an issue about promises on the economy; it is about applying sensible policy in difficult circumstances to help businesses make the decision to grow— that is, employ another person, invest a bit more money, and pay a higher wage. And we will stick

to that plan, which is much more constructive than following the policies that that member might propose.

Michael Woodhouse: By how much have total after-tax wages grown in New Zealand and Australia since 2008?

Hon BILL ENGLISH: Real after-tax wages have increased by 11 percent in New Zealand since September 2008. By comparison, they have increased by 8 percent in Australia over the same period. So the wage gap has narrowed a bit, but it is a long-term challenge and it is still a significant gap, so there is plenty more work to do. This is a vast improvement on the 9 years to September 2008, when New Zealand’s real after-tax wages increased by only 4.4 percent—that is, slightly more than one-third of the increase in the last 3 years.

Hon Trevor Mallard: Was he told while he was preparing to answer this question why, after describing narrowing the wage gap with Australia as a fundamental purpose of his Government, the Prime Minister was not prepared to defend his record in this House?

Mr SPEAKER: I am not sure that the Minister of Finance is responsible for that question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Questions are often asked of Ministers about whether they have specific information or not. My question is was he informed why, and, cutting right to the chase, the Prime Minister was not prepared to answer—

Mr SPEAKER: Order! No, if I had any sympathy with the member, I am afraid he has just blown it now. That question has now been ruled out.

Question No. 2 to Minister

Rt Hon JOHN KEY (Prime Minister): Just in relation to, I think, question No. 2, I was asked a question and I am just looking to take this opportunity to seek leave to table the following information. New Zealand Government bond rates reached over 20 percent in May, June, and August of 1985—

Mr SPEAKER: Order! [Interruption] Order! The Prime Minister will resume his seat right away. [Interruption] Order! I am on my feet. Both sides’ *front-benchers will cease this interjection when I am on my feet. The right honourable Prime Minister knows that the practice is to establish the document. The member is seeking leave to table a document, I take it, and the Standing Orders are very particular. If a member is granted leave to table a document, it must be tabled. Before I put leave to the House, we need to know the source of the document the right honourable Prime Minister is seeking to table.

Rt Hon JOHN KEY: The data for all of it, including the 22 percent—my favourite—is from the *Reserve Bank. I am looking to seek leave to table the document and not the *iPad, though, because I need that back.

Mr SPEAKER: I do not think the House is yet clear that the document is a Reserve Bank document. It is a Reserve Bank document. If it is just a website, we do not seek leave to table things from websites.

Better Public Services Targets—Boosting Skills and Employment

7. SIMON O’CONNOR (National—Tāmaki) to the Minister for Tertiary Education, Skills

and Employment: How is the Government improving pathways into vocational training as part of its target for lifting qualifications at Level 4 and above?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Today the Government published five vocational pathways to support young people progressing from school into tertiary training and into a career. Vocational pathways identify the real knowledge and skill requirements of a number of key industry sectors, providing certainty to learners and their families that their subject choices are relevant and connected to employment opportunities. The pathways cover construction and infrastructure, manufacturing and technology, the primary industries, the service industries, and social and community. Having these clear vocational

pathways for students will help us achieve our *Better Public Services target of 55 percent of 25 to 34-year-olds holding a level 4 or above qualification.

Simon O’Connor: How will these vocational pathways help young people in the real world?

Hon STEVEN JOYCE: Many young people at school are seeking a strong sense of direction about how to get where they want to go *career-wise. We have worked with the *Industry Training Federation, industry, and educators to bring together new and clear pathways that will help learners through the wide range of work and study options available to them. The pathways show students how their skills and knowledge will be valued in the real world when they look for a job and start their career. Lifting student achievement and ensuring that all young people have the skills they need to reach their potential are vital for them, for their families, and, of course, for the New Zealand economy.

Grant Robertson: Has the *Minister now read the *State Services Commission advice that I tabled in the House yesterday, which says: “The proportion of the 25 to 34-year-old population with qualifications at level 4 or higher was growing steadily up until around 2009. Since then it has flattened off …”, and why does he think that might be?

Hon STEVEN JOYCE: I have seen that advice. There is some debate as to whether that happened in 2007 or 2009, but, *nevertheless, why do I think that would be? It is because of the settings left by the previous Government in the last few years of its time in office. As we know—or as the member should know, as somebody who spent such a long term in tertiary education—it does take a period of time for settings to change and to lift completions of degrees. I would point out to the member that this year, 2012, we are expecting 31,000 bachelor’s and bachelor’s honours completions by domestic students, up from about 28,500 in 2008 and 26,000 in 2007. In fact, we expect more than 32,000 in all the years going forward, and that is a response to the increased number of places at universities that this Government has put in place.

Biosecurity Management—Vote Biosecurity Savings in 2009 and 2010

8. Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) to the Minister for

Primary Industries: What were the total line-by-line savings in Vote Biosecurity in Budget 2009 and Budget 2010?

Hon DAVID CARTER (Minister for Primary Industries): The 2009 *Budget presented savings of $1.384 million in 2009-10, $854,000 in 2010-11, $688,000 in 2011-12, and $610,000 in 2012-13. The 2010 Budget presented savings of $2.635 million in 2010-11, $2.27 million in 2011- 12, $2.275 million in 2012-13, and $2.75 million in years 2013-14.

Hon Damien O’Connor: If, as his front-line* staff claim, staff shortages led to the Queensland fruit fly* incursion, does the Minister agree that the $2 million, or thereabouts, in savings made in 2009 from cutting staff was a case of false economy, given that the fruit fly response so far has cost $1.4 million?

Hon DAVID CARTER: The member is wrong to claim there has been a cut in biosecurity spending. What I have just said to the member is that the total savings presented in 2009 were $3.56 million, and in 2010 were $9.45 million—a total of $12.99 million. However, the member must take into account spending on new initiatives in Budget 2009 and Budget 2010, and that new initiative spending totalled a total of $35.528 million. The net increase of expenditure for Vote Biosecurity* over the two Budgets is, in fact, $22.537 million. The member needs to learn how to read Budget documents.

Hon Damien O’Connor: In reference to a new initiative, does the Minister agree with his own biosecurity staff that the direct exit policy allows passengers from Australia to be “let out the door with just a basic check, relying on honesty”, and that this is putting our entire economy at risk?

Hon DAVID CARTER: No, I do not agree at all with a letter from a few biosecurity staff. The member again needs to realise that the organisation is in the midst of wage contract negotiations. It is not surprising that staff may make these sorts of allegations.

Hon Damien O’Connor: Does the Minister admit that he misled industry groups in giving assurances that detector dogs would provide the final check on passengers, given that there have never been detector dogs in Hamilton or Rotorua, and there has been none at Wellington since October, and only one to cover Dunedin and Queenstown?

Hon DAVID CARTER: No. At no time was there ever an assurance that there would be dogs operating at every international airport 24/7*. The dogs are but one aspect of the biosecurity system. That member continues to do serious harm to the biosecurity system when he continues to criticise not only the people who operate it extremely well but the system itself.

Hon Damien O’Connor: Is the Minister aware that, according to his own front-line* biosecurity staff, the media have been misled by biosecurity officials about the interception of goods at *Auckland Airport; if so, what action is he going to take to address this?

Hon DAVID CARTER: I am aware of an anonymous letter “To whom it may concern” that is claimed to be from a few biosecurity staff. That letter, in my opinion, is full of inaccuracies.

Hon Damien O’Connor: Does the Minister’s own letter dated 13 June in response to a constituent, stating that there will be more dogs and inspectors on the *front line in time for the peak summer season, incorporate a message for all fruit flies and for all pests and diseases that until that time the border is clear and open?

Hon DAVID CARTER: We have certainly got a large dog-training programme under way, because that member’s previous Government did not put the resources into training detector dogs. We have also advertised for 40 new staff, 35 of those to be at *Auckland Airport and five of those to be at *Wellington Airport.

Student Achievement—Ministerial Cross-sector Forum on Raising Achievement

9. NIKKI KAYE (National—Auckland Central) to the Minister of Education: What commitments has the Government made to raising student achievement in New Zealand?

Hon HEKIA PARATA (Minister of Education): We have committed to a target of 98 percent participation in quality early childhood education in 2016. This is important because participating in quality early childhood education has considerable benefits for children, particularly for ensuring that they go to primary school confident, able to engage, and eager to learn. Evidence also shows that those who start behind tend to stay behind. To support this target we are investing $1.4 billion in early childhood education, including $47.9 million more in equity funding over 4 years for priority learners and communities. This will assist participation in early childhood education by vulnerable children, who are currently not receiving sufficient support to succeed in education.

Nikki Kaye: What other commitments has the Government made to raising student achievement?

Hon HEKIA PARATA: We have committed to ensuring that in 2017, 85 percent of 18-yearolds will have *National Certificate of Educational Achievement (NCEA) *level 2 or an equivalent qualification. This will be up from 67 percent in 2010. At present one in five 15 to 16-year-olds is dropping out of school and NCEA level 2 or an equivalent qualification would give learners better employment opportunities in the long term. It is an ambitious target, but this Government is determined to see more of our young people reach their employment potential when they leave school. That means lifting up those who are being left behind and encouraging those who are doing well to do even better.

Hon Nanaia Mahuta: In light of that response, when does the Minister intend to release a detailed action plan on her goal; and will there be specific action to lift Māori and Pacific achievement rather than further cuts to the education budget to make up for the $114 million hole left from her class size turn-round?

Hon HEKIA PARATA: I am working not only with the Ministry of Education but with a forum of 30 education sector leaders from across the country on how we develop that detailed plan. Can I

remind the member that this is the fourth Budget in a row that this Government has increased investment in Vote Education, to a total of $9.6 billion.

Hon Nanaia Mahuta: I raise a point of order, Mr Speaker. I did ask when, and it was a specific question about a time for the action plan to be released.

Mr SPEAKER: Well, it is a shame that the member did not confine her question to that. I clearly remember that the last part of her question made a claim about holes in the budget and that sort of thing. If the member wants a supplementary question answered it has got to be a concise question, and that had far too much in it to get the bit she wanted answered.

Hon Nanaia Mahuta: I seek leave to table a document from the *State Services Commission that states that a more detailed action plan will be released in coming weeks.

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.

Question No. 8 to Minister

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I apologise, I should have tabled this earlier. I seek leave to table a letter from front-line* biosecurity staff, claiming, among other things, a shortage of 30 people at the Auckland International Airport*.

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.

Public Transport, Auckland—Integrated Ticketing System

10. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Transport: What involvement, meetings or contact did his predecessor have with Infratil*, NZ Bus* or Snapper Services regarding Auckland’s integrated ticketing system, and what involvement did the Government have in the decision to include Snapper in the project?

Hon GERRY BROWNLEE (Minister of Transport): I am advised that my predecessor did not have any meetings, contacts, or involvement with Infratil*, NZ Bus*, or **Snapper specifically on Auckland’s integrated ticketing projects. He did meet with these organisations. On 12 December 2008 he met with Infratil. On 19 February 2009 he met with NZ Bus regarding the Public Transport Management Act*. On 18 June 2009 he met with NZ Bus at the launch of the Wellington flyer service; on 3 March 2010 he met with Lloyd Morrison*. And on 24 June 2011 he met with NZ Bus at the launch of its fleet replacement programme. It is possible that integrated ticketing was raised at these events. Ministers, though, had no involvement in the decision to include Snapper in the Auckland integrated fares scheme.

Phil Twyford: Did his predecessor discuss in any of those meetings with NZ Bus, Infratil, or Snapper the proposal for the Snapper card* to be rolled out in Auckland in advance of the integrated ticketing system?

Hon GERRY BROWNLEE: The only involvement that Ministers have had in this is to insist to the *New Zealand Transport Agency that the systems it puts in place are flexible. Ministers have had no involvement in the decision to include Snapper in the integrated system.

Phil Twyford: What actions did his predecessor take that led him to say to reporters yesterday that the Government was only trying to be fair to Infratil and Snapper in allowing the Snapper card to be rolled out in advance of the integrated ticketing system?

Hon GERRY BROWNLEE: In order to answer that, I think it only fair that I state what the question was. The question related to why the Government has not done something about this, and I simply said that given the negotiations that have occurred between Auckland Transport*, the New Zealand Transport Agency, and Snapper, with the date for the go button on the integrated ticketing

system having been extended right out to, now, 30 November 2012, it was, in fact, in order that they have more time to integrate their system with the **Thales system, which will be the base of the operation.

Phil Twyford: Did his predecessor intervene on behalf of Infratil to pressure the Auckland Regional Transport Authority,* and, subsequently, Auckland Transport, and the Land Transport New Zealand* boards to allow the Snapper card to be rolled out in advance of the integrated ticketing system?

Hon GERRY BROWNLEE: No, that is not my understanding. The member may want to take that up with Auckland Transport.

Employment, 90-day Trial Period—Reports

11. JAMI-LEE ROSS (National—Botany) to the Minister of Labour: What recent reports has she received regarding the success of 90-day trials?

Hon KATE WILKINSON (Minister of Labour): I am pleased to inform the House that a new *Department of Labour report shows that 60 percent of employers have used 90-day trials to take a chance and hire new staff in what is a tight labour market. The report also shows that 40 percent of employers who hired someone on a trial period would not have taken that person on without it.

Jami-Lee Ross: What other information does she have on the considerable benefits of extending 90-day trials to all workers last year?

Hon KATE WILKINSON: More good news. The report also notes that the vast majority of employers—80 percent—retained their staff once the trial period was over. Given that previous research by the New Zealand Institute of Economic Research* has told us that 90-day trials led to 13,000 new jobs in small and medium sized* businesses, it is safe to say that many more jobs have been created since the trials were extended to all businesses last year. I am also pleased to report the findings that 90-day trials have been especially beneficial for young people and the long-term unemployed, and it is clear that trial periods are of great benefit to both employers and employees.

Accident Compensation Corporation—Management of Long-term Claimants

12. KEVIN HAGUE (Green) to the Prime Minister: Does he stand by his reported comments regarding ACC that he “backed the corporation’s harder stance, saying it should continue and there was no evidence legitimate claimants were missing out”?

Rt Hon JOHN KEY (Prime Minister): I think the member might find that that was poetic licence taken by the *New Zealand Herald. I stand by my actual statement in response to a question, which asked whether I had any concerns that ACC is prioritising its bottom line over entitlements for claimants, to which I responded that I had not seen any real evidence of that. I also said that what has got to be carefully monitored is that we are not throwing people off the tail, or their support from ACC, if it is neither legally correct nor fair.

Kevin Hague: How can he be sure that legitimate claimants are not missing out when almost half of those long-term claimants who have appealed ACC’s decision to exit them in 2012 are found by *Dispute Resolution Services to have been wrongly kicked off?

Rt Hon JOHN KEY: There can and will be isolated cases where someone has not been treated fairly, and that is against what I think is appropriate, which is why I said on Monday that it had to be legal and fair. I would point also to the advice that I have in relation to *Dispute Resolution Services that over the past 6 years the average percentage of disputed decisions found in the corporation’s favour is 71.8 percent.

Kevin Hague: How can he be sure that legitimate claimants are not missing out when, of those decisions of ACC upheld by Dispute Resolution Services that are subsequently appealed at the District Court, around half of those are overturned?

Rt Hon JOHN KEY: As I said earlier, I cannot be sure in every case, which is why I said earlier in the week that it is very important that the corporation deals with people in a way that is both

legally correct and fair. It is also important that people have an avenue to test their rights, if they believe they have not been fairly treated, and people do. The Government separated Dispute Resolution Services from ACC, to emphasise its independence. As I said in answer to the last question, in terms of disputed decisions, 71.8 percent are found in the corporation’s favour.

Kevin Hague: Is he aware that a core competency required in ACC case manager job descriptions is that case managers “can decide and act without having the total picture”, and does he agree that the full picture is needed if the numbers of cases overturned on appeal are to be reduced?

Rt Hon JOHN KEY: No; that is an operational matter that should be put to the chief executive, or at the very least the *Minister for ACC.

Kevin Hague: Can the Prime Minister confirm that the average over 6 years of decisions by ACC that have been upheld under review in fact masks a trend whereby, in the last 3 years, those decisions have been below the 70 percent target that the Government has set, whereas in the preceding 3 years they were above it?

Rt Hon JOHN KEY: No. What I can say, as I said in response to earlier questions, is that over the past 6 years the average percentage of disputed decisions that are found in the corporation’s favour is 71.8 percent. The average percentage of elective surgery decisions found in the corporation’s favour is 64.6 percent. In the year to date the percentage of elective surgical decisions found in the corporation’s favour is higher than the rate under a Labour Government. But can I make this one point, and that is that the corporation deals, to the best of my knowledge, with about 1.5 million claimants a year. There are some very technical and difficult cases for everybody in amongst that. But for the most part we should be congratulating the corporation, because I think that for the most part it does a good job for New Zealanders.

Kevin Hague: What action, if any at all, has the Government taken to improve the quality of ACC’s decisions, given the increasing number of decisions that are being taken to review, and ACC’s repeated failure over the past 3 years to meet its contracted target of having at least 70 percent of its decisions about long-term claimants upheld at review?

Rt Hon JOHN KEY: As I said earlier, Dispute Resolution Services was made independent from the corporation to help in that regard. In terms of the success rate in favour of the corporation, it is very high, as I have been saying. There will always be individual cases, but for the member to make the case that, because a few cases go against the corporation, everything is broken there, is just simply incorrect.

Kevin Hague: I seek leave to table an ACC document. It is the job description for a case manager in claims management.

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

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