QUESTIONS TO MINISTERS

Cost of Living—Management

1. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What steps is the Government taking to keep down the cost of living for New Zealanders?

Hon BILL ENGLISH (Minister of Finance): The Government has taken a number of steps and, assisted by general economic conditions, is helping to keep interest rates at 50-year lows and annual inflation at around 1 percent. The steps the Government has taken are to maintain a track to surplus, which will take the pressure off interest rates and reduce inflation pressures; responsible and orthodox monetary policy is helping keep inflation low; increased competition in the electricity industry has halved the 8 percent annual increase in electricity prices in the 9 years up to 2008; cutting red tape and increasing flexibility for businesses means better prices for customers; and investing in infrastructure and delivering better public services helps the economy become more competitive.

Maggie Barry: What recent reports has he received on the cost of living?

Hon BILL ENGLISH: One measure of the cost of living is the Consumers Price Index. Statistics New Zealand today reports that consumer prices rose by 0.4 percent in the March quarter, and annual inflation—that is, the inflation for the year up to the end of March—was 0.9 percent. This means that annual inflation has now been running at 1 percent or less for four quarters. This is well down on inflation of more than 5 percent per annum, which was the rate when the Government took office in late 2008. The impact of low inflation on interest rates means that a family with a $200,000 mortgage is around $200 a week better off in interest payments compared with late 2008.

Maggie Barry: What reports has he received on recent food prices?

Hon BILL ENGLISH: The food price index came out last week for March. Of course, food prices fluctuate, often for seasonal reasons as much as for cost and price inflation reasons. This report showed that food prices fell in the month of March. Food prices for the year to March, which encompasses the whole seasonal cycle, fell by 0.4 percent—that is, on average, food prices for the year to March went down.

Maggie Barry: How do these moderate cost of living increases compare with increases in real after-tax wages?

Hon BILL ENGLISH: Well, these moderate increases and, of course, for some classes of expenditure such as food, reductions in the cost of living compare quite favourably with wage increases in the last 5 years. Since September 2008 gross wages have increased by 14 percent. After tax they have increased by 22 percent. Inflation has been 9 percent, which means that real after-tax wages have increased by 12 percent since September 2008. In the 9 years up to September 2008, after-tax wages increased by only 4 percent.

David Shearer: Is it correct that power prices went up by 5.2 percent to 31 March, which is nearly six times the rate of inflation? Can he confirm that?

Hon BILL ENGLISH: I will take the member at his word. That price increase is included in the collective CPI, which went up by 0.9 percent for the year. So some households would have paid more for electricity and they paid less for food; on balance, their cost of living went up by 0.9 percent. But all households are grateful the Labour Government is no longer in charge—

Mr SPEAKER: Order! [Interruption] Order! That is quite a sufficient answer, thank you.

Sue Moroney: Well, can he explain, then, how keeping ACC levies artificially high keeps down the cost of living for New Zealanders when the regulatory impact statement on this decision shows that the Government’s refusal to lower levies, as recommended by ACC and the Ministry of Business, Innovation and Employment, is costing workers and employers up to $2 billion more a year than what is needed to cover the cost of injuries?

Hon BILL ENGLISH: That is a bit rich coming from the party that expanded entitlement to ACC without increasing the levies, but I agree with the member. If we can continue to reduce ACC levies, it will reduce the cost of living. Two years ago we did decrease those levies by $600 million per year, and we are looking at every opportunity to decrease them further.

Iain Lees-Galloway: How does increasing fuel taxes by 9c a litre keep the cost of living down, especially given that transport officials advised the Government that an increase of that magnitude would raise nearly $20 billion more than what is required to carry out their road-building programme?

Hon BILL ENGLISH: Well, I do not agree at all with the member’s last assertion. In fact, the fuel tax is calibrated to the roading investment programme in a highly transparent manner. That fuel tax increase is part of the collective measure of price increases, the CPI, which shows that over the last year the cost of living went up by 1 percent. I hope Labour keeps going on about this issue, because the more it complains about the rise in the cost of living, the lower it seems to be.

Iain Lees-Galloway: I seek leave to table two tables from a briefing received by the Minister of Transport from the ministry that indicate that fuel excise taxes of 9c a litre will generate nearly $20 billion more than required.

Mr SPEAKER: Leave is sought to table those two tables. Is there any objection? There appears to be none. They can be tabled. Document, 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 that “We’ve done as good a job as we can in the conditions we’ve got to try and help low-income New Zealanders.”; if so, does he think power bills going up by six times the rate of inflation will help low-income families?

Rt Hon JOHN KEY: Yes. I think it is worth recalling the track record of this Government, which has seen power prices go up by about 20 percent in our time in office, compared with the 72 percent increase under Labour. But I have no doubt that the little Labour elves will be trying to dream something up to back up their—

David Shearer: I raise a point of order, Mr Speaker. He did answer the question when he said yes. I do not think he needed to go on.

Mr SPEAKER: He did, and I certainly agree with that, and on that basis we will call a supplementary question.

David Shearer: Given that he has been in power now for more than 4½ years, can he guarantee to consumers that electricity prices will not increase further as a result of the asset sales programme, given that power prices have gone up by six times more than inflation?

Rt Hon JOHN KEY: I do not believe that the mixed-ownership model programme will have any influence on the prices that consumers pay. It is actually not true that State-owned enterprises offer cheaper prices than private companies. The most recent information I have shows that Contact Energy, the largest privately owned company, has the lowest national weighted average price for electricity of any retailer.

David Shearer: Given that electricity prices increased more rapidly than in our competitor countries over the last 4 years, at a time when electricity demand is flat, does he think the electricity market is working for the benefit of hard-working New Zealanders?

Rt Hon JOHN KEY: It is certainly working a lot better than it was. Let us face facts. Prices went up by 72 percent under Labour. This Government has actually reformed the electricity sector with some very significant moves, including closing Whirinaki and including virtual swaps that have taken place. The truth is that on Monday, to get in the paper, David Shearer said he would keep power prices down. He has got no clue how to do that. The little Labour elves are trying to work out how to make that happen, and it will not.

David Shearer: I raise a point of order, Mr Speaker. The only person without a clue, as we found out yesterday, is the Prime Minister.

Mr SPEAKER: Order! That is not a point of order. It is not a point of order, but I invite the member to ask a supplementary question.

David Shearer: Has his Minister for Social Development told him that requests to Work and Income for grants to pay for electricity and for gas tripled in the 2-year period; if so, does he intend to take any action to bring down electricity prices for ordinary, hard-working New Zealanders?

Rt Hon JOHN KEY: Firstly, the Government has taken action, and that is why the rate of power increases is going up slower under a National Government than under a Labour Government. Secondly, the Government, in very difficult economic times, has provided tremendous support for at-risk New Zealanders, and will continue to do so.

Rt Hon Winston Peters: Twenty-four hours after first being asked how many phone calls he made to Ian Fletcher prior to his appointment as the Government Communications Security Bureau head, what is his answer?

Mr SPEAKER: The right honourable Prime Minister, as far as it relates to the primary question.

Rt Hon JOHN KEY: The same answer I gave yesterday: I do not have that information with me. If the member wants to put it down in writing, my office will provide it to him.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Any Prime Minister would realise after yesterday’s answer that that was never going to be satisfactory. Twenty-four hours later he turns up here and he does not know the answer to a very critically serious question. That is just a cover-up.

Mr SPEAKER: Order! The difficulty with the situation here is that it was a very general primary question. Many Speakers have ruled that it is inappropriate to demand an exacting answer to a supplementary question that follows a very general primary question. The Prime Minister has given you what I think is a satisfactory course of action—for you to put down a more specific question at the next question time.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The difference between one and two, which is the question here, I think—whether there was one phone call made to Mr Fletcher by the Prime Minister or two—is not really exacting. I mean, it is 100 percent different. Anyone would remember whether they made one or two phone calls.

Mr SPEAKER: I appreciate the comment the member is making. It is for the Prime Minister to determine how he has decided to answer the question, and he has answered it in the way that he has. That has addressed the question.

Rt Hon Winston Peters: Why does the Prime Minister not treat this House seriously and get his staff to trawl through his phone records for the period prior to Mr Ian Fletcher’s appointment, and come to this House and answer frankly, openly, and properly, the way former Prime Ministers have done?

Rt Hon JOHN KEY: The member has two options: put it down as a primary question, and I will give him the answer, or put it down in writing, and my office will give him the answer.

Rt Hon Winston Peters: Given his previous statements about intelligence matters, did the SIS tell him about the residency application of a man by the name of Kim Bestor when he met with them on 12 October 2010, one day before the SIS, strangely, blocked the man’s application?

Rt Hon JOHN KEY: No.

Rt Hon Winston Peters: I seek leave to table an affidavit of Grant Kenneth Wormald for first defendant in relation to minutes 28 September 2012 in the Kim Dotcom case.

Mr SPEAKER: Leave is sought to table that affidavit. Is there any objection? Is it a matter that has been before the courts and then been released by the courts, or does it breach any—

Grant Robertson: Released.

Mr SPEAKER: It has been released, I am assured. I therefore put the leave. Leave is sought to table that affidavit. Is there any objection? There appears to be none. It can be so tabled. Document, by leave, laid on the Table of the House.

Resource Management Act Reforms—Effect on Business Investment

3. AARON GILMORE (National) to the Minister for the Environment: What recent reports has she seen on the impact of the Resource Management Act 1991 on business investment in New Zealand?

Hon AMY ADAMS (Minister for the Environment): Earlier this week Statistics New Zealand published its 2012 business operations survey. It shows that in the last 2 years hundreds of New Zealand businesses have cancelled projects worth potentially $800 million to our economy, due mostly not to the standards that they have to meet but to the uncertainty and the long time frames in the Act. It also shows that of the businesses that identified the Resource Management Act as a constraint, 87 percent of these were small and medium enterprises, showing that it is our mum and dad companies that bear the brunt of these problems. More than half of the cancelled projects were cancelled in the pre-application stage or well before even receiving a decision.

Aaron Gilmore: Why should we be concerned about the impact of the Resource Management Act on investment?

Hon AMY ADAMS: The uncertainty within the Resource Management Act means businesses and developers are reluctant to invest in projects to extend and expand their operations and are potentially scaling back projects that might otherwise have been more ambitious. The impacts of this are real. The delays and uncertainties mean new jobs are not being created, houses are more expensive, and communities have no idea what to expect in their neighbourhoods. Unnecessary costs are borne by every single New Zealander in one way or another.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou katoa. Would the Minister agree with Whanganui iwi that “the voice of the environment is being overtaken by the economy” in her Resource Management Act reforms; if not, why not?

Hon AMY ADAMS: No, I do not agree with that statement. The greatest gains for business are very clearly those that come from creating more certainty and making the processes easier to comply with. It is not about lowering standards; it is about having clearer rules about what you can do and where you can do it. If this House is genuinely interested in creating jobs and creating opportunities, then I am hopeful that it will back me in making proposals that make it easier for new jobs to be created, for new opportunities to be created, and for New Zealanders to get ahead.

Aaron Gilmore: How will the Government’s proposed reforms to the Resource Management Act led by that Minister help to increase investment?

Hon AMY ADAMS: With a lack of certainty around outcomes and time frames being a key barrier to investment, we are proposing a number of reforms to the Resource Management Act to address these issues—for example, clearer national guidance, reducing time frames for processing consents, and collaborative planning to create more robust solutions. Providing that sort of greater certainty will lead to more jobs and more affordable housing for New Zealanders.

Wanganui Collegiate School—Integration

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his reported statement in relation to Cabinet’s decision to integrate Wanganui Collegiate, that it was a very difficult decision, but he is sure it was the right thing to do; if so, why?

Rt Hon JOHN KEY (Prime Minister): It is important to note that, at the end of the day, it was the Minister of Education’s decision to integrate Wanganui Collegiate School, not Cabinet’s. But the Cabinet Manual is clear that significant statutory decisions must be discussed at Cabinet. This was a very difficult issue, as the Minister herself has acknowledged, and Ministers had a range of views on it. We discussed it at length, after which the Minister of Education decided to integrate the school. I do think that that was the right thing to do, because Wanganui Collegiate School has been a high performing school, it has a longstanding history, the community support for it is very high in Wanganui, and it plays an important role in the community.

Metiria Turei: In 2010 did the Prime Minister have any discussions, including dinners, with the proprietor, with members of Wanganui Collegiate School’s Board of Trustees, or with its lobbyist, Saunders Unsworth, about its intention to apply to integrate the school; if so, when and with whom?

Rt Hon JOHN KEY: I do not have those details with me. I would have to ask my office. I will put it down in writing if you are prepared to as well.

Metiria Turei: What instructions or encouragement did the Prime Minister give to the education Minister to start negotiations with Wanganui Collegiate School, despite the advice of ministry officials not to because it would be a $3 million a year waste of money?

Rt Hon JOHN KEY: It was a longstanding issue, so I cannot hope to document all the discussions that took place, but what I can say is that the situation was looked at on its merits. I could see the argument from both sides, but I believe the Minister made the right decision in integrating the school.

Metiria Turei: Why did the Prime Minister seek an update on the proposal to integrate, as noted by the then education Minister Anne Tolley, on the front of an August 2010 briefing paper, where she wrote “Send copy of this to PM, please; he has asked for an update.”?

Rt Hon JOHN KEY: Joined-up Government! The member may well be aware that the school was in significant financial difficulty. For a long period of time, when Anne Tolley was the Minister of Education, there were instances where the Government had to make a rapid decision as to whether to provide some support to the school to bridge it while there was a view being taken of whether it could integrate it or not. Obviously, I was interested in what was going on there.

Metiria Turei: Did the Prime Minister similarly ask for or request individual updates on Ōuruhia Model School as it began discussions on closures last year, or perhaps Pōtaka School in Gisborne, which is still waiting for news on its future; if not, why did he single out Wanganui Collegiate School for his very special attention?

Rt Hon John Key: In terms of broader schools, there are substantial discussions that take place between my office—and if you want to ask the current Minister of Education, you know, I have taken an active interest in what has been happening in terms of school closures in Christchurch and the impact on those committees. In relation to Wanganui Collegiate School, I go back to what I said earlier. The school was in significant financial difficulty. The Government was forced to make a decision at the last minute as to whether it would provide some support for the school. We did that

on a number of occasions, and we did that until a decision could be made about whether the school would be integrated or not.

Metiria Turei: Did Cabinet defy the advice of the education Minister that integration would be a $3 million a year waste of money, and bail out Wanganui Collegiate School because the Prime Minister is prepared to bend the rules for elite schools for wealthy kids?

Rt Hon JOHN KEY: No, we do listen to officials, and it is no secret that the Ministry of Education thought we should decline the application. The Minister has considered a wide range of issues, and in the end the Minister of Education made the decision to integrate the school.

Chris Hipkins: Will the Prime Minister guarantee that there will be no school closures or mergers in Wanganui, or citing, as a result of excess capacity within the State school system; if not, why not?

Rt Hon JOHN KEY: That is ultimately a matter for the Minister of Education, not for me.

Metiria Turei: I seek leave to table a 25 August 2010 briefing from the ministry to the Minister that includes a handwritten note from Minister Anne Tolley, which says: “Send copy of this to PM, please; he has asked for an update.”

Mr SPEAKER: Leave is sought to table that briefing. Is there any objection? There appears to be none. Document, by leave, laid on the Table of the House.

Metiria Turei: I seek leave to table a document dated 4 April 2011, a briefing from the ministry to the education Minister recommending decline of integration on the basis of increased State costs and risk of school closures in Wanganui.

Mr SPEAKER: That is quite a sufficient explanation. Leave is sought to table that briefing to the Minister dated 4 April 2011. Is there any objection? There appears to be none. Document, by leave, laid on the Table of the House.

Health Services—Delivery

5. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Is he confident that the Government’s initiative to provide “Better, Sooner, More Convenient” health care is meeting his expectations; if not, why not?

Hon TONY RYALL (Minister of Health): Yes, but there is always room for improvement, and I dare say it is possible we could get an example of that in the next minute. It is important to understand that, despite tight times, this Government has invested an extra $2 billion into public health services, including achieving the third-highest percentage increase of developed nations in the OECD’s latest report.

Hon Annette King: What is the basis for the claim that he made that more than $10 million per year will be saved through changes to hospital food provision, when most district health boards have made it clear that, like the Prime Minister, they have no clue how the savings have been estimated, and the Audit Office yesterday reported that Health Benefits Ltd needs to improve its transparency of reported savings?

Hon TONY RYALL: That advice comes from the Health Benefits Ltd information that has been provided—information that makes it clear that the claim in the House last week that 50 hospital kitchens would close was untrue, and similarly the claim that 1,300 people would lose their jobs was also untrue.

Hon Annette King: Is he aware that Meals on Wheels are also included in the contract, and that the meals are to be plated, frozen, and stored at two production plants before being transported and stored at a regional distribution hub, then sent to a hospital kitchen to be reheated, before being delivered by volunteers to the clients, and how will this provision reduce costs and improve quality of food for those who receive it and pay for it?

Hon TONY RYALL: I think the member is jumping to assumptions, like she did last week. What we know is that the proposal at the moment sees 65 percent of the food cooked on site, which is the complete opposite of what the member told the House only a week ago.

Hon Annette King: Why did he tell the public that the contract to provide hospital food from two production sites, as set out on page 33 of the Health Benefits Ltd document, was “in its early stages”, when Health Benefits Ltd has already shoulder-tapped the provider, which is already inspecting hospital kitchens, and staff have already heard from him last week that “Some people may lose their job,”?

Hon TONY RYALL: Because clearly it has not even moved to the formal business case process for consideration by district health boards. Let us be quite frank here: 50 hospital kitchens are not going to close, as Mrs King claims; 1,300 people are not going to lose their jobs, as Mrs King claimed; and all the food is not being cooked at two production centres, as Mrs King claimed. I think the biggest apology that needs to come from this Chamber today is for the fact that Mrs King told so many stories last week.

Hon Annette King: Talking of stories, when did Health Benefits Ltd advise him that the contract to provide hospital food from two production sites, which he denied last week, in a cookchill style—airline provision of food, with food being able to be kept in the fridge for up to 7 days before being fed to patients—could “lead to negative publicity that could prove harmful for the Minister”, as set out on page 52 of the Health Benefits Ltd document, if you want a few facts?

Hon TONY RYALL: I have been kept regularly informed by Health Benefits Ltd of its activities. I would have to say this to New Zealanders. The No. 1 priority in all of this is to maintain and improve the quality of food nutrition in New Zealand. That is why Health Benefits Ltd has a group of expert nutritionists working with it in developing this proposal. The public of New Zealand were misled last week when Mrs King told them that 50 hospitals would close and 1,300 people would lose their jobs, and when she said that everything would be served to them frozen. What we know is that at least two-thirds will be cooked on site. That is quite a different story from what Mrs King misled them on last week. The No. 1 priority, though, is better nutrition for New Zealanders in hospitals.

Hon Annette King: Point of order, Mr Speaker.

Mr SPEAKER: Order! I have a point of order from the Hon Annette King and it will be heard in silence.

Hon Annette King: I seek leave to table page 58 of the Health Benefits Ltd report, showing that all Meals on Wheels will be produced in a production plant, and that they will then go to regional distribution hubs. They will then go to hospital receiving kitchens—

Mr SPEAKER: Order! [Interruption] Order! That document has been sufficiently described to the House. Leave is sought to table page 58. Is there any objection to it being tabled? There is none. It will be tabled. Document, by leave, laid on the Table of the House.

Heart Disease—Angiograms

6. SCOTT SIMPSON (National—Coromandel) to the Minister of Health: What progress is the Government making on improving access to angiograms for patients with severe chest pain?

Hon TONY RYALL (Minister of Health): Waiting times for tests and hospital stays have been reduced for patients in the central North Island with severe chest pain. Eighteen months ago in the central North Island only a third of the people were receiving an angiogram at Waikato Hospital within 72 hours of presenting with serious chest pain—one of the lowest intervention rates in the country. As a result of a major project across the five district health boards, the number of patients regularly receiving an angiogram within the 3 days is now over 70 percent.

Scott Simpson: What measures are Midland district health boards taking to perform more angiograms?

Hon TONY RYALL: The improvement in angiograms and access to better heart care for patients in the Midland region is a result of a project of the National Cardiac Clinical Network and the five Midland district health boards. The Midland Acute Coronary Syndrome project assures that at least 70 percent of patients who have serious heart symptoms undergo their angiogram within 3 days. Previously, and for many years before then, many people would wait in regional hospitals for an extensive period of time before they were referred to Waikato Hospital. We have now got up to 70 percent getting those angiograms within 3 days. There have been a lot of very innovative changes in clinical practice—such as preparation for tests while awaiting hospital transfer and the establishment of a 10-bed facility at Waikato Hospital’s Hilda Ross House to accommodate stable heart patients—that have helped to free up beds and achieve faster, better care for patients in that region.

Question No. 5 to Minister

Hon ANNETTE KING (Labour—Rongotai): I seek leave to table page 33 of the Health Benefits Ltd report, which says that there will be two production plants for the production of food— something that the Minister denied last week.

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

New Zealand Defence Force—Potential Cuts

7. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Defence: Will he rule out further cuts to personnel numbers in the New Zealand Defence Force and cuts to the inshore patrol vessel fleet; if not, what cuts are being considered?

Hon Dr JONATHAN COLEMAN (Minister of Defence): There are no plans to reduce the personnel numbers in the New Zealand Defence Force and no plans to reduce the number of inshore patrol vessels. Furthermore, no cuts to capability are being considered.

Hon Phil Goff: If there are no plans to cut the inshore patrol vessels, why did the Chief of Defence Force, Rhys Jones, say on Sunday that reducing the inshore patrol vessel fleet was an option; and was that because there will be further cost-cutting, or was it because he simply cannot put all the ships to sea because he does not have the trained personnel to staff them and the Aussies want their seconded sailors back?

Hon Dr JONATHAN COLEMAN: There are a number of limbs to that question. The first thing is that the Chief of Defence Force’s remarks were taken out of context. He was talking about the long-term view out to 2035. As regards putting ships to sea, both frigates are at sea, of the inshore patrol vessels three of the four are ready to deploy, and the two offshore patrol vessels are at sea. If that member thinks that there are too many inshore patrol vessels, I would remind him that he was the one who bought them.

Hon Phil Goff: Just so that we can get it clearly on the House’s record, will the Minister categorically rule out any further cuts in Defence Force numbers after the reduction that he made of more than a thousand in the Defence Force last year?

Hon Dr JONATHAN COLEMAN: Numbers go up and down, but the numbers where they are at the moment are about right. We look at a long-term regular Defence Force of 8,500 to 9,000, which is the range currently, and there are no plans to reduce that.

Hon Phil Goff: When the Minister was warned in the latest Defence Force Ongoing Attitude Survey, not yet made public, that “the combination of current levels of morale and organisational commitment poses potential risk to individual performance and attrition”, why does he continue to deny that these factors could have contributed to the catalogue of errors that led to the death of Private Michael Ross?

Hon Dr JONATHAN COLEMAN: Well, we have talked about this previously, and I categorically deny that morale issues are anything to do with what was a very tragic accident. I would also go on to say that 77 percent of people across the Defence Force rate morale in the workplace as satisfactory or better, and 70 percent rate their own morale as satisfactory or better—a lot better than I would suggest you would find in the Labour caucus right now.

Hon Phil Goff: When there is so much emphasis on cost saving and cost cutting in the New Zealand Defence Force, why is the Defence Force continuing to pay Commodore Kevin Keat $225,000 a year when he was suspended months ago and it would take the Minister 10 minutes to found out whether he did fraudulently fill out the high-level security vetting form? [Interruption]

Mr SPEAKER: Order! The member asked a supplementary question. I certainly want to hear the answer, even if the member himself does not.

Hon Phil Goff: I raise a point of order, Mr Speaker. I was responding to an interjection from the Minister of Justice, as you yourself heard, and your response was unbalanced.

Mr SPEAKER: Order! There were too many interjections from around the House, including not only the member but other members of his caucus. Let us now hear the answer. I think that is a reasonable point Mr Goff has made.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Your response again failed to note that Judith Collins set off those interjections.

Mr SPEAKER: Order! I did not note that but where I noted the loudest interjection coming from was the member who has just raised the point of order. I am going to ask the member, the Hon Phil Goff, to ask his question, because we now have discontinuity.

Hon Phil Goff: When there is so much being said about cost cutting and cost saving in the New Zealand Defence Force, why is the New Zealand Defence Force continuing to pay Commodore Kevin Keat $225,000 a year when he was suspended months ago and it would take the Minister 10 minutes to find out whether or not he inaccurately and falsely filled out his high-level security vetting form?

Hon Dr JONATHAN COLEMAN: That member seems to be calling for me to override a legal process. Mr Keat deserves the benefit of natural justice. There is a process to follow, there are legal issues, and that member knows very well that it has to follow the prescribed process. I would challenge him, if he wants to go outside the Chamber and say that Mr Keat is guilty and should be sacked, he should have the guts to do that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I think if you analyse pretty simply that last remark, that was grossly out of order to accuse a member of not having guts. There are many, many precedents on that, and Speakers have thrown members out for that. [Interruption]

Mr SPEAKER: I think that on balance that is an absolutely fair point of order, and I ask the Minister to rise and withdraw the last part of his answer.

Hon Dr JONATHAN COLEMAN: I withdraw and apologise for that last part.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. As you were seeking to correct the offence, Mr Tau Henare decided to add to it by shouting out words that confirmed that he believed it was true. He should be asked to apologise, wash his mouth out, and leave the House.

Mr SPEAKER: Order! If Mr Tau Henare said that, I ask him to stand, withdraw, and apologise as well.

Hon Tau Henare: I apologise.

Mr SPEAKER: And withdraw.

Hon Tau Henare: And I withdraw.

Budget 2013—Tourism Marketing and Promotion

8. EUGENIE SAGE (Green) to the Minister of Tourism: Will any of the extra $158 million for tourism in Budget 2013 be spent on tourism marketing and promotion for the 100% Pure New Zealand campaign; if so, how much?

Rt Hon JOHN KEY (Minister of Tourism): A significant portion of the new funding will likely go to Tourism New Zealand. “100% Pure New Zealand” has been the core of its marketing campaign since 1999, and will likely continue to be so. The member will have to wait for the Budget announcements, though, for more details.

Eugenie Sage: When his Government cut Department of Conservation funding by $54 million in 2009 and by another $8.7 million this year and next year, was his plan to address the growing gap between our clean, green marketing image and the reality to spend more on advertising?

Rt Hon JOHN KEY: No. I mean, firstly, I think it is important to note that “100% Pure New Zealand” is not an environmental claim and never has been; it is a marketing slogan. Secondly, if I were to reflect on the information that we have from visitors in relation to their satisfaction, overall visitor satisfaction with the environment is ranked nine out of 10.

Eugenie Sage: Why is he supporting funding to promote “100% Pure New Zealand” and not also supporting more funding for the Department of Conservation to help give integrity to that brand and to help protect and maintain the assets on which the tourism industry depends and which draw visitors to New Zealand?

Rt Hon JOHN KEY: Well, I do not agree with the premise of the question. I mean, the Department of Conservation does have integrity and does do a very good job of supporting New Zealand for tourists who want to come and visit it from overseas.

Eugenie Sage: Has the Minister advocated for more funding for conservation to help make the New Zealand brand real, or is he happy to promote New Zealand as a destination to see more polluted rivers, oil slicks from risky oil drilling, and more big mines on conservation land, like this one in Victoria Conservation Park?

Rt Hon JOHN KEY: Again, I just do not agree with the statements that the member is making. If we just look at our 20-year plan in terms of rivers that may be unfit for swimming, we are going to spend nearly half a billion dollars of taxpayer and ratepayer money cleaning up those rivers and lakes. What I might add is, that is five times more than was spent by the previous Government.

Power Prices—International Comparisons

9. ANDREW WILLIAMS (NZ First) to the Minister of Consumer Affairs: Has he seen any reports that New Zealand power prices have increased at twice the rate of most other countries?

Hon CRAIG FOSS (Minister of Consumer Affairs): I have seen a number of reports on power prices, including reports that New Zealand consumers are increasingly taking advantage of greater choice and competition, and are switching companies for a better deal, and that, under a National Government, consumers are far better off than the 72 percent, or 8 percent per annum, increase in power prices they endured under the previous Labour Government, which may well have been twice the rate of other countries.

Andrew Williams: What steps is the Government taking to address the widespread concern with rapidly escalating power prices, as is reported in the New Zealand Listener this week?

Hon CRAIG FOSS: As far as it is under my portfolio of consumer affairs, most of that is actually a question to the Minister of Energy and Resources. Under the Powerswitch programme, 70,000 New Zealanders have had the opportunity to switch power companies, power providers, over the last 2 years. That has been a very, very successful programme, as well as increasing aftertax incomes for all New Zealanders and those on fixed incomes to help them pay for their power and their cost of living.

Andrew Williams: Given that power companies are making record profits despite falling demand for electricity, why are power bills so high?

Hon CRAIG FOSS: I thank the member for his support of the mixed-ownership model.

Andrew Williams: I raise a point of order, Mr Speaker. I did not ask anything about the mixedownership model. That did not answer my question.

Mr SPEAKER: I invite the member to put the question again, please.

Andrew Williams: Given that power companies are making record profits despite falling demand, why are power bills so high?

Hon CRAIG FOSS: A large proportion of the New Zealand electricity industry is currently owned by the Crown, the State, and under that model it has seen very increased prices, particularly in the 9 years of the Labour Government and its 72 percent increase. That is one of the reasons.

Andrew Williams: Will the Government assure the public that future electricity prices will not increase at a faster rate than the CPI; if not, why not?

Hon CRAIG FOSS: I note that the CPI today came out at 0.9 percent per annum and after-tax incomes are actually increasing under this National Government, to help people afford their cost of living.

Andrew Williams: I raise a point of order, Mr Speaker. It was a simple yes or no answer that we required. He did not answer the question.

Mr SPEAKER: The member cannot demand a simple yes or no answer, but I accept the point that the question was not addressed adequately. Would the member please ask the question again.

Andrew Williams: Will the Government assure the public that future electricity prices will not increase at a faster rate than the CPI; if not, why not?

Hon CRAIG FOSS: That question should be addressed to the Minister of Energy and Resources, but I can assure him, on recent track record, that under the National Government power prices have increased by about half to a third of the rate under the previous Labour Government.

Veterinarians—Rural Veterinary Bonding Scheme

10. IAN McKELVIE (National—Rangitīkei) to the Minister for Primary Industries: What progress can he report on efforts made to increase veterinarians in rural New Zealand?

Hon NATHAN GUY (Minister for Primary Industries): Yesterday I welcomed 30 new vets into the 2013 intake of the rural veterinary bonding scheme. The scheme is now in its fifth year, and so far 136 new vets have joined, with an outstanding retention rate of 96 percent.

Ian McKelvie: Why is the Government investing in keeping vets in rural New Zealand?

Hon NATHAN GUY: Livestock farming is the engine room of New Zealand’s economy and a big part of rural communities. Tackling the shortage of rural vets is important for animal health and for realising the Government’s ambitious goal of doubling primary sector exports by 2025. For farmers it means a sustainable, cost-effective, and responsive rural veterinary workforce.

Police Training Programme, West Papua—Media Access

11. CATHERINE DELAHUNTY (Green) to the Minister of Foreign Affairs: Will New Zealand journalists be able to visit and monitor the New Zealand Police training programme in West Papua when it recommences in September 2013 under an aid allocation of US $2 million; if not, why not?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Foreign Affairs): The member is ahead of herself. The Minister of Foreign Affairs has received no advice on the design, timing, and funding of the project. There will be an announcement when a decision on the proposed project is made. The Ministry of Foreign Affairs and Trade itself monitors aid projects in a stringent way. There is no project yet for journalists to consider visiting.

Catherine Delahunty: Will he support journalists and a parliamentary delegation to visit West Papua and monitor the effectiveness of the proposal announced yesterday of the New Zealand Police training programme, and if yes, how will he support that?

Hon CHRISTOPHER FINLAYSON: The Minister has received no advice on the design, timing, and funding of the project. There will be an announcement when a decision on the proposed project is made. There is no project yet for journalists to consider visiting.

Catherine Delahunty: After the ambassador’s announcement yesterday that the project is starting in September 2013, will this project include New Zealand Police training the West Papuan

police to stop violently assaulting people who are alleged to have committed political crime, such as raising the Morning Star flag?

Hon CHRISTOPHER FINLAYSON: The media reporting in the Jakarta Post, which I presume the member is referring to, is wrong. The Minister has received no advice on the design, timing, and funding of the project. There will be an announcement when a decision is made. There is no project yet for journalists to consider visiting. What could be simpler than that?

Catherine Delahunty: Keeping it simple, will he raise the issue of military and police violence against West Papuans at the Pacific parliamentarians’ conference in Wellington this week?

Hon CHRISTOPHER FINLAYSON: New Zealand continues to raise the situation in partnership with the Indonesian Government bilaterally and in multilateral fora, including at the United Nations’ Universal Periodic Review of Indonesia.

Catherine Delahunty: I raise a point of order, Mr Speaker. I appreciate the Minister’s answer, but my question was very specific: will he raise this issue at the conference in Wellington this week, the Pacific parliamentarians’ conference?

Mr SPEAKER: The Minister may like to add to that, but my interpretation was there is a multinational forum and they continue to raise the issue. But if the Minister wanted to add to that, it would be helpful.

Hon CHRISTOPHER FINLAYSON: As I have said, the Minister continues to raise these issues in various multilateral fora. Whether it will be raised by the Minister at the conference to which the member refers, I cannot say.

Mr SPEAKER: I thank the Minister for that.

Government Communications Security Bureau—Prime Minister’s Statements

12. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Does he stand by his statement on 24 September 2012 in relation to the work of the GCSB, “I think you can take confidence in the fact that to the best of my knowledge, I’ve never been informed or ever had reason to believe there’s ever been an error before”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Grant Robertson: Why did he not mention at his media conference on 24 September that there were unresolved issues about possible spying, as he was told in July 2012 by Ian Fletcher, the Director of the Government Communications Security Bureau?

Rt Hon JOHN KEY: Because the context of the statement I made was in the context of illegal spying. It was correct then, and it remains correct now.

Grant Robertson: Did he say to the Director of the Government Communications Security Bureau, Ian Fletcher, in July 2012 that he regarded the possibility of unlawful spying as a serious situation and that it needed to be resolved, as he said on Radio New Zealand this week?

Rt Hon JOHN KEY: As I have said before, in July when the matter was raised with me by Ian Fletcher I did say to him it was a very serious matter and that he needed to get a resolution to that issue. I would make the point that at no point did the Inspector-General actually raise the issue with me; neither did he suggest to the agencies they should cease operations.

Grant Robertson: If it was such a serious situation, why, when he was asked six times at the media conference on 24 September as to whether he had ever had any concerns about unlawful spying, did he not mention that this was flagged to him by the Director of the Government Communications Security Bureau in July 2012?

Rt Hon JOHN KEY: For the reason I gave—that the press conference was in relation to illegal spying. What is true is that by that point we had identified that there had been illegal spying in the case of Mr Dotcom. Also correct are all of the other statements I made that there was no other illegal spying, nor are we currently aware of other illegal spying. It is very important to understand that the Inspector-General is considering those matters at the moment. They are unresolved.

Louise Upston: Can the Prime Minister tell the House how the Government plans to strengthen oversight of our intelligence agencies?

Rt Hon JOHN KEY: I can. The Government is proposing to significantly strengthen the oversight of our intelligence agencies. Among the changes we intend to make are the following: increasing the resourcing and staffing of the Inspector-General’s office, including creating a new role of Deputy Inspector-General; explicitly expanding the Inspector-General’s programme of making the office work more transparent; removing the requirement that the Inspector-General of Intelligence and Security should be a retired High Court judge—this will increase the pool of people who can do the job—and making the Inspector-General’s office more proactive by increasing the requirements of the office and moving it a step forward from the existing reviewfocused work programme. These are all important changes that we need to make as we move towards rebuilding public confidence in the Government Communications Security Bureau. I would have thought they would be worth supporting by the Labour Party.

Grant Robertson: How is it, as he has said, “a prudent course of action” to ignore what he said was a serious situation of New Zealanders potentially being illegally spied upon, do nothing about that, and fail to mention it when asked direct questions?

Rt Hon JOHN KEY: The member is incorrect. For a start-off, these activities had been undertaken for a very long period of time. Secondly—[Interruption] Yes, potentially while Mr Robertson was in the Prime Minister’s office. Secondly, a flag was raised and work was being undertaken. I made it clear to the director that he needed to keep me informed of that. I go back to this fundamental point: at no point did the Inspector-General, the person who was doing the thinking in this area, raise the issue with me; neither did he suggest to the agencies they should cease operations.

Louise Upston: Can the Prime Minister outline for the House why other agencies, like the Police, the SIS, and the New Zealand Defence Force, need assistance from the Government Communications Security Bureau?

Rt Hon JOHN KEY: I can. The bureau has unique skills and capabilities that the other agencies do not have. Those agencies need to access these high-quality skills and capabilities for a variety of reasons, all of which are vital. At this time, assistance to the Police and the SIS in relation to New Zealanders remains halted. Some assistance to other agencies has resumed, and only where the Crown Law Office has advised it is lawful to do so. This includes assistance to the New Zealand Defence Force. Government Communications Security Bureau support may contribute to noncombative evacuation operations, humanitarian aid, disaster relief, and monitoring of illegal activities throughout New Zealand’s search and rescue areas. These activities are important examples of the role the bureau plays. I would have thought these would be the sorts of things that Labour would be interested in voting for.

Grant Robertson: Why did he not tell the truth in September about what he knew about potentially unlawful—[Interruption]

Mr SPEAKER: Order! The way that question has been framed has clearly led to disorder. Would the member just rephrase the question without reference to a Minister telling the truth.

Grant Robertson: Can he understand why New Zealanders do not believe him about the Government Communications Security Bureau saga when he did not tell the truth to them in September 2012?

Rt Hon JOHN KEY: No, and, given the forensic analysis that Mr Robertson goes through— they must be interesting, the conversations he has with Mr Shearer about his forgetfulness about his bank—

Mr SPEAKER: Order!

Grant Robertson: In July 2012 did Ian Fletcher raise with him a flag about possible unlawful spying, and why, when asked about that by the media with almost those exact words in September 2012, did he not mention Mr Fletcher raising that with him?

Rt Hon JOHN KEY: I feel that it is repetition, but, as I have said, the statement was made in September about the context of illegal spying. It was correct then, and it remains correct now. Those matters are unresolved. The Inspector-General is looking at those issues, but no decision has been made.

ENDS

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