QUESTIONS TO MINISTERS

Dairy Industry—Potential Contamination of Whey Protein

1. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What recent reports has he received about international market reaction to the potential whey protein contamination issue?

Hon BILL ENGLISH (Minister of Finance): The latest global dairy trade auction was held overnight—the first auction since Fonterra confirmed it was dealing with a potential whey protein contamination issue. The online auction is considered a barometer of international dairy prices, and Fonterra is the largest seller at the auction. The global dairy price index slipped a modest 2.4 percent compared with the previous sale 2 weeks ago. The total volume of product sold at the auction increased to over 60,000 tonnes, up from 38,000 tonnes 2 weeks earlier. The results confirm there has not been a material market impact on Fonterra’s prices from the contamination issue, and the international demand for dairy products remains strong.

Jami-Lee Ross: How does the latest global dairy auction result compare with previous results?

Hon BILL ENGLISH: The 2.4 percent fall in prices is among the smaller price movements up or down. It has been described as relatively small, or a mild fall in the wider scheme of things. At the previous auction the price index increased 5 percent and price drops of over 5 percent occurred at auctions in May and June this year. Over the past year the prices have increased by 73 percent, so prices for our dairy products remain at elevated levels. Maintaining those elevated levels, of course, will require the current situation to be handled transparently and effectively.

Jami-Lee Ross: What was the initial market analysis of the global dairy trade auction result, particularly in respect of indications of future market prices and demand?

Hon BILL ENGLISH: Economists said that prices and demand for longer-term contracts for delivery from November were encouraging. Fonterra share prices are up today and are overall down less than 2 percent since the Friday close. The indications are that providing the issue of the potential contamination is handled effectively and transparently, the direct impact on the New Zealand economy can be contained.

Dairy Industry—Potential Contamination of Whey Protein

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his statement in Parliament yesterday that “it does seem very, very odd that Fonterra allowed production to carry on and for that infant baby formula to go into the supply chain or into the distribution chain”; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes, because that is the natural question that the public, overseas customers, ourselves, and others will be asking.

Dr Russel Norman: Does he agree with the characterisation of the chain of events that Fonterra knew that its product could have the dangerous Clostridium botulinum in it and yet let it be

processed into baby formula in Australia, re-imported into New Zealand, put on supermarket shelves, sold to parents, and fed to babies all the while Fonterra knew that it could contain the Clostridium botulinum in it?

Rt Hon JOHN KEY: No, I am not sure that I would agree with that characterisation. The member is using the word “knew”. I think that is the issue. Up until the Wednesday of last week, I do not think that Fonterra did know.

Dr Russel Norman: Does the Prime Minister agree that once the initial test was done back in March that showed that there was a Clostridium in there, Fonterra knew that there was some kind of Clostridium, but it just was not sure whether it was Clostridium botulinum or a different kind of Clostridium?

Rt Hon JOHN KEY: Firstly, I really cannot speak for the company. I do not either have ministerial responsibility or, secondly, I just do not know what the company knew. I know that something showed up in the tests that it undertook in March, but I do not know exactly what it understood that to mean, and therefore I cannot offer an opinion about whether it was safe for Fonterra to carry on with the processes that carried on from there.

Dr Russel Norman: Then why did the Minister yesterday say—and he says he stood by this statement—that he thought it was “very, very odd that Fonterra allowed production to carry on …” if he is unsure about it?

Rt Hon JOHN KEY: I do think it is odd, but I cannot offer a view on what the company absolutely knew. What I know from what I have seen in the public domain is that in March there was something that showed up in the tests that were undertaken. I cannot tell you whether that should have waved lots of red flags or none whatsoever. That is what an inquiry will show us. I do think it is a bit odd that those tests showed something in March of this year, and yet production carried on.

Dr Russel Norman: Does the Prime Minister have any further information about this issue that the Government has not yet made public?

Rt Hon JOHN KEY: The member is asking a very broad-ranging question that I cannot answer, because I am sure Ministers will have very detailed information about lots of things that would not necessarily have travelled to my office. But if you are asking me whether I have some really specific germane piece of information that really should be in the public domain and is not, I have not been advised of anything of that nature.

Dr Russel Norman: Is the Prime Minister aware of whether Fonterra has breached any regulations in this process?

Rt Hon JOHN KEY: Again, no, I am not aware. I am aware of the fact that the company has all sorts of legal obligations, as does the regulator, effectively, the Ministry for Primary Industries through food safety. But no, at this stage, I am not aware whether Fonterra has breached any of those. That is what an inquiry will one day show.

Dr Russel Norman: Is the Prime Minister confident that the regulations that are in place are sufficient; if he is confident that they are, have any regulations been breached?

Rt Hon JOHN KEY: I think I have covered off the last part in my earlier answer. In terms of the first one, to the best of my knowledge, the laws in this area have proven in the past to be sufficient and have worked. Fonterra has been the world’s largest dairy exporter, and you have to say, on balance and on the whole, it has had a very strong consumer record, and one of high safety standards. So there is no particular reason that something should have showed up, but, again, that is what an inquiry will show—whether there are any deficiencies.

Dr Russel Norman: Does the Prime Minister know whether the Ministry for Primary Industries has the processes in place that would have identified this potential contamination, had the Australian manufacturer not required Fonterra to test for it?

Rt Hon JOHN KEY: No, I cannot answer that question. It can obviously apply a test, but it does not apply every test—there are all sorts of potential things you could test for. I am sure the ministry

has the capacity to do that, but it does not always carry out those tests. My understanding is that this test was carried out in Australia because of—or, in all probability, one of the markets was going to require this test.

Ministers—Confidence

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he have confidence in all his Ministers?

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he have confidence in his Minister for Primary Industries, given that he implemented Budget cuts of $26 million for the Ministry for Primary Industries since his Government came into power?

Rt Hon JOHN KEY: Yes, I have complete confidence in the Minister for Primary Industries.

David Shearer: Did his Government cut the Budget for food safety from $95 million in 2008 to just $85 million this year, or $20 million in real terms; if so, has this had any impact on our ability to detect and respond to food safety questions?

Rt Hon JOHN KEY: I do not have those details with me, but it is interesting that we are only 24 hours into it, and it looks like Labour is turning on the blame game.

David Shearer: Was he, and his Ministers, warned back in 2010 that “amalgamating food safety into what is now the Ministry for Primary Industries risked comprising food safety standards” and that “food safety is vitally important for our exporters”?

Rt Hon JOHN KEY: I do not have that advice with me—if it was presented, I would have to go back and look through all of the records—but what I can say is that when the merger was undertaken and the ministry assumed food safety, that was done for very good reasons and, in my view, it has been a successful merger. The laws that actually control the standards that are set and the processes that they go through were not changed.

David Shearer: In light of his answer, did he consider the independent review of food safety in 2007, which recommended that food safety be established as a stand-alone agency “because it is considered world best practice”; if so, was the amalgamation designed simply to cut costs, as he stated in his Better Public Services speech last year?

Rt Hon JOHN KEY: The introduction and amalgamation of food safety as part of the Ministry for Primary Industries was not designed to cut costs overall—of course, the Government wants efficiencies overall—and no, we did not consider the 2007 report, but it would have been commissioned by Labour. What we did do was take a series of advice and that advice supported the moves that the Government took.

David Shearer: Given that under the 1999 Animals Products Act “any producer, processor, transporter, or exporter of animal products must disclose any relevant information that would compromise the integrity and reputation of New Zealand exports”, does he believe Fonterra complied with the law in the way that it responded?

Rt Hon JOHN KEY: That will be the purpose of an inquiry, to answer that very question. But, as I understand it, the obligation, as it has been relayed to me, is that when there is a known issue— which was on the Wednesday—the company has 24 hours to ensure that AsureQuality is made aware. That was done, as I understand it, and then AsureQuality has a further 24 hours to ensure that the Government through the regulator, the Ministry for Primary Industries, is informed. That also took place. Whether there should have been earlier disclosures, that is all part of an inquiry.

David Shearer: Did he ask his Ministers why they were not kept informed of the Fonterra issue, given that there is a legislative requirement that they be kept informed; if so, what reasons did they give?

Rt Hon JOHN KEY: To the best of my knowledge they were kept informed. At 12.35 on Friday the Ministry for Primary Industries was advised—I assume by Fonterra—that there was an issue at

that point. They have been fully advised as and when information has come in to Fonterra, to the best of the knowledge that the Government has.

David Shearer: Does the Prime Minister have confidence in AsureQuality, given that it gave a clean bill of health to the dairy plant responsible for the contamination?

Rt Hon JOHN KEY: We will need to go back again, as part of an inquiry, and look at all of those details. I am not going to jump to conclusions yet, but if the question were to be posed the other way round, have I seen any advice that would indicate that I should not have confidence in AsureQuality, then the answer would be: to the best of my recollection, no, I have not seen that advice.

Dairy Industry—Potential Contamination of Whey Protein

4. PAUL FOSTER-BELL (National) to the Minister for Food Safety: What update can she provide the public on the safety of infant formula?

Hon NIKKI KAYE (Minister for Food Safety): A public information campaign is under way to inform parents about the recall of two product lines, Nutricia Karicare Stage 1 New Baby Infant Formula from birth, and Nutricia Karicare Gold+ Stage 2 Follow-on Formula from 6 months. I can confirm that the Government has committed funds towards advertising to assist with this public information campaign. The Director-General of the Ministry for Primary Industries has also advised me that he will be holding a press conference today to provide a further update on the process he has undertaken to resolve this issue. Parents and caregivers should continue to check the Ministry for Primary Industries website for updates, and should call PlunketLine and Healthline if they have any health concerns.

Paul Foster-Bell: What cross-Government work is happening in terms of public safety relating to infant formula?

Hon NIKKI KAYE: I am advised that the Ministry for Primary Industries is continuing to work closely with the Ministry of Health to help ensure public safety. The Hon Tony Ryall has informed me that Plunket nurses are today contacting as many Plunket mothers as possible who they know are using infant formula, to ensure they are aware of the recall. The Government also wants to ensure that this message is accessible for mums and dads in New Zealand and abroad. The Ministry for Primary Industries has advised me that there will be documents, in different languages, relating to the recall available on the Ministry for Primary Industries website.

GCSB, Review of Compliance—Investigation into Leak and Access to Phone Records

5. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Did his inquiry, headed by David Henry, request phone call logs for contact between Andrea Vance and Hon Peter Dunne; if not, how does he explain the email sent from the Henry Inquiry to Parliamentary Service at 5.53 pm on Monday 20 May 2013?

Rt Hon JOHN KEY (Prime Minister): Let me start by saying David Henry has made it quite clear in his own press statement that the inquiry he led “never requested the phone records of journalist Ms Andrea Vance”. Secondly, with reference to the email the member is asking about, I invite him to read it carefully and—here is a novel idea—read it in full, because the email sent at 5.53 p.m. on 20 May requests phone logs, and then goes on to say: “Please note, we do not want the call logs of the two numbers of interest. That is outside the parameters of our Inquiry.” The numbers of interest were Ms Vance’s numbers, which would be why, when the member tried to hawk this off through Twitter yesterday, everybody who got it thought he was the twit.

Mr SPEAKER: Order!

Grant Robertson: In light of that answer from the Prime Minister, can he confirm that the email that he is quoting from says that the Henry inquiry is seeking—[Interruption]

Mr SPEAKER: Order! There is too much noise, particularly from that sector of the House. The member can start his question again.

Grant Robertson: In light of that answer, can the Prime Minister confirm that the email that he was quoting from seeks information about contact between the listed extensions, Peter Dunne’s, to and from the numbers of interest, Andrea Vance’s, and is he saying that “to and from” does not mean contact between Andrea Vance and Peter Dunne?

Rt Hon JOHN KEY: I know that this can be difficult for some people to grasp, but when you make a phone call, what happens is that one person rings another person or other people. That involves getting a phone like this one at my bench here. You have a number, and you ring another number, right? And if the other person rings you, by the way, that is the number that comes in to you. So, by definition, of course it will show the numbers that, for instance, Mr Dunne may have made and the numbers that he has received phone calls from, but Andrea Vance’s phone records are not part of that, and they, as Mr Henry quite correctly said, do not fall within part of the interest. The phone logs of Andrea Vance were never requested and should not have been received.

Grant Robertson: So is the Prime Minister saying that calls from Andrea Vance’s phone are not her phone records?

Rt Hon JOHN KEY: What I am saying is they are not her phone records; they are Mr Dunne’s records of whom he received a phone call from.

Rt Hon Winston Peters: Has he in his time as Prime Minister ever involved his staff in seeking, through an agency of State, that a private citizen’s phone records be accessed despite no issues of national security being involved?

Rt Hon JOHN KEY: No. If the member is asking me in terms of the Government Communications Security Bureau (GCSB), the SIS, and the work that they do, there are conditions within their Acts for which their warrants can be established, and they must meet those conditions. One of those is national security.

Grant Robertson: Who supplied him the email from the inquiry dated 31 May that he used in his answers last week in the House?

Rt Hon JOHN KEY: They came from my office in preparation for question time.

Grant Robertson: How is it that his office and department were able to locate an email that showed that the inquiry was not looking for phone call logs, but missed the one from 11 days earlier, where it did ask for phone call logs?

Rt Hon JOHN KEY: Because, as was disclosed in the House by Minister Joyce answering on my behalf on Thursday, there were 39 emails, but my office was not given those 39 emails. It was given the emails that were germane to answering the question, because we do our best in question time to answer the questions, even if they are dumb questions.

Mr SPEAKER: I am just pointing out to the Prime Minister that those sorts of comments are certainly not helpful to the order of the House. I would appreciate it if he would desist.

Rt Hon Winston Peters: Given that my prior question referred to no national security issues being involved, which would rule out the SIS and the GCSB, can I ask the Prime Minister again whether he, in his time as Prime Minister, has ever involved his staff in seeking, through an agency of State, that a private citizen’s phone records be accessed, despite no issues of national security being involved?

Mr SPEAKER: That is a question that is very wide of the mark. The Prime Minister answered it the first time. I am going to give the Prime Minister the opportunity to answer it.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With respect, the question closed with the statement “despite no issues of national security being involved”. The Prime Minister then answered and said that if the member is referring to the GCSB—and I presume he means the SIS as well—then he would answer in terms of that. I specifically ruled out those two agencies with that statement, so now I want to know whether another agency of State has fitted the bill of the question I have now asked the Prime Minister twice.

Mr SPEAKER: I appreciate that the question has been asked twice. I am going to ask the Prime Minister to answer it, but I point out that it is a question that is very marginal. It is very wide of the original primary question.

Rt Hon JOHN KEY: Because it could be interpreted in so many ways, I will need to get some advice so I can give the member an answer to it.

Grant Robertson: Why will he not take responsibility for the actions of an inquiry that he set up, which is now being described in a Dominion Post editorial as having the whiff of a cover-up?

Rt Hon JOHN KEY: The member should keep up. I did last week in the House when the question was asked by Mr Norman.

State Housing—Progress on Building New Houses

6. Peseta SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Housing: What progress is the Government making in building the additional new homes as part of the Asset Management Strategy for Housing New Zealand?

Hon Dr NICK SMITH (Minister of Housing): This financial year we will directly build more homes than in any year in the last 25 years. Housing New Zealand Corporation right now has builders on the ground on 600 different sites around New Zealand, constructing new homes. A further 500 are under contract, with work due to start in a matter of weeks. This will contribute to the corporation’s target of at least 2,000 new homes by June 2015. In addition to this, subsidiary housing Hobsonville Land Co. will deliver around 540 homes, the Social Housing Unit is funding the construction of another 700 homes, and the Ministry of Business, Innovation and Employment is also directly contracting the construction of homes in places like Rangers Park, to support Christchurch’s recovery.

Peseta Sam Lotu-Iiga: What reports can he give of initiatives that will see better utilisation of the Government’s land holdings to increase both social and affordable housing?

Hon Dr NICK SMITH: We have dozens of redevelopment initiatives under way that increase the overall number of homes on Housing New Zealand Corporation land but reduce the overall proportion that are State housing. In the member’s own electorate, Maungakiekie, in Maria Street we are building 21 homes where there were previously three and retaining six of those for State housing purposes. In northern Glen Innes we are going from 156 homes to 260 homes. The removed houses that were subject to the protest action by the member for Te Tai Tokerau were, ironically, relocated to his electorate, where they are being used for marae housing.

District Health Boards—Performance

7. BARBARA STEWART (NZ First) to the Minister of Health: Is he satisfied with the performance of all district health boards?

Hon TONY RYALL (Minister of Health): I am happy and satisfied with the performance of district health boards helping to deliver record immunisation rates for New Zealand children, huge improvement in emergency departments seeing patients within the 6-hour target, record numbers of heart and diabetes checks, faster cancer services so patients do not need to go to Australia, record elective surgery, and delivering record access to first specialist assessments. However, there is always room for improvement and for district health boards to do better, particularly with regard to the occasional individual unacceptable case.

Barbara Stewart: Is he satisfied that a 90-year-old woman was kicked out of Tokoroa Hospital at 2.30 a.m. on 23 July and was forced to get a neighbour out of bed to come and return her to her home in Pūtāruru?

Hon TONY RYALL: No, I would not be happy with that. I would have to check that to make sure that the circumstances were correct, but I can tell you that that would be unacceptable.

Barbara Stewart: Is he satisfied that a patient being referred by his general practitioner to MidCentral District Health Board for a cardiology test was told by the board that he was only a

semi-urgent case and that it could not offer him an appointment until January 2014 and, instead, told him to see his general practitioner?

Hon TONY RYALL: If that is the case that I think it is, I can advise the member that the district health board provided that patient with incorrect information and they will be getting, I understand, an appointment much sooner than that.

Barbara Stewart: When will we see an end to this treatment of an increasing number of vulnerable elderly patients who, under his watch, have been shunted out of hospitals in the early hours of the morning and into the night?

Hon TONY RYALL: I simply reject that claim. The fact is that under our Government we are providing better emergency department service faster. That member only needs to cast her mind back to the Government that her party supported under Labour, where patients—old people— waited in the North Shore Hospital emergency department for 3 days on end, under bright fluorescent lights, and she continued to support that party.

Welfare Reforms—Investment Approach

8. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by her statement that “the investment approach will change the entire focus of the welfare system so that support is invested where it will make the biggest difference”?

Hon PAULA BENNETT (Minister for Social Development): Yes.

Jacinda Ardern: Can she confirm that despite her so-called investment approach, the cuts to the training incentive allowance to assist sole parents in training and education remain in place?

Hon PAULA BENNETT: They are still working their way through policy as to how money will be spent and allocated, but, at this stage, yes.

Jacinda Ardern: Can she confirm that her welfare reforms will now see sole parent employment contractors receive bonus payments as high as $9,500 per person, more than double the cost of the training incentive allowance for a whole year?

Hon PAULA BENNETT: The member is drawing a few dots there and not actually having that add up. What is happening is that some are being contracted out. I do not imagine it is going to be at that cost. The average cost is about $2,700.

Hon Member: No it’s not.

Hon PAULA BENNETT: What we have also done—yes, it is. That is the average cost for us to contract it out. What we have also done, of course, is increase the number of case managers so that they are able to work more intensively. That is making a huge difference. We have a work focus case management going on a lot more each week. We are seeing more people get into work—

Andrew Little: What about the bonus payments?

Hon PAULA BENNETT: —and that is the reality. Calm down, young man. You will be all right. Calm down. [Interruption]

Mr SPEAKER: Order! The level of interjection from Andrew Little is excessive.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I have a point of order. It will be heard in silence.

Hon Trevor Mallard: I think the suggestion of being called a young man might be regarded as a compliment, but the suggestion that you should calm down is something that I think—

Mr SPEAKER: Order! That is not a helpful point of order. The member will resume his seat.

Jacinda Ardern: Can she confirm that a woman in the exact same position she once was in, now gets $100 per week less in training support, is required to find more work while studying, despite increasing unemployment and high childcare costs, and will have recently received a letter telling her that she risks having her benefit cut if she simply misses a Work and Income appointment?

Hon PAULA BENNETT: Actually, none of that is true. Women on the DPB now, or on the sole parent support, are financially better off each week than they ever were in the 1990s when I was actually there. So if you want to go back more than 20 years and have a look at it, then that is

the truth of it. Actually, they are getting more support to get into work, their lives and the lives of their children are being changed, and I am going to continue to back them into those jobs. That really makes the biggest difference for them every time.

Jacinda Ardern: Given her investment approach—[Interruption]

Mr SPEAKER: Order! Would the member please start her question again.

Jacinda Ardern: Can she give a guarantee that all of the 44,000 people she has estimated will come off a benefit as a result of her reforms, will do so because they have moved into a decent job and not because they missed a letter or a phone call from Work and Income or have been arbitrarily kicked off?

Hon PAULA BENNETT: The member, yet again, is misrepresenting. They will not get their benefit cut for missing an appointment. They would have been given opportunity after opportunity to actually step up to their obligations, and that is the fact of it. Also, for the majority of them, if they are sanctioned, actually no money comes out of their account—or does not go in—because they can re-comply really, really easily before that happens. What they are being given is more support and, actually, better case management than they have ever had before, and we are seeing real results for people and their families on that.

Question No. 7 to Minister

BARBARA STEWART (NZ First): I seek leave to table a copy of an email outlining a 90- year-old’s experience at Tokoroa Hospital.

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

Climate Change—Government Position

9. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Does he agree with the Prime Minister’s Chief Science Advisor that “climate change is happening now”?

Hon TIM GROSER (Minister for Climate Change Issues): Yes, and I personally think this report is the best compilation of science that I have read in recent years, from any source.

Dr Kennedy Graham: How does he reconcile Dr Gluckman’s statement with the statement of the Minister of Finance, who, when asked in March this year whether climate change was real, replied: “It may well be.”?

Hon TIM GROSER: It may well be—yes, indeed, it may well be—and I do not see any need to reconcile those statements at all.

Dr Kennedy Graham: How does he reconcile this with the statement of the Minister of Science and Innovation, who, when asked in March this year, whether human-induced climate change is happening, replied that “It’s open to debate, really, actually, by a whole range of experts.”? [Interruption]

Hon TIM GROSER: Well, as my colleague below me has just said, we would need to look at the full quote. But the underlying point is this: this Government is treating this as real. This Government acknowledges that there is some room for genuine scientific argument around the metrics, around the pace of time, around global warming potentials, and a host of related science issues. But the underlying point, I can assure the member, is that, yes, we are treating it as real—of course.

Dr Kennedy Graham: How can he claim that his Government is taking it real and taking meaningful action on climate change, when it has scrapped the moratorium on new fossil fuel generation, made cuts to climate research funding, scrapped the biofuels sales obligation, scrapped car fuel efficiency standards, and weakened the emissions trading scheme so much that the price of New Zealand Units has now plummeted from over $20 in 2009 to a couple of dollars today?

Hon TIM GROSER: The price of carbon in the international market is functionally unrelated in any real sense to New Zealand’s emissions trading scheme, and the member knows this. In respect of specific action, I could reel off a whole host of actions this Government has undertaken, from investing $42 million in advanced biofuels to putting in place a whole series of new guidelines to help councils manage adaptation—and I could probably spend another half an hour on my feet on this matter.

Dr Kennedy Graham: Is the Minister worried about the impact of New Zealand’s lack of action on climate change on our clean, green image and international reputation, given that we have the worst emissions track record among developed countries and we are the last to enter a formal target for 2020?

Hon TIM GROSER: Right now I am much more concerned about our image through rather more natural events, such as the one we have been debating yesterday, and I am not the slightest bit concerned about our position on climate change in relation to that matter.

Buildings, Earthquake-prone—Policy

10. JACQUI DEAN (National—Waitaki) to the Minister for Building and Construction: What is the Government doing to improve the earthquake-prone buildings policy system?

Hon MAURICE WILLIAMSON (Minister for Building and Construction): Today I announced the Government’s new, nationally consistent policy to deal with earthquake-prone buildings. It was clear that the current policy needed to be changed following the Canterbury earthquakes and the subsequent Royal Commission of Inquiry into Building Failure Caused by the Canterbury Earthquakes, which made 36 recommendations in relation to earthquake-prone buildings. The new policy today deals with the 13 outstanding recommendations, with the other 23 already being part of the Government’s work programme. Overall, the Government’s decisions are broadly in line with the royal commission’s recommendations.

Jacqui Dean: What are the key elements of the new policy?

Hon MAURICE WILLIAMSON: Earthquake-prone buildings will be identified and assessed within 5 years, and building owners will then have another 15 years to either strengthen or demolish those buildings. There will be extensions of up to 10 years from the national time frame for some heritage buildings, and exemptions will also be available for buildings where the impact of failure is very low. The current strengthening requirements for earthquake-prone buildings will not change. Owners will still have to strengthen to 34 percent of the new building standard. A public register of earthquake-prone buildings will be created by the Ministry of Business, Innovation and Employment, so that the public can see firsthand which buildings qualify.

Te Ururoa Flavell: Kia orana, Mr Speaker. What advice has he received from the Minister for Disability Issues about how the new earthquake-prone buildings policy aligns with the Government’s commitment to progressively improve the accessibility of public buildings?

Hon MAURICE WILLIAMSON: The decision taken by the Government this week was to allow for regulations to be put in place that would determine what criteria would be required for the triggering of disability access and fire safety standards, if, indeed, a building was also requiring earthquake strengthening. Those criteria have not yet been established, and I look forward to the debate of that, as we begin to promulgate the regulations for such.

Callaghan Innovation—Overseas Contracting by KiwiStar Optics

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Science and

Innovation: What decisions, if any, have been made by Callaghan Innovation with regard to overseas contracting by KiwiStar Optics and why have those decisions been made?

Hon STEVEN JOYCE (Minister of Science and Innovation): I am advised that Callaghan Innovation has decided not to enter into a proposed subcontract with the Australian Astronomical Observatory for two reasons: firstly, because the contract involved was for a fixed fee and is

considered high risk; and, secondly, Callaghan Innovation is itself considering the future options for ownership of KiwiStar Optics at this time. It is not in its long-term plan to own New Zealand businesses, and I know that Industrial Research Ltd itself also quit a number of companies. Callaghan’s plan is to work with all Kiwi firms and help accelerate the commercialisation of innovation of those firms.

Hon Trevor Mallard: Does he agree with that decision of Callaghan Innovation to veto a contract worth $2.4 million to produce hi-tech lenses for the Australian Astronomical Observatory, with the resulting loss of two $1.8 million contracts with Caltech and Berkeley?

Hon STEVEN JOYCE: I think the member is well ahead of himself there. Firstly, there are two things. One, I do not think it is right for politicians to be offering opinions on what any organisation, Crown entity, or company does in terms of whether they should enter into a contract. They have to be in the position to judge the risks as to whether they should proceed. That is why those entities exist. In relation to this one, my understanding is that discussions are ongoing with the Australian Astronomical Observatory, and so there are a number of things that could yet transpire. I do not think we are in a position to say what the member has said about the effects on the other contracts.

Hon Trevor Mallard: Does he regard the manufacturing of multimillion-dollar telescope lenses as the type of work that should be abandoned to be done in Australia, with the staff transferring, the scientific knowledge transferring, and the contacts transferring, as is now being proposed?

Hon STEVEN JOYCE: Again, I think Mr Mallard is putting a particular perspective on it. The reality is that Callaghan Innovation is looking at any number of possibilities for the future of KiwiStar Optics.

David Shearer: Rubbish.

Hon STEVEN JOYCE: It is, clearly, at this point.

Hon Trevor Mallard: None of them in the country.

Hon STEVEN JOYCE: No, they are in the country. In terms of what you talk about in terms of lucrative, high-value work, in this particular instance it is a very high-risk, fixed-price contract, which may not be in its best interests—and indeed that is what Callaghan Innovation has determined—to enter into.

Dr Megan Woods: Does the Minister consider Callaghan Innovation’s decision to not sign the $2.4 million contract between the Australian Astronomical Observatory and KiwiStar Optics to be consistent with his view that Callaghan Innovation is to become the high-tech HQ for New Zealand businesses, and that it will assist firms across New Zealand to turn their ideas into exportable products and services more quickly, providing jobs and growth for New Zealanders?

Hon STEVEN JOYCE: I thank that member for that advertisement. I do consider that it is consistent with Callaghan Innovation’s mandate, which is to be a high-tech HQ for Kiwi businesses. It does not mean that it should own all those businesses. It means that it should work with New Zealand businesses up and down the country, and that is what it is designed to do.

Dr Megan Woods: Does the Minister agree with former KiwiStar Optics optical scientist Andrew Rakich, who is currently working for the European Southern Observatory, that if KiwiStar Optics no longer fits with the mission of Callaghan Innovation, then Callaghan Innovation should divest itself of KiwiStar Optics in a way that ensures its ability to continue to succeed as a standalone business entity rather than the ad hoc and rushed cancellation of the contract as has occurred?

Hon STEVEN JOYCE: The member raises some fair questions in that regard. I will make three points in response. I understand the gentleman concerned actually does have a relationship with this organisation still, and also some sort of financial relationship with the organisation. That may have an impact on his views. The second point in relation to that is that it is absolutely appropriate, as I have made clear to Callaghan Innovation all the way through, that if it is considering change, it do its absolute best to, as he suggests, put them into private ownership or perhaps, in a couple of cases, attach to universities and so on, and it is exploring all those options.

Dr Megan Woods: I seek leave to table a letter from Dr Andrew Rakich to Mary Quin of Callaghan Innovation where he states that in his opinion KiwiStar Optics has the potential to compete on the global market with global companies, and the combination of expertise built up over seven decades—

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

Hon Trevor Mallard: Was there?

Mr SPEAKER: There was objection.

Hon Trevor Mallard: What action is the Minister prepared to take to ensure that the scientists and technicians currently employed and linking with organisations in India, Australia, two in the United States, and Europe do not transfer to Australia?

Hon STEVEN JOYCE: Well, I will not be stopping them at the border if that is the member’s suggestion. I have made it clear, as I said in the answer to a previous question, to the board and management that they should do everything, and their best—and they will do—to ensure that any change actually does its absolute best to retain the expertise in this country. But as the member’s colleague herself noted, the reality is that actually this is an international discipline. The gentleman who has raised the issue, who has a financial interest in the outcome of these contracts, who does—

David Shearer: Oh, come on.

Hon STEVEN JOYCE: Well, it is important that we note these things. The gentleman who has raised this issue is himself working in Amsterdam right now on a contract over there.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think members have been cautioned about making what are effectively defamatory statements about people. I want to make it clear that the person who raised the matter with me does not live in Amsterdam.

Mr SPEAKER: OK. The member has made that point through a point of order. I am not sure that it was a valid point of order, but the point has been made.

Health and Safety, Workplace—Reform

12. CHRIS AUCHINVOLE (National) to the Minister of Labour: What recent announcements has he made about health and safety reform in New Zealand?

Hon SIMON BRIDGES (Minister of Labour): Today I announced the Government’s response to the recommendations of the Independent Taskforce on Workplace Health and Safety. The reform package Working Safer represents the most significant changes in health and safety at work in 20 years, and is essential to meeting our target of reducing the workplace serious injury and death toll by 25 percent by 2020. Achieving the step change required is not something the Government can do alone; it requires leadership and action from businesses and workers, and recognition that good health and safety is an aid to good business practice and improved productivity.

Chris Auchinvole: What are some of the major aspects of the Working Safer reform package?

Hon SIMON BRIDGES: We have broadly accepted all the task force’s recommendations. The reform package includes a new health and safety at work Act; a large increase in funding for WorkSafe New Zealand in order to strengthen enforcement and education; a focus on high-risk areas; a stronger focus on occupational harm and hazardous substances; and stronger penalties, enforcement tools, and court powers. This reform is the legacy we owe to the Pike River families and the families of the 75 people who are killed each year in our workplaces.

Darien Fenton: Are the health and safety reforms compromised by the fact that only 98 out of 158 warranted health and safety inspectors have been recruited, and his department is now so desperate it is considering bringing in inspectors from New South Wales at an additional cost of $25,000 each per year?

Hon SIMON BRIDGES: I do not understand the member’s figures to be correct. From memory, the number of health and safety inspectors today is some 116. I think when you include various others, including trainees, you get to more like 150, or a little more than that, within the

Ministry of Business, Innovation and Employment health and safety group. It is also, I think, right to record that I make no apology for the reform process we have gone through, because the fact of the matter is that we did need to improve standards and training, and that is what we are about doing.

ENDS

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