Questions and Answers - March 4

QUESTIONS TO MINISTERS

Prime Minister—Statements

1. Hon DAVID CUNLIFFE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement “our approach is to put everyday New Zealanders at the heart of everything the Government does, so we organise services around them”?

Rt Hon JOHN KEY (Prime Minister): Yes. The Government has always been up front and transparent with New Zealanders about what it is doing, what exactly it is funding, and precisely where the money is coming from. It is about trust—or trusts as the case may be, David.

Hon David Cunliffe: Should a person facing charges in relation to the deaths of 29 Pike River miners have had those charges discharged for $3.4 million?

Rt Hon JOHN KEY: I think it is important to understand that Government Ministers played no role in the decision that was taken. A decision was made by WorkSafe New Zealand about whether a successful prosecution could be undertaken, and the view was taken that a lot of money would be spent on lawyers without actually coming to a positive outcome. On that basis, as Justice Farish herself said, the right conclusion was actually reached.

Hon David Cunliffe: Does the Prime Minister believe that the Pike River families feel that the Government had their interests at heart when the charges against Mr Whittall were discharged, thus preventing him from ever being retried?

Rt Hon JOHN KEY: Firstly, I think the Pike River families would know that in New Zealand we have a judicial system, and if the judge makes a call, as Justice Farish did, then they would respect that. Secondly, yes I do think the Pike River families would respect the fact that this is a Government that has funded the re-entry up the drift and at all times been honest and up front with the Pike River families. I always find being honest and up front a very important trait, as, I am sure, do Mr Cunliffe’s colleagues.

Hon David Cunliffe: If New Zealanders are at the heart of everything he does, why did he or his negotiators agree that the Daina Shipping Co. could leave the Rena where it is if it pays $10.4 million?

Rt Hon JOHN KEY: We have not agreed to that. What is the case is that the owners of the Rena are likely to make an application to the regional council to leave the shipwreck there. On that basis a decision would have to be made by the regional council and the Environment Court. But I am interested in the fact that the Leader of the Opposition is actually talking about shipwrecks at the moment—

Mr SPEAKER: Order! Supplementary question, the Hon David Cunliffe. [Interruption] Order! I have called the Hon David Cunliffe.

Hon David Cunliffe: Why will the Prime Minister or his agencies not release the economic and environmental impacts of the Rena salvage deal when the Mayor of Tauranga and iwi have called for as much to be disclosed as possible?

Rt Hon JOHN KEY: In the fullness of time I am sure the regional council will consider all of the relevant information, and, if required, so will the Environment Court. But I am interested to see that the Leader of the Opposition thinks the biggest issue in New Zealand at the moment is whether there is a shipwreck at the bottom of the ocean rather than a shipwreck—

Mr SPEAKER: Order!

Grant Robertson: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! This is a point of order, and it will be heard in silence.

Grant Robertson: In the last two replies from the Prime Minister he has breached Standing Order 383, as he has pretty much every day this year. The first time you stood up, the Prime Minister did not sit down. He repeated it, and you did get up. I wonder what penalty there is on the Prime Minister for consistently breaching that ruling and ignoring you getting to your feet.

Mr SPEAKER: Order! The member is right to quote Standing Order 383, but, if he also looked at Standing Order 377, my job is to judge the content of the answer in light of the content of the question. If questions are asked that are very brief and concise, I will do my best to assist the questioner to get answers that are equally brief and concise.

Grant Robertson: I raise a point of order, Mr Speaker. In the last question asked by the Leader of the Opposition, I do not believe there was anything that breached Standing Order 377 at all. He asked why the Prime Minister or his agencies would not release the economic impacts of the deal that the Mayor of Tauranga wanted. I do not think there was anything political in that question at all.

Mr SPEAKER: The member raises a reasonable point. There was an addition to that—as the mayor had asked, etc.—so it was not exactly a concise question. I will do my best, as I said to the member. If the question is clear and concise, I will do my best to get an equally clear and concise answer.

Hon David Cunliffe: Does the Prime Minister have the interests of all New Zealanders at heart when on Children’s Day he has had to reveal that some 20,000 additional New Zealand children are growing up in poverty, bringing the total number to nearly 300,000—nearly one child in four—or is there another issue that he thinks belongs closer to the hearts of New Zealanders?

Rt Hon JOHN KEY: What is true is that there has been an error made by, as I understand it, Treasury and Statistics New Zealand. I will say that that did not in any way alter Government policy, but if the member is asking a serious question about what the Government is actually doing to support less well-off New Zealanders, then let us just have a look at that. It includes $2.5 billion a year being spent on Working for Families; $4.5 billion a year being spent on benefits; $1.8 billion a year on subsidising housing through income-related rents and the accommodation supplement; all State houses have been insulated that can be under this Government, with $350 million being spent to insulate 240,000 homes; $1.5 billion a year—

Mr SPEAKER: Order! I thank the Prime Minister for that answer, but I think at this stage it is now long enough.

Hon David Cunliffe: Does the Prime Minister really have every New Zealander at heart when his State-owned enterprise KiwiRail has imported asbestos-ridden Chinese locomotives, despite the fact that the same manufacturer supplied contaminated locomotives to Australia, and can he guarantee New Zealanders asbestos-free workplaces?

Rt Hon JOHN KEY: I can confirm that that is in breach of the contract, as I understand it, that KiwiRail signed, and that KiwiRail is going to ensure that the suppliers resolve that issue. But, as I say, it is absolutely fascinating that the Leader of the Opposition has focused on train wrecks and shipwrecks. Does that not sum it up for his week so far!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. When a questioner is caught in the way that the Prime Minister is behaving, your admonishment is usually to say that he will not be granted another question. What is your admonishment for the Prime Minister, who, despite your recent intervention, carries on concluding every answer with an attack on the questioner?

Mr SPEAKER: Well, I am not sure exactly what the point of order is that the member is raising. Could he clarify the point of order?

Rt Hon Winston Peters: I will clarify it for you. My point of order is that tacked on to every answer from the Prime Minister is a personal attack upon the questioner—in this case unerringly each time he has answered a question. My question is when are we going to see him being admonished by you in the way that you have constantly and unerringly admonished questioners doing the same thing?

Mr SPEAKER: Order! Now I understand the point of order. As I said to Mr Robertson only a few minutes earlier, it is helpful if I can get a clear and concise question. Then I can help the questioner get a clear and concise answer. When the answer is a little longer, and sometimes has a political flick, then it is likely to also get a political flick back. All I can do, at the end of the day, when I see the Prime Minister going into an area that is not necessarily going to restore or bring order to the House, is stand and cease the Prime Minister from continuing with that answer. It would have to be a very serious offence for me to take the matter further and actually ask the Prime Minister to leave the Chamber and not be available for members of any party to then ask him questions.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The rules of this House apply to every Minister in this House and every member in this House, and there is no distinction. So, with respect, if you are prepared to remove a questioner from the House, why are you drawing a distinction where the Prime Minister is concerned?

Mr SPEAKER: What I am saying to the member is that it is with very much reluctance that I ask any member to leave the House, but I will treat every member the same when there is an issue of disorder being created by that member, regardless of whom that member is. If that is the ultimate punishment I have to deliver, with some regret I will so deliver it.

Grant Robertson: I raise a point of order, Mr Speaker. I have two points of order. The first is to follow on from that to say that, of course, there are other sanctions that are available; for instance, offering extra supplementary questions. It does not have to lead to the Prime Minister leaving the Chamber, and you have previously added extra supplementary questions. My second point of order is a different one, which is that when you have risen to your feet throughout today, and the Prime Minister has completed what he feels he wants to say when you are on your feet, I think that is a different point of order. It is one that will lead to further disorder in the House if he keeps doing that.

Hon Gerry Brownlee: I feel obliged to make a comment, and that is to back up your assertion around Standing Order 377, where, in fact, the opening comments from the Hon David Cunliffe in his speech did breach Standing Order 377(1)(a). They went on to involve a breach of 377(1)(b), and although they did not go as far as breaching 377(1)(c), they went very close to that.

Mr SPEAKER: I thank the member. There will be occasions when because of the particular year we are in and the fact that this is a debating chamber, there will be political barbs exchanged from one side to the other. If members do not expect that to happen, then I suggest they are not going to see Parliament operate that way. In regard to the point made about further questions being given, that is a tactic I have used on occasion, and I will continue to use it when I think it is justified.

Tracey Martin: I raise a point of order, Mr Speaker. Kia ora, Mr Speaker. I am concerned, actually. My point of order is about the respect given to you by both sides of the House when you stand on your feet. I wonder whether it is possible to speak to the sound people after today’s session

so that when you rise to your feet, the microphones are turned off so we can actually hear you without hearing everybody else.

Mr SPEAKER: I will check that that is happening, but when I rise to my feet, I can assure you that anybody who is in the midst of an answer has their microphone cut off at the time. That is certainly the case. I will check that that has happened. I thank the member for the point she raises.

Economy—Reports

2. IAN McKELVIE (National—Rangitīkei) to the Minister of Finance: What reports has he received on momentum building in the economy—particularly trends in jobs, wages, and business confidence?

Hon BILL ENGLISH (Minister of Finance): Treasury has released its Monthly Economic Indicators for February, which indicates that the positive momentum in the economy in the September 2013 quarter appears to have continued into the December quarter. The number of people employed increased by 66,600 in 2013, unemployment fell to 6 percent, and total weekly gross earnings were 5.2 percent higher than a year earlier, reflecting the combined effect of wage and job growth. Labour force participation—that is, the proportion of the adult population available for work—is close to a 28-year high. The rate of building consents is at the highest level since 2008 and has doubled since 2011. Consumer and business confidence are relatively high. All this adds to momentum building in the economy.

Ian McKelvie: How are more jobs, higher wages, and improving growth contributing to the rebalancing of the economy?

Hon BILL ENGLISH: The Government is focused on a more productive and competitive economy, and that means working to rebalance the economy so that more of it is exposed to world trade. Last month’s trade balance of a $306 million surplus was the highest ever recorded in January. We know that that is driven to a large extent by the rebound of dairy prices. In the long term we need to see less Government spending and less domestic consumption, and more focus on profitable export sectors that earn a living for New Zealand from the rest of the world.

Ian McKelvie: What recent reports has he seen on business confidence and outlook for economic growth?

Hon BILL ENGLISH: The importance of business confidence is that it tends to drive investment decisions. So when business is confident about the future, it is more likely to borrow the money or raise it from other sources and invest in the plant and equipment and the opportunities for more higher-paying jobs. Without that confidence, we will not get the investment and the betterpaying jobs. The ANZ Business Outlook survey shows that 71 percent of firms are optimistic.

Hon Annette King: A party political broadcast.

Hon BILL ENGLISH: Wait for it. That is the highest level since 1994. We hope, by consistent policy, to convert that confidence into higher levels of investment, which will benefit New Zealanders’ jobs and incomes.

Ian McKelvie: As the economy returns to growth, what steps is the Government taking to build on recent gains?

Hon BILL ENGLISH: The Government is focused on locking in gains from this positive outlook where the Government has a direct role in doing so. Last week we confirmed the adult minimum wage would increase to $14.25 an hour, from $13.75 an hour. The minimum wage has increased from $12 an hour in April 2008. So it has increased by almost 19 percent in that time. The Government has sought to balance the needs of workers and businesses to keep the minimum wage at around 50 percent of the average wage, and that relationship of the minimum wage at 50 percent of the average wage is the highest in the OECD.

Household Disposable Incomes—Treasury Estimates

3. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: When did he first become aware that Treasury had miscalculated estimates of household disposable income?

Hon BILL ENGLISH (Minister of Finance): For the benefit of the member, I might take slightly longer than usual to outline the sequence of events. My office received the first written advice on 11 December that Treasury and Statistics New Zealand had made an error in the data. Treasury said that although the absolute measure of child poverty, using the OECD’s measure of 60 percent of the median income, would be around 2 percentage points higher, the high-level trends and findings remained the same. Therefore, generic or high-level comments made by Ministers about trends in inequality would be consistent with both the previous and revised data. On 12 December I received an aide-mémoire from Treasury that confirmed high-level trends and findings of the Ministry of Social Development’s household incomes report, and that they would remain broadly valid. Ministers asked officials to look carefully at how the error had occurred and investigate its wider implications on policy advice, including on the ministry’s household income report. On 16 January Treasury advised my office it had discovered another error relating to data for 2007 and 2008. Ministers again instructed officials to recheck the data and its implications. Officials did that, and Treasury completed an internal review, including review by a third party. After officials and Ministers were satisfied they had all the correct data, the error was publicly communicated by Treasury and Statistics New Zealand on 27 February. It is important to note that no one has missed out on entitlements to benefits, Working for Families, or targeted support for vulnerable families, and, if anything, the error compounds the Government’s strong focus on supporting vulnerable families and vulnerable children.

Hon David Parker: When did he inform the Prime Minister that Treasury had miscalculated household disposable income by overstating incomes of 300,000 low and middle income families, and can he explain why the Prime Minister kept that secret while questioning the motives of the Salvation Army report on poverty in New Zealand?

Hon BILL ENGLISH: I expect the Prime Minister was advised some time around the middle of December. There were two things that had to happen. One was that we sought reassurance about whether the data error made any difference to the broad conclusion that income inequality is pretty flat in New Zealand—that is, it is not getting worse; it is getting vaguely better. The answer to that was yes. Secondly, we wanted to make sure that officials ensured the data was accurate in every respect before new data was published, and it took them about 6 weeks to do that.

Hon David Parker: Why did he hide this $1.2 billion overstatement of low incomes for more than 2 months and fail to disclose the error when answering questions in this House on 29 and 30 January about measures of income inequality?

Hon BILL ENGLISH: First of all, we did not hide it. Officials were asked to go and investigate how the error occurred and to ensure that there were no other errors. It turned out that they found other errors after they were sent back by Ministers to recheck the data. Secondly, the data does not undermine the conclusion that in New Zealand income inequality has been roughly flat for the last 3 or 4 years and is getting slightly better. The assertion by the Labour Party that the rich are getting richer and the poor are getting poorer is wrong.

Hon David Parker: I raise a point of order, Mr Speaker. There were two parts to that supplementary question. The Minister, in reply, said “Secondly,” as if he was responding to the second part, which was about why he did not fess up on 29 and 30 January. But he did not answer that part of the question.

Mr SPEAKER: And the member knows full well that if he asks two supplementary questions, the member can choose to answer one of those, and he did.

Hon Kate Wilkinson: What issues affecting households with low disposable incomes were inherited by this Government in 2008?

Hon BILL ENGLISH: We inherited rising social spending and declining social outcomes. Shortly before the change of Government in 2008 the Salvation Army produced the same report as the one it produced earlier this year. Its findings were that more children appeared to be at risk of harm, more youths were engaged in crime, violent crime was up, more people were in jail, and Child, Youth and Family referrals were rising. The Salvation Army said at the time that it was disappointed that despite significant increases in Government spending the social problems were getting worse. So we listened to its advice. We have not increased spending, and a number of these social problems are now improving.

Hon David Parker: Given this billion-dollar error, which occurred in his own department, does he now concede that both income inequality and the number of children living in poverty are worse than he previously claimed?

Hon BILL ENGLISH: No, I do not. The picture is this: the deep recession into which Labour pushed New Zealand, followed by the global financial crisis, had a bigger impact than people thought. Since then, income inequality has not deteriorated; in fact, it has slightly improved.

Hon Kate Wilkinson: How is the Government delivering better outcomes for households on limited disposable incomes?

Hon BILL ENGLISH: The best contribution a Government can make is to manage an economy in a way that supports more jobs and higher incomes. So, for instance, since 2008 median weekly earnings have increased by more than 15 percent, and after-tax incomes have increased by 25 percent. [Interruption] Well, for the member’s benefit, if we use the measures that the Opposition is quoting, the median equivalised household disposable income, which is the benchmark that those members are using for poverty, has gone up by 6.9 percent after inflation. So all the children to whom the member refers are in households where the income has gone up, and their relationship to the median income is about the same. Rising incomes are lifting more families out of poverty.

Rt Hon Winston Peters: Can the Minister remember on coming into power in 2008 that the minimum wage had just been raised from $9 to $12 per hour, and can he remember which party brought about that dramatic attack on income inequality and so can be trusted in the future on this matter?

Hon BILL ENGLISH: My memory is a bit vague, but I think it might have been New Zealand First. Actually, New Zealand First has turned out to be more effective than the whole Labour Party on most of these issues in the last 6 years.

Hon David Parker: Does he think that his $1 billion stuff-up is no big deal because it affects only children in child poverty and low to middle income families, and how does he think the Government’s cronies would have reacted if they had been short-changed by over $1 billion from their corporate welfare payments?

Hon BILL ENGLISH: The member clearly does not understand the measure if he thinks that families have “been short-changed”. A data error was made deep in the bowels of Statistics New Zealand by a statutorily independent agency, so it is nothing to do with the Government. Secondly, we have made sure that that miscalculation has made no difference to any entitlement of any New Zealand family or child, and that is the case. No New Zealand family or child is worse off because of that miscalculation.

Resource Management Act Reforms—Cultural Impact Assessment

4. TE URUROA FLAVELL (Co-Leader—Māori Party) to the Minister for the

Environment: Will she continue to protect the concept of cultural impact assessments as a key tenet of the Resource Management Act 1991 and does she agree with David Taipari, Chair of the Māori Statutory Board for Auckland Council, that, like built heritage, it was important to protect archaeological sites or sites of significance to mana whenua?

Hon AMY ADAMS (Minister for the Environment): I do agree that particular sites of significance to mana whenua are a key consideration under the Resource Management Act. In

respect of the second part of the question I note that cultural impact assessment is not a mechanism referred to in the Resource Management Act. However, I am aware that its use has evolved as a tool used by decision makers to give effect to obligations under the Act—in particular, under sections 6(e) and (g) and 7(a). I can confirm that it has always been our intention to maintain and, in some cases, enhance these provisions in our reforms.

Te Ururoa Flavell: What will she do to encourage and support the inclusion of technical reports focused on cultural impact assessments into the assessment of environmental effects required under the Resource Management Act to ensure that a comprehensive and holistic view of all effects is understood and addressed to achieve the purpose and principles of the Act and to protect archaeological sites or sites of significance to mana whenua?

Hon AMY ADAMS: Of course, there is already obligation within schedule 4, which sets out the requirements of the environmental effects provision. It specifically requires all applicants to consider all of the effects of their proposal, including historic and cultural impacts, and works through how they must do that. It is very difficult within the structure of an Act like the Resource Management Act to specify exactly how that works in each case, because, of course, of the myriad of situations that can arise. But I can certainly assure the member that that will continue to be supported under the current arrangements, and there will be considerable support to councils as to how they give effect to that in practice under the proposed reforms.

Te Ururoa Flavell: How will the Minister encourage local government to co-create with mana whenua systems and procedures to engage effectively with tangata whenua, therefore reducing compliance costs for the applicant, without sacrificing the fundamental role that mana whenua have in protecting sites of social, historic, and cultural significance?

Hon AMY ADAMS: That is a critical part of what the reforms are trying to do, which is to ensure that those interests are involved far earlier on in the planning process. And one of the failings, in my view, to date is that there has not been adequate and effective engagement with iwi and with stakeholders up front in the planning process. Under the reforms there is the proposal to have an iwi participation agreement right at the outset of all planning, so that the council and all of the iwi groups in that area can work together on how they will integrate all of those issues into the plan frameworks so that applicants know exactly what they need to do in each situation and what work is required of them in each particular case.

Rt Hon Winston Peters: With regard to the unelected Māori Statutory Board for the Auckland Council, why have 19 iwi been given unbridled power to claim rights to any piece of land in cultural impact assessments, some so special the reasons may not be disclosed, and yet charge applicants, iwi by iwi, thousands of dollars for these approvals?

Hon AMY ADAMS: The bulk of that question really is outside my responsibility as Minister, but what I can say to the member is that my understanding of what the council has proposed in its plan—and this is a matter for the council, its plan, and its community to work through—is that the council is requiring consultation, not approval rights. It is not giving rights of veto. It is not requiring approvals. It is requiring consultation in certain situations. How that works, how far the net is thrown, and whether that is appropriate are matters that are being worked through right now.

Household Disposable Incomes—Treasury Estimates

5. JACINDA ARDERN (Labour) to the Minister for Social Development: When was she first advised about the miscalculation affecting “estimates of disposable income”, and how was this advice received?

Hon PAULA BENNETT (Minister for Social Development): On Tuesday, 10 December 2013 my staff were told verbally; on Monday, 16 December the Ministry of Social Development officials briefed me in a meeting; and on Tuesday, 18 February the ministry advised me of the revised figures for the household income report.

Jacinda Ardern: Is the Minister telling the House that during the majority of the public debate over the Children’s Commissioner’s Child Poverty Monitor she knew that the numbers it had been given by her ministry were wrong and yet she told no one?

Hon PAULA BENNETT: As outlined by the Minister of Finance, I think what was most important was that a proper and thorough check of the error—where it was, whether there were possibly other errors—had to be gone through, and that is what happened during that time.

Jacinda Ardern: Has she or her ministry apologised to the Children’s Commissioner, which is now having to redo the Child Poverty Monitor—the technical report has been removed from the website as a result of this mistake—a report that it had to use charitable money to complete in the first place?

Hon PAULA BENNETT: At the end of the day, it is not the Ministry of Social Development, it is not Bryan Perry, and it is not the household income report that has made this mistake; it is the data that was received from Statistics New Zealand and Treasury. It is them, and we have made them aware. We are now offering the Children’s Commissioner whatever assistance we can to help it with a new report.

Jacinda Ardern: Knowing now that there are 285,000 children living in poverty, rather than 265,000, what does she plan to do differently in terms of tackling this issue?

Hon PAULA BENNETT: What we have seen is that the estimate was around 2 percent higher than what we advised. As the Minister said, actually it flat-lined and is now getting better than what it was in 2010. So what that says to us—

Hon Member: 20,000 more.

Hon PAULA BENNETT: It is. Well, in 2010, going by 60 percent of the median, after housing costs, it was supposedly 300,000. It is now 285,000, and in the last year it has been on 285,000 as well. So, as I say, it has gone down and then flat-lined. It is the responsibility of parents. It is the responsibility of families. It is the responsibility of communities. And, yes, the Government has a role to play. With that, we have made sure that welfare reforms—[Interruption] I can tell the member that there are 12,000 fewer children living in benefit-dependent households just in the last 12 months alone.

Jacinda Ardern: How does her Government’s so-called focus on getting people into work help with the two out of five children in poverty who are in working families already?

Hon PAULA BENNETT: We assist them with things like the accommodation supplement. As you know, 40 percent of that goes to families who are in work. As she knows, there is assistance for hardship. More than 800,000 hardship grants were issued last year, equalling well over $2 million. Some of those grants went to working families, as well, in looking after them.

Jacinda Ardern: It’s getting worse.

Hon PAULA BENNETT: It is not actually getting worse. The member yells out: “It’s getting worse.” It actually is not, if she goes by the facts that are there. [Interruption] I also hear another member yelling out that it is a cover-up. Well, it is not a very good cover-up when the ministries themselves put out a press release.

Science and Research Funding—Research and Development Growth Grants

6. TIM MACINDOE (National—Hamilton West) to the Minister of Science and Innovation: What announcements has he made to encourage further investment in research and development by tech-savvy firms?

Hon STEVEN JOYCE (Minister of Science and Innovation): Last week I announced the second tranche of research and development growth grants—$59 million over 3 years awarded to 19 high-tech Kiwi businesses. The grants provide up to $5 million a year co-funding to mid-sized New Zealand - based tech companies that have experience in research and development. Growth grants were introduced last year as part of changes to research and development funding, designed to encourage more research and development to be undertaken by businesses in New Zealand. The

new funding follows last month’s announcements of more than $140 million over 3 years for the first 31 companies under this new scheme.

Tim Macindoe: What level of investment is the Government making in research and development, and how is this helping high-tech New Zealand - based businesses to succeed?

Hon STEVEN JOYCE: That is a very good question. The Government is investing around $566 million over 4 years in research and development support for high-tech businesses, through Callaghan Innovation growth grants, project grants, and student grants. Currently around 470 hightech Kiwi companies access these growth grants, project grants, and their predecessor technology development grants. And 291 undergraduate and postgraduate students are currently undertaking internships at Kiwi high-tech companies. Investment in research and development is critical to helping our innovative and high-tech companies succeed. For example, Fisher and Paykel Appliances, which many will know was purchased by Chinese manufacturer Haier in 2012, last year announced that it would be expanding its Dunedin and Auckland - based research and development staff by around 100, and in the last 24 hours it has confirmed a further 65 staff to be employed in Dunedin. Fisher and Paykel Appliances is a recent recipient of a Callaghan Innovation research and development growth grant.

Tim Macindoe: What support has he seen for research and development growth by high-tech businesses based in New Zealand?

Hon STEVEN JOYCE: I have seen a number of comments. In response to the announcement I referred to earlier, Dunedin Mayor Dave Cull has endorsed the growth plans of Haier and Fisher and Paykel Appliances in his city, saying that this kind of development is exactly what the city needs, and it builds on the strong relationship Dunedin has with Haier. However, those comments have not been universal. They contrast with other recent statements noting that Haier’s investment in Fisher and Paykel Appliances was apparently a “dark day” for New Zealand and with demands that the Government intervene to prevent the sale. This particular person thundered that the Government cannot stand aside from this change of ownership. Both of these comments came from Labour’s current leader, David Cunliffe.

Sue Moroney: Can he please inform the member for Hamilton West, who is asking those questions, what he will do to reverse the 180 jobs that have been lost from Ruakura Research Centre in Hamilton?

Hon STEVEN JOYCE: Well, I think the member should talk to the member immediately to her right from Palmerston North, who might have a different view on that particular question, but this Government is increasing investment significantly in research and development. We have increased it dramatically over the 4 years of the global financial crisis, including significant investment in research and development companies operating in the Waikato.

Sue Moroney: I raise a point of order, Mr Speaker. The question was very direct. It was about 180 jobs in Ruakura, and I was asking the Minister, not any other member.

Mr SPEAKER: No, I listened carefully to the question. I listened to the answer. The question has been addressed.

Ministers—Confidence

7. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he have confidence in all his ministers?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: What action will the Prime Minister take to correct the record given that he, his Minister of Finance, his Minister for Social Development, and others have spent the past 3 months claiming that inequality and poverty have not worsened under National when, in fact, they knew that 45,000 more children are living in poverty than when National took power?

Rt Hon JOHN KEY: None; we stand by the view that income inequality is not widening.

Metiria Turei: Can the Prime Minister confirm that he was wrong when he said in his state of the nation speech that the poor are not getting poorer when, in fact, 285,000 New Zealand children—20,000 more than estimated—are living in poverty?

Rt Hon JOHN KEY: No, I was right.

Metiria Turei: Why did the Prime Minister mislead the House on 29 January when he said: “inequality has not been widening in the last 10 years; it has been very consistent over the last 10 years.”, when in fact inequality was declining before National took power and then rose to historic levels?

Rt Hon JOHN KEY: I did not, and the member is wrong.

Metiria Turei: Is the Prime Minister concerned that staff from the Minister of Finance’s office hand-delivered information to the press gallery in January arguing that inequality was flatlining when the Minister of Finance and his office knew that the data they were relying on was wrong; if so, what will he do about that?

Rt Hon JOHN KEY: In fact, members of Mr English’s staff were right. I can actually see, I suppose, why people do hand-deliver things, because if you email them you are bound to email your policy, as the Labour Party has done to the National Party this afternoon.

Metiria Turei: That answer did not address the question at all. It was a straight question, it was—

Mr SPEAKER: Order! The question was whether the Prime Minister is concerned about— [Interruption] Order! I am on my feet. The question was whether the Prime Minister is concerned about members of the staff in the Minister of Finance’s office hand-delivering information. He said he saw no concern in that at all.

Metiria Turei: Given that we all now know that 45,000 more children are living in poverty than before National came to power, was Paula Bennett correct to say on 12 February this year that over the past 5 years on every measure child poverty has flatlined; if not, what will the Prime Minister do to make sure she corrects the record?

Rt Hon JOHN KEY: Firstly, I would need to check the details of exactly what was said because, as we often know, things are taken out of context or are incorrect. But I think it is worth just taking a second to reflect on the situation, because the member is quite wrong. Income inequality is not growing in New Zealand; it is flat-lining. Secondly, this is a Government that has spent billions and billions and billions of dollars. It has actually had to borrow to support the most vulnerable and at-risk New Zealanders. It might be very inconvenient for the member to have to acknowledge the great work that the National Government has done in the last 5½ years in this area, but actually these are the facts.

Metiria Turei: Does the Prime Minister not really believe that the public can see that he is simply dancing on the head of a pin to suggest that inequality is declining when, in fact, since the extreme high in 2010 it has corrected slightly to settle at near record high levels?

Rt Hon JOHN KEY: I stand by the view that there is no evidence to support that income inequality is widening. I know that the member does not want to accept Bryan Perry’s work, but that is the definitive study in this area and it is correct. If the member wanted to add everything into her numbers she would come up with the same results that Bryan Perry does and that is that income inequality has been flat-lining over the course of the last decade or so.

Metiria Turei: Is the Prime Minister suggesting that revelations that child poverty is much worse than previously thought and that 45,000 more children are living in poverty under his Government should make no difference to his policy programme for those 45,000 children?

Rt Hon JOHN KEY: The Government deals with real people, not historical data. In fact, the Government borrowed billions of dollars to support the most at-risk New Zealanders during this time and was absolutely right to do so. If anything, the data confirms just how right we were to borrow those billions of extra dollars to support these youngsters.

Hon David Parker: Is the Prime Minister aware that in the Perry report, which relies upon income inequality figures, those income equality figures exclude capital gains, which are concentrated amongst the most wealthy?

Rt Hon JOHN KEY: Well, I do not have all the details of every number that is in and out. But if the member wants to progress a comprehensive capital gains tax, it is going to be very interesting to have that discussion on the campaign trail when Mr Cunliffe will be telling New Zealanders they will be facing a capital gains tax on their family home. But maybe he will not say exactly the same thing to them that he says to others, which we are getting many reports of at the moment.

Metiria Turei: Is it not the truth that amidst a major national debate about inequality and poverty the Prime Minister and his Ministers used data they knew to be wrong to mislead the public into thinking that child poverty was not a national crisis?

Rt Hon JOHN KEY: In a word, “no”.

Metiria Turei: Now that the Prime Minister knows that 45,000 more children are living in poverty since he became Prime Minister, will he finally acknowledge that not a single policy of his or his Government has alleviated the appalling poverty that each of these children and their families are suffering?

Rt Hon JOHN KEY: Well, all that really shows you is how out of touch that member is, because 60 percent of all children in New Zealand who are registered in poverty as defined by the OECD measure are those living in welfare-based homes. There are 1,500 people going off welfare a week into work as a result of the National-led Government. Every policy that I see from the Greens would put those people back in the dole queue. If that is what the member wants, she should keep advancing the sorts of policies that she is doing.

Health Targets—District Health Boards

8. Dr JIAN YANG (National) to the Minister of Health: What progress can he report on the Government’s health targets for district health boards?

Hon TONY RYALL (Minister of Health): The Government has set six national targets to provide focus for district health boards and primary care networks to address key areas to improve health services for New Zealanders. The House will be aware that the Government and clinicians set a target that patients would be admitted, discharged, or transferred from an emergency department within 6 hours for 95 percent of patients. In the last quarter the result was 94 percent. This is the highest result ever since the targets began. The doctors and nurses in emergency departments across the country, supported by their colleagues in the hospitals, are providing faster health care than ever before.

Dr Jian Yang: What were the other important results in the latest health targets data?

Hon TONY RYALL: Yes, more good news. The district health boards delivered almost 80,000 elective surgery discharges—3,500 more than planned. All cancer patients who were ready for treatment waited less than 4 weeks for radiotherapy or chemo, and almost a million heart and diabetes checks have been carried out over the monitored period. Health professionals across New Zealand deserve our thanks for this real improvement in health services.

Hon Annette King: What progress or otherwise did Statistics New Zealand report in its recent New Zealand in Profile: 2014 overview on the cost of an adult visit to the doctor? Did it show a 24 percent increase in the cost since 2008—almost 5 percent a year—under his watch?

Hon TONY RYALL: I do not have that information with me, but what I can tell the member is that this Government has provided increased subsidies for GPs year on year on year.

Grant Robertson: I raise a point of order, Mr Speaker. Somewhat surprisingly, the Minister told us he did not have that information. I think he has addressed the question, inadequately as it is.

Mr SPEAKER: I think that on this occasion the member is absolutely right.

Energy and Resources, Minister—Statements

9. BRENDAN HORAN (Independent) to the Minister of Energy and Resources: Does he stand by all his statements regarding iron sand seabed mining; if so, why?

Hon STEVEN JOYCE (Acting Minister of Energy and Resources): Yes, in the context in which they were given.

Brendan Horan: Can the Minister explain how giving Trans-Tasman Resources research and development grants of up to $15 million over 3 years to take New Zealand’s ironsand from the seabed makes any sense at all, when that company estimates its royalty payments would be up to only US$8 million per year and the addition of research and development grants would effectively cut its royalty payments to less than 1 percent?

Hon STEVEN JOYCE: That is actually the responsibility of the Minister of Science and Innovation, but, helpfully, the Minister has been speaking to that Minister. The research and development growth grants that this particular company has obtained are, of course, for around 20 percent of its actual research and development expenditure. It has to provide the other 80 percent. So I suspect the member’s numbers are wrong and his assumptions are wrong. But I could perhaps quote from the media release that the company put out when it actually received the grant, saying that “it hoped that the grant will help it develop a world-class iron sands export business that will employ approximately 250 people and increase New Zealand’s GDP by $300 million.” Of course, those are the assertions of the company and we have got to wait to see whether they come true, but should they do that, then it would be of great benefit to New Zealand.

Brendan Horan: Taking into account the research and development grants, how can the Minister justify the ecological and environmental risk, along with the loss to New Zealand of minerals that have accumulated over millions of years, for a paltry royalty payment by Trans- Tasman Resources, equating to just about two houses per year on Mount Maunganui’s Marine Parade?

Hon STEVEN JOYCE: I think, unfortunately, that the member shows a lack of interest once again, like a lot of members on that side of the House, in jobs and growth for New Zealanders. This is about encouraging an opportunity—

Hon Member: Answer the question.

Hon STEVEN JOYCE: —I am—for a resource business to grow jobs in this country. In terms of the environmental impact, that is being properly assessed by the Environmental Protection Authority, and the process is under way at the moment, but should that be OK, then this Government would welcome the jobs that come with such a project.

Brendan Horan: I raise a point of order, Mr Speaker. The Minister has previously confirmed that there is no local labour content in any—

Mr SPEAKER: Order! If the member wants to raise a point of order, he should do so. If he wants to continue a debate on this matter, this is not the forum to do so.

Schools, Canterbury—Greater Christchurch Education Renewal Programme

10. NICKY WAGNER (National—Christchurch Central) to the Minister of Education: What recent announcements has she made on the Greater Christchurch Education Renewal Programme?

Hon HEKIA PARATA (Minister of Education): I am delighted to report to the House that we have accepted the Aranui community’s recommendation for a year 1 to 13 school and community campus. In Rolleston we are responding to the significant population growth in the area, the community’s need for more schools, and their preferred configuration. This will include another primary school and a new secondary school to be built over the next 2 to 3 years. These schools will be modern learning environments with flexible learning areas. They will ensure a great education for children and young people in the areas of Rolleston and Aranui.

Nicky Wagner: How have the Rolleston and Aranui communities been involved in this process?

Hon HEKIA PARATA: I am pleased with the very consultative process that has been followed with both communities and I thank them for their valuable input and continuing involvement in these schools. In Aranui we established a community group to lead the first phase of consultation, which has provided extensive feedback and ideas for the schooling organisation and the facilities and services that the campus will provide. They have galvanised community support for a new education vision for Aranui and I thank them all for that.

Nicky Wagner: What other progress is being made on the Greater Christchurch Education Renewal Programme?

Hon HEKIA PARATA: Of the $1.137 billion for the Christchurch renewal programme, $30 million is being spent this year and a further $100 million will be spent next year. The new Pegasus school will open on schedule for the start of term 2 this year. The new Halswell Primary School will open for the start of term 4 this year. New builds for the merged schools are on schedule and rebuilds for Linwood College, Hornby High School, and Hillmorton High School for their new year 7 to year 8 cohorts are on track. This Government has always been committed to Christchurch, and I am delighted that we are making great progress on the education front. We will continue to work hard on our investment of $1.137 billion over the next 10 years. There is excellent momentum.

Dr Megan Woods: Does she now consider that there has been meaningful consultation with the Phillipstown School community following the High Court’s ruling that her original decision was unlawful, and has she been asked by Phillipstown for more time to consult and/or more information?

Hon HEKIA PARATA: Yes, and yes.

KiwiRail—Discovery of Asbestos

11. DARIEN FENTON (Labour) to the Minister of Transport: Does he have confidence in KiwiRail following the discovery of asbestos in DL locomotives?

Hon GERRY BROWNLEE (Minister of Transport): Yes. KiwiRail specified in the contract that no asbestos was to be used in the manufacturing of the DL locomotives. After reports from Australia in November 2013 about Chinese-manufactured trains being found to have traces of asbestos, KiwiRail reiterated that no asbestos was to be used. Assurances were given, but these have turned out to be incorrect. The testing of the locomotives began after routine quality-control testing of flaking paint on Friday indicated a possible presence of asbestos. KiwiRail immediately suspended the trains from operation and organised independent testing of the locomotives over the weekend, and it will report to me this afternoon on its findings. KiwiRail will not resume using these locomotives until it is completely satisfied that there is no health risk to its employees or the wider public.

Darien Fenton: How can he have confidence in KiwiRail when the asbestos was found on 25 February but the workers were not told until 28 February and the public were not told until 1 March?

Hon GERRY BROWNLEE: I will be getting more information about all of these matters from KiwiRail this afternoon, and then I am sure I will be answering written questions that come from the member on those matters.

Darien Fenton: Can he confirm that the inspection conducted on some of the 40 DL locomotives purchased from China has shown the asbestos to be in a shockingly degraded state and that there are at least two locomotives that are so toxic they will need to be laid up and quarantined?

Hon GERRY BROWNLEE: No, I cannot confirm that. If the member has that information, presumably it has come from some of her friends in the union movement who are doing their best to shut KiwiRail down.

Darien Fenton: How can New Zealanders have confidence—[Interruption]

Mr SPEAKER: Order! I apologise. I cannot hear the question because of the interjections across the House.

Darien Fenton: How can New Zealanders have confidence in his oversight of KiwiRail given that work on recovering the DC locomotive that rolled over in South Auckland on Saturday has also been halted by KiwiRail until further notice because of a significant amount of asbestos-laden material found in the soil underneath it?

Hon GERRY BROWNLEE: There is no doubt about it, KiwiRail was a bit of a dead duck when it was announced by the Labour Government some years ago and continues to be a problem child for the Government.

Darien Fenton: Is this his Government’s plan for creating new jobs: getting Kiwi workers to perform the highly dangerous task of removing killer asbestos from Chinese-built locomotives; and is that not ironic given that his Government did not have the confidence in Kiwi workers to build them in the first place?

Hon GERRY BROWNLEE: I think that I need to clear up a couple of things there. Firstly, there have been no locomotives of significant size built in New Zealand since the 1960s—smaller shunt engines were built during the 1970s—and it would have taken millions and millions and millions of dollars to gear up the workforce to build these engines. The nonsense that the member talks needs to stop and the member needs to recognise that KiwiRail, if it is to be successful, does have to be able to perform inside the huge amount of capital the Government has made available to it to get on with things. As for the issue around asbestos, people are cleaning up asbestos all over this country every day, and a lot more these days than was the case under that party’s leadership.

Rt Hon Winston Peters: How can the Minister have confidence in KiwiRail when it is so busy trying to fix up the locomotive and Aratere shambles that it has neglected necessary maintenance on the Arahura, which recently resulted in a wire holding up a lifeboat snapping, damaging and disabling that lifeboat?

Hon GERRY BROWNLEE: I do have confidence in the management of KiwiRail to deliver on the Turnaround Plan—the $1.3 billion investment that the Government has made in the company. Naturally, there will be legacy assets that were overseen by another Government at another time that will have some maintenance issues with them.

Rt Hon Winston Peters: How can any competent Minister still have confidence in KiwiRail in the light of its decision to save a measly $34,000—

David Bennett: What about Huka Lodge?

Rt Hon Winston Peters: Yeah, I will tell you about that shortly, son. Do not worry about it. I have got a reputation for getting my facts right.

Mr SPEAKER: Order! The member will get back to the question; otherwise, he will lose it.

Rt Hon Winston Peters: How can any competent Minister or Government have any confidence in KiwiRail in light of its decision to save a measly $34,000 by allowing the Arahura to make a number of sailings on one of the most dangerous stretches of water in the world, minus a lifeboat?

Hon GERRY BROWNLEE: I am not aware that that happened. If the member has information about it, he should put it on my desk.

Rt Hon Winston Peters: I seek leave for the Minister to go downtown and—

Mr SPEAKER: Order!

Financial Markets Conduct Act 2013—Crowd Funding

12. JONATHAN YOUNG (National—New Plymouth) to the Minister of Commerce: What decisions have been made on crowd funding following the passage of the Financial Markets Conduct Act 2013?

Hon CRAIG FOSS (Minister of Commerce): Cabinet has approved regulations for crowdfunding as part of the Government’s financial markets overhaul. Crowdfunding provides a platform where contributors receive shares in the businesses they invest in, providing a new avenue for early stage growth and capital and to source the risk capital they need to grow. I have decided that there will be no investor caps for equity crowdfunding, other than the previously announced $2

million cap that one company can raise through crowdfunding each year. This is an exciting development for both start-up businesses and investors. With the regulations coming into force on 1 April this year, New Zealand will lead Asia-Pacific in the development of crowdfunding.

Jonathan Young: What reports has he seen that are supportive of the decisions made about crowdfunding?

Hon CRAIG FOSS: I have seen a number of reports supportive of the decisions made to enable crowdfunding. I am encouraged to see a number of firms that have expressed an interest in taking up opportunities in the crowdfunding space and that acknowledge that the changes are an exciting development in New Zealand. Implementing the Financial Markets Conduct Act is a key component of this Government’s Business Growth Agenda to help build New Zealand’s capital markets and drive business growth and jobs.

Hon Damien O'Connor: What action has the Minister undertaken to protect the reputation of New Zealand’s capital markets given the publicly voiced concerns and an official complaint by an international investor relating to possible insider trading of Fonterra units on the NZX? What has he done?

Hon CRAIG FOSS: That is a stretch from the original primary question. But if any individual has concerns about such matters, NZX is, of course, obliged to administer and look into such matters. Of course, the Financial Markets Authority has ultimate oversight over NZX.

ENDS