QUESTIONS TO MINISTERS

Prime Minister—Statements

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

Rt Hon JOHN KEY (Prime Minister): Yes.

Hon David Cunliffe: Why did he state on 4 April 2013 that the role he played in Ian Fletcher’s appointment as head of the Government Communications Security Bureau (GCSB) was “Only that the State Services Commissioner came to me”—came to me—“with the recommendation.”, when in fact he personally phoned him to encourage him to apply for the job?

Rt Hon JOHN KEY: Because at the time I was asked in the House that was my recollection. At the end of the day, it was my appointment anyway.

Hon David Cunliffe: Who organised the breakfast meetings on 17 June 2011 and 12 March 2010 between him and Ian Fletcher at the Stamford Plaza and Hyatt Regency respectively?

Rt Hon JOHN KEY: I cannot be 100 percent sure, but, to the best of my recollection, it would be my office.

Hon David Cunliffe: Given that, to the best of his recollection, his office organised both meetings, is it correct that the 17 June breakfast was held 3 days after he signed off on the interview panel for the GCSB director’s position and 3 weeks before the existing shortlist of candidates for that position was scrapped; if so, does he still claim that the GCSB role was not discussed with Mr Fletcher at that breakfast?

Rt Hon JOHN KEY: In answer to the last part of the question, yes.

Hon David Cunliffe: Was anyone from the Department of Prime Minister and Cabinet or his office present at the meeting held on 14 December 2011 to brief on Operation Debut against Mr Kim Dotcom?

Rt Hon JOHN KEY: Well, no one from my office was. I cannot be sure whether the Department of Prime Minister and Cabinet had a representative there.

Hon David Cunliffe: Does he stand by his statement “We share information in isolated cases about New Zealanders with our partners, and we do that when there’s a really good reason to do that.”; if so, what policy governs when and how the GCSB shares that information and whether any limits are placed upon its subsequent use?

Rt Hon JOHN KEY: Yes—some, where it is believed to be relevant.

Hon David Cunliffe: Has the Prime Minister sought or received any advice on whether remote operations such as drone strikes against non-combatants or in non-declared conflicts are compatible with international law?

Rt Hon JOHN KEY: No.

Budget 2014—Advice Received on Interest Rates

2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: In preparing Budget 2014, what advice did the Government receive on how responsible fiscal management will take pressure off interest rates for New Zealand households and businesses?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The Government recognises that interest rates are the single largest cost on families with a mortgage. That is why we are focused very much on keeping rates lower for longer—certainly much lower than the almost 11 percent mortgage rates of 2008. In that context, the Budget has struck a very good balance between investing in priority areas such as families and children and staying on track for surplus without putting undue pressure on interest rates. Last week the Minister of Finance released Treasury advice showing the impact of increasing the Budget operating allowance. The allowance is the amount set aside at each Budget for new policy initiatives, spending, or revenue initiatives. This advice confirmed that increasing the allowance to $1.5 billion in Budget 2015 is around the upper limit before it begins to materially affect interest rates.

David Bennett: What did Treasury’s advice say would be the wider economic consequences of significantly higher Government spending?

Hon STEVEN JOYCE: That is a very good question, and one that the Opposition should listen to carefully. We all know what those consequences would be. We saw them in 2008 when Government spending increased sharply. Floating mortgage rates reached almost 11 percent, which hurt households and businesses across the country. Treasury advised that in an economy expected to be operating at or above capacity, significantly higher spending would lead to a more pronounced interest rate cycle, push the New Zealand dollar higher, and push interest rates up. This would increase pressure on the tradable sector and work against efforts to rebalance the economy and create jobs. Treasury said lifting the annual operating allowance to $1.5 billion would have an official cash rate impact of around 0.15 to 0.3 over 4 years. The Government would still meet its objective of reducing net Crown debt to 20 percent of GDP by 2019-20. You can simply imagine how much higher interest rates would be if we saw the sort of large operating allowances we saw under the previous Government.

David Bennett: Why did the Government seek Treasury advice about the likely impact on interest rates of an increase in the annual operating allowance?

Hon STEVEN JOYCE: Because interest rates are very important to Kiwi families. The Government wanted to modestly increase spending in priority areas but remain fiscally responsible and not put undue upward pressure on interest rates. This will provide options for targeting extra investment to further improve public services, repay debt, resume contributions to the New Zealand Superannuation Fund, and possibly make modest tax reductions in future years. However, it is very important that we do not return to the big spending increases of the mid-2000s, which, together with a doubling of house prices, forced the Reserve Bank to push up the official cash rate to a record 8.25 percent. That is why we sought the advice.

David Bennett: How does the Government’s planned $1.5 billion annual allowance for Budget 2015 compare with allowances up to 2008, and what were the consequences of those large previous allowances?

Hon STEVEN JOYCE: The proposed $1.5 billion annual operating allowance is a very modest one compared with allowances before 2008. As the Minister mentioned at the Budget lock-up last Thursday, the final year cost of the five Budgets to 2008 averaged almost $4 billion per Budget. In fact, the final year allowance in Budget 2008 alone was a whopping $7 billion. The impact of that sort of reckless Government spending was obvious. Floating mortgage interest rates were almost 11 percent, the economy went into recession ahead of the global financial crisis, exporters were going backwards very quickly, and we were left with a $3.9 billion fiscal deficit in 2008-09—before the global financial crisis and before the Canterbury earthquakes—because revenue could not support that high spending. We certainly would not want to go back to that situation again—

Hon Trevor Mallard: 2008-09 wasn’t before the GFC. That’s just nonsense.

Hon STEVEN JOYCE: It is absolutely correct, Mr Mallard. You should listen carefully, because that is why the New Zealand public will not support your party to come back.

Capital Gains Tax—Investment Properties

3. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Has he received any report from the Treasury disproving the analysis from Westpac’s chief economist that a proposed 15 percent tax on capital gains on investment property would have a significant effect on the net present value of residential rental property investments; if so, will he table that Treasury report?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Firstly, for the benefit of the member, I note that Westpac advises that its absolute clear preference is for a comprehensive capital gains tax on all properties in New Zealand. I have not received a report from Treasury on the particular proposal the member refers to. However, Treasury has advised on the expected general effects of capital gains taxes over and above the one we actually already have, which applies when assets are bought and sold for profit. Again, I should point out that Treasury’s preference, if there was to be a capital gains tax, is that it should be a comprehensive one, as well. Anyway, Treasury said that although a capital gains tax would deliver no long-term reduction in house prices and “the majority of the effect”—

Hon David Parker: Oh, rubbish.

Hon STEVEN JOYCE: —well, you can disagree with Treasury; we know that you do not accept its advice any more—“would be felt by tenants through higher rents”. So the majority of the effect—this is according to Treasury, which Mr Parker does not listen to—would be felt by tenants through higher rents. Another report said that the devil is in the detail, and that working out whether the pros outweigh the cons of a capital gains tax “would be a very substantial exercise.” The Inland Revenue Department’s view, which was also reported by Treasury, was that the practical disadvantages were likely to outweigh the advantages.

Hon David Parker: I seek leave to table the Treasury report dated 27 September 2012 on information on a capital gains tax limited to investment housing.

Mr SPEAKER: Order! The document has now been well described. It is a Treasury report dated 27 September 2012. Is there any objection to that Treasury report being tabled? There is not. Document, by leave, laid on the Table of the House.

Hon David Parker: Does he agree with the advice in that Treasury report that the taxation of capital gains on investment housing, excluding the family home, will redirect investment into savings and the productive economy?

Hon STEVEN JOYCE: I do not have that particular quote from the member, but I do have the quote—which I suspect is from the same report—that says that there would be no long-term reduction in house prices and that the majority of the effect would be felt by tenants through higher rents. Once again, Treasury’s preference is for a comprehensive capital gains tax on every single New Zealand house.

Hon David Parker: Does he agree with the advice of Treasury in that same report that the taxation of capital gains on investment housing, excluding the family home, will “reduce the price of housing and increase affordability of owner-occupied housing;”?

Hon STEVEN JOYCE: No, and in that case, any suggestion that putting a capital gains tax on 25 percent or thereabouts of New Zealand housing would have that sort of effect is an exaggeration. If you want to see an example of where that has been done and where it has not been successful, look at Sydney, Australia.

Tim Macindoe: What other comments have Westpac economists made about an additional capital gains tax in New Zealand?

Hon STEVEN JOYCE: I have seen two other quite relevant comments from Westpac economists highlighting very significant drawbacks of adding an additional capital gains tax. The first is that they point out that it is unlikely to happen, because it would be complex to administer and, worse, much of the burden would fall on tenants who tend to have low incomes, which is exactly the same advice as received from Treasury. The second comment I have seen from Westpac economists is that top-end properties rather than low-end properties would be less affected by a capital gains tax, so price differentials between high-priced houses and low-priced houses would widen. That is because investors are less prevalent at the top end of the property market. So it is rents at the bottom end of the market that would be most affected. So, once again, the Labour Party, in its attempt to fiddle around with the economy, would lift costs on those members of society who could least afford that. There are two very good reasons, in addition to many others, that an additional capital gains tax is yet another dead-end for Mr Parker.

Hon David Parker: Does he agree with the advice of Treasury in that report that the taxation of capital gains on investment housing, excluding the family home, will “reduce the level of foreign borrowing compared to the status quo.”?

Hon STEVEN JOYCE: The reality is that we have a capital gains tax on investment properties right now. We have tightened rules for loss attributing qualifying companies, we have prevented property investors from using rental losses to inflate Working for Families payments, and we have increased the Inland Revenue Department’s funding to target property speculators, and that has been raising $2.5 billion in additional tax. So the Opposition acts like there is not a capital gains tax on investment properties now, and there is.

Tim Macindoe: What other reports has the Minister seen from Westpac about the New Zealand economy?

Hon STEVEN JOYCE: It is interesting that Mr Parker’s new friends at Westpac have been actually considering the nature of the New Zealand economy after the next election. They say that, depending on the outcome of the next election, the market implications would be substantial. For example, if a certain outcome occurred, they would see a downturn in domestic demand, a period of slower economic activity due to business uncertainty, businesses holding off on investment and hiring decisions, and difficulties for a new Government to keep Government spending in check. It would push up interest rates. That is the Westpac prognosis under a Labour-Greens Government.

Hon David Parker: Why does he not stop the pretence and admit that National’s housing policy has been totally ineffective and adopt Labour’s comprehensive housing policy, which addresses both demand and supply by implementing a capital gains tax, excluding the family home, building 100,000 affordable houses, and restricting purchases by offshore buyers?

Hon STEVEN JOYCE: In Mr Parker’s bubble that would make a difference, but actually it is the policies that some parts of Australia have had for some time and their house prices are higher than New Zealand’s. This Government’s policies of freeing up the supply of housing have doubled the number of houses being built over the last 3 years, and those numbers are continuing to climb—

Phil Twyford: Rubbish!

Hon STEVEN JOYCE: It is absolutely correct. This Government is focused on managing growth positively for jobs for Kiwi builders and Kiwi construction workers, not clamping down with yet more taxes to drive the economy back into recession, which is the proposal of the Labour Party.

Tim Macindoe: What other reports has the Minister seen opposing an additional capital gains tax because of its many drawbacks and problems?

Hon STEVEN JOYCE: Weirdly, I have seen a very interesting speech to the Property Investors Association conference, which was in July 2005. This speech, which was unusually good by a Minister, for the standards of the time, noted that the Government of the day agreed with a review known as the McLeod Tax Review, which concluded that—

Hon David Cunliffe: Tell us about Rob Muldoon.

Hon STEVEN JOYCE: Be quiet, Mr Cunliffe; I am coming to your punchline. The review concluded that the disadvantages of such a tax, such as its complexity and costs, outweighed any theoretical benefits. The speaker at that conference went on to say that the Government of the day believed that the status quo was entirely adequate and that any form of new property tax should be off the agenda. That speech was delivered by none other than the then Associate Minister of Finance, David Cunliffe.

Prime Minister—Statements

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: When the Prime Minister said that the Budget would focus on young families and those vulnerable children who most need our care, what rationale did he use to exclude 60 percent of babies born into poverty from getting the parental tax credit payment?

Rt Hon JOHN KEY: For a start off, the $500 million package aimed at families, which includes three of the five elements, includes all New Zealanders. In terms of those who are on benefits, there are other ways of addressing that, through emergency benefits or extra supplementary payments.

Metiria Turei: I raise a point of order, Mr Speaker. I was very explicit in my question: it asked for the rationale in excluding children from the parental tax credit. That was not addressed by the Prime Minister.

Mr SPEAKER: Order! The difficulty was the member was not as explicit as she is now saying she was in her question. On this occasion the Prime Minister has addressed the question. But if the member wants quite a specific supplementary question, the way to do it is to ask it.

Metiria Turei: Can the Prime Minister confirm that according to Budget documents, an overarching objective of Budget 2014 was to “increase the amount of payments made to families with newborns”; if so, why did his Ministers direct officials to increase payments only for newborns whose parents had a job?

Rt Hon JOHN KEY: In answer to the first part of the question, yes.

Metiria Turei: At what point in the Budget process did he and his Ministers decide to exclude babies born to parents on benefits from additional financial support for newborns?

Rt Hon JOHN KEY: I do not have the exact timing of that.

Metiria Turei: Can the Prime Minister confirm that the newborn payments are designed to help families meet the cost of having a new baby and to relieve family stress; if so, what is the rationale for denying that additional financial support to a baby whose parents do not have a job?

Rt Hon JOHN KEY: In answer to the first part of the question, yes.

Metiria Turei: What advice has the Prime Minister sought or received on whether excluding the children of beneficiaries from the parental tax credit breaches the principle of treating all children in low-income families equally for all child-related tax-funded payments?

Rt Hon JOHN KEY: Families are treated in different types of ways depending on the support they get from the Government. Those who are on benefit are able to receive hardship assistance, and many of them do.

Metiria Turei: I raise a point of order, Mr Speaker. My question was very explicit about the advice that he had sought or received. He did not address that question at all.

Mr SPEAKER: It is a marginal call, but I will allow the member to ask the question again.

Metiria Turei: What advice did the Prime Minister seek or receive on whether excluding the children of beneficiaries from the parental tax credit breaches the principle of treating all children in low-income families equally for all child-related tax-funded payments?

Rt Hon JOHN KEY: To the best of my knowledge my office did not ask for any advice on that. The Minster for Social Development’s office would have done so, and the advice it was given was that there is wide-ranging support for the people in the category she mentioned.

Metiria Turei: Will the Prime Minister immediately extend eligibility to the paid parental tax credit to all New Zealand newborn children on the basis that every child born in New Zealand deserves improved life outcomes in order to meet the stated objectives of Budget 2014?

Rt Hon JOHN KEY: No.

Budget 2014—Education Initiatives

5. MAGGIE BARRY (National—North Shore) to the Minister of Education: How will Budget 2014 continue to support the education system?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. The Government will invest $857.8 million over the next 4 years and the remainder of this year for new education initiatives and sector support. Despite the tight fiscal environment, this will take total spending on early childhood, primary, and secondary education to $10.1 billion in 2014-15. This is a significant investment in our children and New Zealand’s future and is part of a comprehensive range of practical measures in Budget 2014 to help families and children. Raising student achievement continues to be one of the Government’s top priorities, and this is recognised by a further substantial boost to funding for early childhood education and schools.

Maggie Barry: What initiatives does the Government have under way to support the profession to raise achievement?

Hon HEKIA PARATA: Work is well under way on setting up the flagship $359 million Investing in Educational Success programme, which was announced by the Prime Minister in January. The initiative creates four new career roles to support the education profession and to build quality and consistency of teaching and leadership across the system. This is the largest single investment in teachers and school leaders that they will have seen in their careers. It sits alongside the review of professional learning and development, the transformation of the Teachers Council, and the work we have done to recognise, strengthen, and value the profession. The Government has made a major commitment to raise student achievement by backing the teaching profession to win.

Chris Hipkins: Why has the first round of charter schools been given an extra $9 million over the next 4 years, which equates to around $6,000 per student per year in addition to the up to $40,000 per student per year they are already getting, while State schools in the local areas receive only around $6,000 to $7,000 per year in total and have received a funding increase in this year’s Budget that only barely covers their increasing costs?

Hon HEKIA PARATA: Because that covers the shortfall of the investment in these five schools, which cater for 340 students who have been failed by the system. Our Government is an “and-and” Government, and we are focusing on both the mainstream public system, which is getting $10.1 billion, and providing for five schools out of 2,500 to raise achievement for five out of five kids.

Maggie Barry: What other Vote Education initiatives were included in Budget 2014?

Hon HEKIA PARATA: We are also putting substantial extra funding into day-to-day operations and modern infrastructure for schools and early childhood education centres. This includes $85.3 million more for schools’ operational grants. That is $600 million more in the last six Budgets. The continual increase in schools’ operational grants over successive Budgets has equalled or exceeded inflation. We are also investing a further $155.7 million over 4 years for early childhood education, including an increase in funding rates to help keep fees affordable, as well as forecast growth in the number of kids attending early childhood education. Government spending on early childhood education has almost—[Interruption]—listen up—doubled over the last 6 years from over $800 million in 2007-08 to $1.5 billion this year. That is how much this Government cares about education.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. How will Budget 2014 develop and improve literacy for our most vulnerable communities and whānau, and what achievements have been made to date?

Hon HEKIA PARATA: An extra $2.4 million of operating funding over the next 4 years will go to the Reading Together programme so that it can expand to include more than 140 decile 4 and 5 schools. Reading Together is a research-based programme that helps parents to support their children’s reading at home. The extra money will cover the extension of the programme into all decile 4 schools and up to half of all decile 5 English-medium schools. The programme will be available to students in years 1 to 8 and their families. Research has identified Reading Together as a low-cost, high-impact programme with strong evidence of effectiveness. For example— [Interruption] Sorry to bore the Opposition about—

Mr SPEAKER: Order! It is not only the Opposition you are boring. The answer is long enough.

Child Health Services—Free General Practitioner Visits for Under-13s

6. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: What consultation with general practitioners, nurses, and district health boards did he undertake before announcing free doctors’ visits for children aged under 13?

Hon MICHAEL WOODHOUSE (Minister of Immigration) on behalf of the Minister of

Health: I thank the member for the opportunity to talk about one of the most popular and positive announcements in Budget 2014—free doctors visits and prescriptions for children under 13, made affordable by the hard work of our health professionals over the last 5 years. As is customary for Budget initiatives, there was no formal consultation with general practitioners, nurses, or district health boards. However, the policy was promoted and discussed widely by the health sector in recent times, including the Children’s Commissioner and the Māori Affairs Committee. I am sure the member will join with the Government in welcoming this policy, which is all about providing better support to children and their families.

Hon Annette King: In light of that answer, has the New Zealand Medical Association subsequently advised him that general practitioners could raise the cost of adult consultations in order to cross-subsidise the cost of seeing more children if the subsidy is insufficient?

Hon MICHAEL WOODHOUSE: The advice I have seen is that the New Zealand Medical Association strongly welcomed the policy, with the chairman, Mark Peterson, saying it improved the situation for children by targeting services to those who need them most. He was at the head of a long list of supporters including the Medical Association, the Paediatric Society, numerous general practitioners—

Hon Annette King: I raise a point of order, Mr Speaker. My question asked whether the Medical Association—

Mr SPEAKER: Order! I heard the question and I am sure the Minister heard the question. I will now allow the Minister some time to answer it.

Hon MICHAEL WOODHOUSE: That list includes numerous community general practitioners, the College of General Practitioners, and thousands of parents from around New Zealand.

Hon Annette King: I raise a point of order, Mr Speaker. My question asked whether the Medical Association—

Mr SPEAKER: Order! I am going to ask the member to repeat the question.

Hon Annette King: Has the Medical Association subsequently advised him that general practitioners could raise the cost of adult consultations in order to cross-subsidise the cost of seeing more children if the subsidy is insufficient?

Hon MICHAEL WOODHOUSE: I cannot confirm whether, amongst the plethora of positive feedback that the Minister has received, that little barb was received by him.

Rt Hon John Key: Has the Minister seen any reports of other political parties who might be interested in following this policy—

Mr SPEAKER: Order! The Prime Minister’s question is out of order. There is no responsibility of the Minister for other parties’ policies.

Hon Annette King: How many consultations per child per year on average did he base his announcement of $30 million to pay general practitioners for free doctors visits for children under 13 years of age?

Hon MICHAEL WOODHOUSE: I cannot answer the exact question, but I would encourage the member to put the question down in writing or read the Budget—I am sure it is in there somewhere. What I do know from evidence of the under-sixes is—

Mr SPEAKER: Order! The Minister has now answered the question.

Hon Annette King: I raise a point of order, Mr Speaker. Could I ask the Minister to refer to the page in the Budget where—

Mr SPEAKER: Order! No, the member cannot do that. She has a supplementary question if she wants to continue.

Hon Annette King: Is the amount to be paid for a consultation for a child under 13 years likely to be more or less, on average, than the $74 per enrolled child paid for free visits for under-6-yearolds?

Hon MICHAEL WOODHOUSE: As the member well knows the scheme is a voluntary opt-in scheme. The Government is very confident of its success. Given the fact that 98.2 percent of children who currently qualify for free health-care as an under 6, and the fact that 97.7 percent of under-sixes get after-hours care, the Government is very confident that the scheme will be very popular and widely taken up.

Hon Annette King: I raise a point of order, Mr Speaker. You might have noticed that I asked whether it was more or less than the $74—

Mr SPEAKER: Order! The member will resume her seat. The difficult I had was that I actually could not hear the detail of the member’s question because there was so much noise coming from both sides of the House. I am going to invite the member to repeat the question.

Hon Annette King: Is the amount to be paid for a consultation for a child under 13 likely to be more or less on average than the $74 per enrolled child paid to provide free visits for under-6-yearolds?

Hon MICHAEL WOODHOUSE: I am not in a position to answer that question but I am sure that if she put it down in writing, we could.

Budget 2014—Support for Vulnerable Children

7. Hon PHIL HEATLEY (National—Whangarei) to the Minister for Social Development: What measures does Budget 2014 contain to support vulnerable children?

Hon PAULA BENNETT (Minister for Social Development): Budget 2014 is all about families and this caring National Government that is delivering it. A key part of our families package is a $33 million investment in our most vulnerable children, on top of, of course, those free doctors visits for under-13-year-olds, an extension to paid parental leave, and an extension to the parental tax credit. I also like that we are extending paid parental leave to caregivers, such as those who are doing Home for Life and working so hard. There are around 22,000 cases of abuse and neglect of children in New Zealand every year, and 50 children have died in the past 5 years because of extreme abuse. That is why $16.4 million of extra money is being invested in the Children’s Action Plan, which resulted from consultation with New Zealanders. This money will be funded towards the Vulnerable Kids Information System, which is about sharing information about those most vulnerable children, and also a new hub that is there, which is about making sure that we have got the phone calls going to the right place and are tracking where those children are being looked after.

Hon Phil Heatley: What investment does the Budget make in the children’s teams?

Hon PAULA BENNETT: Included in the $16.4 million for the Children’s Action Plan is money for eight new children’s teams. The two pilots have been running in Rotorua and Whangarei and they are steadily growing and working with more children. A children’s team will work with

children who are just under the threshold of Child, Youth and Family. The teams assign a lead professional whose job it is to ensure that the kids have one plan. At the moment, we see those children having an education plan, a social work plan, and a health plan. We are going to pull them all together into one, then a lead professional will make sure that they are actually reaching those milestones and being safer and better protected.

Jacinda Ardern: Has the 2014 Budget allocation for care and protection services kept pace with inflation since she took office?

Hon PAULA BENNETT: From memory, the Child, Youth and Family budget has had a 15 percent increase over the last 5½ years.

Hon Phil Heatley: What support does the vulnerable children’s package provide to Child, Youth and Family exactly?

Hon PAULA BENNETT: The children’s teams, as I said, are working with those children who are just at that lower-risk end of the spectrum, so that Child, Youth and Family can then keep its focus on its business of intensive case management for the protection of those children who are being abused and neglected. This Budget supports Child, Youth and Family by providing an investment of $13.7 million, including money to trial some new approaches to understanding how best to work with children. But there is also funding in that for more one-on-one therapeutic placements for children in care, and more support for Child, Youth and Family caregivers, including coaching and specialist training. The reality is that these children are incredibly complex and have very high needs in many cases. This extra funding will go to them.

Prime Minister—Statements

8. Su'a WILLIAM SIO (Labour—Māngere) to the Prime Minister: Does he stand by his statement that he has a “plan to deliver a brighter future for New Zealand.”?

Rt Hon JOHN KEY (Prime Minister): Yes. That statement was made in the context of my walking into Westpac Stadium and talking about the number of New Zealanders going to Australia under a Labour Government. Of course, if we decided to do that video again for the 2014 election, I would hold it in a phone booth.

Su'a William Sio: How have Pacific peoples enjoyed a brighter future under his Government, when according to the 2013 census the median incomes of those living in Māngere have decreased to $19,700 a year since 2006, while the incomes of those in Devonport have increased by almost $5,000 to more than $35,000, and that is without even adjusting for inflation?

Rt Hon JOHN KEY: I do not know where the member gets his numbers from, but the New Zealand Income Survey shows that average weekly earnings for Pacific people in paid employment have increased from $670 in 2008 to $764 in 2013. That is an increase of $94, or 14 percent. But, frankly, I would not expect the member to get the numbers right. Labour does not have a Treasury analyst any more; it has a marketing consultant.

Su'a William Sio: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! This is a point of order.

Su'a William Sio: I am happy to table—

Mr SPEAKER: Order! [Interruption] Order! That is just abusing the ability to raise a point of order to seek to table a document. Those figures are freely available. If the member wants to continue his political debate, he does that by raising further supplementary questions.

Grant Robertson: I raise a point of order, Mr Speaker. I seek your advice on where that leaves the Opposition asking questions when the Prime Minister begins his answer by challenging figures from, in this case, the census. We are left in the position where you say “Well, you have to use further supplementary questions for that.”, and we are then not able to table the information that the Prime Minister has effectively accused Su’a William Sio of making up.

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. If the member resumes his seat, I will assist. It is quite in order for any Minister to rise to his feet and dispute the figures and use

some other figures. That is in order. It has been a practice that I have observed here for a long period of time. To try to then table census figures, which are freely available to all members if they want further information, is an abuse of the system. If the member wants to delve into these figures, he should do it with further incisive supplementary questions.

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

Mr SPEAKER: Before I hear the member, if the member is in any way attempting to dispute a ruling that I have just made, I will take a serious view of it.

Hon Trevor Mallard: Not at all.

Mr SPEAKER: Good. Then I look forward to the point of order being raised.

Hon Trevor Mallard: The suggestion that I would like to make is that I think, probably because of the noise in the House, the Prime Minister did not hear the question, because he said “I don’t know where you got your figures from.”

Mr SPEAKER: Order! The member is now just trifling, and using the point of order system to do so. It was a political question that was raised. It was responded to adequately by—it was addressed by the Prime Minister. It has been answered. If the member wants to continue his line of questioning, he should do it with further supplementary questions.

Su'a William Sio: I will ask again. How have Pacific peoples enjoyed a brighter future under his Government when, according to the 2013 census, the median incomes of those living in Māngere have decreased to $19,700 a year since 2006 while the incomes of those in Devonport have increased by almost $5,000 to more than $35,000, and that is without even adjusting for inflation?

Rt Hon JOHN KEY: I am glad the member asked how many Pacific people are enjoying a brighter future, because the answer is that 45,000 Pasifika children aged between 6 and 12 will get access to free doctors visits.

Hon Annette King: It’s got nothing to do with the question.

Rt Hon JOHN KEY: We know that Annette King is opposed to free doctors visits. When we look at tertiary training and the brighter future, we expanded the number of Māori and Pacific training places from 600 to 3,000. When we look at early childhood education participation for Pacific people, it went up from 83.6 percent in 2007 to 89 percent. When we talk about a brighter future for young Pacific people in National Certificate of Educational Achievement, it has gone up from 55 percent in 2008 to 71 percent for school-leavers very recently. If we look at the number of people on the unemployment benefit, that has been falling in recent times. I think all New Zealanders are sharing in the brighter future.

Su'a William Sio: How, then, does he explain that under his so-called rock star economy Pacific people are facing an unemployment rate of 13 percent, with Auckland Pasifika people on 14.6 percent unemployment, and all consistently in double figures in the last 5 years, under his watch?

Rt Hon JOHN KEY: I would be the first to accept that Pacific unemployment is too high. That is why the Government has been working on a variety of programmes like trade training for people. That is why we are working on lifting education standards so that people have more qualifications. But I do say this one thing to the member, and I think he should take it out into the Pacific communities when he goes out in his constituency on the weekend. Under this Government we will continue to welcome migrants from the Pacific; under his Government, guess what? His leader is saying no to his fellow Samoan friends and families, who will be stopped under a Labour Government and its anti-migration policy.

Su'a William Sio: Does he still stand by his “brighter future” statement, when under his Government only 18.5 percent of Pacific people own their own homes, compared with 49.8 percent for the general population and 56.8 percent for those of European origin?

Rt Hon JOHN KEY: Yes. Of course we would like to see the level of homeownership among Pacific people increase, which is why the Government is doing a number of things. But I will say this: the one thing we do know is that if Labour becomes the Government and it applies a capital gains tax—

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: It is out of order for the Prime Minister to inaccurately represent other parties’ policies.

Rt Hon JOHN KEY: If I was inaccurately doing that, the member would have a fair point of order, but actually it is the member’s policy to have a capital gains tax.

Mr SPEAKER: The member asked a question around how the Prime Minister stands by his statement about delivering a brighter future. The Prime Minister answered that and then certainly led into, towards the end of his answer, other parties’ policies. That is not an appropriate way to answer a question. I accept that and I was standing to my feet to try to conclude the Prime Minister’s answer as the member raised his point of order, but it is a legitimate point of order.

Building and Construction Industry—Security of Payments to Subcontractors

9. JULIE ANNE GENTER (Green) to the Minister for Building and Construction: Will he change the Construction Contracts Amendment Bill or promote other legislative change to ensure that money held by a main contractor, for payment to subcontractors when their work is completed, is not used for any purpose other than paying those subcontractors?

Hon AMY ADAMS (Minister for the Environment) on behalf of the Minister for Building

and Construction: The Minister is sympathetic to the position of subcontractors. Officials have been instructed to consider all options to protect subcontractor payments, including legislation. This is an important issue and it is essential that any solution is robust. The Minister intends to meet with the Specialist Trade Contractors Federation to discuss the recommendations from his officials, once they have completed that work.

Julie Anne Genter: Given that subcontractors lost millions in the Mainzeal collapse well over a year ago because their retention moneys were used for other purposes, how much longer will subcontractors have to wait for this simple legal protection of their money?

Hon AMY ADAMS: I would point out to that member that the Minister has been in the role for 14 days and he has instructed his officials to report back to him on this issue within the month, and then very quickly thereafter he will meet with the federation and progress it.

Julie Anne Genter: Why is the Government not fixing this problem in the bill that is before the House right now, when so many submitters have already asked that this particular bill deal with the retentions issue, including the Building Disputes Tribunal, the Building Industry Federation, the Construction Strategy Group, the New Zealand Contractors Federation Inc, the New Zealand Law Society, the Specialist Trade Contractors Federation, Steel Construction New Zealand, Master Plumbers, Gasfitters and Drainlayers (NZ) Inc, the Electrical Contractors Association of New Zealand, and many others?

Hon Amy Adams: I note that the Commerce Committee in its report suggested that the amendment that the member is talking about would be out of scope for the current bill, but I know that the Minister is working through this very carefully with his officials. I would also note that the advice I have had indicates that the sector does not support the legislative fix that that member is promoting.

Julie Anne Genter: Will the Government fulfil its promise to act in the wake of the Mainzeal collapse and support my Supplementary Order Paper to ensure that subcontractors are paid for their hard work given that the Government’s bill does not do so?

Hon AMY ADAMS: I can tell that member that the Government is not intending to support her Supplementary Order Paper, because, as I have said, first of all, we have had some advice that it may be out of scope. Second of all it does not deal with all of the issues in this very important area, and a solution needs to be robust. Third, and most important, the sector does not support it and wants to continue with the process that the Minister is running.

Julie Anne Genter: I seek leave to table an issue of BuildLaw, which was put out by the Building Disputes Tribunal, which suggests that my Supplementary Order Paper is excellent and is exactly the sort of thing that the Government should be pursuing.

Mr SPEAKER: Well, the easiest way forward is for the House to decide. Leave is sought to table this particular opinion on a member’s Supplementary Order Paper. Is there any objection to it being tabled? There is not. Document, by leave, laid on the Table of the House.

Budget 2014—Freshwater Management

10. JACQUI DEAN (National—Waitaki) to the Minister for the Environment: How does Budget 2014 help communities and councils manage their local freshwater resources?

Hon AMY ADAMS (Minister for the Environment): The Government is undertaking significant reforms to better manage New Zealand’s freshwater. These include a National Policy Statement for Freshwater Management, a proposed national objectives framework, national bottom lines, collaborative planning processes, and better water accounting. In addition, we are spending hundreds of millions of dollars on freshwater clean-ups. As part of this, last week in Budget 2014 we announced an additional $20 million of new money over the next 4 years to help councils improve the way they plan and make decisions about managing their local freshwater resource and to help communities restore their local freshwater bodies.

Jacqui Dean: How will the funding support better decision-making?

Hon AMY ADAMS: Good decision-making must be backed by robust, high-quality information. Funding in the Budget includes $12 million to support water science, economics, guidance, and implementation for the freshwater reforms. This may include greater information on the current state of their water bodies and the economic and environmental impacts of various water-quality targets, and improved data collection to monitor progress. There is also $3 million that includes support for collaborative processes for freshwater management, including the development of tools, guidance, and support. We know these processes have the potential to include a wide range of stakeholders in decision making, resulting in stronger, more robust outcomes. A further $5 million is targeted to supporting community-led restoration projects through the Te Mana o te Wai Fund, announced in partnership with the Māori Party.

Te Ururoa Flavell: Is the Minister promoting a compulsory national objective for primary contact for freshwater management; if not, why not?

Hon AMY ADAMS: What the Government has proposed so far—and I would reiterate that final decisions have not been made—is a compulsory bottom line for human health. That would be the first time ever that there would be a requirement on all councils to manage all freshwater bodies for human health. It would be a decision for the community as to whether they manage that water body for wading and splashing, or for full immersion activities. That will depend on how each community views that water body and how they use it. I would also note that actually the board of inquiry in 2010 specifically removed the reference to swimmability.

Justice, Minister—Statements

11. Hon MARYAN STREET (Labour) to the Minister of Justice: Does she stand by all her answers to Oral Question No. 11 yesterday?

Hon JUDITH COLLINS (Minister of Justice): Yes, especially my statement that this Government is focused on the big issues.

Hon Maryan Street: When the Chief Executive of the Ministry of Justice first advised her of the situation in respect of Nigel Fyfe’s employment, what was her response?

Hon JUDITH COLLINS: My response to Mr Andrew Bridgman has always been that these are matters for him to decide.

Hon Maryan Street: Did the Chief Executive of the Ministry of Justice raise the situation of Nigel Fyfe’s employment with her more than once; if so, was her response the same each time?

Hon JUDITH COLLINS: I really would like that member to be a little bit clearer in her question, because she seems to be making some sort of allegation. Mr Bridgman raised with me— [Interruption]

Mr SPEAKER: Order! Allow the Minister to answer the question.

Hon Clayton Cosgrove: Tell the truth.

Hon JUDITH COLLINS: That is out of order. Perhaps the member would like to ask again, because I am not quite sure what she was trying to say.

Mr SPEAKER: The way forward is for the member to please repeat the question. If we could have a little less noise from the Opposition side, it would then be easier for me to hear the answer.

Hon Maryan Street: Did the Chief Executive of the Ministry of Justice raise the situation of Nigel Fyfe’s employment with her more than once; if so, was her response the same each time?

Hon JUDITH COLLINS: My answer to Mr Bridgman when he raised the decision that he had already made in relation to Mr Fyfe and the leave that he was taking was exactly the same.

Hon Maryan Street: Did she ever refer to Nigel Fyfe as a “bad egg” to any Auckland acquaintance?

Hon JUDITH COLLINS: I do not believe I have because it is not a term that I would normally use. It is an old-fashioned term.

Hon Maryan Street: Who suggested that Nigel Fyfe should be put on gardening leave or be reinstated as a special projects manager?

Hon JUDITH COLLINS: I would have no idea. It was obviously a decision of the chief executive, not mine. He did not discuss with me what he was doing.

Budget 2014—Departmental Output Expenses

12. ANDREW WILLIAMS (NZ First) to the Minister of Finance: How much have departmental output expenses been cut in Budget 2014 for the 2014/15 financial year compared with the 2013/14 financial year?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: They have not been cut. Departmental output expenses have increased slightly, from $12.99 billion in 2013-14, to $13.015 billion in 2014-15. But actually, rather than on the amount we spend, the focus has to be on the results we get from public services, because, of course, as the member may be aware, money does not grow on trees. The Better Public Services programme sets 10 challenging targets for delivery. We are making good progress, and the focus is very much on value for money as well as on the overall amount.

Andrew Williams: I seek leave to table a document prepared by the Parliamentary Library that shows that departmental output expenses have been reduced by—

Mr SPEAKER: Order! The document has been well described. It is a report prepared by the Parliamentary Library for the member himself, I am assuming. Is there any objection to that being tabled? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Andrew Williams: What was the reaction from heads of departments in response to the significant cuts to departmental output expenses across four ministries in his Budget?

Hon STEVEN JOYCE: I am sorry, but the member is simply wrong, and I am trying to divine why he is running this line of questions, because that is certainly not the advice from the Budget. As I said, if anything, the departmental expenses have gone up very slightly. To be of assistance to the House, I wonder whether the member is confusing the change of expenses from just single category to multiple category appropriations under the new law, which may look like a change in some tables, but, in actual fact, is exactly the same.

Andrew Williams: Does he believe additional police officers will be able to be recruited into the police force given the fact that he has cut a whopping $42 million from the police output expenses budget?

Hon STEVEN JOYCE: On the particular matter that the member raises, my advice is that that was simply a one-off amount that had been placed in the 2013-14 year. It was never expected to continue in the 2014-15 year, and it is not having any impact on police numbers.

Andrew Williams: How well does he think that the Ministry of Business, Innovation and Employment is set to manage health and safety given the increase in workplace deaths and accidents in forestry and in mining and given the fact that the Minister has cut $30 million from the labour department section of the ministry’s budget?

Hon STEVEN JOYCE: I think it is important for the member to understand that there is a change there in the setting up of the Crown agency WorkSafe New Zealand, where some previously departmental money has been moved into the WorkSafe New Zealand budget, and there is actually a big and significant increase in the investment in health and safety through that adjustment. I think, again, it is important to note also the work that is being done in that area. Although it is very early days, we are seeing, fortunately, some reduction in the casualty rate in the industries that the member raises.

Andrew Williams: Does he believe that rural and provincial New Zealand will still have good access to courts and will not face further court closures given that he has cut $22 million from the Department of Courts budget, which has seen courts closed in the likes of Dargaville, Feilding, Upper Hutt, and Warkworth?

Hon STEVEN JOYCE: Well, I do not agree with the member’s negative analysis. In fact, one of the key reasons we are needing less court time than we did previously is that crime has dropped so dramatically under this Government, which is why I make the point that, actually, it is not just about the amount of money spent; it is the quality of that expenditure. The member may not know this, but, as I said before, money just does not grow on trees. No matter how much you water the trees, you do not get more money.

Andrew Williams: Having cut police, courts, labour, and at least 30 other departmental output budgets by over $284 million, how much additional funding has the Prime Minister’s Diplomatic Protection Squad been allocated in the Budget 2014 given the last 4 consequent years of milliondollar blowouts for protecting the Prime Minister?

Hon STEVEN JOYCE: And there I was, feeling slightly guilty about that arboreal comment before—but no longer because, actually, I think that the member’s question is ridiculous. The simple fact of the matter is—as I pointed out to him at the very first question he raised—that it has gone up slightly and that this Government is focused on getting results for the investment we make. Actually, one of the successes of all the Ministers in this Government—and I think, for the Minister of Finance, it makes it easier for him to do his job—is that we are actually continuing to get better results from our public services all the time, without putting buckets of extra money in.

Andrew Williams: I raise a point of order, Mr Speaker. I did not hear any response to the Diplomatic Protection—

Mr SPEAKER: Order! The answer addressed the question that was raised by the member.

ENDS

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