Questions to Ministers

Prime Minister—Statements on ACC Levies

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : Does he stand by his comment that “no one’s arguing that we’re not working as fast as we possibly can” to cut ACC levies given ACC, the Ministry of Business, Innovation, and Employment, Treasury, the Employers and Manufacturers Association, and Infometrics are among those recommending bigger cuts?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement in the interview, which included “So we’ve cut over $1 billion in levies so far and we’re on track to cut more.” We did tidy up the mess we inherited from Labour—that is certainly true—but if you look at it in the early days when we were first in Government, ACC wanted to massively increase its levies. It wanted to take them through the roof, and as Cabinet we said “Well, no, I don’t think that makes sense.” So there is often a differential between what ACC thinks and what we can afford.

Andrew Little : Given it is affordable and it is what ACC wants, why not cut levies by $350 million a year now rather than vague promises to cut them in the future with no time frame?

Rt Hon JOHN KEY : The Government receives a recommendation on levy increases or reductions from ACC and then makes a decision based on what it thinks is appropriate. In fact, actually it is not—

Iain Lees-Galloway : You think ACC is wrong?

Rt Hon JOHN KEY : Well, actually, yes, it is wrong sometimes. Just to give you an example, in 2010-11 ACC wanted to increase levies by $1.137 billion more than what Cabinet approved. In 2011-12 it wanted to increase them by $165 million more. In fact, if you look at the time that we have been in office, ACC has wanted to increase levies by $1.302 billion more than Cabinet approved and it has reduced them by $673 million less. Actually, Cabinet does use discretion, and thank goodness it does.

Andrew Little : Is he aware that his overcharging of ACC levies will see ACC add hundreds of millions of dollars a year to reserves that are already well in excess of what it needs, and why should that money not stay with businesses and workers instead?

Rt Hon JOHN KEY : I do not think that is right. The Government has cut $1 billion from ACC levies so far. It has a $0.5 billion cut planned. We take the best advice and information that we can and assess things. Although I would not want to get ahead of the next levy-setting process, indications are that the overall liability might in fact increase slightly over the last year—in fact, Cabinet being slightly more prudent about its actions will prove to be right.

Andrew Little : Given that his previous Minister for ACC said ACC’s call to cut levies was ignored “because we need to get to surplus”, why is it Government policy to use ACC levies, which are meant for helping injured Kiwis, to fill the hole in his Budget?

Rt Hon JOHN KEY : It is not. It is one of the factors that we know flows through to the operating balance before gains and losses –just one of many—but Cabinet makes a decision largely based on what it thinks is affordable and trying to smooth things out. As I said earlier ACC wanted to increase those levies in 1 year alone by $1.137 billion more than what Cabinet approved. The reality is the member cannot have it both ways. He cannot say on the one hand that he does not want levies to go up when that is what ACC recommends and on the other that he does want levies to go down faster when that is what ACC recommends. Either he is a slave to it or he is not.

Tim Macindoe : What reports has the Prime Minister received calling for the Government of the time to ignore the ACC board’s recommendations on ACC levies?

Rt Hon JOHN KEY : Well, fascinatingly enough, I have seen a report from October 2009 arguing strongly that the Government should utterly reject the ACC board levy recommendations. Those comments came in a media release issued by the then Amalgamated Engineering, Printing and Manufacturing Union National Secretary, Mr Andrew Little, which shows you can reject the board’s recommendations one year and apparently be a slave to their recommendations another.

Andrew Little : Coming to 2015, why does he think massaging the Government’s books is more important than the businesses that will see lower profits, the workers who will see lower wages, and the 700 people who will be out of a job because of his ACC rort?

Rt Hon JOHN KEY : This is a Government that is working alongside business and New Zealanders to produce a strong economy, strong growth, and a strong small to medium sized enterprises sector, all reflected in the fact that our country is growing and doing well. It makes sense, actually, for the Government to make sure it is sensible about ACC levies so that we are not driving them up massively one year and cutting them by more than we can afford the next year and having to raise them again. The member may be aware that if one looks at the discount rate and what is happening to it in New Zealand and what that might mean to the earnings of ACC and what that might mean to the liability—and, actually, Mr Parker knows exactly what I am talking about. Let us wait and see what the next recommendation from ACC is.

Andrew Little : Is it not time for him to be straight with Kiwis—he is overcharging ACC levies, and he knows it, business knows it, workers know it, and he could stop it by ending the rip-off right now?

Rt Hon JOHN KEY : If the member wants anyone to be straight, maybe the member should be straight and admit that his high horse in Northland went lame and is now tripping over the white flag of surrender that is obviously happening up there. Falling off a high horse in Northland can force ACC levies up. I am fearful that a new charge is coming.

Economy—Reports

2. NUK KORAKO (National) to the Minister of Finance : What reports has he received on the economy and particularly on New Zealand’s creditworthiness compared to other developed economies?

Hon BILL ENGLISH (Minister of Finance): I have seen a recent report from credit rating agency Moody’s Investors Service, which reaffirms New Zealand’s triple A rating, with a stable outlook. Moody’s notes that despite a fall in dairy prices during 2014 New Zealand’s economy is growing relatively strongly, and it expects continued growth of around 3 percent. Overall, it is a positive assessment of the direction that the New Zealand economy is going.

Nuk Korako : What does Moody’s say about New Zealand’s economic performance compared with other developed economies?

Hon BILL ENGLISH : It makes a number of comparisons. It says that New Zealand has demonstrated a track record of somewhat faster and more stable growth in the recent past compared with other developed countries. It does point out that New Zealand is pretty focused on the agricultural sector as its main source of export revenue, but points out that New Zealand demonstrates some degree of diversity of individual products within this larger segment of agricultural exports. Moody’s notes that there is also a number of other factors that reduce the risk of economic concentration in agriculture, including our relatively low reliance on agricultural employment, and only about 6.4 percent of total employment, it points out, is in the agricultural sector.

Nuk Korako : What did Moody’s say about New Zealand’s current account balance?

Hon BILL ENGLISH : Like all other credit rating agencies, Moody’s highlights New Zealand’s current account deficit as a risk, as it has done for around 30 years. However, there is reason to believe that we are making progress in this area, and we expect further improvements over the next few years as we implement further economic reforms. The current account deficit continues to be smaller than forecast and currently sits around 2.6 percent of GDP, so it will be interesting to see whether it goes as negative as some people forecast. Household savings have been positive for the past 5 years, for the first time in 20 years, and the net international investment position has fallen consistently over the last 6 years. These are all some signs of moderate progress on long-term imbalances in the New Zealand economy.

Nuk Korako : How is the Government’s fiscal policy contributing to New Zealand’s stable ratings outlook?

Hon BILL ENGLISH : Moody’s makes the same point as other credit rating agencies—that although New Zealand has very high levels of household debt, this is offset to some extent by the strength of the Government’s finances. The ratio of Government debt to GDP is well below the median of triple-A sovereign-rated countries, and Moody’s believes that Government debt will continue to decline over the next few years as a percentage of GDP.

Prime Minister—GCSB Surveillance

3. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister : Does the Prime Minister still stand by his answer that he will resign if the GCSB has conducted mass surveillance of New Zealanders; if so, what is his definition of mass surveillance?

Rt Hon JOHN KEY (Prime Minister): Yes, and there is no mass surveillance of New Zealanders by the Government Communications Security Bureau (GCSB). To me, mass surveillance would involve surveillance of an entire population or a substantial part of that.

Dr Russel Norman : With regard to his answer that it would involve a significant proportion of the population, is he aware that there have been 1.6 million visits by New Zealanders to the Pacific from 2009 to the current day, whose private communications have been intercepted by the GCSB, and does this not meet the definition that he just gave of mass surveillance?

Rt Hon JOHN KEY : I think the member is making assumptions he should not actually make.

Dr Russel Norman : Is mass surveillance different from mass collection; if so, how?

Rt Hon JOHN KEY : Mass collection is not a term used in the Government Communications Security Bureau Act. It would mean different things to different people. But I think people understand what mass surveillance would mean. Mass surveillance is if you surveil an entire population. That does not happen. It is against the law. The Act makes it quite clear, and in fact it spells out clearly under what circumstances the GCSB can collect information about New Zealanders. It is largely set out in sections 14 and 15B of the Act.

Dr Russel Norman : Which one of the Prime Minister’s statements is correct—his statement this morning: “I don’t even know what you mean by mass collection. I’ve got no clue. It’s not a term I’ve ever seen, nor a term I’ve ever used.”, or his statement in September 2014, when he said: “There is no mass collection—not of New Zealanders.”?

Rt Hon JOHN KEY : The point I was making is that mass collection is not a term used by the GCSB. It is not a term that I use. That was in relation to a particular issue about Speargun, but it is not a term that the GCSB uses.

Mr SPEAKER : Order!

Andrew Little : Will he be straight with New Zealanders—if they travel to the Pacific Islands, will their electronic communications be captured by the GCSB and sent to the National Security Agency, or not?

Rt Hon JOHN KEY : I am not going to go through the operational details of the way that the GCSB operates, except to say that it operates within the law. The law is extremely clear about under what circumstances the collection of data about a New Zealander could occur. That is in sections 14 and 15B. But I will make this exact point. There is absolutely no—zero—change in the way things happen under this Government from what happened under Helen Clark’s. So if you want to ask these questions, I will give you her number in New York and you can give her a ring as well.

Mr SPEAKER : Order! There is just too much interchange between both front benches.

Dr Russel Norman : Is the Prime Minister aware of the statements by Sir Bruce Ferguson that mass collection and mass surveillance are basically the same things, when Sir Bruce stated on the radio: “it’s the whole method of surveillance these days. It’s … mass collection,”?

Rt Hon JOHN KEY : I am not responsible for the comments that Bruce Ferguson makes. I think the member is actually misrepresenting him. But I go back to the single point. Mass surveillance is not occurring against New Zealanders; it never has. It does not matter how many times the member says it; it is simply not true. The law is very clear about what can occur when it comes to New Zealanders, and the law is subject to oversight by the inspector-general. The inspector-general actually makes their findings public, in terms of what they do, and there are no examples that have been brought to my attention where the GCSB has acted in breach of the law, with the exception of the Kim Dotcom situation. It does not matter how many times Nicky Hager, the anti-American view, and the Green Party want to tell New Zealanders that they are being surveilled en masse, they simply are not.

Dr Russel Norman : Has it not been brought to his attention that the GCSB is engaged in full-scale collection of all the data coming out of Pacific Island nations and that many hundreds of thousands of New Zealanders have visited, or have lived in, those Pacific Island nations during the period that all that data was collected?

Rt Hon JOHN KEY : One of the problems when a member wants to rely on stolen information is that they get a very, very warped sense of reality. I would have thought, given that the member was part of the Intelligence and Security Committee for 3 years, he would have a basic understanding of the way the GCSB works. The GCSB has to establish a warrant; a warrant has to have a particular reason. The Government Communications Security Bureau Act makes it completely clear that information cannot be gathered against New Zealanders with possible exceptions that are spelt out in sections 14 and 15B of the Act. The inspector-general has total responsibility, complete opportunity, and insight to review not only the warrants but the actions of the GCSB. Just because someone goes on a holiday somewhere means absolutely nothing, and it will not matter how many times the member says that, he is simply not right. I make the point to the members opposite that nothing has changed under this Government from the previous Government. If they have got complaints or they do not like things, I will give them Helen Clark’s mobile number and they can give her a call.

Dr Russel Norman : If mass collection and mass surveillance are two different things, as the Prime Minister has been claiming, what has changed since the Prime Minister admitted on Campbell Live in August 2013 that, under the law, to go and look at someone’s email is the same as collecting their email?

Rt Hon JOHN KEY : Firstly, the law has changed, actually, in that time. But—[Interruption] Well, the law has changed. Mass surveillance of New Zealanders does not happen. There are only—

Hon Member : The story’s slipping.

Rt Hon JOHN KEY : Well, the story is exactly the same as when Helen Clark was Prime Minister. I hate to tell you the bad news. The question has always been posed by members in the Green Party that mass surveillance of New Zealanders occurs. It does not.

Dr Russel Norman : I raise a point of order, Mr Speaker. It is with regard to the answer. It was a pretty specific question and I do not believe the Prime Minister has addressed it. I was using one of his own quotes.

Mr SPEAKER : Part of the question asked what had changed, and the Prime Minister said that, well, for one thing the law has changed. The question was definitely addressed. [Interruption] Order! It is very difficult for me to hear the answers with the constant barrage that is coming from my left-hand side. If it continues, I will have to ask someone to leave the Chamber.

Transport Infrastructure—Investment in Northland

4. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport : What update can he give on Government investment in bridge infrastructure in Northland?

Hon SIMON BRIDGES (Minister of Transport): The Government is committed to ensuring that Northland has the infrastructure and the services it needs and deserves. [Interruption] I know that there is a lot of excitement about this. That is why yesterday I was proud to be part of an announcement with the National Party’s Northland candidate, Mark Osborne, committing to replace 10 single-lane bridges—

Mr SPEAKER : Order! This is the last time I am going to rise to my feet and ask members to my left-hand side to quieten down. Next time I will be asking a noisy member to leave the Chamber. This is a question that has been asked. It requires an answer and I want to be able to hear the answer. That is the last warning I will give to members on my left-hand side today.

Hon SIMON BRIDGES : I was proud to be part of the announcement with National’s Northland candidate, Mark Osborne, yesterday committing to replace 10 single-lane bridges on Northland’s twin coast highway over the next 6 years. This is an excellent commitment for the north. Mr Osborne deserves credit for advocating this. This is a party that is enabling economic growth in the north. Unlike others, the Government has backed and will continue to back Northland to succeed.

Jonathan Young : How much has been committed to the upgrading of the 10 bridges, and what are the expected benefits?

Andrew Little : Tell us about State Highway 3.

Hon SIMON BRIDGES : You go back to your deal making, Andrew.

Mr SPEAKER : Order!

Hon SIMON BRIDGES : The Government wants to ensure that Northland is ready for the influx of visitors and businesses that will come off the Pūhoi to Wellsford highway and on to the twin coast highway. That is why we are committed to the next logical step, spending between $32 million and $69 million to replace 10 single-lane bridges on those twin coast highways with modern two-lane bridges that are fit for purpose. This investment will make sure that Northland has safer and more resilient roads and bridges that will enable the region to take increased freight coming out of the region, as well as increased tourist traffic across the region. I repeat: this is a party that backs the regions, unlike the latte-sipping, St Mary’s Bay folk over the other side.

Phil Twyford : What reports has the Minister seen on the transportation of pigs in Northland; and does he have any figures showing the amount of additional pork that these new bridges will take to market?

Hon SIMON BRIDGES : The member should not talk about his colleagues in that way. Frankly, this is something that the people of Northland do not see in that way. They think that it is important for their region. I saw at first hand with my own eyes the safety issues of these single-lane bridges and the way they are a lifeline to communities. When flooding comes communities cannot access emergency services, and double-laning the bridges and improving them will enable economic growth for many years to come in a region that this side backs while the others ignored it.

Jonathan Young : How much money has the Government invested in State highway and local roading projects across Northland?

Hon SIMON BRIDGES : Heaps. This National-led Government has invested $750 million in State highway and local roading projects across the north. That is some 40 percent more than Labour did in the same, equivalent period—and that does not include the Pūhoi to Wellsford highway, a $1.7 billion project that this Government, unlike the others who call it a holiday highway, will promote. Yesterday’s announcement shows that the National-led Government is committed to making sure that Northland succeeds and it is the only one offering the level of investment in First-World infrastructure to ensure Northland delivers on its abundant potential.

Government Financial Position—ACC Levies

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : How would the Crown’s fiscal position be affected if ACC’s recommended reductions to its Work and Earners’ levies for 2015-16 were implemented?

Hon BILL ENGLISH (Minister of Finance): It is impossible to say, because the ultimate result of taking a different decision on ACC levies would have to be weighed alongside the ultimate result of taking a different decision on school operational funding, or the way that the Government deals with the funding of the Christchurch rebuild. What I can say is that for the 2015-16 year the Government reduced levies by around $180 million less than ACC recommended. In 2010 ACC recommended an increase to the motor vehicle levy of over $100, given the financial trouble left by the previous Government, but we increased the motor vehicle levy by about half of that. So the Government has consistently taken a conservative view both about increases and decreases in ACC levies, particularly given the volatility in interest rates and discount rates.

Dr Russel Norman : I raise a point of order, Mr Speaker. This was a question on notice. It has a very specific numerical answer, which the Government can easily access, because Treasury provides these estimates all the time. The Minister has basically just got up and said that he will not answer the question, even though there is a very clear and simple answer to the question.

Mr SPEAKER : I do not accept the point the member is making. The Minister, right at the start, said it was impossible to give an answer, because there are a number of other decisions that may flow. That is the answer that the Minister clears to give; it has addressed the question. I accept that the member may not be happy with it but I cannot insist on an answer that quantifies an amount if the Minister has said that it is impossible to do so.

Grant Robertson : Was the then Minister for ACC, Judith Collins, correct when she said that the recommendation to cut workers and earners levies had been rejected by the Government “because we need to get to surplus. We believe the surplus is something that is very important … for … the Government”?

Hon BILL ENGLISH : In the first place, the member is wrong. He is implying that levies have not been cut. In fact, they have been cut by $1.5 billion since we started reducing levies. In respect of the second issue, every Minister believes that the decision that affects them is the one that makes all the difference to the surplus or the deficit. I get to hear this stuff every day, and none of them are right. In the end Cabinet makes decisions that add up to a surplus or a deficit and no particular decision is determinative of the outcome.

Grant Robertson : What advice did Treasury give him on whether ACC levies should be lowered to the extent that ACC recommended?

Hon BILL ENGLISH : I have had 6 years of advice. I am not sure which bit the member is referring to. What I can tell him is that there are certainly examples where Cabinet has made a different decision from the one that all the officials have recommended, and I have to say that over the 6 years Cabinet has been right and officials have been wrong.

Grant Robertson : Will he commit to lowering levies for the ACC work and earner accounts in the Budget in May by the $350 million that he is currently overcharging New Zealand businesses and workers?

Hon BILL ENGLISH : No, I will not make that commitment. It would be rash and imprudent because—

Grant Robertson : Oh, ha ha!

Hon BILL ENGLISH : Well, it would be for this reason: the Government has yet to receive the valuation of ACC as at 31 December. The early indications are that that valuation will show levy reductions are significantly less possible than the member thinks.

Grant Robertson : Is he saying that Treasury, ACC, the Ministry of Business, Innovation and Employment, and all the officials who have told the Government that it can lower ACC levies far more than it has, are rash and imprudent, or is it the truth that he is trying to prop up his measly surplus by ripping off Kiwis?

Hon BILL ENGLISH : Whatever advice officials have given was going to be out of date as soon as that valuation turns up. As I have said, Cabinet has ignored officials’ advice in the past for both large increases and large decreases. Through that time we have been able to reduce the burden of levies by $1.5 billion, and I notice that the Labour Party members did not support any of that, because they were so worried about the mess they had left ACC in, which they did not want talked about.

Communications—Reports on Fibre Connections

6. SIMON O’CONNOR (National—Tāmaki) to the Minister for Communications : What recent reports has she seen on growth of fibre connections compared to other OECD countries?

Hon AMY ADAMS (Minister for Communications): The latest OECD broadband portal penetration statistics show that New Zealand is now ranked first in the world amongst developed countries for annual growth of fibre connections from June 2013 to June 2014, with an annual growth of 272 percent, compared with an annual growth of fibre connections across the OECD of just 12.4 percent.

Simon O’Connor : How are fibre connections in the ultra-fast broadband programme progressing against expectations?

Hon AMY ADAMS : On our current level of uptake, with over 69,000 connected users as at 31 December 2014, representing 11.3 percent uptake, this is a 26 percent increase on the previous quarter and is ahead of Crown Fibre Holdings’ expectations for this stage of the project. As a comparison, Singapore was at just 2 percent uptake at the same point of their build—i.e., 43 percent complete—and they did not reach 11 percent uptake until they were 86 percent complete.

Transport Infrastructure—Investment in Northland

7. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Transport : Does he think his “deep commitment to Northland” has been demonstrated by the Government cutting spending on Northland roads by $36 million or nearly 30 percent over the last 5 years?

Hon SIMON BRIDGES (Minister of Transport): Absolutely. The member should stop cherry-picking his numbers between discrete years. This side of the House has invested $750 million since it has been in office—40 percent more than that side of the House did when it was in Government—in Northland.

Phil Twyford : I seek leave to table data from the New Zealand Transport Agency showing funding has been cut—

Mr SPEAKER : Order! I just need to know: is that information that is freely available on a website?

Phil Twyford : It is on the New Zealand Transport Authority website.

Mr SPEAKER : Then I will not be putting the leave. If members want it, they can get it.

Phil Twyford : What does it say about his “deep commitment to Northland” when he says that the 10 Northland bridge upgrades would not be going ahead now if it was not for the by-election?

Hon SIMON BRIDGES : I have not said that. These bridges are for everyone, including Willow-Jean Prime, even though the member would rather she stayed at home.

Phil Twyford : Will the Government build the 10 bridges if National loses the by-election?

Hon SIMON BRIDGES : Yes, because we are deeply committed to Northland. That is why we have spent 40 percent more to date than the other side of the House, who have not been to the regions in a very long time and who tend to keep themselves at the cafes of two or three cities only, and that is why we are spending some $2 billion into the future. We, unlike the other parties, back the regions, and we back Northland to succeed.

Phil Twyford : Is he concerned about a backlash from local people who say that the first bridge on the list he announced yesterday is suspiciously close to the home of his own candidate, and can he reassure people that that was not a factor in making that bridge a top priority?

Hon SIMON BRIDGES : Yes, I certainly can. The only backlash I heard about up north was about a dirty deal done between backroom doors by parties on the other side. But our candidate—it is radical, I know—actually lives in Northland. He actually lives near those single-lane bridges and he, like me, backs the north. We do not swan around—

Mr SPEAKER : Order! The question has been answered.

Phil Twyford : When the Prime Minister said yesterday that he did not know whether any cost-benefit analysis had been done on the 10 bridges, did the Minister advise him that the cost of those bridges equates to about $10,000 per vote, according to recent polling, and does that meet or exceed his criteria for a fair return on investment of taxpayers’ money?

Hon SIMON BRIDGES : The bridges stack up. That is why three of them have been concluded and completed in the regional land transport plans for some time. That is why I have seen the safety issues, the resilience issues, firsthand, why the people of Northland know they are needed, and why we are backing that region.

Transport, Minister—Statements

8. RON MARK (NZ First) to the Minister of Transport : Does he stand by all his statements?

Hon SIMON BRIDGES (Minister of Transport): Yes, including my statement that New Zealand First members can say all manner of weird and wonderful things, but, because they are not in Government, they cannot achieve diddly-squat for the people of Northland.

Ron Mark : We will see about that after the by-election—

Mr SPEAKER : Order! I know it is an interesting time, but if members could just ask the supplementary question, I for one would be grateful.

Ron Mark : Thank you, Mr Speaker. Can the Minister tell the House exactly when did he get the approval for the extra funding required for the New Zealand Transport Agency to replace the 10 one-way bridges on Northland’s twin coast highway—exactly when?

Hon SIMON BRIDGES : This has been a matter I have been discussing with Northland since early on as a Minister of Transport, going up there in December and talking about it. Late last week a decision was made on this.

Ron Mark : Can the Minister then enlighten the House as to what seismic change occurred last week when the regional land transport plan 2012-15 and the draft regional land transport plan 2015-21 do not say anything about replacing 10 bridges in Northland?

Hon SIMON BRIDGES : It is good to see that the member cannot read. On page I think it is 34 of the draft regional land transport plan, it talks about three of the bridges in the programme—Matakohe, Kaeō, and Taipā. Unlike that member, we know the region very well.

Ron Mark : Is it not a fact that there were no plans to replace 10 bridges on the Northland twin coast highway, and that this is pure pork-barrel politics of the very worst kind on the back of National’s disastrous polling in Northland for the Northland by-election?

Hon SIMON BRIDGES : I appreciate the members are bitter because they heard about our announcement. They wanted to beat us to it, and then when we got ours out, they had to go with some ill-conceived port plan that no one likes. But we have been talking to the people of Northland for a long time about this, and, unlike that party, we have been backing them for some time.

Ron Mark : In light of the previous comment about the Kaeō Bridge, if this by-election proves to be not the result the Minister wants and National loses, will Minister Bridges accept that Kaeō Bridge, which is just down the road from the National Party candidate—

Mr SPEAKER : Order! Just ask the question.

Ron Mark : —will be one bridge too far?

Hon SIMON BRIDGES : That member may as well live in St Mary’s Bay as well, because he does not know the electorate. The fact is that the candidate for National does not live near Kaeō. We are backing those bridges whatever happens in the by-election, but we know, and the people of Northland increasingly know, that it requires a strong voice in Northland in Government to make a difference, not someone whispering in the wind from the Opposition.

Resource Management Act Reforms—Environmental Protection

9. EUGENIE SAGE (Green) to the Minister for the Environment : Will he be taking any steps to increase protection for indigenous trees and vegetation in the proposed changes to the Resource Management Act?

Hon Dr NICK SMITH (Minister for the Environment): The Resource Management Act already provides ample opportunities for councils to be able to protect indigenous trees and vegetation, so no. The law gives councils discretion over whether they wish to protect individual trees or groups of trees, and, where they are protected, as in the kauri case in the Waitakeres, whether to grant consent for alteration or removal. The situation with trees does vary hugely from community to community, and it is entirely appropriate that the Act gives councils discretion over what trees to protect and, where they are protected, when to grant consent for their removal. It is healthy that there is debate around how councils administer that discretion, but it is not a fault with the law.

Eugenie Sage : Does he see the Auckland Council’s decision to allow a developer to fell centuries-old kauri and rimu trees as striking the correct balance between landholder rights and the environment?

Hon Dr NICK SMITH : The Resource Management Act gives councils the discretion to decide whether trees should be protected. The group of trees in the Waitakere Ranges was included in the district plan, and in the draft unitary plan that is currently before the panel, for protection. The council commissioned a 70-page report on the individual case and it decided that consent would be granted to remove the tree—that is a decision for the council.

Eugenie Sage : If this 500-year-old kauri is not protected under the Resource Management Act as it stands, how can he justify strengthening landholder property rights and weakening the Resource Management Act’s environmental safeguards, as he proposes?

Hon Dr NICK SMITH : There are hundreds of cases of trees that come before councils every year. I am hearing all the time the case put by the Green Party that you should let councils make decisions. The council has made a decision, which there is a healthy debate about, but it is a decision that rests with the Auckland Council.

Eugenie Sage : Does he believe that felling this 500-year-old kauri is acceptable when less than 1 percent of old-growth kauri forest remains; if not, will he commit to a national policy statement on indigenous biodiversity to guide councils in their implementation of their statutory responsibility to protect biodiversity?

Hon Dr NICK SMITH : I am not convinced that a national policy statement under the Resource Management Act would have a significant effect on such a discretionary decision. The reality is that councils have to make those trade-offs as to where to protect trees and where to allow them to be felled. If there is a particular instance in this case that I am surprised by, it is the decision by the Auckland Council not to notify the decision. The test under the law is that if the effect is less than minor, they do not have to notify it. I am advised it is about a 200-year-old kauri. I am surprised by the decision not to notify a decision to remove a 200-year-old kauri.

Small Businesses—Reports

10. MELISSA LEE (National) to the Minister for Small Business : What reports has he received on confidence from small businesses in the New Zealand economy?

Hon CRAIG FOSS (Minister for Small Business): I have received a report that shows New Zealand business confidence—of course including small businesses—in the New Zealand economy continues to improve. According to the most recent ANZ Business Outlook: “Business sentiment has started the year with an extremely positive tone. … A net 34 percent of firms are optimistic about the general economy.”, up from 30.4 percent in the previous survey. The Government’s policies, such as prudent Government spending, lowering personal and company tax rates, and focusing on sustainable jobs, are enabling business confidence to rise. Confident businesses are the engine room, creating GDP growth of 3.2 percent and 80,000 new jobs last year.

Melissa Lee : What other areas highlighted in this report show small-business confidence is growing?

Hon CRAIG FOSS : The report highlights that the New Zealand economy is progressing very well. The economy is into its fifth year of economic expansion. According to the report, businesses remain very optimistic about their prospects. The ANZ Business Outlook states “Profit expectations [have] firmed … More money in the till is positive for expanding employment and investment.” Growing confidence from small businesses in the economy shows why this Government is better for business.

Melissa Lee : What reports has he seen that impact negatively on business confidence and their profits?

Hon CRAIG FOSS : I have seen a report on a proposal that would cost New Zealand businesses around $500 million per annum beginning in early 2015. This additional $500 million cost on to New Zealand businesses would occur if the minimum wage was increased to $16.25 by early 2015, as proposed by the Labour Party. Adding $500 million additional costs on to New Zealand businesses would be extremely negative for business confidence, profits, growth, jobs, and New Zealand.

Flag—Referendum

11. TRACEY MARTIN (Deputy Leader—NZ First) to the Deputy Prime Minister : Does he consider the flag referendum to be a judicious use of taxpayers’ money?

Hon BILL ENGLISH (Deputy Prime Minister): Yes.

Tracey Martin : Does he agree with the Ministry of Justice’s statement that “a factor in the decision to change the flag is whether there are net benefits in change.”; if so, what net benefits has he identified for this expenditure?

Hon BILL ENGLISH : The cost of the referendum is really about involving New Zealanders in what would be a significant change for every New Zealander. It is simply not appropriate to go down the much cheaper road of the Government making a decision by itself to change the flag. But I might say that there would probably be more net benefits than some of the other referenda New Zealand has operated. For instance, back in 1997 we spent today’s equivalent of $26 million on a single referendum on compulsory superannuation, advocated by New Zealand First. Ninety-two percent of New Zealanders rejected the change, so that turned out to be a complete waste of $26 million.

Tracey Martin : Does he believe that paying Flag Consideration Panel members between $640 and $850 per day worked is a judicious use of taxpayers’ money when the average daily wage for the majority of the same taxpayers is just over $200 per day; if so, why?

Hon BILL ENGLISH : The members of the Flag Consideration Panel have a pretty important role, and that is to run a design competition to enable the selection of three or four flags for New Zealanders to vote on. So it is a pretty serious task. The Government is not doing it and officials are not doing it; the Flag Consideration Panel is doing it. Secondly, the member gives a somewhat misleading impression that the panel is going to be working every day. In fact, for that daily rate, that panel may be working 20 to 25 days out of the next 2 years. In that context, we will be getting more than our value for money.

Tracey Martin : Does he believe that the $25.7 million estimated cost of the flag referendum is a more judicious use of taxpayers’ money than rebuilding teaching blocks demolished in 2011, so that Northland College students do not have to continue to have their lessons in corridors; if so, why?

Hon BILL ENGLISH : The Government has—I can inform the member from some knowledge of it—I think the largest education investment programme New Zealand has seen for decades. Consistently over the last 3 or 4 years our investment in modern learning environments has been very substantial. I would hope that in the case of Northland College not only can we get the classrooms rebuilt when it is practical but we can lift the levels of educational achievement in that school, because they are not as high as they should be. We are catering to the needs of our schools. In respect of the flag, if you want to have a debate about the flag, then you need to do it properly. That means involving New Zealanders, and that means an expense of $25 million or whatever the number actually is.

Tracey Martin : I raise a point of order, Mr Speaker. The question was very succinct. It asked whether the Minister believed that the spend was better on a flag or on classrooms, and we got a very long answer that actually did not answer that specific question.

Mr SPEAKER : Order! I do not accept the argument the member is raising. The Minister went through in significant detail the fact that a lot of money was being spent on education. So he answered one part of the question and then went to the importance of the flag debate, and he considered that it was worthwhile having this panel do the work before it went to referendum.

Accident Compensation—Work and Earners’ Levies

12. SUE MORONEY (Labour) to the Minister for ACC : What is the purpose of the Work and Earners’ levies charged by ACC?

Hon NIKKI KAYE (Minister for ACC): The work levy funds entitlements under the Accident Compensation Act to workers as well as the self-employed for work-related personal injuries. The earners levy funds entitlements under the Act for earners who suffer a non-work personal injury. It also funds entitlements for injuries suffered by a person through receiving treatment from a registered health professional—i.e. treatment injuries.

Sue Moroney : Why is she preparing to overcharge businesses and their staff up to $400 million more this coming financial year than what the northern branch of the Employers and Manufacturers Association, independent analysts Infometrics, and even her own officials say is needed to fully fund the lifetime costs of accidents and injuries?

Hon NIKKI KAYE : Firstly, the member cannot predict what I am preparing for. We have a process under the legislation that enables consultation with a range of parties around potential levy reductions. But the second point that I would make—and the second point is very important for the Labour Party members—is that, as the Deputy Prime Minister has already highlighted, these accounts can shift quite significantly on a range of factors, including the discount rate, including the number of people who are in work, and including the claims information that comes in. It is my understanding that the latest accounts of ACC up to 31 December should be published, probably, in the next week.

Sue Moroney : Is she aware that ACC officials have already factored in funding certainty, sustainability, and levy stability into their equation before recommending the lower levy rates that her Government has rejected, and that Infometrics, in its independent report, has allowed for a 17 percent buffer over and above full funding of injuries in determining that employers and workers are being overcharged $350 million a year in ACC levies?

Hon NIKKI KAYE : It is really important to make the point that actually the mandate that the ACC board has in terms of recommendations to Cabinet is different from the wider considerations that we take into account—that is, for instance, public interest. It is a number of other things, as has been mentioned in this House. The second point that I would make is that the member and the Labour Party have not actually published that Infometrics report. They have published an executive summary. I would like to see that full report, because my understanding is that there are a number of people saying there could be significant flaws in it. The first flaw that we are looking at is whether gradual process has been taken into account in their calculations. So I do want to see the full report. But the major point is this: we have delivered $1.5 billion of levy reductions. We said at the election there will be further levy reductions, but we have to take a long-term view, because if we do not, we end up in the situation that Labour left us in, which was a $5 billion hole in ACC accounts.

Sue Moroney : Why is she following the false lines used by discredited Minister for ACC Nick Smith in an attempt to cover up her Government’s ACC rort—she just used them—when even Judith Collins, when she was the Minister for ACC, admitted that the higher levies are “because we need to get to surplus and we’re very honest about that”, and Judith Collins said that when she spoke to the New Zealand Herald just last year?

Hon NIKKI KAYE : The first point is, as has been said by a number of Ministers in this House and a number of my colleagues, that that is one factor. But let me tell you the other factors—and you should be looking at this when you see the latest accounts from ACC. No. 1 is the discount rate. That can affect our accounts by hundreds of millions of dollars. The second thing that needs to be taken into account is the number of people in work. The third thing that needs to be taken into account is the overall claims that are coming in. These are major factors that can affect the ACC accounts. The second point that I would make for the member, and that I would continue to make for the member, is that if the Labour Party wants to tie its ACC policy to one point in time, then we will end up in a situation that history left us in with a $5 billion hole. Our view is that we need to take a much longer-term view and take into account those longer-term shifts that are happening and the volatility in the accounts.

Sue Moroney : Does she have any legal authority as the Minister for ACC to strike ACC levies for any other reason than the full funding of accidents and injuries; if she believes she does, can she please point the House to that legal authority?

Hon NIKKI KAYE : There are several areas of the legislation that cover how we set levies, but there are also things that we need to take into account. The first point is that there is a process around levy setting. The board recommends to the Minister, and then the Minister takes that to Cabinet, which has the overall discretion. The second point, and the provision that I would point the member to, is section 6 of the Accident Compensation Act. This is a point that Labour does not get. The fundamental thing that happens here, if you take a Labour policy, is that you get volatility and not certainty for businesses, if you do not take into account section 6 of the Accident Compensation Act, which is about stability—it is about stability and not having a yo-yo effect in terms of—

Mr SPEAKER : Order! The answer is quite long enough.

Sue Moroney : I raise a point of order, Mr Speaker. With regard to that answer, the question was straightforward. It was about her legal authority to strike levies for any other reason than the reason she just outlined. I was asking for other reasons.

Hon NIKKI KAYE : Section 6.

Sue Moroney : Section 6 talks about—

Mr SPEAKER : The question has been addressed.

ENDS

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