strong>Questions to Ministers

Economy—Reports

1. JOANNE HAYES (National) to the Minister of Finance : What reports has he received about the economy’s performance in the lead-up to the Budget last month?

Hon BILL ENGLISH (Minister of Finance): I have received a number of reports, including Treasury’s Monthly Economic Indicators report for May. It confirms that, for the most part, the domestic economy started 2015 on a solid footing. Job growth remained strong in the March quarter, buoyed by above-average levels of business confidence and activity expectations. Treasury also noted that New Zealand’s robust relative economic performance has strengthened net migration inflows, while also enticing more people into the labour force with a record high participation rate.

Joanne Hayes : What do more recent trends in business confidence show, and how do these trends compare with historical averages?

Hon BILL ENGLISH : The ANZ’s latest Business Outlook survey shows that business confidence and firms’ expectations for employment, investment, and overall activity are easing. However, as ANZ noted, these indicators are receding from high levels. The lower confidence levels are more in line with the moderate growth outlook underpinning the Budget forecasts. Confidence in the agricultural sector has, understandably, eased now that lower dairy prices have been confirmed, and it looks as if the construction industry is adapting to a flattening out of strong growth.

Joanne Hayes : What lessons does he take from recent trends in business confidence in other economic indicators?

Hon BILL ENGLISH : I think the main lesson is that when you are a small open economy, there are always going to be events happening in the world that are working against economic growth, as well as events that are working for economic growth. That is why the idea that the Government should second-guess which industries ought to grow is just nonsense, because we could never quite figure out what the right mix is meant to be. Instead, this Government is committed to protecting and improving the economy’s resilience so that we can adapt to whatever happens. One of the natural buffers is the floating exchange rate. In July last year the New Zealand dollar reached US88c; today it is around US71c. Even when one sector such as dairy has lower prices, other sectors such as tourism, international education, the wine industry, information and communications technology, and high-tech manufacturing continue to register strong growth—all of which are creating new jobs.

Joanne Hayes : What approach did the Government take to ensure that the benefits of the growing economy were shared by some of the most vulnerable New Zealand families?

Hon BILL ENGLISH : The Budget outlines a future of moderate growth in a resilient economy. That gives us the opportunity to make choices that, frankly, other developed countries do not have. In this Budget, we decided to offer some more support to the lowest-income families, and also to work to help more of the parents of our most vulnerable children into work. That is why we have increased obligations on those on a benefit to be available for work and why we have provided extra childcare support.

Prime Minister—Statements

2. JAMES SHAW (Co-Leader—Green) to the Prime Minister : Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Can I just begin by congratulating the member on his election as co-leader of the Green Party. In response to the question, the answer is yes.

James Shaw : Does he stand by his statement about the Green Party, made this morning, that “We’re not saying we’re opposed to working with them on issues, but we work with every political party on issues.”; if so, does he see climate change as an issue worth working on?

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

James Shaw : Does he believe that the 1993 cross-party accord on superannuation is an example of consensus politics that has been positive for the country; if so, why will he not seek to build cross-party consensus on climate change, given that both are examples of issues that carry an enormous potential cost to taxpayers?

Rt Hon JOHN KEY : I think that the Government has been quite clear about climate change. It has got the emissions trading scheme, and it is in the process of going through a consultation process on what our post-2020 targets should be. I think what is very clear is that the Greens’ perspective on what New Zealanders should have to pay when it comes to climate change is far more significant than what the Government believes the economy can bear. A target of a 40 percent reduction on 1990 levels would be disastrous for the New Zealand economy.

James Shaw : Which of the following options creates a better framework for New Zealand businesses to thrive: option A, a stable, predictable, and sensible price signal on carbon that is backed by all major political parties; or option B, policy settings that change with every change of Government?

Rt Hon JOHN KEY : Option C: do not vote for a change of Government and you will get continuity.

James Shaw : Is he aware of the cross-party accord in the United Kingdom on climate change, signed by David Cameron, Nick Clegg, and Ed Miliband; and given the success of that accord there, why is he not open to negotiating a similar—[Interruption]

Mr SPEAKER : Order! [Interruption] Order! The member has every right to ask this question, and I wish it to be heard. The member can start his question again.

James Shaw : Is he aware of the cross-party accord in the United Kingdom on climate change, and, given the success of that accord there, why is he not open to negotiating a similar arrangement here in New Zealand?

Rt Hon JOHN KEY : If the member is going to model himself on Nick Clegg and Ed Miliband, I suggest that while he is having his welcoming and congratulatory drinks, that he also has his farewell drinks.

James Shaw : So is he—

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. [Interruption]

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

Rt Hon Winston Peters : I listened to that question very carefully, and to the answer as well. The question was asked twice. The answer in no way sought to address the question.

Mr SPEAKER : I have some sympathy for the point of view that the member is raising, but the difficulty that I have is that the first question asked, which then caused some disorder, mentioned some other names that were not in the supplementary question. On that basis—I agree that it was a marginal call—I decided to proceed with the question as asked, and the Prime Minister, in answering it, referred to some parts of the first question that were not exactly repeated in the second supplementary question.

James Shaw : Is the Prime Minister saying that we in New Zealand cannot achieve something that bitter rivals in the UK can achieve by putting their differences aside on the issue of climate change, and since when did he set his political sights so low?

Rt Hon JOHN KEY : It is quite clear that different political parties have different views when it comes to climate change. What is true is the Government is going through a consultation process for the target that it intends to take to Paris. If the member wants to have his political party actually go through the process and put in a submission as part of the consultation process, the Government will consider it along with all other submissions.

James Shaw : Why will he not put politics aside and seek to work with other parties to reach a lasting and durable cross-party agreement on the climate that puts in place an emissions reduction target that New Zealanders can be proud of?

Rt Hon JOHN KEY : It is pretty clear that the Greens want to have a reduction target that is significantly greater than what either the economy or consumers can afford, or what would be fair. When the member says that he wants to have discussion and consultation with the Government, what he really means is that he wants the Government to see it the Greens’ way, and, in my view, that would be disastrous for the economy.

Foreign Affairs, Minister—Confidence

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : Did he approve of Minister McCully’s dealings with the Saudi Arabian businessman Hamood Al Ali Al Khalaf?

Rt Hon JOHN KEY (Prime Minister): Yes. The full Cabinet agreed to the proposals put forward by Minister McCully in a paper that was tabled in the House last week.

Andrew Little : When his Cabinet made its decision to pay $4 million of taxpayer money to private Saudi interests, how much of the payment was for intellectual property?

Rt Hon JOHN KEY : I do not have those exact details, but I am aware that it fitted within the $4 million that went to the business hub part.

Andrew Little : When his Cabinetmade its decision to pay $4 million of taxpayer money to private Saudi interests, how much of the payment was for settlement of the then threatened legal proceedings?

Rt Hon JOHN KEY : I do not think it would be right to claim that you could actually compartmentalise it in that particular way. There was a range of different issues, and they included: the potential exposure of a legal claim, wanting to resolve the issues that were holding back the Gulf States free-trade agreement, the fact that we thought we could promote New Zealand in an international environment, and we thought it was the right thing to do.

Andrew Little : Did he know that the $4 million payment, which Minister McCully told Cabinet was for intellectual property and settling the legal claim, was really a facilitation payment, and could he please enlighten the House on the difference between a facilitation payment and a bribe?

Rt Hon JOHN KEY : The member is really making some pretty silly statements. The $4 million was paid to Al Khalaf’s company under a contract for services between the Ministry of Foreign Affairs and Trade and that company. It related to costs associated with shifting the operations that were previously based in New Zealand to a new hub in Saudi Arabia.

Andrew Little : Given that answer, why does Minister McCully’s Cabinet paper state that in return for the $4 million the private Saudi interests would “use their best offices to connect New Zealand Government and trade interests with key Government and commercial decision-makers in Saudi Arabia”, and what is that but a bribe by any other name?

Rt Hon JOHN KEY : As I said, the advice I have had is that the $4 million was paid on the basis of a contract for services. It related to costs associated with shifting. They included the intellectual property and access to a physical location in Saudi Arabia and other items listed in the Cabinet paper that was released last week.

Andrew Little : Can he give a categorical assurance that Murray McCully was fully transparent with, and did not mislead, Cabinet?

Rt Hon JOHN KEY : I am quite confident that Mr McCully fully advised Cabinet.

Andrew Little : When he said that he wanted higher standards in Government, did they include tolerating senior Ministers misleading Cabinet and using taxpayer funds to buy off foreign sheep farmers; and is it not time for Murray McCully to go?

Rt Hon JOHN KEY : Someone polling 9 percent might want to reflect on whether it is time to go.

Rt Hon Winston Peters : Will the Prime Minister make available to this Parliament and the public all the legal advice and opinion that Cabinet received behind this deal; if not, why not?

Rt Hon JOHN KEY : No, as is consistent with the way legal advice is always treated and was treated when the member was the Minister of Foreign Affairs—if he bothered opening the legal advice, I suppose.

Health Services—Social Bonds

4. Dr SHANE RETI (National—Whangarei) to the Minister of Health : How will social bonds help deliver better health outcomes?

Hon Dr JONATHAN COLEMAN (Minister of Health): Budget 2015 set aside nearly $29 million for social bond pilots that will see the Government paying upon delivery of solutions to tough social challenges. Social bonds will see NGO providers partnering with sources of private capital to deliver on contracted outcomes in health and other social sectors.

Dr Shane Reti : How will the first social bond work?

Hon Dr JONATHAN COLEMAN : The first social bond will build on a successful pilot where an NGO has placed employment experts into a general medical practice to assist mental health patients into work where appropriate. While the contract details are being finalised, an NGO provider in partnership with a private source of finance will agree to deliver an increase in outcomes for this patient group. Payment occurs when results are delivered.

Darroch Ball : Is the use of social bonds not simply the Minister’s admission that the Government’s form of investment approach and welfare reform have failed outright, and does he think that profit not people is the right motivation to solve our complex social issues?

Hon Dr JONATHAN COLEMAN : No, absolutely not. This is in addition to everything we have already done. We have tried some very innovative solutions during our time in Government to achieve some of those tough better public service targets, and that is why the lifetime liability for beneficiaries has decreased by $7.5 billion under this Government. That is why there are 42,000 fewer kids in New Zealand living in beneficiary homes than 3 years ago, and we will continue to focus on what works.

Hon Annette King : In light of his answer to Dr Shane Reti, is he aware that an employment officer was placed within a primary health organisation when we were in Government, but his Government cancelled such a project?

Hon Dr JONATHAN COLEMAN : No, but what I am aware of is that when that person was the Minister of Health she was not successful in getting—

Mr SPEAKER : Order! The Minister will resume his seat. He answered the question in the very first part of his answer.

Mental Health Services—Social Bonds

5. JAN LOGIE (Green) to the Minister of Health : Can he guarantee no NGO that embarks on a social bond contract, in order to assist people with the most complex mental health needs into work, will go under as a result of not meeting agreed targets; if not, why not?

Hon Dr JONATHAN COLEMAN (Minister of Health): One of the benefits of social bonds is that they protect service providers by shifting financial risk away from the providers and on to investors who provide the funding and who are better placed to absorb risk. This allows the Government to pay for results and to access the expertise and local knowledge of NGOs and service providers without exposing them to financial risk that they cannot necessarily bear. Although the Government will not provide guarantees to service providers, it is taking steps through social bonds and other programmes to pay for better results for New Zealanders, but at the same time help service providers to better manage risk.

Jan Logie : So I assume that was a no.

Mr SPEAKER : Order! That question was answered very fully by the Minister. The member now accepts the answer and just proceeds to ask her supplementary question.

Jan Logie : Will he guarantee that no one with high mental health needs will be bullied into an unsuitable job in order to ensure an investor gets a return on their investment?

Hon Dr JONATHAN COLEMAN : Yes.

Jan Logie : How will the Minister guarantee that?

Hon Dr JONATHAN COLEMAN : Through the contracting process.

Mr SPEAKER : Sorry?

Hon Dr JONATHAN COLEMAN : Through the contracts that we sign.

Jan Logie : Does he agree with the Department of Internal Affairs, which advised against social bonds because investors, by nature, are looking to maximise profits while minimising risks, and that a low-risk social investment completely defeats the purpose?

Hon Dr JONATHAN COLEMAN : No, That is not what the Department of Internal Affairs said. I have a report here in front of me—the advice to me from the Department of Internal Affairs—which says that social bonds are “… an exciting financial instrument with the potential to revitalise social policy delivery and inject private sector funding and innovation into the sector.” I thought the Greens would actually be in favour of social entrepreneurship, but if it is not their idea, then apparently it is a bad idea.

Metiria Turei : I raise a point of order, Mr Speaker. Given the Minister has just quoted from an official document, I suggest that he then table it for the House as—

Mr SPEAKER : Order! This is easily resolved. If the Minister is quoting from an official document—[Interruption] He is? Then would it be tabled, please. It will be tabled. Document laid on the Table of the House.

Health Services—Advice on Social Bonds

6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health : What advice, if any, did he receive on the “Better Public Services Seed Funding: Social Bonds Pilots”?

Hon Dr JONATHAN COLEMAN (Minister of Health): I have received a wide range of advice from Treasury, the State Services Commission, and the Ministry of Health, and I have got a feeling that I am about to receive some more advice from the member.

Hon Annette King : Why has he not released the KPMG reports into social impact bonds, in light of the United Kingdom’s Peterborough prison pilot, which his Government called a world leader, but which was cut short and investors did not receive a return on investment for the full contracted period?

Hon Dr JONATHAN COLEMAN : I think that is very much the point. If these social bonds programmes do not deliver results, then the investors do not get the return. So there is no risk for the Government, because we are contracting for results and we are saying that we will pay when the results are delivered. If that happened in Peterborough, I presume that the provider was not delivering—end of story.

Hon Annette King : Why has he chosen mental health sufferers as guinea pigs for the Government experiment, when the pilot programme, costing at least $1.13 million from the health budget, did not recommend mental health for social impact bonds, and the Department of Internal Affairs report commissioned by that department, which the Minister quoted—but not all of it—said not to engage in trials or implementation, but to monitor overseas experience?

Hon Dr JONATHAN COLEMAN : The first thing is that these are social bond pilots. The second thing is that we have not shied away from striving to achieve results in areas that are very difficult to make progress in. So that is why, with mental health clients, we are determined to help them get back into work where appropriate. I think that the Labour Party should actually be getting behind this and giving us a pat on the back, because we are going to contract for outcomes that will make a real difference to the lives of mental health patients, and I would ask what is wrong with that.

Barbara Stewart : Does this move not show a clear privatisation agenda and a move towards an initial public offering, as reported by Bloomberg in an article today?

Hon Dr JONATHAN COLEMAN : No.

Hon Annette King : Has anyone told him that funding for NGOs providing mental health services in the community has not increased for at least the past 5 years, and this latest hare-brained scheme is nothing more than privatisation dressed up as social investment?

Hon Dr JONATHAN COLEMAN : What they have told me is that under this Government the funding is actually delivering better results than ever. Unlike under the last Government, which poured in more and more money but delivered no results, we are actually making sure that money is guided where it is needed. We are measuring results and this is part of that. We are not going to pay for it unless we achieve a result. I know it is anathema to Mrs King, but that is a fact.

Hon Annette King : Is he aware that the barrier to getting mental health sufferers into work now is prejudice, so how do social bonds paying a profit to private investors change that prejudice?

Hon Dr JONATHAN COLEMAN : That is very much the point: there is prejudice. So we have to use innovative means to actually overcome those barriers. The member would prefer us to do nothing because actually she does not care about employment outcomes for mental health clients. We do.

Hon Annette King : What is correct: when he said that social impact bonds will focus on an area where the Government is not currently active—“So actually we’re not getting an employment outcome for people with mental health problems.”—or when he said in the same interview “There’s been a very successful programme run partnering with a NGO to get people with mental health issues into work. It’s working.”?

Hon Dr JONATHAN COLEMAN : Listen to the context of the whole interview. It all is correct and it all makes sense. Go and have a listen to it again.

Hon Annette King : I raise a point of order, Mr Speaker. I do not think that was an answer. “Just go and listen to the interview.” is hardly an answer.

Mr SPEAKER : Order! The member now needs to listen to the answer that was given. The question asked which was correct and the Minister answered by saying both statements were correct.

Hon Annette King : How can it be?

Mr SPEAKER : That is the need for further supplementary questions.

Prime Minister—Statements on Superannuation

7. DAVID SEYMOUR (Leader—ACT) to the Prime Minister : Does he stand by his statement in the House last week that because New Zealand Superannuation costs are currently less than 5 percent of GDP, and are forecast to rise to 8 percent of GDP by 2060, this represents a responsible path for overall Government spending?

Rt Hon JOHN KEY (Prime Minister): I stand by my statement, which was “We have set out a responsible path for overall Government spending so that current settings for New Zealand superannuation are both affordable and fully factored into our long-term forecast.” That is true, as the Budget shows. Other parties in this House from time to time want to cut back on superannuation entitlements, while other people want to spend the money on something else. That is a fiscal choice they should put clearly to the electorate, including Andrew Little and his idea of means testing.

David Seymour : Does it not strike the Prime Minister as odd that he is commending OECD fiscal arrangements, given that countries like France, Greece, Italy, Portugal, and Spain are all facing a brutal fiscal adjustment that means pushing up the age of eligibility for pensions, increasing pension contribution rates, and shifting indexation from a wage to an inflation basis? Is that the future we are offering younger New Zealanders?

Rt Hon JOHN KEY : No, I think it is about correctly reflecting, actually, on the current position, which is that New Zealand superannuation currently costs 4.8 percent of GDP and is expected to rise to 8 percent of GDP by 2050. At the moment, the OECD average today is 9.5 percent and is expected to rise to 11 .7 percent. So, yes, although the costs of New Zealand superannuation will rise, I think it is affordable and within our projected forecast.

David Seymour : Does the Prime Minister plan to still be in office in the 2020s when the cost of superannuation to New Zealand taxpayers rises by $1.5 billion every year?

Rt Hon JOHN KEY : I certainly hope so, but of course there will be many elections to run on, and I look forward to working with the member for as long as he is the member for Epsom, which is where I live.

Housing, Affordable—Development of Crown Land in Auckland

8. ALFRED NGARO (National) to the Minister for Building and Housing : What response has he received from Auckland Council and housing companies to the Auckland Crown land programme launched on Friday?

Hon Dr NICK SMITH (Minister for Building and Housing): There was a very positive response to the initiative and to the first four sites—the 30 hectares in Manukau, Avondale, Massey East, and also to the west of our Hobsonville development. I welcome the undertaking from the Auckland Council in committing its housing project office to ensure that we achieve pace, and I also note that the council announced a similar initiative where it has surplus land with capacity for nearly 3,000 homes. It was also very encouraging to have over 250 development companies at the launch—more than double what my officials expected. I am confident that we will have our first development agreement in place by October.

Alfred Ngaro : What initiatives prior to this programme did the Government have under way on Crown land for housing in Auckland?

Hon Dr NICK SMITH : We already have four such initiatives under way. There is the very successful development at Weymouth involving 282 homes. This was where the Auckland Housing Accord was signed and the first special housing area was launched. This is land that has sat vacant for every one of the 9 years that the previous Government was in office. I am advised the programme is running 3 months ahead of schedule. There is the very substantive development at Hobsonville involving 3,000 homes—400 of those have been completed, 150 are under construction, and 500 are being consented. It is now moving at such pace that all of the properties are being sold off the plans. There is a further project at Papakura, on former Defence Force land, which involves 600 homes that are currently being built, and of course there is the development at Tāmaki, where we already have 446 homes completed and another 190 are under construction. Across these four initiatives we have over 12,000 new homes being built on public land across Auckland.

Alfred Ngaro : What reports has he received on the latest building consent figures for Auckland for the month of April and for the latest year, and how do they compare historically?

Hon Dr NICK SMITH : There was a very positive figure of 912 homes consented in Auckland in the month of April. I compare that with the last month of the previous Government, where it was fewer than 200 for the month. The number for the year was 8,155. That is more than double what it was 3 years ago. So we have doubled the house-building rate. I would also draw it to the attention of the House that that 8,000-plus figure is the strongest rate of house building in Auckland—[Interruption]

Mr SPEAKER : Order! Would the Minister resume his seat.

Hon David Parker : I raise a point of order, Mr Speaker. Once again it was a very long answer, and if I could also raise a related point. When the Opposition has even two easily answerable legs to a supplementary question, we only ever get one answer. And yet you allow Ministers of this Government to give five or six answers to multi-pronged supplementary questions from the Government.

Mr SPEAKER : The member is raising a reasonable point on this occasion. The answer to the previous supplementary question was unnecessarily long and I brought it to an end. This answer too has gone on for too long. The reason I was not responding was that there was a large level of interjection on the question, which does not help me bring the answer to a conclusion. The question has been answered at length.

Rt Hon Winston Peters : Does the Minister not understand that the 9,000 consents about which he boasts do not even cover the housing needs of those immigrants flooding into Auckland at the rate of about 34,000 to 35,000 every year?

Hon Dr NICK SMITH : There has actually been very little change in the number of new immigrants arriving in Auckland. What has changed is that we do not have 30,000 people a year leaving for Australia. Members on this side of the House welcome the fact that Kiwis have got confidence in New Zealand and they are coming home. It does raise extra challenges for us around housing, but we are up to that challenge.

State-owned Enterprises—Sales

9. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does he stand by his statement in Budget 2014 “the share sale proceeds saw $4.7 billion go to the Future Investment Fund and we said we would spend $1 billion of that on schools, and a further $1 billion on health”; if so, as at Budget 2015 how much has been allocated to health and education from the Future Investment Fund?

Hon BILL ENGLISH (Minister of Finance): Yes, and a good thing about the Future Investment Fund is that the money going in and out of it is completely transparent. As I said in a Budget press release last month, $635.6 million has so far been invested from the fund into education and another $684 million into health, and that is not counting, of course, the other investments such as the investment in ultra-fast broadband, which is a key technology to advancing both of those sectors. There is a further $726 million remaining in the fund without having to borrow. It is too early to say what all the disbursements from the fund will be, as the Government will continue to look for opportunities to reprioritise existing capital, to recycle more capital, and to fund other initiatives from the Future Investment Fund.

Grant Robertson : Is it correct that of the $726 million that he just mentioned, already $190 million of that has been pre-committed for spending on KiwiRail?

Hon BILL ENGLISH : That may be the case. I am pleased the member drew attention to KiwiRail because one of the calls on the Future Investment Fund has been that KiwiRail now requires somewhere between $200 million to $250 million a year—

Mr SPEAKER : Order! [Interruption] Order!

Grant Robertson : I raise a point of order, Mr Speaker. You will appreciate that that was a very specific question about the Budget that Mr English delivered only last week. He said he did not know the answer, which is remarkable—

Mr SPEAKER : Order! The member will resume his seat. He was going quite well until then. The member took the opportunity in a supplementary question to mention KiwiRail, so I was giving the Minister a chance to respond to that.

Grant Robertson : Given that the Budget documents state that there is only $536 million left to allocate from the Future Investment Fund, but that he has already committed to spend a further $680 million on education and health, is he going to answer this with tricky accounting or is it just another broken promise?

Hon BILL ENGLISH : The money will be spent on health and education, and if it runs out because of other calls on the Future Investment Fund, then we will look at reprioritising existing capital, recycling more capital, such as the sale of vacant land in Auckland, or borrowing to make sure that we do invest appropriately in health and education.

Grant Robertson : Is it correct that he has overcommitted Future Investment Fund funding by $424 million?

Hon BILL ENGLISH : No, and it is a bit rich that the Labour Party is complaining that the Future Investment Fund is too small when it did its best to sabotage the asset sales—

Mr SPEAKER : Order! The question was answered right at the start.

Grant Robertson : Can I help the Minister out: is 364 plus 316 plus 280 more than 536?

Hon BILL ENGLISH : It may or may not be. I was not adding it up, but I can assure the member that regardless of his focus on the accounting, which makes him sound more like a Treasury analyst than the Opposition spokesperson, we will make sure we have enough capital to invest in health and education, as required, to deliver better services and get better results.

Rt Hon John Key : Is it true that if the Opposition spokesman was any good with numbers, he would have got them the two times he had a go at the leadership?

Mr SPEAKER : Order! That supplementary question will not help the order of this House. Question—[Interruption] No, there is no need for it to be answered.

Transport—Government Priorities

10. JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport : How is the Government supporting the delivery of its Transport priorities?

Hon SIMON BRIDGES (Minister of Transport): As part of Budget 2015, this Government is investing some $250 million in strengthening the transport system to increase safety and reliability, to improve resilience, and to ensure that older New Zealanders have continued access to public transport. Specifically, we are spending $209 million investing in KiwiRail, with a further $190 million to be funded in Budget 2016 to ensure the continued delivery of services and to maintain the national network. There is $10 million being invested in the SuperGold card scheme to meet strong and growing demand, and $15.9 million is being invested in the MetService to replace its meteorological forecasting system, to establish a new disaster recovery backup facility, and to provide free weather forecasting services for the recreational aviation sector.

Jonathan Young : How is the Government delivering on its priorities of supporting the regions?

Hon SIMON BRIDGES : Through the Accelerated Regional Roading Package, the Government is investing $212 million in accelerating 14 regionally-significant State highway projects. This investment underscores the Government’s priority of supporting the regions, which are a key driver of our economy, and ensuring that we have a modern transport infrastructure.

Prime Minister—Statements on Northland

11. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister : Does he stand by all his statements with regard to Northland?

Rt Hon JOHN KEY (Prime Minister): Yes, in the context in which they were given.

Rt Hon Winston Peters : Does he think that the Government is delivering for Northland when Northland College is so dilapidated, run down, neglected, mould-ridden, and leaky that the police have asked to use the school for training because it is the closest thing available to “a ghetto environment”; if so, why?

Rt Hon JOHN KEY : I do not have the details on Northland College, other than what I read in the paper this—[Interruption] I was going to say, other than what I read in the paper this morning. There is a programme to improve facilities at Northland College, and I am sure that will be carried out.

Rt Hon Winston Peters : Is it not a fact that regions like Northland are the victims of neglect, while $350 million in extra funding is going to Auckland schools alone—when the worst classrooms are in provincial New Zealand, where principals are saying that the process is “just hopelessly slow” and that “When you are living with it day-to-day it’s tough … I just feel if we were in Auckland it would be done faster.”?

Rt Hon JOHN KEY : No, I do not think that is correct. I think there are, obviously, poor conditions at Northland College, and that issue needs to be resolved.

Rt Hon Winston Peters : How can he explain the over $2.4 million being spent on the failing Whangaruru charter school when just up the road at Northland College we have got pupils who are learning in sheds and staff who are trying to cope with appalling conditions?

Rt Hon JOHN KEY : I think that they are slightly different issues. One of them is a partnership school, which is one of the early partnership schools to be advanced, and that was all about providing, ultimately, greater choice for children who want to go there. It is a different issue from the conditions at Northland College.

Rt Hon Winston Peters : Is it not a fact that the money spent on the Whangaruru charter school could have paid for 45 classrooms and would have provided an extra classroom, desperately needed, at the school called—

Hon Hekia Parata : How long has that school been run down?

Rt Hon Winston Peters : Which school are you talking about—

Mr SPEAKER : Order! I am going to ask the member to start his question again without interjection from my right. [Interruption] Order! Would the member start his question again.

Rt Hon Winston Peters : Is it not a fact that the money spent on the failed Whangaruru charter school could have paid for 45 classrooms, and that just down the road at Whananaki School, there has been a demand for an extra classroom for over a year and the Minister has failed to do a scrap about it?

Rt Hon JOHN KEY : As I said earlier, I do not have the specific details for those colleges. I do know that the Government has been investing heavily, as you saw in Budget 2015, in new classrooms, upgrades, and the roll-out of ultra-fast broadband. It is probably a reflection on the member for Northland that he gets involved in an issue because it is in the paper, rather than actually leading the charge.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. The Prime Minister started off by answering the question so well, and then, as usual, he began a personal attack, which was something that failed 3 months ago in the Northland by-election.

Mr SPEAKER : The member has made his point, but not with a legitimate point of order.

Education, Minister—Statements on Funding

12. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education : Does she stand by her statement that “the Government is fully funding the delivery of the school curriculum”?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes.

Chris Hipkins : If schools are sufficiently funded to deliver the curriculum, why was one secondary school forced to cancel a biology field trip resulting in the teacher having to get special permission from the New Zealand Qualifications Authority to alter data collection requirements so the students would not fail their National Certificate of Educational Achievement because the school could not afford to deliver the learning the curriculum requires?

Hon HEKIA PARATA : I am surprised by that because funding for schools has gone up every year since we have been in Government. Operational grants, which are fully at the discretion of the school, have been at or ahead of inflation. I would be a bit worried about the management by that school.

Chris Hipkins : If it is indeed a matter of schools making choices, as the Minister seems to suggest, why do 54 percent of school principals—more than half—report they cannot afford to comply with the guidelines that prevent them seeking parental contributions to the cost of their kids’ education, with some openly admitting they simply ignore them altogether?

Hon HEKIA PARATA : The member may have misread the news item, because it was 54 principals not 54 percent, and of those 54 principals, 22 said they had concerns about their spending.

Chris Hipkins : Has she discussed the financial pressures schools are under with the finance Minister, Bill English, who previously claimed that without parental contributions, or parental funding, schools were “screwed”—his words, not mine; if so, why do the most recent figures available show that parental donations continue to increase by over $16 million a year?

Hon HEKIA PARATA : I have ongoing, very robust discussions with the Minister of Finance and they have resulted in a 1 percent operations grant funding increase being made available to schools this year, although inflation is predicted to be 0.1 percent. Again, I do not know where the member is getting his figures from, but the most recent I have say that there is a consistent contribution of donations by parents, making 1.8 percent of overall Government grants. Those donations are for extracurricular activities.

Chris Hipkins : Does it not say everything about the current Government’s priorities that this year’s Budget pumped a further $53 million into her broken Novopay payroll system while only $42 million was invested in school operations grants—the money that goes directly to kids’ education—which is the lowest increase in school funding in over 20 years?

Hon HEKIA PARATA : Again, the member might need to learn how to read the Budget, because, actually, we do not just throw money at schools. We look at the operational funding against what the actual costs are. Schools get both operational funding and resourcing for the employment of teachers. Schools have never been more well-funded than under this Government at $10.8 billion.

ENDS

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