Questions to Ministers

Economy—Reports

1. Dr JIAN YANG (National) to the Minister of Finance : What recent reports has he received on the performance of the New Zealand economy and the Government’s management of its finances?

Hon BILL ENGLISH (Minister of Finance): I recently saw the report of international credit-rating agency Fitch Ratings. This assessment affirmed New Zealand’s long-term foreign and New Zealand dollar Issuer Default Ratings at AA and AA+, respectively, and the outlook on both is positive. This rating reflects the resilience of the New Zealand economy. Kiwi households have been saving rather than over-borrowing for 5 consecutive years now. Our net international investment position, which measures our international indebtedness, has strengthened from 85 percent of GDP in 2009 to 64 percent of GDP today. The Reserve Bank has also strengthened, crucially, the resilience requirements on our banking system.

Dr Jian Yang : What are some of the factors that Fitch Ratings identified when making its assessment?

Hon BILL ENGLISH : There were a number, but I will mention just one or two. It pointed out that the Government’s annual operating deficits have continued to narrow, and it pointed out that the New Zealand public sector has relatively low debt, which stood at—according to its methods—35.7 percent of GDP in 2014, compared with a median of 72 percent of GDP across OECD developed countries. The Government is getting on top of the deficit, and we will begin to reduce debt as we achieve surpluses.

Dr Jian Yang : What is Fitch Ratings’ view on the outlook for the Government’s finances and for New Zealand?

Hon BILL ENGLISH : In terms of the outlook for New Zealand, Fitch Ratings noted that our growth was 3.3 percent in 2014, ahead of other AA category countries. It noted lower agricultural production due to drought earlier this year and weaker demand following the fall in dairy prices, and it expects that the pace of economic growth in New Zealand will ease to around 2.8 percent in 2015. That is not surprising, but it does show that we are on track for sustainable moderate growth.

Dr Jian Yang : Does that mean that there are no risks to New Zealand arising from recent international developments such as those negotiations occurring between the Greek Government and other eurozone Governments?

Hon BILL ENGLISH : No. The rating agency assesses, essentially, the capacity of New Zealand to be resilient in the face of those kinds of risks eventuating. And it is good news for the economy that Fitch Ratings believes the New Zealand economy is resilient, partly because of its relatively low debt levels and partly because of the flexible microeconomic policies that this Government is pursuing.

Flag Referendum—Cost

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : Does he stand by his justification for the $26 million process to consider changing the flag that “It’s just sheer confusion with Australia. Even at APEC they tried to take me to Abbott’s seat”?

Rt Hon JOHN KEY (Prime Minister): I do. If the member was watching Television New Zealand a few weeks ago, he may have seen a reporter conduct an experiment in Times Square, New York, where only two out of 50 people correctly identified our flag; almost everyone else identified it as the Australian flag. I also stand by all the other reasons I have put forward for changing the flag, including that “Our flag is the most important symbol of our national identity and I believe that this is the right time for New Zealanders to consider changing the design to one that better reflects our status as a modern, independent nation,”.

Andrew Little : Was it worth spending over $8 million so far on the flag referenda when only 739 people attended the meetings and 99 percent of the “What do you stand for?” postcards he sent to Kiwi homes went straight in the bin?

Rt Hon JOHN KEY : I do. As I said yesterday to the co-leader of the Greens, of course some people turned up to the roadshow, but there have been 10,291 alternative designs. There has been 1.18 million people reached by Facebook. There have been 146,000 views of the New Zealand flag history. But one political party—one political party in this Parliament—as of an hour ago has as its policy: “review the design of the New Zealand flag involving flag design [experiments] … and with full public consultation and involvement.” That was the Labour Party, as of an hour ago. [Interruption]

Mr SPEAKER : Order! [Interruption] Order! Before I call the member, the House will settle.

Andrew Little : Was it worth paying over $2,000 for each member of the public who attended the meetings, given that one of the attendees said he “came for the free cookies.”?

Rt Hon JOHN KEY : I do think it is actually worth spending, potentially, $26 million—I suspect it will be a little bit less. But I do think it is worth spending that money on such an important constitutional issue. If the member is now telling New Zealanders that if he was Prime Minister of New Zealand he would potentially change the length of the parliamentary term, the flag of New Zealand, or other constitutional issues with no involvement with New Zealanders, then I think that is a very interesting thing he should be saying.

Andrew Little : In light of that answer, and bringing things back to reality, has he actually read the public submissions on the standfor.co.nz website and seen that most of them either say “Keep the flag we’ve got.” or “Stop wasting our money on this vanity project.”?

Rt Hon JOHN KEY : Yes, I have seen some of those comments. It is interesting: if it is so much my project and my idea, why the hell is it the Labour Party policy then? That is all I can say.

Tim Macindoe : What strong endorsements has the Prime Minister seen in support of changing the New Zealand flag?

Grant Robertson : No, he’s already used that one.

Rt Hon JOHN KEY : No, no, this is a different one. There have been many endorsements, but one of the strongest I have heard has come from a prominent New Zealander, and I like to listen to prominent New Zealanders. This person said: “My personal opinion is we should have something more relevant to an independent, small Asia/Pacific nation. I think a referendum is a suitable way to deal with an issue that can be very polarising. The elements I’d like to see in the flag are the Southern Cross, blue for the sea, green for the land and mountains, and a reference to our Māori heritage.” I am grateful for that support and those suggestions from Mr Andrew Little of—[Interruption]

Mr SPEAKER : Order! Would the House settle.

Rt Hon Winston Peters : Is it not a fact that we designed our flag in 1904, well before the Aussies copied it, and that there is only one—

Hon Member : You were there.

Rt Hon Winston Peters : Yes, but you look like you were there; I do not.

Mr SPEAKER : Order! Finish the question.

Rt Hon Winston Peters : Well, it was a terrible interruption. Is it not a fact that we designed our flag in 1904, well before the Aussies copied it, and that there is only one political party that would not join his flag committee, because we were opposed to changing our flag, and that that party is New Zealand First?

Mr SPEAKER : Either of those two supplementary questions.

Rt Hon JOHN KEY : I acknowledge that the member was involved in the debate in 1904 at the time. Secondly, I make this point. That is actually our third flag here in New Zealand. And, actually, if we want to have a symbol that properly represents New Zealand, in my view that is the silver fern. That is actually what is on the gravestones of those very brave men who were buried overseas prior to 1978. I do think a change of flag would be a great way of not only unifying our country but also of taking a view to the world that New Zealand is an outward-looking, internationally competitive, great country with its own identity.

Andrew Little : Which of the following flag designs is his favourite, given his Government has spent over $800 on each of them: kiwi with a rainbow out its rear; whale—not Whale Oil Beef Hooked—with kiwi, sheep, and rainbow; laser kiwi; buzzy bee seen from above; or “Aotearoa: blow on the pie”?

Rt Hon JOHN KEY : Well, I accept that a whale is a mammal and not a fish, but the last Labour leader that came to Parliament dangling those out like that leader has was gone by lunchtime; I reckon he might be too.

Tim Macindoe : What documents has the Prime Minister seen in support of a change to New Zealand’s flag?

Rt Hon JOHN KEY : I have seen a document from a group that aims to “enhance knowledge, appreciation and pride in New Zealand’s identity, history, biculturalism, multiculturalism and other diversity, community resilience, distinctiveness, accomplishments and nationhood … through a review of the design of the New Zealand flag involving flag design experts and with full public consultation and involvement.” That was the policy of and remains the policy of the Labour Party.

Andrew Little : Rather than wasting money on meetings no one attends, postcards no one returns, and flags no one takes seriously, why not admit the truth that Kiwis do not want this—they do not want their money wasted on prime ministerial vanity projects?

Rt Hon JOHN KEY : If nobody wants this and it is a waste of money, then why was it Labour Party policy? That is the naked politics of this. The Labour Party wants to change the flag; it just does not want a National Government to do it.

Mr SPEAKER : Supplementary question—[Interruption] Order! Before the member—[Interruption] Order! I am trying to call for order and I am not getting much assistance from one person on my left.

Rt Hon Winston Peters : Is it not a fact that the reason he is so keen on changing the flag is that he spent so much time selling out the old one?

Rt Hon JOHN KEY : No. The reason I want to change the flag is that you can look at other Commonwealth countries that in their history have changed their flag. Let us take Canada, which did exactly that in 1965. Let us look at what Canada put on the gravestones of their brave men when they died in World War I and the likes. The answer is the maple leaf. Show me a single Canadian who would go back to the old flag that they had, which looked very much like our flag except it was red. This is a party and a country, I believe, of progress and change—a multicultural country that is outward looking, not a bunch of dinosaurs like them over there.

Andrew Little : Is this what he meant by being focused on the issues that matter: at a time when the New Zealand economy is rapidly going down the toilet, he wastes $26 million of taxpayers’ money on doomed referenda because he was once sat under the Australian flag?

Rt Hon JOHN KEY : Let us be blunt. If we want to have a discussion about being focused on the issues that matter, Andrew Little would be asking a question about housing, but he is embarrassed—he is embarrassed—about his use of Chinese names and the dodgy way he cooked the books. He might ask a question about prisons, but he knows that his member over there has overcooked things. He might even ask a question about partnership schools. But, no, this is called a squirrel—talk about anything other than the issues that matter, because he is so embarrassed about his own performance.

Rt Hon Winston Peters : Can I seek leave to table some research that shows—[Interruption]

Mr SPEAKER : Order! [Interruption] Order! The member will resume his seat. The member is seeking now to table a document. I cannot hear what it is in order to know what to decide. So I am asking the member now to repeat his point of order.

Rt Hon Winston Peters : I seek leave to table some research that demonstrates that Canada did not have an official flag until they adopted the maple leaf.

Mr SPEAKER : No, that information is, effectively, what is—[Interruption] Order! What the member is attempting to do is to table that document now to make a political point. That is not the point of tabling documents. If members want to research it, I am sure they can do so.

Prime Minister—Statements

Rt Hon WINSTON PETERS (Leader—NZ First): Come down half prepared—

Mr SPEAKER : Order! Question No. 3.

Rt Hon WINSTON PETERS : Well done, Mr Speaker. Thank you very much.

Mr SPEAKER : My pleasure.

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

Rt Hon JOHN KEY (Prime Minister): The member nearly needed to flag away his question. The answer is yes.

Rt Hon Winston Peters : Well, if that is the case, does he stand by his statement with regard to trade with the Russian Federation: “Free trade deals offer real benefits with jobs and economic growth in New Zealand”; if so, why did he warn struggling New Zealand dairy exporters, many going broke, against trading with Russia?

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

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. The question was not “did he warn”; I said “why did he warn”.

Mr SPEAKER : The member has been here a very long time. There were two parts to that supplementary question. The Prime Minister chose to answer the first part. That addressed the question. Further supplementaries?

Rt Hon Winston Peters : Does he stand by his statement: “Russia offers a wealth of opportunities for New Zealand exporters. Its food imports exceeded US$30 billion in 2008, making Russia the world’s fifth-largest food import market.”; if so, how can he stand by that statement when his Government has done worse than nothing to ensure that the Russian market is open to struggling New Zealand dairy exporters?

Rt Hon JOHN KEY : I do not have that quote with me. It sounds like it is fairly historic, but in answer to the first part of the question: if that is the case—and I will take the member’s word for it—yes.

Rt Hon Winston Peters : Given that his Government does not have any trade sanctions against Russia, does he not think that in the interests of struggling Kiwi farmers, his Government should prioritise access to the Russian market, and now—and it should have done it months ago—and, in the Security Council, a resolution to the Ukrainian crisis?

Rt Hon JOHN KEY : In answer to the first part of the question, no. I actually think that New Zealand should show solidarity with other countries that have applied sanctions on Russia because of the actions that it has undertaken. The reason that we do not have bilateral sanctions on Russia is to do with the fact that, actually, this Parliament will not give the Government the authority to do that, because it is blocked by the Labour Party.

Residential Tenancies Act 1986—Costs and Benefits of Changes

4. Dr PARMJEET PARMAR (National) to the Minister for Building and Housing : What are the costs and benefits of the recently announced changes to the Residential Tenancies Act 1986 that will require homes to be insulated and to have smoke alarms?

Hon Dr NICK SMITH (Minister for Building and Housing): The new requirements will see 180,000 homes insulated, at an estimated cost of $600 million. The benefits are reduced hospitalisations from both circulatory and respiratory illnesses, and reduced pharmaceutical costs, as well as fewer days off school and work. There are also savings in power bills from insulation. I am advised that the benefits equate to $2.10 for each dollar of cost. The legal requirement for smoke alarms is a no-brainer. It will affect 120,000 rental properties that currently do not have them, at a cost of $7 million. The record of fire fatalities shows a greater proportion in rental properties, and this measure is expected to save three lives per year. It is also expected to deliver benefits of $15.10 for each dollar of cost.

Dr Parmjeet Parmar : How do these changes to the Residential Tenancies Act build on previous initiatives to improve the insulation of homes?

Hon Dr NICK SMITH : The first priority of this Government was getting on and insulating all State houses. There were 30,000 of them. The second step was in respect of Warm Up New Zealand, where the Government provided subsidies for insulating homes, and that is on schedule to deliver 290,000 houses with retrofitting of insulation. This further initiative is 180,000 homes. So through initiatives from this John Key - led Government, that is insulating 500,000 homes. That will provide 1.2 million New Zealanders with a warmer and healthier home.

Phil Twyford : What about the heating in private rentals?

Hon Dr NICK SMITH : I make the comparison—for the member that interjects—that that is 500,000 homes. The previous Government insulated fewer than 20,000 homes in its 9 years.

Dr Parmjeet Parmar : Why did the Government decide not to proceed with a comprehensive housing warrant of fitness?

Hon Dr NICK SMITH : Our work showed that it was neither cost-effective nor practical. The cost of inspections alone was estimated at $225 per property per year, which would be added on to rents. We found that the really important standards—like a home being waterproof, being free from damp, and having safe electrical fittings—were already covered in the regulations, and the issue was one of enforcement. We found on the lesser issues—the likes of safety stays and safety visibility strips on windows—that it would have been overkill to prohibit the renting of a house where those measures were not there and that a better tool was education. Our approach of focusing on insulation and on the issue of smoke alarms, in our view, delivers the best gains at the least cost.

Dairy Price—Economy

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : When did he first become aware that there was an international glut of dairy products and does he stand by his reported comments that he has no plans to take active steps to diversify the economy in response to falling dairy prices?

Hon BILL ENGLISH (Minister of Finance): In respect of the first question, around the same time as everyone else. One of the clear signals of expanded supply in the global dairy market was when prices started dropping in the global dairy trade. In respect of diversifying the economy, I would say that, first of all, under the excellent leadership of the Hon Steven Joyce, the Government’s programme through the Business Growth Agenda is encouraging a range of industries to develop in New Zealand. Secondly, right now I would say the relative price signals for the dairy industry in respect of any other investment in New Zealand are probably doing a pretty good job of diversifying the economy.

Grant Robertson : Did he miss the Goldman Sachs report in July last year that said there was going to be a 5-year international dairy glut, or, like his colleague the Minister for Economic Development, did he just think that was a laughing matter at the time?

Hon BILL ENGLISH : I would be surprised if I had not read that particular piece of commentary, but, of course, there is always a range of opinions in the market, and recent experience with the dairy price has been that almost all of that opinion has underestimated the extent of excess supply and, therefore, the short-term drop in the prices. But, unlike the member, we have a positive outlook for the dairy industry in the future. Unlike the Labour Party, we do not believe that New Zealand has far too much dairy and that the industry ought to shrink, which appears to be what that member thinks.

Grant Robertson : Is he aware that dairy, at 20 percent of New Zealand’s exports, represents the same percentage of exports as iron ore is for Australia, and, given what has happened to the Australian economy, does he not think he should be just a little bit more energised in his response to the collapse in dairy prices?

Hon BILL ENGLISH : The fact is that if the dairy industry is 20 percent of exports—and, actually, it is a bit less than that—it is because it has been a successful, globally competitive industry. It would be a bit like asking why New Zealand does not diversify from rugby because the All Blacks are too successful. We have got all our eggs in the All Black basket. The fact is that if it is a well-performing industry, we would hope that it would keep performing. If you think that having too much dairy is a problem, look what happens when you have a bit too little.

Grant Robertson : In light of that answer, does he therefore believe that today’s forecast from the BNZ of a payout of $3.80 per kilo for 2015-16, and a downside scenario payment of $2.80 per kilo, represents a serious problem for the health of the New Zealand economy, or is it like John Key said on Monday, and it does not really affect 95 percent of people?

Hon BILL ENGLISH : Of course it is of concern, but this is an industry that has characteristics that the member would not be familiar with, because he has always worked in the public sector, and that is that it has developed the resilience and the flexibility to deal with commodity cycles. Unlike that member, we have confidence that the industry will deal with the cash-flow problems—quite serious cash-flow problems—that flow from these very low dairy prices. In any case, the lower exchange rate will cushion the effect on the dairy industry, but also encourage the expansion of tourism, in particular, along with international education, and underpin the profitability of meat and wool, horticulture, and the film industry—all industries that are succeeding reasonably well at the moment.

Grant Robertson : Is it correct that the NZX dairy futures today predict a further 16 percent drop in August to a US$1,550 a tonne price for milk solids—only $50 more than the price that would see a $2.80 a kilogram payout?

Hon BILL ENGLISH : That may be the case and if that eventuality became a reality, of course that would be of concern. But the member seems to be suggesting that the New Zealand Government can take some action about the price, which it cannot because it is a world price. It is not a Fonterra problem or a Fonterra price; it is a world price. Secondly, I would have thought that if the member is concerned about diversification in the New Zealand economy, then the lower the dairy price the more likely you are to get diversification of investment into other sectors. That is pretty self-evident.

Grant Robertson : So in light of that answer, can the Minister of Finance confirm that his only path to real diversification of the economy is the collapse of the dairy industry?

Hon BILL ENGLISH : No, I am simply pointing out that unlike the Labour Party and the Greens, we are not pleased about low dairy prices. We actually like our dairy industry to be big and strong and successful, and in the long run we believe it will be. Alongside the market pricing the Hon Steven Joyce is leading a programme that is having a positive effect on diversifying the New Zealand economy. But the strongest signal for diversification is the uplift in profitability around tourism, around horticulture, and around IT, which is occurring because of the drop in the exchange rate over the last 2 or 3 months.

Grant Robertson : How does he think that the success of Steven Joyce’s great diversification strategy is reflected in the lowest levels of business confidence, consumer confidence, and employer confidence that we have seen in New Zealand in many years; how is that successful strategy going?

Hon BILL ENGLISH : Of course prices go up and down, and confidence goes up and down often in relation to prices and in relation to what people are reading in the media about the prospects for the world economy and the New Zealand economy. Diversification amounts to people making risky investments in new industries or expanding industries. Unlike the member, they take a view longer than 2 or 3 months. In fact, some of those investments have to be 20-year investments. That is how a good economy runs.

Prime Minister—Flag Referendum

6. JAMES SHAW (Co-Leader—Green) to the Prime Minister : Does he stand by his answers to Oral Question No. 4 yesterday?

Rt Hon JOHN KEY (Prime Minister): Yes.

James Shaw : Will he be prepared to adopt a more ambitious climate target if it can be shown how New Zealand can achieve greater emissions reductions than 11 percent by 2030 even without including agriculture?

Rt Hon JOHN KEY : As I said in the House yesterday, the Government has set what I think is a fair and balanced target of the 30 percent reduction of the 2005 base by 2030. I have indicated to Parliament that the Government is prepared to do more if we can find an answer to our agricultural emissions, which represent about half of the emissions that New Zealand has. I think that is set in about the right place.

James Shaw : Does he accept that an increase in renewable electricity generation from 80 percent to 100 percent can reduce New Zealand’s emissions by approximately 5 megatons and therefore enable New Zealand to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY : I do not have those details with me, but I will accept the member’s word that it is probably right. What I would say is that we are one of the countries in the world with the highest levels of renewable energy already. The Government’s stated goal is to get to 90 percent, and we will be working hard to do that. Whether we can get to 100 percent, and what the cost implications of that would be, I do not know, but I suspect if you look at the fact that you would have to close Huntly power station and you would not even be able to replace Huntly with combined-cycle gas, that could be a very expensive process.

James Shaw : So does he agree with Ministry of Transport advice that if one-third of New Zealanders switched to electric cars we could reduce carbon emissions from transport by over 20 percent and therefore enable New Zealand to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY : Yes, the Government supports the view that electric cars have a strong place in New Zealand society, and I suspect that as they get a bit cheaper, you will see more people actually taking up electric cars. New Zealand is well placed for that because the electricity that would drive those cars is largely going to be renewable. So, again, that makes sense. But you have to look at the overall costs to consumers. We have to get to a point where they make that choice that it is economic for them to do that. We have to get to the point where we can have enough of that electricity generation coming from renewable sources. But I think the Government is working on a plan to get there on all of these matters. I stand by the view I said earlier: the Treasury advice the Government has received is that the target we have set is actually a bigger cost share to New Zealand businesses and consumers than, for instance, the Europeans, who arguably have a bigger reduction target because it is easier for them to achieve that.

James Shaw : Does he accept that if we planted half our marginal pastoral land in pine forest while letting the other half revert back to native forest, we can capture up to 24 megatons of carbon, thereby enabling New Zealand to get to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY : Again, they are the member’s numbers, but I will accept them at face value. Again, there comes a cost with doing all of those things, and the Government has been involved in assisting with, and having, programmes that lead to marginal planting.

James Shaw : In light of the evidence that there are plenty of practical, pragmatic steps that New Zealand can take, using existing technology and even without including agriculture, will he now work with us to ensure that New Zealand can take a more ambitious climate target to Paris?

Rt Hon JOHN KEY : No, because as I said yesterday, it is quite legitimate for the Greens to have their own policies and to take those to the next general election. I think they should be honest, actually, with New Zealanders about the cost of those. The member says that here are all these things that you could do, but he does not say what the actual costs to businesses and consumers would be, and the answer is that the cost would actually be considerable. The member stands up and tells us to get more renewable energy and a lower emissions profile from agriculture, and yet in the same breath I know he is deeply opposed to changes to the Resource Management Act that will allow us to convert Huntly from coal to combined-cycle gas. He cannot have it both ways.

James Shaw : It is not time for National to get up to speed on the numerous economic studies, the latest being from the London School of Economics, which shows that the majority of emissions reduction can be achieved in a way that has a net economic benefit to New Zealand?

Rt Hon JOHN KEY : I think the member does a disservice to the New Zealand Treasury. We have a lot of very bright people who work there alongside many other agencies that have looked at that matter. The member should look at the official advice that the Government received, but the official advice from Treasury, as I last recall it, is that the cost of New Zealand carrying out a target of even a 30 percent reduction off the 2005 level comes with a greater cost than in comparable countries.

Property—Register of Foreign Property Buyers

7. RICHARD PROSSER (NZ First) to the Minister of Finance : Is he still sceptical about how effective a register of foreign property buyers would be; if so, why?

Hon BILL ENGLISH (Minister of Finance): Yes, I am sceptical because a real-time, full register of who owns all the property in New Zealand would be an expensive and high-compliance method for getting sufficient data on which to make policy decisions. We think it is reasonable that we collect more information that is useful but not onerous in property transactions. That is why from 1 October all buyers of property other than the main home will have to have an IRD number, and non-residents will have to have a New Zealand bank account and provide their country’s tax ID number. We believe that this is a lower compliance way of collecting data that we would actually use.

Richard Prosser : Given that answer, is he aware that a number of other jurisdictions have implemented such registers without apparent difficulty?

Hon BILL ENGLISH : In the jurisdictions where it sounds like they have got a register, it is not evident that it is actually having any impact. For instance, in Australia, despite nominally having a register—or having a list of foreign buyers at least, which is a different thing—there seems to have been mass non-compliance with the related policy. It simply proves that a register on its own makes no impact on who buys what; but it is a very expensive way of knowing who has already bought something.

Richard Prosser : Will he instruct Landcorp, which is currently managing the former Crafar farms, on behalf of Shanghai Pengxin, to tender for the acquisition of those farms in order to bring them back into New Zealand ownership; if not, why not?

Mr SPEAKER : It is a long way from the original question but I will allow it.

Hon BILL ENGLISH : No, it is not obvious that that would be an advantage either to Landcorp or to the New Zealand economy.

Richard Prosser : Does he agree that New Zealand farmland is better in the ownership of New Zealand - resident local farmers rather than foreign corporations; if not, why not?

Hon BILL ENGLISH : Fortunately, politicians do not get to decide exactly who owns what in an open-market economy. But I would point out to the member that there has been a cycle over the past 30 or 40 years of both foreign ownership and corporate ownership of farmland being at times popular and then becoming unpopular. In the long run, the New Zealand owner-operated model—those who live it and love it—tends to be the only one that can make money out of New Zealand farmland.

Child Immunisation Programme—Reports

8. Dr SHANE RETI (National—Whangarei) to the Minister of Health : What recent reports has he received on the effectiveness of the child immunisation programme?

Hon Dr JONATHAN COLEMAN (Minister of Health): The Government has made the immunisation of young children a top priority. The pneumococcal vaccine, which forms part of the free National Immunisation Schedule for babies and young children, is proving to be very effective. The latest data from Environmental Science and Research shows the rate of pneumococcal disease has decreased by 62 percent between 2007 and 2014 for children under 5. Most of the pneumococcal strains covered by the vaccine have now been almost completely eliminated in New Zealand children, which means fewer kids with ear infections, pneumonia, septicaemia, and meningitis.

Dr Shane Reti : How does this fit into the Government’s Better Public Services programme?

Hon Dr JONATHAN COLEMAN : In 2007 our immunisation rates were amongst the worst in the developed world. That is why this Government has made increasing immunisation rates one of its 10 Better Public Services result areas. The latest immunisation results show that 93 percent of children aged 8 months have been fully immunised. That compares with a shocking rate of 67 percent in 2007. We are on track to meet later this year the 95 percent target of children aged 8 months who are immunised, which is great news for Kiwi families.

Auckland Housing Market—Inequality

9. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Finance : Does he stand by his statement about whether inequality was a problem in the Auckland housing market, “We’ve been concerned about that for some time, that there’s part of Auckland where there’s been really no new supply of lower value houses that low and middle-income families can afford”?

Hon BILL ENGLISH (Minister of Finance): Yes, and it is time that the member agreed with this. As I have said for some time, council planning rules increase inequality because of land use rules that limit heights, prevent subdivisions, increase land costs, and impose delays on the provision of new housing. Of course, the lower the value of that housing, the more impact it has. As the Productivity Commission recently pointed out, it is affordable housing that is most affected by these rules. That is why the Government is working with the councils that are the deciders and regulators in respect of housing supply to cut red tape, free up land and infrastructure constraints, and get more houses built.

Phil Twyford : What advice has he had on whether inequality will be increased or decreased by high levels of property speculation, reducing the opportunity for young New Zealanders to get into their first home?

Hon BILL ENGLISH : High levels of property speculation are a very obvious symptom of constrained supply. There are not high levels of property speculation in Upper Hutt or Invercargill because there is not much evidence of constrained supply relative to demand. The best response to high levels of speculation, if that is what is occurring, is to expand supply as quickly as possible. In that respect the member’s cooperation in persuading the Auckland Council to act decisively on this matter would be appreciated, but, actually, the Labour Party does not really want to help out.

Phil Twyford : Why should people have any confidence in his main housing supply initiative, the special housing areas, when only 5 percent to 10 percent of the houses built are affordable—at current prices, that means $560,000—and fewer than 300 houses have been built in those special housing areas in nearly 2 years?

Hon BILL ENGLISH : It is possible that the member does not have all the facts, but, in any case, the special housing areas were a response to the fact that the core Auckland planning process simply could not deliver any new supply of any scale because it was designed to stop new supply—with the support of that member and the councillors from his party on that council, who have spent the last 15 years making sure Auckland did not grow. That is why we had to have special housing areas. They are not perfect but they are a lot better than what was there.

Phil Twyford : What are the advantages to New Zealanders, if any, of allowing non-resident foreigners to trade our houses for capital gain?

Hon BILL ENGLISH : I do not know why the member is so scared of repeating his definition of non-resident traders in houses. Last week he was very clear who they were. But, of course, foreign investors make some contribution, because if they invest in housing that expands supply, that is good, and, in fact, when the price is pushed higher, it encourages more development and more supply. However, we are getting on with building houses; we are not sitting there going through the phone book trying to decide which migrants should remain homeless.

Phil Twyford : Why is his Government willing to implement anti - money-laundering rules at the request of the President of China, but unwilling to restrict non-resident foreign buyers, as the majority of New Zealanders want?

Hon BILL ENGLISH : The anti - money-laundering rules are not being made at the request of the President of China. In fact, it has been a global effort to slow down the flows of dirty and corrupt money around the world, and the anti - money-laundering rules were put in place some years ago—

Hon Gerry Brownlee : By Labour.

Hon BILL ENGLISH : —in fact, probably by the previous Government. We are simply requiring any foreign buyer to open a bank account so that they have to go through those thorough processes of identification. That may stop some foreigners buying houses in New Zealand.

Offenders Deported to New Zealand—Supervision

10. JONO NAYLOR (National) to the Minister of Justice : What announcements has she made about improving the oversight and supervision for offenders deported to New Zealand?

Hon AMY ADAMS (Minister of Justice): Last week I announced the completion of work to establish a register of offenders deported to New Zealand after being convicted of a crime overseas. The register, operated by Police, will improve on the current efforts to manage deported offenders by providing a central, systematic source of information for all justice sector agencies to work from. It will help to ensure that relevant information on New Zealanders who have committed crimes overseas and are then returned to live in our communities is available to those who need it.

Jono Naylor : What other measures is the Government working on to improve the way that we manage offenders deported back to New Zealand?

Hon AMY ADAMS : The deported offenders register is one of three streams of work under way to improve the way that we respond to offenders being deported back to New Zealand. Work is also well under way to improve information sharing with Australia, where the majority of deported offenders come from. Last week my colleague Hon Peseta Sam Lotu-Iiga signed a memorandum of cooperation with his Australian state-level colleagues to advance this work. Finally, we are also developing measures that will enable monitoring conditions to be imposed on deported offenders similar to those that we impose on prisoners released from New Zealand prisons, in order to better protect the public and help the offender to reintegrate into society. I look forward to updating the House further as this work progresses.

Housing—Affordability

11. METIRIA TUREI (Co-Leader—Green) to the Prime Minister : Does he stand by his statement that “You certainly wouldn’t want to say to a low-income family they can never own a home, because I believe that they can own a home.”?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement. I was asked how realistic it was for people on low and middle incomes to aspire to own a home in Auckland, and I said that it depends on their circumstances, and they are many and varied. It depends on their family make-up, and what sort of property they would buy. It depends on where they are prepared to live. It depends, long-term, on interest rates. But you certainly would not want to say to a low-income family that they will never own their own home, because I believe that they can own a home, but we will have to work hard to make sure we produce as much supply as we can.

Metiria Turei : How does the Prime Minister seriously believe that low-income families in Auckland can own their own home—notwithstanding all the conditions he wrapped around that statement—when more than 80 percent of the homes sold in June in Auckland went for more than $500,000, pushing them well out of the reach of low-income families there?

Rt Hon JOHN KEY : Of course it is far more difficult for a low-income family, and the Government acknowledges that. But there are plenty of low-income families that buy homes. You only need to go and ask the Tindall Foundation, the housing foundation that is helping a lot of low-income families into homes.

Metiria Turei : Well, can the Prime Minister tell the House how he believes a low-income family—that is, one earning less than $700 a week—can, first, afford to save a 20 percent deposit of $90,000 for a house worth $450,000, then meet the weekly mortgage repayments of around $446 a week, and still feed and clothe their family?

Rt Hon JOHN KEY : I am glad that member is not running the country, because, quite frankly, firstly, she does not understand the policies—so, for a start off, it is 10 percent under a Welcome Home Loan—and, secondly, she lacks horribly in ambition. If the member wants to go and tell every low-income family in New Zealand that they should have no ambition to do better in life, to be able to own their own home and to try and achieve that goal, she is welcome to it. I think it is possible for people to be able to do that. I accept that it is extremely difficult, and more difficult for low-income families, but there are some very inexpensive homes, even in a place like Auckland.

Metiria Turei : Is this not just yet another example of a Prime Minister entirely out of touch with the reality of the lives of low-income families, and of his Government being simply uninterested and, worse, incapable of delivering policies that will enable these families to own their own home?

Rt Hon JOHN KEY : No, I think the member is just so negative and so toxic for the Greens’ brand that it will not be very long before she is replaced by Julie Anne Genter.

Mt Eden Corrections Facility—Reports

12. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections : Does he stand by his statement in regards to the July 2014 report on fight clubs in Mt Eden Corrections Facility, that he “became aware of the report’s existence only late last week”?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Yes.

Kelvin Davis : Is he confident that Serco is accurately reporting all assaults at Mt Eden Corrections Facility; if so, why?

Hon Peseta SAM LOTU-IIGA : I get my information from the department, through Serco, and I have no reason not to believe that the information that is conferred on me is accurate; so yes.

Kelvin Davis : Was the Department of Corrections visiting Mt Eden Corrections Facility to investigate allegations of fight clubs a year ago; if so, does he accept Serco’s claim that it only became aware of the issues recently?

Hon Peseta SAM LOTU-IIGA : Yes, I accept the chief executive’s claim that he received that report just last week; just as I received that report just last week, too.

Kelvin Davis : Will he investigate the fact that Serco is transferring injured prisoners out of Mt Eden Corrections Facility to keep its data looking clean, as he admitted to Sean Plunket on Radio Live today?

Hon Peseta SAM LOTU-IIGA : The review that we instituted early this week is quite wide—quite wide—and it will look at all matters relating to contraband and violence at Mt Eden prison, and that should encompass what that member has just asked.

Kelvin Davis : Has he asked corrections to check whether the number of incident reports filed by Serco covers all of the incidents recorded on YouTube videos; if not, how can he be confident that Serco is reporting all assaults accurately?

Hon Peseta SAM LOTU-IIGA : I have asked for a wide-ranging review, which will encompass all incidents that have happened at Mt Eden Corrections Facility relating to violence in the past few years.

Kelvin Davis : What action did he take when he first became aware of the Nick Evans dropping case?

Hon Peseta SAM LOTU-IIGA : When I heard of Nick Evans’ death, we ordered the chief inspectorate’s investigation immediately, which is normal for a death in custody. Obviously, a coroner’s inquest was also demanded.

Chris Hipkins : I raise a point of order, Mr Speaker. With respect, my colleague Kelvin Davis’ question was not about when the Minister became aware of the death; it was about when he first became aware of the case.

Mr SPEAKER : No, no—it was not. [Interruption] No, it was not. [Interruption] Order! With respect, that was not the question; the question was: “What action did the Minister then take?”.

Chris Hipkins : I raise a point of order, Mr Speaker.

Mr SPEAKER : Order! I hope the member is now—[Interruption] I have made a decision. I have listened to the question. The member is wrong. If he wants to raise a fresh point of order, I will hear it, but I am not prepared to entertain him relitigating a ruling that I have made. Is it a fresh point of order? [Interruption] Order! The member will resume his seat. I will repeat it for the benefit of the member. I listened to the question. The way that the point of order was raised by the member, he is wrong. If he wants to raise a fresh point of order, that is OK, but if he is attempting to relitigate the decision that I have made that the question has been addressed, that is not OK. Is it a fresh point of order?

Chris Hipkins : Yes, Mr Speaker. First of all, my apologies; my point of order was, in fact, correct, and I had misphrased Kelvin Davis’ question, which was when he first became aware of the case—sorry, what action he took when he first became aware of the case—

Mr SPEAKER : What is the point of order that the member is now raising?

Chris Hipkins : —not what action he took when he became aware of the death. The Minister has indicated what he did when he became aware of the death, but that was not the question. The question is what action he took when he became aware of the case. He may well have become aware of the case prior to becoming aware of the death.

Mr SPEAKER : I will listen to the Hon Gerry Brownlee.

Hon Gerry Brownlee : It may help the shadow Leader of the House, who seems to be rather pedantic, to know that a case is unlikely to be in the ether until the death has occurred, so I think the Minister is in the right space. [Interruption]

Mr SPEAKER : Order! [Interruption] Order! I have listened to quite enough from both members on this occasion. My job is to adjudicate as to whether the question has been addressed. There is no doubt in my mind that the question has been addressed. Does the member have further supplementary questions? Then we move to Questions to Members. Question No. 1.

Questions to Members

New Zealand International Convention Centre Act 2013 Repeal Bill—Bill’s Intent

1. MAHESH BINDRA (NZ First) to the Member in charge of the New Zealand International Convention Centre Act 2013 Repeal Bill : What is the intention of the New Zealand International Convention Centre Act 2013 Repeal Bill?

TRACEY MARTIN (Member in charge of the New Zealand International Convention Centre Act 2013 Repeal Bill): The intention of the New Zealand International Convention Centre Act 2013 Repeal Bill is self-evident. It is to repeal this controversial 2013 slap-on-the-back deal that exchanged—

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. I assume that you heard that the member’s response was that the point of the bill is self-evident. She need not say any more.

Mr SPEAKER : I certainly heard the answer.

Rt Hon Winston Peters : Point of order.

Mr SPEAKER : Is it a fresh point of order the member is raising?

Rt Hon Winston Peters : It is a fresh point of order.

Mr SPEAKER : I will listen to the Rt Hon Winston Peters.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. My fresh point of order is that the member who just got to his feet and raised a point of order with you is being childish and pedantic. It was self-evident to a person like him is what we are saying.

Mr SPEAKER : No, I think Mr Brownlee raises a reasonable point. I was then interested in the further answer, and I think on this occasion I am quite happy to allow the member to repeat her answer for the benefit of the House.

TRACEY MARTIN : Kia ora, Mr Speaker. The intention of the New Zealand International Convention Centre Act 2013 Repeal Bill is to repeal this controversial 2013 slap-on-the-back deal—

Mr SPEAKER : Order! No, I have now heard enough of the answer.

Mahesh Bindra : How will the New Zealand International Convention Centre Act 2013 Repeal Bill benefit New Zealanders?

Mr SPEAKER : Marginal, but I will allow it.

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. Questions to members under Standing Orders are very, very tight, and that is a speculative question that does not meet the test in any way, shape, or form.

Mr SPEAKER : I think the member is probably right on this occasion, but I am going to be lenient. The point of the supplementary question must be something for which—[Interruption] Order! I am on my feet—the member must be responsible. I am adopting a very lenient interpretation of that. The member has put a bill forward, probably with a great deal of enthusiasm for the particular legislation. I will allow her to briefly explain what she sees to be the benefits of the bill, if it was to be successful.

TRACEY MARTIN : Kia ora, Mr Speaker.

Mr SPEAKER : But briefly.

TRACEY MARTIN : When the New Zealand International Convention Centre Act 2013 Repeal Bill passes into law, it will enhance New Zealand’s international reputation as a country where business can be conducted above the table and in public view. It will also remove the very real possibility of a gambling monopoly in the heart of Auckland and put negotiations—

Mr SPEAKER : Order! No. The answer must also be brief. I warned the member before.

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. I am not sure it is a good thing to allow leniency when a member goes to make those sorts of allegations. If I was to start talking about people receiving large bundles of cash in brown paper bags at fish restaurants, I would get in some trouble. But I do not think that—

Mr SPEAKER : Order! I will hear from the Rt Hon Winston Peters.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. I paid very careful attention to Gerry Brownlee’s protest there, because we all remember he was a director of a Christchurch casino—

Mr SPEAKER : Order! That is certainly not a point of order, and the one before was marginal as well. [Interruption] Order! You can see the difficulty with me attempting to be generous to members.

Fighting Foreign Corporate Control Bill—Intent

2. CLAYTON MITCHELL (NZ First) to the Member in charge of the Fighting Foreign Corporate Control Bill : What is the intention of the Fighting Foreign Corporate Control Bill?

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. I am really questioning why this question even got on the Order Paper when the bill itself has not been read a first time. It is not business before the House until it is read a first time, and therefore speculation about a bill that is not before the House does not fit the Standing Orders.

Mr SPEAKER : No, I think on this occasion—I could seek some further advice, but it is on the Order Paper and it is scheduled to be debated today. I am going to allow the question to start, but I warn the member, in answering the question, to keep the answer particularly brief; otherwise, it will be closed down.

FLETCHER TABUTEAU (Member in charge of the Fighting Foreign Corporate Control Bill): Thank you, Mr Speaker, for that generosity. This is one of the most simple and yet profound bills to come before this House. The intention of the bill is to ensure that future trade agreements do not include the investor-State disputes settlement provision.

Mr SPEAKER : That is fine. [Interruption] Order! Before calling the member, the supplementary question now must relate to something for which the member promoting the bill is responsible.

Clayton Mitchell : How will the Fighting Foreign Corporate Control Bill benefit New Zealanders, and has he got some examples that he could share with us?

Mr SPEAKER : Order! He can very briefly answer the first part; the second part is completely out of order.

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. There is—[Interruption]

Mr SPEAKER : Order! This is a point of order, so some members in one particular corner of the House will be leaving if they interject throughout the point of order. I will hear the point of order.

Hon Gerry Brownlee : You gave a very clear direction to the asker of the question about what should be in the question. It is impossible for that question to be answered without there being debatable material introduced, and that is not appropriate for members’ questions.

Mr SPEAKER : I think that is a reasonable point that the member is making, but I now must establish a pattern because I was fair in respect of the previous question and allowed a very brief description of the benefit of the bill. I am going to do the same, but certainly the subsequent part of that question that was asked is out of order. The member Fletcher Tabuteau can briefly attempt to describe the benefits of his proposed legislation—briefly.

FLETCHER TABUTEAU : Thank you again, Mr Speaker. When the Fighting Foreign Corporate Control Bill passes into law, the intent is to ensure that future Governments will be free to legislate for the protection of the people of this country whom they would presume to represent. Thank you.

ENDS

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