Questions to Ministers
Tax System—Overseas Ownership of New Zealand Properties
1. FLETCHER TABUTEAU (NZ First) to the Minister of Revenue: Is he satisfied with all legislation regarding tax on property sales to foreigners?
Hon MICHAEL WOODHOUSE (Minister of Revenue): Yes.
Fletcher Tabuteau: Given that satisfaction, with the recent array of tax legislation, why are so many foreign buyers speculating in the
Auckland housing market yet again?
Hon MICHAEL WOODHOUSE: I would be very interested in the information the member uses to frame that question. I do not believe there has been
any material change in that. In fact, if there has been, it has been a slight damping on the interest of overseas buyers
in Auckland.
Fletcher Tabuteau: Will the Minister not concede that foreign speculators have seen through the puffery, have dismissed the ineffectual
tax legislation, and are now already back in force, with evidence—3,000 foreigners a month being issued Inland Revenue
Department (IRD) numbers for the purpose of buying and selling property?
Hon MICHAEL WOODHOUSE: No, I would not. There are many reasons why people from overseas require an IRD number, and, if anything, the process
has become more challenging in order to fulfil our obligations under anti-money-laundering legislation and the
brightline test that the previous Minister brought in last year. [Interruption]
Mr SPEAKER: Order! Can I just ask that when the question has been asked and the answer has been given, could I have a little less
interjection, particularly from New Zealand First members?
Fletcher Tabuteau: Will he at least acknowledge that he will need other more substantive measures to clamp down on this problem, as
Auckland has had a high rate of properties being flicked for quick financial gain and, actually, money-laundering
purposes?
Hon MICHAEL WOODHOUSE: What that demonstrates is that an irrational rant from a New Zealand First member does not a fact make. There is
absolutely no substance—
Fletcher Tabuteau: I raise a point of order, Mr Speaker. I simply take offence at the statement from the Minister. [Interruption]
Mr SPEAKER: Order! The question was asked with quite a lot of—the question was asked in a way where I am not surprised with the
answer being given, put it that way.
Phil Twyford: Why has he rejected the overwhelming majority of New Zealanders, who want a ban on foreign buyers, given that his tax
rules already, in the words of Colleen Milne of the Real Estate Institute of New Zealand, seem to be having limited
effect and the effect is transitory, and in the words of Jonno Ingerson of Quotable Value, saying that foreign buyers
are back in the market?
Hon MICHAEL WOODHOUSE: There are three threads to that question. I will start with the middle one first. There is no evidence yet that the
policies that have been put in place, which have just commenced, are going to do the things the member claims. The chief
executive of Quotable Value did not say what the member has just claimed. To the first part of the question, this
party—this Government—appreciates foreign investment. It does not reject people with Chinese-sounding surnames, and it
has very balanced policies on investment.
David Seymour: In light of the scandalous influxes, why will the Minister not cut the crap and build a wall?
Hon MICHAEL WOODHOUSE: To the question of scandalous influxes, I remind the member that the number of residencies gained in New Zealand last
year was about 15 percent lower than when the New Zealand First leader was the Minister of Foreign Affairs. I see no
reason to build a wall.
Fletcher Tabuteau: On behalf of all New Zealanders, whether they were here last year or—
Mr SPEAKER: Order! [Interruption] Order! The member knows the rules. Simply ask a supplementary question. I am quite happy to move
on if the member wants us to. Ask the question.
Fletcher Tabuteau: What measures does the Minister have in place to clamp down on money-laundering, given that financial transactions
suspected of being linked to terrorism have almost doubled in the past 2 years, with the Auckland property market
expected to go haywire yet again?
Hon MICHAEL WOODHOUSE: That goes well beyond the primary question. It is a question best asked of the Minister of Police, I would suggest.
But I am satisfied that she has very good policies in place with New Zealand First to deter, detect, and prosecute
money-laundering.
Fletcher Tabuteau: What specific legislation does the Minister have in mind to keep dairy land in New Zealand hands, given that the New
Zealand Government cannot act to prohibit sales under the Trans-Pacific Partnership (TPP), accepting—
Mr SPEAKER: Order! This is a question to the Minister of Revenue. The question must, therefore, relate to the portfolio of
revenue. I give the opportunity for the member to rephrase his question to include something of relevance to the revenue
portfolio.
Fletcher Tabuteau: May I speak to your ruling?
Mr SPEAKER: No, you cannot; you can ask your question.
Fletcher Tabuteau: I asked the Minister of Revenue to outline what legislation—revenue legislation—he has in mind, considering we cannot
prohibit—
Mr SPEAKER: Order! I have given the member a chance to rephrase his question. He has rephrased it now, asking about revenue
legislation.
Hon MICHAEL WOODHOUSE: I am satisfied that tax policies and tax administration legislation are fit for purpose. I am also aware, although it
is not within my area of responsibility, that the Overseas Investment Act provides very strong criteria and hurdles to
be met before sensitive land, such as dairy farms, is purchased.
Fletcher Tabuteau: Has his Government abandoned farmers to the whims of Fonterra management, thus exposing all New Zealanders, but
especially our farmers, to the foreign buy-up of high-quality New Zealand land?
Mr SPEAKER: No, there is absolutely no revenue responsibility in that question.
Prime Minister—Statements
2. GRANT ROBERTSON (Labour—Wellington Central) to the Prime Minister: Does he stand by all his statements?
Rt Hon JOHN KEY (Prime Minister): Yes.
Grant Robertson: How did he get it so wrong in November 2014 when he advised farmers not to worry about the dairy price and that it
would bottom out soon, given that he had been told in July that year that there was a 5-year global milk glut?
Rt Hon JOHN KEY: How did the member get it so wrong when he thought he would be the leader twice and lost?
Chris Hipkins: I raise a point of order, Mr Speaker. [Interruption]
Mr SPEAKER: Order! [Interruption] Order! I will hear from Chris Hipkins.
Chris Hipkins: The Prime Minister has to at least make some attempt to get vaguely close to the question that was asked. That answer
came—[Interruption]
Mr SPEAKER: Order! I remind members that this is a point of order. It will be heard in silence. Could the member please continue.
Chris Hipkins: The point that I was making is that the Prime Minister has to at least get somewhere near the question that was asked
by the member. He did not even come close even to addressing the question.
Mr SPEAKER: I will hear from the Hon Gerry Brownlee.
Hon Gerry Brownlee: The Prime Minister responded to some very direct remarks made by Mr Robertson, and it simply serves to point out the
vagaries of prediction.
Mr SPEAKER: No, I think on this occasion—[Interruption] Order! On this occasion there must be some attempt to answer the question.
I am going to invite the member to repeat the question.
Grant Robertson: How did he get it so wrong in November 2014 when he advised farmers not to worry about the dairy price and that it
would bottom out soon, given that he had been told in July that year that there was a 5-year global milk glut?
Rt Hon JOHN KEY: I remain of the view, as I did back then, that the long-term and medium-term outlook for dairy is very strong. But as
we always know, it is always possible to not be able to count and to get your numbers wrong from time to time.
Grant Robertson: Does he not think farmers are owed a response from him to serious questions that is better than juvenile politicking
when they are facing 44 percent of them defaulting on their loans and farm prices dropping by 40 percent by 2018?
Rt Hon JOHN KEY: Offering a serious view about what I think are the long-term prospects for dairy, it remains that you have got a
global opportunity out there emerging in Asia, and the changing markets are very relevant. But if the member now wants
to say that he is supporting the dairy farmers of New Zealand, here are a few suggestions: vote for the Trans-Pacific
Partnership, because by far the largest beneficiary is dairy; reform the Resource Management Act, because that affects
those farmers; take a constructive view to a range of different issues around tax; and do not whack a massive emissions
trading scheme on farmers. Coming into this House and claiming that he is the friend of the farmer when he does
everything he can to put them out of business is not going to fool anyone.
Grant Robertson: Supplementary question—[Interruption]
Mr SPEAKER: Order! I am just waiting.
Grant Robertson: Does he accept the Reserve Bank’s severe scenario for a payout of $4—10 cents above the current forecast—which would
mean 44 percent of farmers defaulting on loans and farm prices dropping by 40 percent in 2018?
Rt Hon JOHN KEY: The member is actually misrepresenting the Reserve Bank. He says that if that was the payout—under $4, and I would
point out that, actually, the total payout is still predicted to be above that, at $4.35—those loans would be
non-performing. That is quite a lot different from defaulting.
Grant Robertson: Does he think that farmer shareholders should be satisfied with the performance of the Fonterra chief executive
officer?
Rt Hon JOHN KEY: I do not have any responsibility for the performance of Theo Spierings, any more than he has any responsibility for
the performance for Andrew Little.
Hon Damien O’Connor: Does the Prime Minister still stand by his previous publicly stated position of supporting the opening up of Fonterra
to share trading on the NZX as a way of bringing outside equity into the company?
Rt Hon JOHN KEY: Those comments were made a long time ago, but what I did support was trading amongst farmers, and I think, from what I
can see, it has worked pretty well.
Grant Robertson: Does he not think he should offer a view to farmers about the performance of the chief executive officer of Fonterra,
given Fonterra is having a debt to equity gearing ratio of 49 percent, demanding 90-day terms from its suppliers so that
it has actually got some working capital, and changing its payout forecast three times in 7 weeks? Does he not think he
owes it to farmers to say what he thinks about that performance?
Rt Hon JOHN KEY: Well, it is not my responsibility whether Theo Spierings does a good job or not. I do not have that responsibility,
any more than I have the responsibility for whether a bank chief executive is doing a good job, or the chief executive
of Telecom is doing a good job.
Economy—Stability and Growth
3. Dr PARMJEET PARMAR (National) to the Minister of Finance: What steps is the Government taking to support resilience and growth in the New Zealand economy?
Hon BILL ENGLISH (Minister of Finance): A range of steps. We can have some confidence in the economy’s ability to manage through future uncertainty. For
instance, the Government is supporting directly innovation through investment in research such as the $170 million
Primary Growth Partnership, where primary production industry contributes, and we work together to create new products
and increase on-farm activity. Despite the fall in dairy prices, the outlook for the economy is for continuing moderate
growth of 2 percent to 2.5 percent, which compares well with most other countries.
Dr Parmjeet Parmar: How is the ongoing expansion in manufacturing helping to support economic growth?
Hon BILL ENGLISH: Earlier this week Statistics New Zealand released its survey of manufacturing for the December 2015 quarter. It shows
manufacturing volumes up by 1.3 percent in the quarter and up by 5.1 percent in the year to December. The value of
manufacturing was flat over the same period, reflecting in part the fall in dairy prices. This is consistent with the
Performance of Manufacturing Index, which has now been expanding for 40 consecutive quarters. Recent indicators also
show increasing manufacturing employment. Overall, this suggests that despite difficulties in the dairy sector, the
economy is continuing to grow moderately and is rebalancing.
Dr Parmjeet Parmar: What are some of the consequences for the wider economy from the downturn in dairy prices?
Hon BILL ENGLISH: In the first place, there are consequences for the farming operators and farming families themselves because some of
them certainly will come under considerable pressure if they have a combination of high debt and high production costs,
or, in some cases, investors who are not as committed as they were before. There is no doubt, though, that the industry
is capable of adjusting and that it will work constructively with the banks, which continue to be supportive. The
Government has long-term confidence in the outlook for the dairy industry.
Dr Parmjeet Parmar: How will increased access to international markets, alongside new initiatives by the Government, support the dairy
industry as well as build resilience and diversity in the economy?
Hon BILL ENGLISH: This next period is going to be one where the dairy industry will be looking for support where the Government can
provide it. We will certainly be supporting the Trans-Pacific Partnership (TPP), because one of the principal—in fact,
the biggest beneficiary of the TPP—is the dairy industry. We would expect the support of the whole Parliament because it
is the single biggest thing this Parliament can do to support, particularly, those regions that will be hardest hit by
the downturn in dairy prices.
Dairy Industry—Payments to Small Businesses
4. JACINDA ARDERN (Labour) to the Minister for Small Business: Does he agree with the statement made by Hon Bill English in the House yesterday regarding Fonterra’s policy of paying
small businesses up to an additional 61 days late, that “these are freely transacting people doing business. Any party
to the transaction is able to choose whether the terms are suitable for them, or not”?
Hon CRAIG FOSS (Minister for Small Business): Yes. I also agree with the Minister’s statement in the House yesterday that it would be unacceptable if it was outside
the current legislative requirements. But I note for the House that although Fonterra may be meeting its legislative and
contractual commitments, it is my expectation that Fonterra and all New Zealand’s large businesses deal reasonably and
fairly with New Zealand small businesses.
Jacinda Ardern: Does he believe, as Bill English does, that small businesses currently contracted by Fonterra are genuinely in a
position to choose the terms that are suitable for them, without risking losing the work that they have?
Hon CRAIG FOSS: I am not sure whether that member correctly understood what Mr English was saying yesterday, but I do note that
companies in New Zealand—Kiwi businesses, large companies—I am sure, value their reputation as fair and reasonable Kiwi
businesses. The court of public opinion will, I am sure, judge those businesses on their behaviour in the market.
Jacinda Ardern: Would it be acceptable for a Government department to pay a small business 61 days after receiving an invoice, when in
2009 the then State services Minister, Tony Ryall, directed departments to pay their bills on time or earlier?
Hon CRAIG FOSS: I am sure that that would be the exception, because, across Government, post the 2009 commitment from Mr Ryall, by and
large the payments from the Crown to small businesses have improved markedly over that period.
Jacinda Ardern: What action, then, will he take against the Ministry of Business, Innovation and Employment—his own
department—responsible for small business, which in 2014-15 paid a whopping 24 percent, or 11,158 of the invoices it
received, late?
Hon CRAIG FOSS: The Ministry of Business, Innovation and Employment is not my department, but I understand the member’s question. What
is actually more important for New Zealand businesses is the cost of the cash flow that they fund. If the ministry is,
in fact, paying some invoices late, it should address that; it should look at that. I am sure that the Minister
responsible will be quite interested in that. But what is most important is that the cost of funding cash flows for New
Zealand small businesses is probably half of what it was just in 2008, when that member’s party was in Government.
Hon Dr Nick Smith: Did the Leader of the Opposition set a good example—
Mr SPEAKER: Order! [Interruption] Order! The question is not in order.
Jacinda Ardern: What specific action will he take as the Minister for Small Business against the Department of the Prime Minister and
Cabinet, ACC, and the Ministry of Business, Innovation and Employment, which have all had significant records in late
payment, including the State Services Commission, which issued a letter to all chief executives instructing them to pay
on time and model prompt payment?
Hon CRAIG FOSS: As a Minister, as a taxpayer, and as an advocate for small business I would encourage all participants—Government,
ministries, agencies, State-owned enterprises—to pay in a reasonable and fair time.
Finance, Minister—Dairy Industry
5. METIRIA TUREI (Co-Leader—Green) to the Minister of Finance: Ka tū a ia i runga i te mana o tāna tauākī mō te ahu miraka kau, “is an industry that’s going to be under pressure”?
[Does he stand by his statement that dairy “is an industry that’s going to be under pressure”?]
Hon member: I don’t think that’s right.
Mr SPEAKER: No, I listened to the translation. It was as recorded. Would the Minister of Finance like to answer?
Hon BILL ENGLISH (Minister of Finance): Yes. Clearly, many farmers are doing it tough and there is a lot of uncertainty about the future of milk prices. Farms
with high levels of debt and high production costs will come under real pressure. Whereas 6 months ago they may have
thought that they could hold on until prices had bounced back up, that looks much less likely now. So it is appropriate
that the dairy industry is thinking about reducing production costs, adapting to capital scarcity, rather than waiting
for prices to rise.
Metiria Turei: Does the Minister take any responsibility for the enormous pressure dairy farming families are under, given that his
Government has encouraged them to convert to dairy, to take on more debt, and to intensify their farms, and now 5,000
families could lose their farms because of it?
Hon BILL ENGLISH: I would be very surprised, if the member spoke with any of those families, if their business decisions were made by
what they read from press releases from the Government. These people are capable, competent people who weigh up the
business risks and decide what risks they take. Some of them might have overextended themselves, and I would be
surprised if they blamed anyone else for that.
Metiria Turei: Does he accept that the Government’s goal of doubling food exports by 2025 and subsidising irrigation was an
encouragement to farming families to increase their debt and intensify their farms?
Hon BILL ENGLISH: No. One would only have to look at the range of debt across farms in the dairy industry, or any other industry, and
you would find that some of them have no debt, some of them have moderate debt, and a few—probably a very few—have
levels of debt that are now turning out to be higher than is comfortable. The Government has made no apology for
supporting primary production through its investment in science and innovation, its investment in biosecurity, and
getting alongside them in the development of large-scale irrigation schemes into which we have actually put only quite
small amounts of money.
Richard Prosser: Will the Minster’s Government support New Zealand First’s Receiverships (Agricultural Debt Mediation) Amendment Bill,
which will provide our dairy farmers with a similar level of regulated debt mediation support to that enjoyed by farmers
in Australia and Canada; if not, why not?
Hon BILL ENGLISH: No, we will not, because we believe that the parties involved in that debt are capable of working their way through
it. The large banks have lent money to the industry in full knowledge of all the risks and with a deep understanding and
history in the industry. We believe they are committed to the long-term future of the industry—that it is in their
interests that, for instance, the land price is maintained at reasonable levels and does not drop rapidly, and therefore
they and the farmers will be able to work through whatever stress there is.
Metiria Turei: Has the Minister received any advice on how many families in the wider rural communities, not just farm owners but
farm labourers and contractors as well, will have financial problems because of his Government’s failed dairy strategy?
Hon BILL ENGLISH: No. It is a bit galling to hear from the Greens concern for people whom they have branded for the last decade as
reckless capitalist polluters—suddenly they are very worried about them. I find it a wee bit hard to find that the
Greens are serious.
Richard Prosser: Given his previous answer, what contingency plan does his Government have, in the likely event of widespread farm
foreclosures, to support unsecured creditors and their staff and families in the heartland communities who support the
dairy industry and rely on it—feed suppliers, fencers, silage and hay contractors—
Mr SPEAKER: Order! Bring the question to a conclusion. [Interruption] Order! The question is too long.
Hon BILL ENGLISH: There is no evidence—no good reason—to believe that there will be widespread farm foreclosures. The Government
believes that the industry is resilient and the financial services sectors that support it have an interest in its
ongoing success. If that member wants to do what farmers would regard as showing strong support for them, then he and
his party would vote for the Trans-Pacific Partnership (TPP) and vote for Resource Management Act reforms—and I am sure
if they went around the regions saying that, they would be welcomed with open arms.
Metiria Turei: What will the Minister do to prevent more of our productive land being sold off to overseas buyers when farming
families are suffering huge debt burdens and are forced to sell their farms?
Hon BILL ENGLISH: Any offshore buyer who wants to buy the farms has to go through the Overseas Investment Act process, which includes, I
think, 15 separate tests. It has been subject to court action in recent years that has raised the thresholds, and the
Government has every intention of leaving that in place. The member needs to keep in mind that those families who do
have higher levels of debt probably incurred that from paying fairly large amounts for the farm that they have moved
into recently. I think the industry would expect that they have the opportunity to work through their stressful
situation with the banks.
Metiria Turei: Given that the Minister has no advice on how many farming families will suffer as a result of this, does he think he
ought to go and get that advice, and does he intend to act on any advice he is given about projects or initiatives to
support those farming families who will be—
Mr SPEAKER: Order! Bring the question to a—[Interruption]. Order! It is question time, not speech time.
Hon BILL ENGLISH: You do not need to get advice to know that there will be a significant number of farming families distressed. This is
not a new kind of phenomenon in farming communities. I myself recall a number of years, actually, of fairly intensive
stress in the late 1980s and early 1990s in the sheep and beef industry over the same sorts of issues. We have a lot of
confidence in this farming community to be able to adapt to difficult circumstances and to get through those on the
basis that the outlook for the dairy industry is quite strong in the light of ongoing global demand for protein.
Rt Hon John Key: Does the Minister believe that actions speak louder than words, and, if that is the case, would the farmers of New
Zealand expect political parties that claim to be standing up for them to vote for the TPP that would reduce hundreds of
millions of dollars of tariffs against them, or will they see through all of this—
Mr SPEAKER: Order! Again, the question was too long. The first part can be addressed.
Chris Hipkins: I raise a point of order, Mr Speaker. I thought you would probably rule the question out of order. The Minister of
Finance has no responsibilities for how other parties vote in the Parliament.
Mr SPEAKER: Order! No. The first part of the question, in my mind, was in order, in that it simply asked for—it did not talk about
Opposition parties; “other political parties’ support: wouldn’t that be the best thing for farmers?”. I think, in view
of the circumstances of where the discussion has been, that the question is in order. It can be addressed by the
Minister.
Hon BILL ENGLISH: I am sure that distressed farming families would take some notice of the outpouring of sympathy they are getting from
Opposition parties, but, knowing farming people, I think they would regard actions as more telling. They will be
surprised to know that those expressing the strongest sympathy today have said they will vote against Resource
Management Act reforms that will assist that industry and vote against the most recent free-trade agreement, of which
the dairy industry is the biggest beneficiary. They might be surprised, having heard the words today.
Metiria Turei: Can the Minister confirm that the Trans-Pacific Partnership (TPP) agreement promise of a tariff reduction of just 1.3
percent by 2030 is not going to help the 5,000 farming families who are facing the loss of their farms today, because of
his Government’s failed dairy strategies?
Hon BILL ENGLISH: No, I disagree with that. The dairy industry, I am sure, would be pleased to see any expression of real economic
support from this Parliament and, secondly, that agreement includes significant benefits for other members of their
communities—people in the beef industry and in the horticulture industry. Actually, dairy farmers care about those
people and they care about their communities. They would expect the Greens to change their mind and vote for the
Trans-Pacific Partnership agreement.
David Seymour: Does the Minister agree with the following quote from the valedictory speech of outgoing Green MP Russel Norman:
“Let’s just say it—we have too many cows.”?
Mr SPEAKER: Order! I do not think there is any need for that question. I am going to rule it is out of order.
Rheumatic Fever—Rates
6. SIMON O’CONNOR (National—Tāmaki) to the Minister of Health: Can he confirm that rheumatic fever rates have dropped 45 percent since 2012?
Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, and it is encouraging to see this latest significant drop in the rates, which continues progress towards the
Better Public Services target of reducing rheumatic fever rates by two-thirds by the end of June 2017. This shows that
the Government’s $65 million investment to prevent rheumatic fever is making a real difference to the children,
families, and communities most at risk.
Simon O’Connor: What progress has been made in reducing rheumatic fever rates in Māori and Pasifika communities?
Hon Dr JONATHAN COLEMAN: Rates for Māori have more than halved since 2012, down 54 percent. There has also been a drop of 27 percent for
Pacific people. More than half the national reduction was in the Northland District Health Board and the Counties
Manukau District Health Board. Part of the success can be attributed to the Pacific engagement service, which has
engaged with more than 39,000 Auckland and Wellington Pacific families, through home visits and community events, to
raise awareness of rheumatic fever and what can be done to prevent it. However, there is still much left to do.
Simon O’Connor: What initiatives have the Government put in place to tackle rheumatic fever?
Hon Dr JONATHAN COLEMAN: Healthy homes initiatives in all high-incidence areas are offering packages of housing-related interventions to more
than 3,000 families each year. There are over 300 drop-in clinics, and more than 40,000 high-risk young people have
accessed these sore throat drop-in services. Children are also being assessed and treated for sore throats through
school-based services in 200 North Island schools. There is also a national rheumatic fever awareness campaign aimed at
young people, as well as the parents and caregivers of children and young people most at risk.
Student Achievement—Literacy and Numeracy Skills
7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she satisfied that students completing NCEA qualifications have the basic functional literacy and numeracy skills
they will require for further study or employment?
Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes.
Chris Hipkins: Was the recent Tertiary Education Commission report, which found that up to half the students meeting National
Certificate of Educational Achievement (NCEA) literacy and numeracy requirements are not functionally literate or
numerate, based on a student sample who had predominantly attained the literacy and numeracy requirements for NCEA,
under the new rules?
Hon HEKIA PARATA: My understanding is no, because the new rules were implemented in 2012 and therefore the results of those new rules
were not taken into account by the Tertiary Education Commission report, which was based prior to the introduction of
those. So when you say “recent”, although it was published in December last year, it used data from 2012.
Chris Hipkins: In light of that answer, why does the report specifically state that the vast majority of students within the sample
completed their NCEA literacy and numeracy requirement under the new rules?
Hon HEKIA PARATA: I cannot speak to that, because I am not at the Tertiary Education Commission and I did not write the report, but
given that the strengthening of the literacy and numeracy requirements and the increasing of the credits from eight to
10 became compulsorily implemented from 2013, it is by definition impossible for a 2012 report to use those results.
Chris Hipkins: Was the report wrong when it stated that under the new rules it is possible to obtain the 10 achievement standard
credits required to meet the literacy requirement for NCEA by completing standards where “the focus … is varied and
there is not necessarily any direct assessment of students’ literacy and numeracy skills”?
Hon HEKIA PARATA: No, the report is not wrong in that literacy can be assessed in subjects other than English, and that the quality
assurance of those assessments is overseen by the New Zealand Qualifications Authority. I stand by its process, as
opposed to an incidental report from the Tertiary Education Commission.
Chris Hipkins: So how can parents, employers, and anybody else be confident that students who obtain NCEA have basic functional
literacy and numeracy, when it is possible to meet the literacy and numeracy requirements without ever having their
literacy and numeracy actually assessed?
Hon HEKIA PARATA: That is not what I said. Literacy is assessed, but it is not assessed only in English. It is assessed in a range of
subjects, whether it is physical education, whether it is science, or whether it is maths. Literacy is required across
all of those subjects, and assessments occur in all of those subjects. As to the second part of your question, which is
how parents and employers can have confidence, they can have confidence because a number of reports have been published
on the quality of NCEA. They include the 2012 report by the Auditor-General, the 2013 report by the New Zealand Council
for Educational Research, and the 2014 report by an independent panel of academics, principals, and the New Zealand
Council for Educational Research. I am happy to table, for the member’s ease of reference, references to all of those
reports that are publicly available.
Chris Hipkins: Can a student meet all of the literacy requirements for NCEA solely from studying physical education?
Hon HEKIA PARATA: I am not absolutely sure about that, but I can—
Chris Hipkins: Yes. The answer is yes.
Hon HEKIA PARATA: —get that report. Well, the member is asking questions that are redundant.
Chris Hipkins: When employers are saying that students with NCEA do not necessarily have the literacy and numeracy skills they need,
when Business New Zealand is saying it, when universities and polytechnics are saying it, and when even school
principals are saying it, why will she not take action to review the system to ensure those getting NCEA actually have
functional literacy and numeracy, or is she worried that doing so means the Government will not hit its 85 percent
target?
Hon HEKIA PARATA: I can point to specific reports that are in the public domain that attest to the robustness of our NCEA. The member
using general references to general people who may or may not have a view does not stack up against the robustness—
Chris Hipkins: Pretty specific study.
Hon HEKIA PARATA: Yes, the member is referring to one principal, and there are a few, but what the New Zealand Council for Educational
Research said in its report of 2013 was that 95 percent of all principals are confident in the NCEA. It would be helpful
if the member actually shared that confidence in our national qualification system.
Rheumatic Fever—Housing Conditions
8. MARAMA FOX (Co-Leader—Māori Party) to the Minister of Health: Following the recent release of the rheumatic fever statistics, what steps is he taking to address the rate of
rheumatic fever amongst whanau living in overcrowded housing conditions?
Hon Dr JONATHAN COLEMAN (Minister of Health): This Government, with support from the Māori Party, has invested $65 million in the Rheumatic Fever Prevention
Programme over the last 6 years. A feature of the programme is Healthy Homes services, working in all 11 high-incidence
district health board regions, and it is making good progress delivering a range of different interventions to families.
We are now seeing real results, with rheumatic fever rates for Māori down 54 percent since 2012. I would like to
acknowledge the work and support of the Māori Party in championing this cause.
Marama Fox: Given the prevalence of rheumatic fever amongst whānau living in overcrowded, substandard homes, what is the Minister
doing with his colleague the Minister for Building and Housing to build larger, warmer, safer homes to further reduce
the rates of rheumatic fever.
Hon Dr JONATHAN COLEMAN: Ministers are working together on these important issues, including the housing Ministers, and they are best placed to
answer questions relating directly to the building of houses. The Healthy Homes services have a number of initiatives to
reduce overcrowding and make houses warmer and safer.
Marama Fox: What further specific measures will the Minister take to ensure the 75 percent reduction by 2017, identified in the
Māori Party initiative in 2013, is achieved?
Hon Dr JONATHAN COLEMAN: We will continue with the initiatives that are delivering success: the 300 drop-in clinics, the 200 school-based
services, and the national awareness campaigns, to name but three of them.
Marine Protected Areas—Kermadec Ocean Sanctuary
9. SCOTT SIMPSON (National—Coromandel) to the Minister for the Environment: What new details of the Kermadec Ocean Sanctuary have been announced and how will these help protect the 620,000
square kilometres of the Pacific Ocean covered by this initiative?
Hon Dr NICK SMITH (Minister for the Environment): Yesterday the Government announced the details of the bill to create the sanctuary that was announced by the Prime
Minister at the United Nations in September. The bill provides for a new conservation board with responsibility for the
Kermadec Ocean Sanctuary, as well as the existing Kermadec Marine Reserve and the nature reserves on the five Kermadec
Islands. This integrated approach makes good sense, and given the size of this area being twice that of New Zealand’s
land, it makes sense, with its unique challenges for management, to have a dedicated board. The second change is that we
have tightened the dumping prohibitions and adjusted the scientific research provisions to maximise the protection,
while also making sure that it is compliant with New Zealand international law of the sea.
Scott Simpson: What feedback has he had, both domestically and internationally, to the new Kermadec Ocean Sanctuary?
Hon Dr NICK SMITH: The sanctuary has been widely welcomed, and the Prime Minister’s announcement was noted very positively in both the
European and the North American media, partly because of the sheer scale of it being an area larger than the land area
of France. The Pew Charitable Trusts, which has advocated for ocean sanctuaries globally, has noted that New Zealand has
set the gold standard with the Kermadecs and it is a powerful international example. I have also welcomed the support of
key organisations like Forest and Bird and World Wide Fund for Nature. They have acknowledged that it is a very
significant global initiative and an extraordinary achievement for nature. The sanctuary increases New Zealand’s area
protected from 0.4 percent of our ocean space to 15.4 percent—i.e., this single sanctuary is 35 times larger than the
existing 44 marine reserves that we have.
Scott Simpson: What particular species and special features will benefit from the protection of this new ocean sanctuary?
Hon Dr NICK SMITH: The sanctuary is home to 6 million seabirds of 37 different species; 35 species of whales and dolphins; three species
of sea turtle—it is the only area where sea turtles are found in New Zealand waters, all of which are endangered—as well
as 150 species of fish. The extraordinary nature of the area is due to it being deeper than Mount Everest is tall, and
having the longest chain of underwater volcanoes anywhere in the world. The combination of the undersea volcanic
activity and the extreme depths means that there are life forms and ecosystems found nowhere else on the planet, but
that will be protected in perpetuity by this bill.
Clayton Mitchell: How does the Government plan to feasibly protect the 620,000 square kilometres of proposed Kermadec Ocean Sanctuary
effectively when there is only one frigate and three Orions, which, at best, could fly over once a week, not to mention
the one lonely Department of Conservation worker working on Raoul Island?
Hon Dr NICK SMITH: Firstly, the member is incorrect about the number of Department of Conservation staff who are on Raoul Island and in
the Kermadecs. Secondly, this is a Government that has actually, under Gerry Brownlee’s leadership, invested in the sort
of defence capability that enables New Zealand to be able to secure an area of protection like the Kermadecs.
Marama Fox: What consultation has there been with the two iwi with a statutory acknowledgment over their interests on the
Kermadecs, and what changes have been made to the proposals as a consequence?
Hon Dr NICK SMITH: I have had extensive discussions with both Ngāti Kurī and Te Aupōuri, who have for many years supported the
establishment of the sanctuary. Both with their input and the input of the Māori Party, we have provided for both those
iwi having direct representation on the conservation board. I have also had representations that there are other iwi in
New Zealand who have an interest in the Kermadecs, and so, with the work of the member’s colleague Te Ururoa Flavell, we
are providing for him to be able to also appoint someone to ensure that that broader and very deep historic interest
that Māori have with the Kermadecs is also provided for in the way in which we are putting this unique area into
permanent protection.
David Seymour: By what quantity will this announcement change the total allowable catch under New Zealand’s quota management system?
Hon Dr NICK SMITH: I am advised that there are about 20 tonnes of fish per year that are taken in the Kermadecs area. Obviously, that
will be banned from the time—it will be an area of full protection from all forms of fishing. Secondly, there was an
application for deep-sea mining in the area, and the Government’s view has been that the area will also be fully
protected from mining activities.
Business, Innovation and Employment, Ministry—Payroll
Dr DAVID CLARK (Labour—Dunedin North): My question is to the Minister: on what date did he first become aware of payroll problems at the Ministry of Business,
Innovation and Employment and what action did he take?
Mr SPEAKER: I did not hear the first part—was it addressed to the Minister concerned?
Hon Steven Joyce: He didn’t address it to anyone.
Mr SPEAKER: Well, would the member just do the question again.
Dr DAVID CLARK (Labour—Dunedin North): To the Minister of Business, Innovation and Employment—[Interruption]
Mr SPEAKER: Order! [Interruption] Order! Sorry, I am just making sure the member is given due consideration. He can start again.
Dr DAVID CLARK: To the Minister of Business, Innovation and Employment—[Interruption] Would you like me to go again, Mr Speaker?
Mr SPEAKER: Yes.
10. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development: On what date did he first become aware of payroll problems at the Ministry of Business, Innovation and Employment and
what action did he take?
Hon STEVEN JOYCE (Minister for Economic Development): Firstly, I have been updated a number of times on payroll as the Ministry of Business, Innovation and Employment has
been brought together, particularly with the four payrolls being brought into one. With particular regard to the issues
that have been publicly discussed in recent days, I was first advised on 5 October last year that the Ministry of
Business, Innovation and Employment was establishing a payroll team to identify and address non-compliance and
historical issues associated with entitlements to holiday pay. I supported the Ministry of Business, Innovation and
Employment’s actions at the time, and I have asked to be kept fully updated on its progress, along with expressing the
expectation to the chief executive that this issue be resolved as quickly as possible.
Dr David Clark: Can he confirm that the issues that he first became aware of in October last year around the Holidays Act and payroll
compliance were known to his Government in 2010?
Hon STEVEN JOYCE: No, I cannot. In relation to this particular payroll the time line is as I described last year. The labour
inspectorate has had broader concerns about public and private providers complying with the Holidays Act, going back
some time, possibly back to 2010, but the issues in relation to the Ministry of Business, Innovation and Employment were
identified to me in 2015, in October last year.
Dr David Clark: The Minister didn’t know.
Hon STEVEN JOYCE: No, you are wrong.
Mr SPEAKER: Order!
Dr David Clark: During the 2012 Ministry of Business, Innovation and Employment merger, did his Government ensure the payroll system
complied with the law?
Hon STEVEN JOYCE: In the Ministry of Business, Innovation and Employment merger in 2012 a decision was taken to merge the four payrolls
together, including the former Department of Labour payroll, which had been used right back, I believe, until around
2000. It was, of course, anticipated, that that payroll, which had been in place for many years, would meet the
requirements, particularly given that the Holidays Act had been passed with its changes in 2003. Unfortunately, from the
period 2003 onwards there had been no attempt within the Government to ascertain that the payrolls were actually
following the Holidays Act as it was laid down in 2003.
Dr David Clark: Is he confident that his department has been providing correct advice to the private sector, given that his department
has failed to implement its own payroll system correctly?
Hon STEVEN JOYCE: For the member’s benefit, the labour inspectorate operates at arm’s length from the operation of the agency,
particularly in relation to payroll matters, because the labour inspectorate has a responsibility to monitor the
Ministry of Business, Innovation and Employment’s payroll as well as other public and private sector payrolls. As I said
to the member in answer to an earlier question, the inspectorate has had concerns for some time about payrolls
generally, and that matter has been discussed with the State Services Commission. This particular issue, though, was
raised in 2015.
Dr David Clark: Why did he fail to follow the advice on his ministry’s website about “calculating annual holiday pay”, which appears
under the tab headed “Get the basics right”?
Hon STEVEN JOYCE: That is a question that could be asked right back to 2003, I believe, because the holiday pay calculation is
recognised as a complex calculation, because it requires providers to assess the greater of the average wages of the
person and the regular-time wages of the person. Just because you are a bad Opposition MP who yells all the time does
not mean you cannot just listen to the answer to the question.
Science and Research—Benefits for Children and Young People
11. Dr JIAN YANG (National) to the Minister of Science and Innovation: How is the Government using science and research to help the development of children and young people?
Hon STEVEN JOYCE (Minister of Science and Innovation): Recently I launched the tenth in a series of National Science Challenges. A Better Start is a challenge using science
to tackle some of the biggest issues facing New Zealand young people. A Better Start is receiving funding of up to $34.7
million over 10 years for research aimed at solving some of the complex problems that are faced by New Zealand children
and young people as they start out in life. It focuses on predicting, preventing, and treating mental health issues and
obesity in children, as well as improving how children learn. It will work to develop new methods for detecting and
supporting young children with developmental and behavioural disorders. This work and other research taking place across
the research sector will have a significant impact on young people’s well-being, employment prospects, and of course,
ultimately, on the New Zealand economy and society.
Dr Jian Yang: What research projects will the A Better Start National Science Challenge be supporting?
Hon STEVEN JOYCE: The proposed initial research for the A Better Start National Science Challenge is about understanding biomedical
conditions and social behaviour that influence how children grow up. The challenge will bring together medical
researchers to work with educationalists on projects like: investigating the way environmental factors and biology
influence child obesity and what can be done to help children achieve and maintain a healthy weight, trialling
interventions to help children at risk of literacy problems succeeding in their first year at school, and developing new
tools to detect common mental health problems like depression and anxiety in teenagers. The A Better Start challenge is
hosted by the Liggins Institute at the University of Auckland, in collaboration with the universities of Otago,
Canterbury, and Waikato, Auckland University of Technology, Massey University, Victoria University, and AgResearch.
Freshwater Management—Water Quality of Rivers and Lakes
12. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: Has he received any advice that New Zealanders would prefer to wade rather than swim in our lakes and rivers?
Hon Dr NICK SMITH (Minister for the Environment): No, and it is Government policy for as many water bodies as practically possibly to be swimmable. When we came into
Government in 2008 there was no national freshwater policy or standards, and we have been systematically strengthening
those. These requirements do not stipulate that every water body be swimmable all the time but they do require councils
to maintain and improve water quality and to identify those rivers and lakes that should be swimmable.
Catherine Delahunty: Given that answer, will the Minister commit to the goal of making New Zealand lakes and rivers swimmable, with
exceptions for issues that he has previously stated, including during high rainfall events, areas where birds colonise,
rivers tainted by volcanic ash, and other natural phenomena that may prevent swimming?
Hon Dr NICK SMITH: We are doing a consultation at the moment, which I started last night, about improvements in the national policy
statement. I am open-minded about strengthening the provisions around swimmability but it is my view that we need to
ensure that they are practical and that in that process of setting the standards we do take into mind the issue of
costs. I give the member a practical example in Auckland: Lucas Creek would cost $150 million to bring it up to a
swimmable standard—a cost that would translate to about $10,000 per household for a stream that nobody has ever wanted
or tried to swim in. So, yes, we want more water bodies to be swimmable but we also want to make sure that the
provisions are practical.
Catherine Delahunty: Given that Landcorp can cut the proposed Wairākei dairy conversions by 50 percent to protect the environment, will he
include in his Next Steps for Fresh Water document a moratorium on dairy conversions in sensitive catchments?
Hon Dr NICK SMITH: Indeed, that has taken place. So, for instance, in an area like Canterbury, where there were no limits on expansion of
dairying, the commissioners have done a very good job of actually creating red zones and of setting limits on nutrients,
and that is happening right throughout the country. What I would welcome from the Green Party is support for that
national policy statement and the requirement to set limits. I would remind the member that prior to this Government
coming to office there were no limits anywhere in New Zealand on nutrients.
Catherine Delahunty: I raise a point of order, Mr Speaker. My question was specifically on whether the Minister would include in the Next
Steps for Fresh Water a moratorium on dairy conversions.
Mr SPEAKER: I invite the member to go back and rehear the answer. The Minister said they were achieving it in another way, and
addressed the question for the benefit of the member.
Catherine Delahunty: What rivers has the Minister waded in recently and did he enjoy it as much as actually putting his head under the
water?
Hon Dr NICK SMITH: I regularly swim—only at the weekend, I was swimming with my family in the Maitai River. But I would point out to the
member that, actually, contrary to the Green Party view that this is all farmers’ problems, if you take the Maitai
River, the key swimmability challenge there is actually the standard of our town sewerage scheme in Nelson. Like in many
urban areas of New Zealand, some of those pipes are old and need upgrading and there is a significant cost for
ratepayers in upgrading those systems, and that needs to be taken into account.
ENDS