Questions to Ministers

Better Public Services—Progress

1. Dr SHANE RETI (National—Whangarei) to the Minister of Finance: What progress is the Government making in its programme to get better results from public services?

Hon BILL ENGLISH (Minister of Finance): More good news. Yesterday we released the latest results of the Government’s Better Public Services programme, where 10 challenging targets were set in 2012. Benefit dependency continues to fall. We currently have the lowest crime rate since 1978. The number of children and young people experiencing physical abuse has reduced somewhat, and immunisation rates continue to grow, with almost 94 percent of 8-month-olds fully vaccinated.

Dr Shane Reti: What progress is being made against result 5, increasing the proportion of 18-year-olds with National Certificate of Educational Achievement (NCEA) level 2?

Hon BILL ENGLISH: The Government is focused on this measure because NCEA level 2 is the entry-level qualification for further training. Since 2011 the percentage of 18-year-olds achieving NCEA level 2 has jumped from 74 percent to 84.4 percent, just short of our 85 percent target, with 2 years to go. By way of comparison, in 2008 just 68 percent of 18-year-olds were achieving these qualifications. That means 7,600 more young people reach that threshold this year than was the case 7 years ago.

Dr Shane Reti: What progress is being made on other targets that aim to improve the outcomes for children and young people?

Hon BILL ENGLISH: Significant progress, because of the work of so many teachers, social workers, policemen, mentors, councillors, and advisers, and they are having a positive impact on our children and young people. It is good that the percentage of children who attend early childhood education has increased each year since 2000 and is now sitting at 96.4 percent. Ninety-four percent of 8-month-olds are fully vaccinated, and, as I said before, the number of young people achieving the basic secondary school qualification has leapt to 84.4 percent.

Dr Shane Reti: How does the Government’s priority of delivering better public services interact with its other priority to responsibly manage its finances?

Hon BILL ENGLISH: The reason we have better public services is partly that we have been managing our finances tightly. In the past, when the Public Service wanted to show progress it would tell everybody it had spent more money, aided and abetted by politicians, whereas now we measure progress by whether we are changing lives—that is, changing the lives of young people who are less subject to abuse; prisoners who no longer reoffend; or young people who get the qualification they need for further training.

Prime Minister—Statements

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements and how does he do so?

Rt Hon JOHN KEY (Prime Minister): Yes, and by standing here in Parliament and saying so.

Rt Hon Winston Peters: How does he reconcile his Government’s comments that the Trans-Pacific Partnership (TPP) agreement will be worth $5 billion, year on year, by 2025 when no other proponents have made such extravagant claims?

Rt Hon JOHN KEY: The member should table the quote where I said that.

Rt Hon Winston Peters: I seek leave to table two quotes, one from Minister Groser and one from Gerry Brownlee.

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

Mr SPEAKER: Order! The member will now resume his seat, and I will hear a point of order from the right honourable Prime Minister.

Rt Hon JOHN KEY: The Rt Hon Winston Peters just misled the House. He said that that was my quote. It was not my quote—

Mr SPEAKER: Order! [Interruption] Order!

Rt Hon Winston Peters: Speaking to the point of order—

Mr SPEAKER: I need no further—[Interruption] Order! I need no further comment from either member. Standing Order 359 is the Standing Order the Prime Minister should refer to if he feels there has been a situation where a member has misled the House. As to the tabling of documents, I am not going to put the leave, because I do not think they will advance the order of this House. But I will invite the member to continue with his supplementary question.

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

Rt Hon JOHN KEY: Point of order—

Mr SPEAKER: A point of order. I will hear—[Interruption] Order! I will hear from the Rt Hon Winston Peters first.

Rt Hon Winston Peters: Thank you very much, Mr Speaker. I am happy to table the question I asked, which began—

Mr SPEAKER: Order! There is no need to do that. Now I will hear from the right honourable Prime Minister.

Rt Hon JOHN KEY: In my opinion, the member said that I had said that the TPP, year after year, would be worth $5 billion. I did not say that thing.

Rt Hon Winston Peters: Mr Speaker—

Mr SPEAKER: Order! No, I need no further assistance from either member. I have advised the Prime Minister on a way forward if he feels he has been misrepresented. He needs to refer to the Standing Orders and follow that way. Now I am inviting the member—if he has a further line of questioning, he is welcome to follow it. I am happy to move to the next question if he would rather.

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

Mr SPEAKER: No, I have dealt with the matter. I am inviting—

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

Mr SPEAKER: If it is a fresh point of order, I will hear it.

Rt Hon Winston Peters: I have been accused of misleading the House—

Mr SPEAKER: Order! The member will resume his seat. And, equally, if the member feels he has been misrepresented, he follows the same procedure. I will not entertain any more points of order on this issue, but I am happy for the member to continue his line of questioning.

Rt Hon Winston Peters: Given that Tim Groser and Gerry Brownlee, being part of the Government, said that, why—

Hon Steven Joyce: Oh, ha, ha!

Rt Hon Winston Peters: Yeah, you do not like facts, do you, sunshine?

Mr SPEAKER: Order! Now I am going to invite the member to start that question again and to complete the question without responding to interjections.

Rt Hon Winston Peters: Thank you very much.

Hon Member: Come on, sunset.

Rt Hon Winston Peters: Ha, ha!

Mr SPEAKER: Supplementary question, the Rt Hon Winston Peters.

Rt Hon Winston Peters: Why, when asked for a response to the current plight of New Zealand dairy farmers, is his answer always the TPP agreement, when four of the countries involved have subsidies of over $110 billion as a barrier to New Zealand dairy farmer competition?

Rt Hon JOHN KEY: If the member goes and has a look at the TPP, he will see that the biggest area of reduction when it comes to tariffs is dairy. If the member wants to come into this House and argue that dairy farmers should pay higher tariffs, he is welcome to do so, but that just shows how little he knows. And he should stop making things up in this House—

Mr SPEAKER: Order! That will not—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I do not know what is wrong with the Prime Minister today—

Mr SPEAKER: Order! [Interruption] Order! I am just making sure it is heard in silence, so I can hear the member.

Rt Hon Winston Peters: I do not know what is wrong with the Prime Minister, but he cannot begin the first question today by attacking me, and he is back to it again, because around about now, and given your countless warnings in the past, he should be asked to apologise.

Mr SPEAKER: No. Order! No. It is a robust debating chamber. Nothing, at this stage has been ruled out of order, and question time can continue if the member wishes it to.

Rt Hon Winston Peters: Despite Tim Groser and Gerry Brownlee’s comments, how is his response that the TPP agreement is a financial relief for New Zealand dairy farmers, when US free-trade agreements with Colombia, Panama, and Korea took more than 4 years to receive congressional approval after signing? In short, how will the dairy industry in 2016, 2017, 2018, and 2019 expect any relief at all from his flippant comments?

Rt Hon JOHN KEY: This is going to come as a great revelation, but Panama, Colombia, and Korea are not part of the TPP.

Rt Hon Winston Peters: Despite the fact that I never said they were, Prime Minister—and obfuscation and deviation will not work in this House—why is the Government blocking a free-trade deal with Russia and pouring massive taxpayer support into the Hollywood film industry, Skycity Casino, Rio Tinto, and now the TPP agreement campaign when the Democrat and Republican campaigns’ leadership in the United States thinks it is a real dog—

Hon Steven Joyce: What’s your question?

Rt Hon Winston Peters: —no, not you; the TPP agreement—and a big corporate protection racket against the interests of its workers and its farmers?

Rt Hon JOHN KEY: Interestingly enough, if one looks at the comments from Donald Trump, the reason he thinks it is a bad deal is that he thinks that the United States has done a bad job of negotiating the terms, which, by definition, means that we did a good job of negotiating the terms, because we got a better deal.

Prime Minister—Statements

3. ANDREW LITTLE (Leader—Labour) to the Prime Minister: Does he stand by his statement that New Zealand is on the “cusp of something special”; if so, did he mean a thousand dairy farmers being forced off their land?

Rt Hon JOHN KEY (Prime Minister): Yes. In answer to the second part of the question, the member is mistaken. As Dairy New Zealand said this morning, possibly around 5 percent of farmers right now are under pressure from having high cost structures and high debt; that is, around 500 farmers. That is quite different from being forced off their land, and a number of groups are supporting them through their current challenges.

Andrew Little: Is the 10 percent of dairy farmers that he said could soon be forced off their land part of the “something special” that he predicted?

Rt Hon JOHN KEY: I did not say that, and there is not a quote to support it.

Hon Members: You did.

Rt Hon JOHN KEY: No, I did not.

Andrew Little: Does he agree with Federated Farmers that banks should pass on the recent official cash rate savings to struggling farmers?

Rt Hon JOHN KEY: Of course we encourage banks to pass on cuts in the official cash rate where they can do so, but, as we know, it is a very complex issue in terms of the way they fund themselves. But, by definition, if the banks are going to follow what Andrew Little is saying today, that would mean when the official cash rate goes up they forcibly will have to pass on those increased costs to every homeowner around the country. That just shows you how ignorant Andrew Little is when it comes to banking.

Andrew Little: In light of that answer and statement of the obvious, what action will he now take to ensure that banks pass on those official cash rate savings to help stop our farmers being forced off the land?

Rt Hon JOHN KEY: This is what the Government is doing to ensure farmers can stay viable: reform the Resource Management Act, signed the Trans-Pacific Partnership (TPP) agreement, ensure that there is irrigation schemes to support them, and support the Primary Growth Partnership. And this is what the Labour Party is doing: it is opposing all of those. It wants to have more tax on farmers through the emissions trading scheme, more water taxes, a capital gains tax—

Chris Hipkins: I raise a point of order, Mr Speaker. The Leader of the Opposition’s question was a relatively specific one. The Prime Minister has danced around it and has not got to it, and has instead launched a tirade of abuse against the Labour Party. Could he perhaps answer the question now?

Mr SPEAKER: I do not agree that the question has not been addressed in the answer that has been given, but where the answer was then leading to is not going to help the order of this House.

Andrew Little: In light of the Prime Minister’s statement about the TPP, can I just clarify: is he seriously saying that tariff savings worth less than 7/100th of 1 percent of current dairy debt is going to save the dairy sector?

Rt Hon JOHN KEY: Comparing subsidies that farmers have to pay with dairy debt is about as relevant as when Stuart Nash thought that the dairy farmers should have to pay tax on their revenue not their profit, which, by the way, when Labour was not trying to pretend that it was the friend of the farmer, was exactly what it was doing: charging them more taxes, charging them a capital gains tax, a water tax, more for the emissions trading scheme, worse for health and safety, and opposing everything that would help them.

Andrew Little: When offshore banks here are already making almost $90 million in profit each week, why should they pocket extra money while forcing farmers off the land?

Rt Hon JOHN KEY: Firstly, the member is saying that they are forcing farmers off the land. What I can see is banks are actually working constructively with farmers. It is not just my view; Dairy New Zealand has said exactly the same thing today. In fact, the chief executive officer of Dairy New Zealand said: “I have been speaking to farmers as you’d expect over the last few weeks. I haven’t heard one of them saying that there should be a bail out.” We know that the banks are working with the farmers, because, actually, it is not in their interests to force them off the land.

Andrew Little: Why should New Zealanders accept offshore banks hoarding interest rate cuts and forcing our dairy farmers off the land so those farms also end up in offshore hands?

Rt Hon JOHN KEY: If the member is wanting to say that all banks operating in New Zealand should fund themselves solely on local deposits and should not use the international swaps markets to fund themselves, he is even more stupid than the public think he is.

Ron Mark: Reflecting on his earlier answer, is he seriously telling farmers who are in negotiations with banks and creditors and unsecured creditors right now, that this wonderful Trans-Pacific Partnership (TPP) agreement, which will not come into force for what—

Mr SPEAKER: Order! Bring the question to a conclusion.

Ron Mark:—the next 5, 10, or 15 years, or reforms on their Resource Management Act are going to save them tomorrow; is that what he is saying?

Rt Hon JOHN KEY: What I am saying is that there are certain things that the Government cannot control: the exchange rate, international commodity prices, the weather—these are three things we cannot control. What we can control are the direct on-farm costs, and this includes helping them through the Resource Management Act, making sure they have got irrigation to off-set droughts, and, actually, yes, when dairy farmers pay $100 extra in tariffs it does affect them. When they pay potentially $100 million into Sri Lanka, it does affect them. If the member does not think so, he should go and speak to the management of Fonterra and see what they think when they get a reduction in the tariffs they pay.

Andrew Little: Will he just level with me for a moment and tell me whose side is he on, New Zealand dairy farmers or the overseas-owned banks?

Rt Hon JOHN KEY: I am on the side of New Zealanders 365 days of the year. I am not on the side of farmers today, but, by the way, Stuart Nash wanted to tax them more. Others on that side of the House wanted higher health and safety costs. These are the people who do not want irrigation schemes, do not want the Resource Management Act reform, and do not want free-trade agreements. This is a joke. These people are not the friends of the farmer; these are the people who try to put them out of business. [Interruption]

Mr SPEAKER: Order! I have a point of order and it will be heard in silence.

Dr David Clark: When I raised previously with you the issue of misrepresenting Labour’s position you referred me to Standing Order 359. The Prime Minister just referred to the Labour Party being opposed to free trade, which is patently untrue. I am wondering—I have written to you on your advice and I am wondering when I might receive a response to my letter.

Mr SPEAKER: I am very surprised that you have not already received a response. It went from my office at about 11 o’clock on Thursday to say that there was absolutely no case of misrepresentation in this House on that particular issue.

Rt Hon John Key: I seek leave to table the TPP so that the Labour Party can sign it.

Mr SPEAKER: No. Order! Leave will not be put. The document is right in front of the Prime Minister. It is available to all members.

Prime Minister—Statements

Mr SPEAKER: Question No. 4, James Shaw. [Interruption] Order! I have called—[Interruption] To Mr Scott, who has a question later: if he wants to ask it, stop interjecting.

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

Rt Hon JOHN KEY (Prime Minister): Yes. I stand by the statements I make.

James Shaw: When he said on Radio New Zealand yesterday that he thought that between 5 to 10 percent of dairy farmers could fail, what specific advice, reports, or evidence was he drawing upon?

Rt Hon JOHN KEY: I would ask the member to table the quote where I said that.

James Shaw: I seek leave to table a link to the Radio New Zealand website. [Interruption]

Mr SPEAKER: I am trying to help the member. It needs to be a bit more specific than that. If the member can table a specific—

Grant Robertson: I raise a point of order, Mr Speaker.

Mr SPEAKER: I am actually dealing with a point of order.

Grant Robertson: I can assist the House.

Mr SPEAKER: That would be very nice.

Grant Robertson: I seek the leave of the House to table a printout from the Radio New Zealand website entitled “Low milk prices wiping farmers out”, at 7.18 p.m. yesterday—

Mr SPEAKER: Order! The document has been described in this case because there is quite a lot of discussion about it. I am going to put the leave and it will be over to the House to decide. Leave is sought to table that particular transcript from Radio New Zealand. Is there any objection? There is not. It can be tabled. Document, by leave, laid on the Table of the House.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. It is not a transcript, and Radio New Zealand corrected their story later on. I have never said that.

Mr SPEAKER: Order! The difficulty is—[Interruption] Order! Prime Minister, if you want to remain for question time, stop interjecting while I am on my feet. The difficulty here is I took it to be a transcript and I described it as such when I put the leave. I therefore think you need to re-describe the document and then I will put the leave, because the House has a right to know what it is agreeing to table.

Grant Robertson: I seek the leave of the House to table a report from the Radio New Zealand website, entitled “Low milk prices wiping farmers out”. Shall I give the time, Mr Speaker?

Mr SPEAKER: You did earlier. It was 7 o’clock in the morning.

Grant Robertson: It was 7.18 p.m.

Mr SPEAKER: It was 7.18 p.m. It is a report from the website. On that basis I will still put the leave. It is over to the House what it decides. Leave is sought to table it. Is there any objection? There is objection. [Interruption] Order! The level of interjection is far too high. When I am rising to my feet and calling for members to cease yelling at each other, they are not doing so. I am looking now for someone to make an example of, from anywhere in this House, and I will not hesitate to use that person for such a purpose.

James Shaw: I raise a point of order, Mr Speaker. Given that I did not receive an answer to the question, would you like me to rephrase my initial supplementary question?

Mr SPEAKER: It is so long past; I think that might be fair. I will allow the member to do so.

James Shaw: When he spoke on Radio New Zealand yesterday about the percentage of dairy farmers who could fail, what specific advice, reports, or evidence was he drawing upon?

Rt Hon JOHN KEY: The way the member asks is exactly the right question. The point I made yesterday is that I do not know the numbers. What I said was that the advice I had had from the bank chief executive officers whom I had spoken to indicated it was a much smaller number than the 25 percent that Radio New Zealand was presenting it as.

James Shaw: What number, not what percentage, is he expecting to fail from this dairy downturn?

Rt Hon JOHN KEY: I would not have a clue. In the end, it is ultimately a matter between the banks and the individual farmers. There is no doubt that some farmers are likely to suffer and have foreclosure, because that happens, actually, in any one given year, even in very high payouts. But I suspect that the numbers will be less than what people think because the banks are going to work very constructively with them, as best they can.

James Shaw: How many small businesses is he expecting to fail as a result of this dairy downturn?

Rt Hon JOHN KEY: Again, I do not know directly. I do not think anyone would know that number. But what I do know is the economy is growing strongly. Actually, business confidence is strong. Treasury predictions are that growth will be between 2.5 and 3 percent. The Reserve Bank itself has indicated that they are growing more strongly. But I will say this. The member represents the Green Party. It wants to put a far higher emissions trading system charge on farmers. That certainly will make them go under.

James Shaw: I raise a point of order, Mr Speaker. My question was fairly brief and it was a factual question. It was not, I think, broad enough to invite broad insults from the Prime Minister.

Mr SPEAKER: The question was brief. It was certainly answered in the initial part of the answer. There was no need for the Prime Minister to then drift into criticising Green Party policy.

James Shaw: How many rural retailers is he expecting to fail as a result of this dairy downturn?

Rt Hon JOHN KEY: Again, I do not know. But what I do know is that the economy is growing. It is creating jobs, unemployment is falling, regional growth has actually been strong around New Zealand, and it is a highly diversified economy. I mean, you have a record number of tourists coming to New Zealand going to small and regional New Zealand and, overall, actually business confidence has been very high. If you have a look at the indicators of right and the indicators of wrong, indicative of where the country is going, it is significantly positive that the country thinks it is going in the right direction. So there are many factors in a highly diversified economy like we have. At the moment dairy prices are lower but beef prices are higher. Some years ago kiwifruit growers—

Mr SPEAKER: Order! The answer is long enough.

James Shaw: What is the scale of risk to Fonterra and the banks in the financial sector as a result of this dairy downturn?

Rt Hon JOHN KEY: I again do not have that information but I do know that the Reserve Bank some years ago—I think last year, actually—did some modelling on a downturn in dairy prices where it looked at a 40 percent reduction in land prices and indicated that banks were resilient enough for that. We are seeing virtually no reduction in land prices at the moment.

James Shaw: When a Federated Farmers poll shows that 11 percent of dairy farmers are under pressure from banks, when farm consultant Peter Fraser warns that 25 percent of farmers are vulnerable, when the Reserve Bank advice predicts that up to 44 percent of dairy farm loans will become non-performing, and the accounting software company Mind Your Own Business says that up to 100,000 businesses will suffer does he now think that this is a threat to the whole economy?

Rt Hon JOHN KEY: No, I do not think that it is a threat to the whole economy. I think it certainly puts pressure on dairy farmers. But it is quite simple. If the member genuinely has concern for dairy farmers of New Zealand, then support the Trans-Pacific Partnership, support irrigation, support Resource Management Act reform, make sure you do not put excess—

James Shaw: I raise a point of order, Mr Speaker.

Rt Hon JOHN KEY: I have not finished my answer.

Mr SPEAKER: I will hear the point of order.

James Shaw: Again, my question was not about Green Party policy. It was about the risk to the New Zealand economy. [Interruption]

Mr SPEAKER: Order! When I consider the breadth of the question, it was a very long question. There was a lot of information that the member took the opportunity to put into the question. It gives the Prime Minister a wider gambit in which to answer the question. Does the Prime Minister have anything further—to conclude?

Rt Hon JOHN KEY: I was listing a series of different things that would actually help dairy farmers. There are certain things that the Government cannot control, as I said earlier: commodity prices, the weather, exchange rates. But there are things that we can control as a Parliament, so if this Parliament wants to support dairy farmers let us do the things that actually can support them. But as long as political parties oppose those things then you will not be able to help them and you should not pretend that you are.

Health Services, Canterbury—Investment

5. JOANNE HAYES (National) to the Minister of Health: Can he confirm that the Government is making major investments in health infrastructure in Christchurch?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. Last week I was in Christchurch for the signing of the construction contract for Christchurch Hospital’s new Acute Services building, which will open in 2018. The Acute Services building will have 413 new beds, an expanded intensive care unit, state-of-the art radiology, acute medical assessment, an expanded emergency department, and a rooftop helipad. Its 12 new theatres and procedure rooms will provide for an additional 6,000 operations per year. At a total cost of $445 million, this facility is the single-biggest Government project in the Canterbury rebuild.

Joanne Hayes: What other health infrastructure projects have been initiated in Christchurch?

Hon Dr JONATHAN COLEMAN: In early February the Government announced a new $72 million out-patients’ facility to be built at Christchurch Hospital and to be opened in 2018. This will be a new five-storey building that will provide out-patient and other clinical services including diabetes, endocrine, ophthalmology, and dental services. I am also looking forward to this May, when the $215 million redevelopment of Burwood Hospital opens.

Joanne Hayes: How much is the Government investing into health infrastructure in Christchurch?

Hon Dr JONATHAN COLEMAN: In total, close to $1 billion is programmed to be spent in the coming years on a range of new and/or redeveloped health facilities in Canterbury.

Rt Hon Winston Peters: How much?

Hon Dr JONATHAN COLEMAN: This new infrastructure helps future-proof Canterbury’s health system for decades to come—$1 billion.

Rt Hon Winston Peters: $1 million?

Hon Dr JONATHAN COLEMAN: “B”—billion. Turn that up.

Reserve Bank—Official Cash Rate

6. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he support the expectation of the Governor of the Reserve Bank that banks would pass on the full Official Cash Rate cut made last week?

Hon BILL ENGLISH (Minister of Finance): Yes, that has usually been the experience in the past, although it is not necessarily immediate or exact. Mortgage lending is a competitive industry, and Kiwis can shop around. I am advised that some banks have already passed on the reduction in the official cash rate. Given some banks cut their rates almost immediately, you would expect competitive pressure to flow to other banks. But we do run a system where that is a decision made by banks, not by the Governor of the Reserve Bank or, as the Opposition is suggesting, by the politicians.

Grant Robertson: Was the Reserve Bank Governor wrong to say on Friday “I’d expect floating rates to come down by 25 basis points”?

Hon BILL ENGLISH: That is yet to be seen, but competition is likely to put pressure on banks to pass on this element of their funding costs.

Grant Robertson: Is it fair that most of the major banks have cut their deposit rates by the full 25 basis points of the official cash rate cut, but have not done the same in terms of rates for borrowing?

Hon BILL ENGLISH: That is a matter the member should take up with the banks. Given that the cut in the official cash rate occurred just at the end of last week, it may take some time for competitive pressures to flow through. But I think most New Zealanders would support the notion that the threat of competition is probably a more reliable impact on their interest rates than the threat of politicians who talk about strong-arming and then legislating banks. If the Opposition members want to run a bank, they should apply for a job running a bank.

Grant Robertson: Does he think that the goal of the Reserve Bank Governor in cutting the official cash rate last week was to prop up the profits of banks?

Hon BILL ENGLISH: You would need to ask the Reserve Bank Governor. He has given a number of interviews, and as far as I know he has not actually specified that as a goal. But the member needs to bear in mind—if it is going to be legally required that banks pass on cuts in the official cash rate, will they be legally required to raise interest rates every time the official cash rate is put up? I suspect the member does not believe that.

Grant Robertson: Why will he not take the side of New Zealand borrowers and savers, and call on the banks to pass on the official cash rate cut—or is he that out of touch that he thinks putting the interests of overseas banks ahead of New Zealanders is what his job is?

Hon BILL ENGLISH: That is a ridiculous way to describe the issue. What the banks will listen to is customers shopping around; that will have a great deal more influence on their behaviour than politicians making statements they cannot follow through on.

Finance, Minister—Statements

7. RON MARK (Deputy Leader—NZ First) to the Minister of Finance: Does he stand by all his statements; if so, why?

Hon BILL ENGLISH (Minister of Finance): Yes.

Ron Mark: Why did he say on Q+A that he was “not overly concerned” that the banks have not passed on the official cash rate cut, when these banks are creaming almost 9 percent interest?

Hon BILL ENGLISH: I do not know what the member’s second statement means, but with respect to the first, the threat of competition—of customers shopping around and of other banks cutting rates—will be the ultimate determinant of where the banks go.

Ron Mark: Does he find it acceptable and in the best interests of the rural sector that a foreign bank can reject a rescue package, sell up a farmer, and send all the unsecured small business owners through the floor, when all that bank had to do was shave its extortionate 8.7 percent interest rate?

Hon BILL ENGLISH: The member may well be making that up. I mean, there is no reference to any particular case—

Ron Mark: I raise a point of order, Mr Speaker. I take offence at that. I seek your protection. We can table documents if we want—

Mr SPEAKER: Order! It is a debating chamber. There is nothing there that I think can be taken offence at. The member just said that he disagreed with the figures, effectively. He could have said it another way, but it is hardly offensive.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I happen to know something of this case, but here is the point: when you make a statement like that, as your opening gambit, it is an allegation of dishonesty.

Mr SPEAKER: Order! No, the member will resume his seat. He may well know something about the case, but that is not a point of order. I will ask the Minister of Finance whether he wishes to continue his answer.

Hon BILL ENGLISH: We have been saying for a while that it is in the best interests of both the banks and the dairy industry to stick together. We would expect that banks will take losses on behalf of farmers they are linked to who may not be able to service their debt completely or pay it all back, and we would expect that farmers will respond to the need to reduce their debt and reduce their production costs in part so that they can meet their obligations to the banks from which they borrow.

Ron Mark: Has that Minister forgotten that when the banks foreclose on a farmer, it is the unsecured creditors—the small businesses, like the fencing contractors, the engineering workshops, the irrigation engineers, the vets, and their employees—who will take the hit, and with that in mind, why will his Government not act? And, in particular, why will it not—

Mr SPEAKER: Order! Bring the question to a conclusion.

Ron Mark: —support New Zealand First’s farm debt mediation bill?

Hon BILL ENGLISH: No, we are fully aware of the consequences, which is why, for instance, the Reserve Bank, which oversees the banking system, has been warning the dairy industry about the size of its debt for some time, because the debt has been entered into freely by farmers borrowing, and those who have worked for those farmers have been well aware that that is the way the industry was working—that is, that a lot of the growth was financed by debt. We would fully sympathise with any farmer who finds themselves in that situation, but all the indications are that the banks understand what would work in their best interests—that is, the stable and orderly restructuring of some debt where farmers are under pressure—and that farmers are doing their best to adjust their spending and their debt levels so they can remain sustainable.

Rt Hon John Key: Can the Minister of Finance confirm that China is New Zealand’s largest export market when it comes to dairy products, and can the Minister confirm that without China as a market to be able to sell into, it would be much harder for New Zealand dairy farmers? And can he confirm—

Mr SPEAKER: Order! [Interruption]Order! There are three parts to that question. The first two, the Minister can address.

Hon BILL ENGLISH: I can confirm that, and I can also confirm that one way to support the long-term outlook for the dairy industry would be for political parties to support the Trans-Pacific Partnership. I can also confirm that New Zealand First seems to want to support the—

Mr SPEAKER: Order! [Interruption] Order! No.

Rt Hon Winston Peters: I seek leave to table all the evidence you need that the Government is currently renegotiating the China agreement because it was a dumb deal in the first place.

Mr SPEAKER: I am not prepared to put that leave, because I am not sure that it was.

Hon Gerry Brownlee: I seek leave to table a document showing that the Rt Hon Winston Peters was Minister of Foreign Affairs when the “dumb deal” was done.

Mr SPEAKER: And I am not prepared to put that leave, either.

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

Mr SPEAKER: If it is a serious point of order, I will have it, but if it is another jocular one, it is not going to happen.

Rt Hon Winston Peters: It is a serious point of order, because—

Mr SPEAKER: I will look forward to it.

Rt Hon Winston Peters: The point is that it needs clarity and for me to table some documents. He does not know how Cabinet is structured. That is why he—

Mr SPEAKER: Order! No, no, no. You can have your general debate tomorrow.

Roading—Waikato Expressway

8. DAVID BENNETT (National—Hamilton East) to the Minister of Transport: What recent progress has the Government made on the Waikato Expressway Road of National Significance?

Hon SIMON BRIDGES (Minister of Transport): Last Friday the Prime Minister and I turned the first sods on the $973 million Hamilton section of the Waikato Expressway, signalling the start of the largest roading project in the Waikato’s history—in fact, outside of Auckland in New Zealand’s history. The highway will pass to the south and east of Hamilton and includes 17 new bridges, walking and cycling links, and five interchanges, all of which make it easier for freight, business, and tourism to travel throughout the region. When finished this new stretch of highway will be transformational for Hamilton City and, indeed, the Waikato.

David Bennett: How will the Waikato Expressway benefit road users in Hamilton and the wider Waikato region?

Hon SIMON BRIDGES: The expressway is now well under way and is about 40 percent complete. When finished in 2020 it will be a game-changer for the region. It will create jobs, boost industry, improve safety, and reduce travel times. It will also unlock economic potential by providing stronger links between the business and agricultural centres of Auckland, the Waikato, and the Bay of Plenty. This side of the House is a Government of infrastructure, and the Waikato Expressway is an excellent example of where we are building lead infrastructure that drives economic and social success for our country.

Schools—Funding

9. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she stand by her statement that “we do need to review the way we fund schools and focus more on outcomes rather than blunt proxy”?

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

Chris Hipkins: Will she rule out funding increasing or decreasing based on student achievement data; if not, why not?

Hon HEKIA PARATA: No; because we are at the very early stages of the process, so I do not want to predetermine outcomes.

Chris Hipkins: If she will not rule that out, how can such a system work without either punishing schools whose results improve or rewarding schools whose results get worse?

Hon HEKIA PARATA: We are at the very early stages of the review. We want to explore what our options are. We want to do that with the sector, and we will take the necessary time to do it.

Chris Hipkins: I raise a point of order, Mr Speaker. It was a very specific question about how the system would work without punishing or rewarding schools.

Mr SPEAKER: Order! [Interruption] Order! I am going to invite—[Interruption] Order! I am going to invite the question to be asked again, but one of the difficulties I have is I could not hear all of the question and I could not hear the answer because of the interjecting, particularly from my right-hand side. It has to cease.

Chris Hipkins: If she will not rule out—[Interruption]

Mr SPEAKER: Order! Just a minute. To the Hon Paula Bennett, that is your final warning for question time today.

Chris Hipkins: If she will not rule that out, how can such a system work without either punishing schools whose results improve or rewarding schools whose results get worse?

Hon HEKIA PARATA: The member’s question is predicated on a view he already has, regardless of my answer. I have said that we are not ruling anything in or out at this stage because we are at such an early stage, so to then go on and answer a question he has made on the basis of a different answer would be to obviate the original answer I gave.

Chris Hipkins: Supplementary question, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I will just wait for a bit of silence.

Chris Hipkins: How will she ensure that any move to shift funding from deciles to the risk profiles of individual children does not result in the stigma associated with deciles shifting from the schools to the individual children?

Hon HEKIA PARATA: Again, the member’s question is based on his view about where money will shift from and to. No decisions have been made in that regard at this point.

Hon Member: It’s in the newspaper, Hekia.

Hon HEKIA PARATA: Oh, the newspaper might say that, but I am saying what I am saying.

Chris Hipkins: Why is the Government considering basing school funding on Treasury’s risk profiling model when Treasury’s own analysis found that up to half the children who experience poor outcomes have none of those risk factors in their lives, while a third of those who are deemed to be at risk do not have poor outcomes?

Hon HEKIA PARATA: I am really pleased that the member has taken the time to acquaint himself with the detailed work that we are doing. Of course, we will take advantage of all the rich material we have to consider the options that might present themselves that may result in a change at some time in the future, but we are not yet at that place.

Chris Hipkins: How will the Government establish the qualification levels of parents if they decide to incorporate that into the school funding system, as proposed in the paper this morning, which she was quoted in; will parents have to bring their CVs along when they enrol their kids at school?

Hon HEKIA PARATA: The member might like to reflect on the time he spent as adviser to a former Minister of Education when the decile system was introduced, and where the qualifications of the family are included in the meshblock that the census uses—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is a very poor reflection on the Hon Dr—

Mr SPEAKER: Order! Can I just—[Interruption] Order! The member will resume his seat. He knows the rules better than most. If he wants to raise a point of order, he should do so.

Chris Hipkins: Why should New Zealanders have confidence in her ability to introduce a new funding system when she has botched other similar projects like Novopay and has allowed the level of donations collected from parents to increase by over 30 percent since National came to office?

Hon HEKIA PARATA: For every hundred dollars that the taxpayer pays to fund our education system, parents pay $1.80. That makes up a very small part of our education vote, and that is a choice that parents make. Moreover, earlier in the House today we heard that all achievement in schools, particularly in National Certificate of Educational Achievement level 2 but also including participation in early childhood education, has gone up under this Government.

Road Safety—Speed Limits Outside Schools

10. JULIE ANNE GENTER (Green) to the Associate Minister of Transport: Will he support the Green Party plan to make 30 kilometres an hour the default speed limit outside schools, given that kids have less than a 50:50 chance of surviving being hit by a car travelling at the current default speed limit of 50 kilometres an hour?

Hon CRAIG FOSS (Associate Minister of Transport): Of course this Government supports making our roads safer for all users. We are spending approximately $1 billion each year on road safety, which includes funding towards safer roads, roadsides, and dangerous intersections, all of which benefit those walking and cycling, both young and old. I note schools and their local communities already have the ability, through their local road-controlling authority, to lower speed limits around schools to 30 kilometres, if that is what is required. This allows local solutions to local issues, supported by local communities.

Julie Anne Genter: Does he acknowledge that the current process for reducing speed limits is unnecessarily bureaucratic and puts hurdles in place for those local authorities that would like to drop the speed limit outside of schools, and that explains why fewer than 20 percent of schools have the safe speed limit of 30 kilometres an hour in front of schools?

Hon CRAIG FOSS: No, I do not accept that that is the reason. The process that we have now has been in place—I think it was last changed in 2003, under the previous Government, supported by that member’s party. So, no, I do not accept that that is the reason why some of these speed limits are not changed by local authorities or road-controlling authorities as that member would like.

Julie Anne Genter: Given that the number of children walking and cycling to school has declined significantly in the time since this process was put in place, will his Government consider changing the process to make the default speed limit outside schools the safe speed limit of 30 kilometres an hour to make our kids safer?

Hon CRAIG FOSS: No. One size does not fit all here. Local communities do know best about their conditions around local schools. I do note we have rural schools and urban schools, and sometimes changing a speed limit on a road, be it a 100 kilometre-per-hour road or a 70 kilometre-per-hour road, can in fact make more danger or create more risk than, in fact, a 70 kilometre-per-hour limit, which many schools already have. I also note that we note concerns around this—so there are limits in and around passing school buses, where if a school bus is stopped, the limit is 20 kilometres per hour, regardless of which direction the car is travelling.

Julie Anne Genter: Can he explain why his Government supports 30 kilometres an hour as the default speed limit when driving past road workers but not when it is around schools, where our kids’ safety is threatened?

Hon CRAIG FOSS: They are two totally different issues. A road worker, in the middle of the road, obviously working on an infrastructure investment—possibly a cycleway, possibly one of the safer roads that this Government is investing in—needs to be kept as safe as possible. But of course every life is as valuable as the next.

Julie Anne Genter: I seek leave to table the research done for the Government, which shows that 30 kilometres an hour is the appropriate speed around—

Mr SPEAKER: Order! We just need the source of the research and the date.

Julie Anne Genter: This is the Safer Speeds Programme, which was a collaboration by the New Zealand Police, the New Zealand Transport Agency, the Ministry of Transport, and ACC.

Mr SPEAKER: And it is available on the website?

Julie Anne Genter: It is.

Mr SPEAKER: Then I am not putting the leave.

Crime Statistics—Burglaries

11. STUART NASH (Labour—Napier) to the Minister of Police: Why did the number of burglaries that were resolved fall from 9,770 in 2008 to 6,136 in 2015, with the proportion of burglaries that went unsolved rising from 84 percent to over 90 percent?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) on behalf of the Minister of Police: In response to the first part of the question, I am advised that the figures the member is quoting are not directly comparable. The first figure refers to the number of burglaries resolved in 2008, while the second figure refers to victimisation—something the police started counting in 2015. In response to the second part of the question, I can advise the member that police are actively working to get those resolution rates up.

Stuart Nash: Does she think that it is acceptable for police to tell burgled South Auckland dairy owners that they are too busy to investigate?

Hon CHRISTOPHER FINLAYSON: I cannot confirm that that statement was made. The police are very concerned with dealing with resolution rates for burglaries, and in particular in South Auckland.

Stuart Nash: Will she admit that cutting the number of general duties constables by almost 18 percent since 2009 has contributed to the Police Association’s inability to respond to burglaries?

Hon CHRISTOPHER FINLAYSON: I do not accept the underlying basis of that question.

Stuart Nash: I seek leave to table an answer to an Official Information Act request to the Minister of Police.

Mr SPEAKER: On the basis that it could inform members of the House, I will put the leave. Leave is sought to table that particular response to an Official Information Act request. Is there any—

Hon Gerry Brownlee: Are they all published?

Mr SPEAKER: They are not all published. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Stuart Nash: Does she believe that there is an issue when 86 percent of Police Association members believe that front-line general duties branch police are under resourced?

Hon CHRISTOPHER FINLAYSON: I actually have not seen that survey, but if people are asked whether they would like more resources, the answer, on most occasions, would likely be yes.

Stuart Nash: I raise a point of order, Mr Speaker. It was not about whether they required more resources but the fact that they—

Mr SPEAKER: Order! No, the question has been addressed.

Stuart Nash: Why has she allowed three Auckland districts to underspend their budgets by almost $14 million while unresolved burglaries are now at over 90 percent?

Hon CHRISTOPHER FINLAYSON: I would have thought that they were operational matters, but let me make it clear to the member that the question of burglary is not taken lightly by the police or this Minister. This is a very difficult crime to resolve in many circumstances, often because it is reported long after the actual event. The key thing is that the police are focused on this issue and the Minister is supporting them.

Irrigation—Government Initiatives

12. ALASTAIR SCOTT (National—Wairarapa) to the Minister for Primary Industries: How is the Government supporting our regions through irrigation and water storage projects?

Hon NATHAN GUY (Minister for Primary Industries): As a Government we are strong supporters of irrigation and water storage projects. Analysis by the New Zealand Institute of Economic Research has shown that irrigation contributes $2.2 billion to the national economy. That creates jobs and is helping to revitalise many towns throughout the regions. Of course, water storage also has real environmental benefits. This includes more consistent river flows in the summer and reduced pressure on groundwater aquifers. It is well summarised by Ikawai farmer Gert van’t Klooster, who said that reliable irrigation “gives you the certainty to farm in the black and gives you the possibility to be green”.

Alastair Scott: What positive effects does irrigation have on different farming models?

Hon NATHAN GUY: Good question. There are many misconceptions about irrigation schemes. One, in particular, is that they only intensify dairy farms. The reality is that dairy accounts for about 50 percent of the irrigated area in New Zealand, with 25 percent relating to sheep and beef finishing and the remainder going into cropping and arable. Irrigation allows for more efficient farmer models in terms of both environmental performance and productivity. One example is the Waimea dam near Nelson, which would enable the conversion of un-irrigated pasture into high-value apple orchards with a reduction in nutrient leaching, and the Central Plains Water scheme will ultimately help support half of the world’s radish seed and a third of the world’s carrot seed, which is grown here in New Zealand.

Alastair Scott: What recent announcements has he made regarding support for irrigation projects?

Hon NATHAN GUY: Last week I announced three new irrigation investments in the Wairarapa, Hawke’s Bay, and Gisborne. These investments come from the Ministry for Primary Industries Irrigation Acceleration Fund, with a total of $1.6 million. Analysis shows that Ruataniwha Dam could increase regional GDP by around $200 million a year and will lead to 2,250 full-time equivalent jobs in that region. In the Wairarapa, analysis shows that the Black Creek and Tividale projects could add around $100 million to the wider region per year.

Hon Damien O’Connor: Will the Minister assure the Tasman District Council that the Government will pay it the $40 million required to build the Lee Valley dam?

Hon NATHAN GUY: There is a process to go through, and that, of course, will be through the Crown Irrigation Investments Ltd, which has a board that makes the ultimate decision. So the member, if he is interested in water storage projects, should actually talk to his colleagues, who are opposed to jobs in the region, who are opposed to exports, who are opposed—

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

ENDS

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