Questions and Answers - 6th April 2016

1. Tax System—Overseas Trusts

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

1. ANDREW LITTLE (Leader—Labour) to the Prime Minister: Does he stand by all of his statements in relation to tax havens?

Rt Hon JOHN KEY (Prime Minister): Yes, and in particular my statement from question time yesterday when I said it is ridiculous to suggest that New Zealand is a tax haven. We have a strong tax treaty and information exchange network that helps discover and prevent tax avoidance through exchanging information between tax jurisdictions. New Zealand has also been a very active participant in the OECD and G20 work to combat tax avoidance. We continue to be a strong voice in this area.

Andrew Little: When he says that New Zealand has “full disclosure”, can he confirm that he means a system where foreign trusts do not have their names revealed in a public database, do not have their trustees or settlors revealed in a public database, and do not automatically supply any financial information to the Government?

Rt Hon JOHN KEY: “Full disclosure” is not that something is on a public database; it is that that information is available. The IR607 requires that the trustee is listed and that the trust’s name is listed. If any one of the 40 countries that we have a tax agreement with, or the 11 that we have a tax information - sharing agreement with want to come to New Zealand and ask for further information, we would supply that. In fact, actually, 20 jurisdictions have done that, and we have supplied it. In the case of Australia, we automatically supply the information to them.

Andrew Little: When he says the Inland Revenue Department (IRD) will supply information to any country that asks, can he confirm that Governments other than Australia cannot get any information at all, unless they somehow know the specific name of the trust, and that those trust names are themselves secret?

Rt Hon JOHN KEY: If a country for which New Zealand has a double tax agreement, or, alternatively, has an information-sharing agreement—[Interruption] It sounds like we are being attacked by drones, but anyway.

Mr SPEAKER: I will have that sorted out as quickly as I can.

Rt Hon JOHN KEY: OK, all right. If any one of those—

Andrew Little: It is trying to get the trust information.

Rt Hon JOHN KEY: I think it is a bumblebee, actually. I am about to deliver the sting, if you give me 2 seconds.

Hon Members: Ha, ha!

Mr SPEAKER: Order! We will just continue with the answer to the question, without interjections.

Rt Hon JOHN KEY: OK. So if any one of those countries that we have an agreement with comes to IRD and asks for the information, we will supply it. Of course, it is for the individual country itself to decide what disclosure regime it wants to have. If it asks for the trust’s information as part of the declaration, then, actually, it will know the name. It is up to the country to decide whether it wants to know.

Andrew Little: Is it the truth that his weak rules on foreign trusts mean enforcement agencies have no idea which of the 12,000 secret trusts are being used by wealthy foreigners for tax dodging?

Rt Hon JOHN KEY: I would best sum it up by saying this: “The government has sought to develop policy that works for all concerned, one that enables New Zealand to co-operate with other tax jurisdictions while not disrupting the legitimate financial transactions of foreign trusts.” Those words came from Michael Cullen, when he put together the legislation that, I might add, we are talking about now, which was voted for not just by Labour and National but was voted for by New Zealand First. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I have called for order, Sue Moroney; I expect it.

James Shaw: If, for example, a Russian oligarch wanted to hide assets in a New Zealand foreign trust, could Russian tax authorities obtain full disclosure of the details if they did not know the name of that trust here?

Rt Hon JOHN KEY: I cannot tell you whether we have a double tax agreement with Russia. You would need to put that question to the Minister of Revenue.

James Shaw: Is the Prime Minister saying that Covisory Partners in Auckland, members of the New Zealand Institute of Chartered Accountants, is wrong when it concludes that “New Zealand is actually a tax haven, at least in respect of certain trusts.”?

Rt Hon JOHN KEY: In my opinion, yes, for a number of reasons, not the least of them being that the arbiter of whether there are reputational issues here is the OECD. It has not raised any issues in this area with us. In fact, despite what Labour said in the House about the OECD not giving New Zealand a clean bill of health, that is completely wrong. New Zealand was rated as—[Interruption] See, once again you are wrong, Grant—

Mr SPEAKER: Order! The Prime Minister will resume his seat. The question has been answered, right at the start.

James Shaw: Is it not true that the same OECD report that he was just quoting, saying that New Zealand had a clean bill of health, also warned that improvements were needed around trusts with non-resident directors and assets, and that nothing has changed in the 3 years since that report?

Rt Hon JOHN KEY: That is not correct. The advice I have had is that the OECD raised a few minor points not specifically related to foreign trusts. They were raised, and those have actually been addressed.

James Shaw: Is he not concerned that, on his watch, New Zealand is building a reputation as a sunny place for shady people?

Rt Hon JOHN KEY: We have, in New Zealand, followed tax rules that have been around for a very long time, since 1988. The disclosure rules that came in, brought in by the previous Labour Government, are robust. We are part of the OECD and other organisations that look at these areas. As I have said publicly over the last few days, if there are recommendations made either as part of the base erosion and profit sharing work we are doing with the OECD, or others, New Zealand is quite happy to adopt and accept those. But we have full disclosure to anybody for whom there is an agreement. And it will not matter how many times the Opposition says we do not, we do, and we have provided it to 20 jurisdictions.

Andrew Little: Why do foreign trust owners deserve more secrecy than New Zealanders who own shares or are company directors?

Rt Hon JOHN KEY: We have tax rules in New Zealand that were established for foreign trusts, and, as I quoted from Michael Cullen earlier—and I quote it again—“the Government’s proposed foreign trust policy is another area where we worked extensively with affected taxpayers to produce good, workable tax policy.” There is nothing wrong with a foreign trust operating in New Zealand. We have a disclosure regime, and we are more than happy to work with, and are working with, the OECD on its base minimisation policy.

Andrew Little: Is it not the truth that wealthy foreigners take advantage of this special treatment to dodge tax at home, and the truth is he does not worry about that one little bit?

Rt Hon JOHN KEY: That is just fundamentally incorrect. Firstly, we are following the rules established by the—

Grant Robertson: Looking after your old mates.

Rt Hon JOHN KEY: Well, they are the rules established by the Labour Government, voted for by Labour and New Zealand First. Secondly, if any—[Interruption]

Mr SPEAKER: Order! There is no point in answering a question asked by Andrew Little when I am getting that sort of barrage from the front bench of the Labour Party.

Rt Hon Winston Peters: If our tax laws are—to use his words—world-leading and right, why is he blaming the last Labour Government?

Rt Hon JOHN KEY: Well, if they are not, why the hell did he vote for them in 2006? [Interruption]

Mr SPEAKER: Order! My patience is weakening on this particular side of the House. If I have got to specifically name people and ask people to leave, I will do so. It would be with reluctance.

Andrew Little: If there is full disclosure, as he claims, can he tell this House which trusts are being used to dodge taxes, which trusts are being used to launder money, and which trusts are being used to hide stolen assets?

Rt Hon JOHN KEY: The member is posing hypothetical assertions.

2. State-owned Enterprises—Kiwibank

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: Can he confirm that KiwiBank will remain 100 percent Government owned?

Hon BILL ENGLISH (Minister of Finance): Yes. New Zealand Post Chair, Sir Michael Cullen, today announced a proposal that would see two additional taxpayer-owned shareholders, ACC and the New Zealand Superannuation Fund, purchase 20 percent and 25 percent of Kiwibank. As these are both Government agencies, Government ownership remains at 100 percent.

David Seymour: Can the Minister guarantee that the rest of the banking sector will remain 100 percent privately owned?

Mr SPEAKER: The Hon Bill English, if there is ministerial responsibility.

Hon BILL ENGLISH: Yes. As we have seen back in the global financial crisis, owning a bank can be a bit tricky, and when they are very large, even the New Zealand Government could not afford to own the other banks.

David Bennett: What are some of the potential benefits of the New Zealand Post proposal?

Hon BILL ENGLISH: It is a proposal at this stage, and final negotiations have yet to be completed. The New Zealand Post board, when it approached the Government, explained it would give Kiwibank access to extra sources of capital for future growth and deepen the commercial oversight of the bank. The Superannuation Fund and ACC would have an investment in a profitable local company. New Zealand Post would receive a return for the shares and use some of that to repay the debt that it built up supporting Kiwibank’s expansion. Some may be paid to the Government as a special dividend.

Hon David Parker: Is the Government willing to implement mechanisms that would prevent the onsale of Kiwibank shares by ACC or the Superannuation Fund to non-public shareholders so as to void today’s step, leading to the privatisation of Kiwibank in the future?

Hon BILL ENGLISH: Yes. Part of the transaction is that there will be a right of first refusal, which means that when ACC or the Superannuation Fund decides to sell its shares, it must first offer them to the Government of the day. I can confirm for the member that the policy of this Government would be that if the shares were offered to this Government we would buy them.

Hon David Parker: Will the Government commit to using most of the special dividend that the Government will now be able to get out of New Zealand Post to fund the additional capital that Kiwibank needs to expand, or is he running down the Government’s ownership of Kiwibank to fund tax cuts?

Hon BILL ENGLISH: We cannot be running down the Government ownership of it because it is 100 percent owned by the Government today, and will still be 100 percent owned by the Government after the transaction. With regard to any capital that is actually returned to the Crown, we will apply that to the financing of other capital investments, which we regard as a higher priority. The owners of Kiwibank—that is, New Zealand Post, the New Zealand Superannuation Fund, and ACC—will fundamentally make the decisions about whether Kiwibank can grow further and how it will capitalise that growth.

David Bennett: If the proposal goes ahead, how will the Government ensure Kiwibank remains 100 percent Government-owned?

Hon BILL ENGLISH: As I have said in answer to the other member’s question, the proposal includes a right of first refusal for the Government over any future sale of shares.

James Shaw: How can he guarantee that Kiwibank will remain in public ownership, when he cannot control who future finance Ministers will be or whether they will choose to buy back the shares?

Hon BILL ENGLISH: I would welcome the capacity to control who future finance Ministers will be. But the Greens, however, cannot contribute to that because they consistently rule themselves out of getting into Government. So that will be a matter for the Government of the day. In the end, the guarantee of public ownership of Kiwibank is a matter for the public and the Government of the day, on any day.

3. Tax System—Overseas Trusts

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

3. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Did he read the report “Taxation of Multinationals” prepared by the Treasury and the Inland Revenue Department dated 15 August 2013, and did he undertake the action sought from him to agree to the recommendations contained in that paper?

Hon BILL ENGLISH (Minister of Finance): Yes, and all recommendations in the paper were agreed to.

Grant Robertson: What action did he take on being advised by officials in that paper that “To protect our international reputation, it may be necessary to strengthen our regulatory framework for disclosure and record-keeping.”?

Hon BILL ENGLISH: The paper outlined a whole range of measures that could be taken with respect to the taxation of multinational companies. The action that we took, relevant to that particular proposal, was that a whole lot of other measures in the paper were important because they protected the New Zealand tax base, which we regard as our top priority. The Mexican tax base is interesting, but it is not our top priority. So we left the measures around those trusts, because, as the paper points out, it would require time, effort, and compliance from the Inland Revenue Department, with no benefit to the New Zealand tax base.

Grant Robertson: Is he saying by that answer that he does not put any value whatsoever on New Zealand’s reputation and would rather get alongside the mega-rich than protect that?

Hon BILL ENGLISH: No, New Zealand’s reputation for tax policy, as confirmed by the OECD when it did its report, is that we have probably the most comprehensive broad-based low-rate tax system in the world. That is, no other developed country has a tax base with as few holes as New Zealand has. That report was about the taxation of multinationals in New Zealand. A large number of the recommendations have been implemented, and we decided that the Opposition’s view about New Zealand as a tax haven is pretty irrelevant.

Grant Robertson: Is it correct that New Zealand is the only OECD country that allows tax avoidance through trusts in this way?

Hon BILL ENGLISH: I do not know about the rules for trusts in every other OECD country, but that is not what the OECD said. What it said was that we comply. As for the member’s assertion that, somehow, having trusts endorses tax avoidance—well, so does having companies, so does having sole proprietors, and so does having PAYE; the tax vehicle is not determinant of whether there is avoidance. Of course, it is the way that people use them that matters, and our top priority is how New Zealanders use our tax vehicles; not how Mexicans use them.

Grant Robertson: How is it possible that our foreign trust disclosure rules do not need to be tightened, when companies like Turner Hopkins advertise themselves by saying that New Zealand is increasingly popular with foreign trusts because “There are very limited disclosure obligations”?

Hon BILL ENGLISH: Whoever they are, they are wrong. The combination of the disclosure requirements and the information requirements around trusts, the application of anti - money laundering procedures, the new introduction of the automatic exchange of information, which is coming, and the Foreign Account Tax Compliance Act regime mean that any foreign investor with a presence in New Zealand could be subject to anything from one to four compliance regimes. So I suggest that the tax advisers update their understanding of New Zealand law.

4. Student Loans—Overseas-based Borrowers

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

4. TODD BARCLAY (National—Clutha-Southland) to the Minister for Tertiary Education, Skills and Employment: What progress is the Government making in ensuring overseas-based New Zealanders meet their obligation to repay their student loans?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Very good progress. Since 2010 the Government has run an initiative to ensure overseas-based borrowers repay their loans, and that initiative is on track to reach its current target of lifting repayments by overseas-based borrowers by $100 million a year. Following a high-profile event in January, repayments by those borrowers have increased by 31 percent over the same period last year, with an additional 20,000 repayments made. It is just a pity that it took the first arrest at the border to achieve that spike in activity. Overall, overseas-based borrowers repaid $184.7 million in the last financial year. To the end of February this year, it has already reached $134 million.

Todd Barclay: Why is it important that overseas-based borrowers meet their obligations?

Hon STEVEN JOYCE: It is important that overseas-based borrowers meet their obligations to taxpayers who have supported their tertiary study, so that we can provide the same support for the next generation of students. Just because a borrower is overseas, it does not mean that their loan will go away while they are not here. Unfortunately, too many have taken that view. It is also important for the overseas-based borrowers themselves to get their loans paid off faster and minimise the interest payments and penalties.

Todd Barclay: What measures are used to ensure overseas-based borrowers meet their repayment obligations?

Hon STEVEN JOYCE: Prior to the current Government starting the current overseas-based borrowers initiative, overseas-based debt was in the “too hard basket”, or worse. We still have a long way to go to get overseas borrowers fully up to speed, but we have brought in fixed repayment obligations and higher repayment thresholds, we have put in place ongoing information-sharing agreements between the Inland Revenue Department and the Department of Internal Affairs to collect details from passport applications, we have introduced the border arrest system for the most non-compliant borrowers, and, from July this year, we will have an information-sharing agreement with the Australian Taxation Office to share information on student-loan borrowers living in Australia without the Inland Revenue Department knowing. With the majority of overseas-based borrowers living in Australia, this new agreement will be a significant step forward and will help us to collect nearly a billion dollars’ worth of overdue debt.

5. Housing—Supply and Affordability

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

5. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he stand by his statement, “Well of course someone has to buy the houses and so of course they will be affordable to somebody”?

Hon BILL ENGLISH (Minister responsible for HNZC) on behalf of the Minister for Building and Housing: Yes, in the context in which they were given.

Phil Twyford: Does he still maintain that when the median price of new builds in Auckland has risen to $800,000, that that is affordable just because someone is buying them, even when many of those new builds are being bought by speculators?

Hon BILL ENGLISH: Of course the overall aim of the Government policy is to enable low and middle income New Zealanders to be able to afford housing, and because Auckland is dealing with the legacy of decades of poor planning, it is taking some time to achieve that. But it would help if the member would stop opposing large developments in Auckland, as he has indicated today that he is opposing one.

Phil Twyford: When average Auckland prices rose $5,000 in the last month to $931,000, how does he expect anyone to afford them, other than wealthy offshore speculators?

Hon BILL ENGLISH: The member may be surprised to know that, even at those high price levels, the proportion of sales to first-home buyers in Auckland has risen quite a bit just in the last 12 months, from around 13 percent to 21 percent of all sales. But, as the member knows, we agree that house prices in Auckland are too high for low and middle income New Zealanders, and we would like to see that member supporting the large-scale developments, not opposing them, and also supporting the Government in trying to influence Auckland Council to produce a plan that will enable affordable housing.

Phil Twyford: When Auckland housing is among the most unaffordable in the world, with homeownership falling and 18 percent of Auckland’s homes still being sold to wealthy offshore speculators, is it not true that his housing policy only benefits the wealthiest 1 percent?

Hon BILL ENGLISH: No. What benefits wealthy homeowners are the stupid planning processes that he and that party endorse. That is, planning processes that stop development, prevent more greenfield land being available, and make densification harder. When we solve those problems—and I hope with that party’s support—then houses will be more affordable for New Zealanders.

6. Prime Minister—Statements

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Given his answer to Oral Question No. 1 yesterday, how does he stand by his statements?

Rt Hon JOHN KEY (Prime Minister): Vertically.

Rt Hon Winston Peters: Yeah, challenged. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Now we will turn to a supplementary question from the Rt Hon Winston Peters.

Rt Hon Winston Peters: When the media of the small Mediterranean island of Malta claim that “The New Zealand Foreign Trust regime is a sacred cow of New Zealand law, a veritable ‘Fort Knox’ of asset protection.”, are they wrong and he right?

Rt Hon JOHN KEY: The member is referring to the legislation that created the rules around foreign trusts, which he voted for.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am asking the Prime Minister for an answer that concerns him and his behaviour yesterday.

Mr SPEAKER: If the question was clearer, I would attempt to help the member—[Interruption] Order! I had some difficulty hearing the question at the start because of interjections, so on this occasion I will invite the member to ask the question—I hope it is in line with Standing Orders—and then we will proceed to the answer.

Rt Hon Winston Peters: When the media of the small Mediterranean island of Malta claim “The New Zealand Foreign Trust regime is a sacred cow of New Zealand law, a veritable ‘Fort Knox’ of asset protection.”, are they wrong and he right?

Rt Hon JOHN KEY: On the advice I have had, yes, they are wrong, because of the disclosure regime New Zealand has.

Rt Hon Winston Peters: If his acquaintances, the Prime Minister of Malta’s chief of staff and his Minister of energy, avail themselves through the and the Haast Trust of this “Fort Knox”, are they also wrong and he right?

Mr SPEAKER: There is no ministerial responsibility for that.

Rt Hon Winston Peters: When Massey University’s Deborah Russell says “It’s shameful for New Zealand to be caught up in international tax avoidance … The loophole in our laws that allows New Zealand foreign trusts to escape taxation has been known about for years, but nothing has been done to shut it down. This makes us complicit in schemes to avoid tax”, is she also wrong and he right?

Rt Hon JOHN KEY: The OECD in 2013 gave New Zealand the highest rating possible in this area: “compliant”. We are following the rules that were established and voted for by that member. If the member was not coming to the House with big crocodile tears today, he would have voted against the legislation in 2006.

7. Forestry—Reports

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

7. STUART NASH (Labour—Napier) to the Associate Minister for Primary Industries: What reports has she seen on the conduct of Hikurangi Forest Farms in Gisborne?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Associate Minister for Primary Industries: I have not seen any reports on the conduct of Hikurangi Forest Farms in Gisborne. However, I have seen some limited media reports of some allegations being made.

Stuart Nash: How does she expect to meet her target, which she announced just last week, of growing the level of processed wood products that we export overseas, when the overseas-owned Hikurangi Forest Farms refuses to supply logs to local processing firms, at a cost of 50 jobs, even when these local mills are willing to pay export-equivalent prices?

Hon STEVEN JOYCE: I think the member should be advised to be careful not to place himself in the middle of commercial transactions between two parties, because I understand from the media reports that there is a negotiation going on at some point. The member is in danger, potentially, of being used by one party, I think, to advance their cause at the expense of the other party.

Stuart Nash: What is she going to do to get Hikurangi Forest Farms to process more of its logs into value-added lumber products in New Zealand, given it promised to build a “state-of-the-art processing facility” in its successful 1996, 2006, and 2007 Overseas Investment Office applications to purchase land, but is yet to take any steps towards building one?

Hon STEVEN JOYCE: My understanding is that that particular company is currently building a facility in the district that is going to create 22 jobs, and, potentially, 44 jobs. I do not know how that relates, in particular, in relation to an Overseas Investment Office application, but, again, I think the member has to be careful. If he is suggesting that we force private companies to sell their logs below other prices because it suits him, then that is a very interesting path to walk down.

Stuart Nash: Why is she prepared to stand up for a wealthy foreign investor, who purchased 33,000 hectares of our forests, but then broke their promises, flaunted our rules, and refused to sell logs to local mills, therefore costing jobs, over the interests of good, hard-working New Zealanders of the East Coast region?

Hon STEVEN JOYCE: I think the House could be excused for thinking that those are the talking points from one party to a potential commercial transaction. I think the member is being used. If I were him I would pipe down, because he has been, basically, asked to advance the case of one private party on behalf of another, and I actually think he should take some care with that.

Stuart Nash: I seek leave to table an Overseas Investment Commission decision sheet from 16 December 1996, which states: “The commission was further advised that the company proposes to establish a state-of-the-art processing facility.”

Mr SPEAKER: On the basis that it is quite some time ago, I will put the leave. Leave is sought to table that particular one-page decision by the Overseas Investment Commission. Is there any objection? There is no objection.

• Document, by leave, laid on the Table of the House.
•
Stuart Nash: I seek leave to table a 21 February 2006 decision from the Overseas Investment Office on Hikurangi Forest Farms, which states “Hikurangi proposes to acquire the subject property to develop a timber processing facility.”

Mr SPEAKER: Leave is sought to table that particular Overseas Investment Office directive. Is there any objection? There is none.

• Document, by leave, laid on the Table of the House.
•
Stuart Nash: I seek leave to table a decision sheet from the Overseas Investment Office on Hikurangi Forest Farms from 15 May 2007, which states “Hikurangi proposes to acquire the subject property … to develop a timber processing facility.”

Mr SPEAKER: Leave is sought to table that particular decision. Is there any objection? There is none.

• Document, by leave, laid on the Table of the House.
•
8. Flu Vaccine—Access

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

8. JACQUI DEAN (National—Waitaki) to the Minister of Health: How is the Government supporting the protection of New Zealanders against influenza this winter?

Hon Dr JONATHAN COLEMAN (Minister of Health): Today I launched the annual influenza immunisation campaign in Porirua. More than 1 million New Zealanders get immunised against influenza each year, and this year we are aiming for 1.2 million. The influenza vaccine has two new strains to ensure New Zealanders are better protected this winter from the strains of influenza circulating around the world, and the vaccine will be funded for eligible patients until the end of July.

Jacqui Dean: Who is eligible for these free vaccinations, and does this include older people, given the demographics and cooler temperatures of some parts of the Waitaki electorate?

Hon Dr JONATHAN COLEMAN: Yes. People over the age of 65 are eligible for a free vaccination, and of course that includes the Waitaki electorate. Vaccination is also free for New Zealanders with long-term health conditions such as heart disease, stroke, diabetes, respiratory disease, kidney disease, and cancer. It is also free for pregnant women. In addition, children aged 6 months to 4 years with a previous admission for a respiratory illness are eligible for a free vaccination.

Jacqui Dean: Apart from influenza, what other steps is the Government taking to increase immunisation rates?

Hon Dr JONATHAN COLEMAN: As one of our six health targets the Government wants to see 95 percent of infants aged 8 months complete their primary course of immunisation on time. In the last quarter our nationwide coverage increased to 94 percent, the highest coverage that has ever been achieved. The Southern District Health Board, which covers part of the member’s electorate, made steady ground, reaching 94 percent coverage.

9. Prime Minister—Statements

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

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

Rt Hon JOHN KEY (Prime Minister): Yes.

Rt Hon Winston Peters: If he stands by his statement that his Government “has been leading the charge on really expanding the use of the gold card and the opportunity and advantages”, why has his Government capped the SuperGold card travel cost?

Rt Hon JOHN KEY: Yes, I stand by that statement, and I am delighted that that senior member got the opportunity to use his SuperGold card on the Pētone to Wellington route this morning.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Two matters. One is that that is not an answer to my question about the capping of the travel cost. Second, I did not use any gold card this morning. [Interruption]

Mr SPEAKER: Order! [Interruption] Mr Brownlee! The problem with the member’s question was that there were two questions in his supplementary question. The Prime Minister chose to answer one of them.

Hon David Parker: I raise a point of order, Mr Speaker. I accept your ruling, Mr Speaker, that the Prime Minister is required to answer only one of two questions, but that does not mean to say that he can answer a third that was not asked. That was out of order and it should be you, Mr Speaker, who stops the Prime Minister from doing that.

Mr SPEAKER: I did not hear anything that I thought was out of order from the Prime Minister.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. A question that asks if he stands by his statement why has something happened is not two questions; it is just one.

Mr SPEAKER: Order! I have ruled it was two questions.

Rt Hon Winston Peters: Well, you are wrong.

Mr SPEAKER: Well then the member will stand and withdraw that comment immediately or else leave the Chamber.

Rt Hon Winston Peters: I withdraw and apologise. Point of order. [Interruption]

Mr SPEAKER: Order! I have ruled on that matter. If the member wishes to raise a fresh point of order, I am very happy to hear it. But if in any way I consider we are just going over old ground and relitigating where we have been, then I will have no hesitation in asking that member to leave the Chamber.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am not going to let down the education system of this country by have you making it up as you go along. I would rather leave the House than do that.

Mr SPEAKER: Well, the member is welcome, then, to leave the House. [Interruption] The member will leave the Chamber.

• Rt Hon Winston Peters withdrew from the Chamber.
•
Ron Mark: If his Government is leading the charge to help seniors who have contributed to New Zealand all of their working lives, why cap funding on free travel to SuperGold cardholders and force ratepayers to top up the shortfall—why?

Rt Hon JOHN KEY: For a start off, I think it is important to have a few of the facts, which are, firstly, that when we came into office SuperGold card funding was $18 million, approximately; now it is $28 million. There were about 800 businesses using it; now there are over 8,000. The entitlements do not change. Yes, we are going to be driving better value for money for the providers that do that, but I think that is sensible. There is a review in 2018-19, and if the Rt Hon Winston Peters did not use his SuperGold card this morning on the train, why the hell did he have a SuperGold card photo-op?

Mr SPEAKER: Order! The last part now will not help the order of this House. Supplementary question—Ron Mark.

Ron Mark: I will not ask why that was a pathetic answer.

Mr SPEAKER: Order! Can I just have the supplementary question.

Ron Mark: Yes, it is coming. If the Government—[Interruption]

Mr SPEAKER: Order! Ron Mark.

Ron Mark: Thank you, Mr Speaker. If the Government cannot afford the free travel benefits of the SuperGold card, how can it afford to give full superannuation benefits to over 82,000 immigrants who have come here and acquired superannuation after 10 years, how can it afford to fund their free health care, and how can he afford to give tax cuts to his wealthy mates?

Mr SPEAKER: Order! There were a number of questions there. The last part is certainly not to be addressed in the answer; it is out of order.

Rt Hon JOHN KEY: As the member knows, the entitlements for the SuperGold card are not changing. The number of businesses using it is dramatically being enhanced, and I think the Government can be proud of its record in relation to the SuperGold card.

Ron Mark: I seek leave of the House to table correspondence from the Greater Wellington Regional Council that shows that the Government is capping the funding.

Mr SPEAKER: It is a marginal call, but I will put the leave and leave it for the House to decide. Leave is sought to table—how many letters? Can I just check?

Ron Mark: One letter.

Mr SPEAKER: It is one letter, as described by Ron Mark. Leave is sought to table that document. Is there any objection? There is none. It can be tabled.

• Document, by leave, laid on the Table of the House.
•
10. Prime Minister—Fresh Water

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

10. CATHERINE DELAHUNTY (Green) to the Minister for the Environment: Does he stand by the Prime Minister’s statement that in Aotearoa “nobody owns water”?

Hon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of the Minister for the Environment: Yes.

Catherine Delahunty: How can he claim that no one owns our water, when Ashburton council is trying to profit from selling the rights to bottle and sell fresh water to overseas companies?

Hon CHRISTOPHER FINLAYSON: Quite easily, because the Ashburton council is not selling water.

Catherine Delahunty: When a private company is right now advertising the sale of Canterbury land with rights to half a billion litres of water as “an outstanding opportunity for any major water soft drinks supplier”, does he really believe this company is not acting like it owns the water?

Hon CHRISTOPHER FINLAYSON: Yes, I am.

Catherine Delahunty: I seek leave to table a website advertisement, which has been taken down in most places, showing the private sale of the rights for half a billion litres of Canterbury water.

Mr SPEAKER: Am I clear in saying that it is a public advertisement the member is seeking to table?

Catherine Delahunty: Yes, that is correct.

Mr SPEAKER: Well, then that is available for all members. [Interruption] I will not putting the leave. Further supplementary questions?

Catherine Delahunty: You have got to have a go in this place.

Mr SPEAKER: Order! Just finish your supplementary question, otherwise I am happy to move on.

Catherine Delahunty: If he thinks no one owns water, then what did I just buy when I paid Coca-Cola $4 for this bottle of spring water taken from the Kaimai Ranges?

Hon CHRISTOPHER FINLAYSON: She bought a bottle of water.

Catherine Delahunty: Who owns it, Mr Speaker? Supplementary question?

Mr SPEAKER: Supplementary question, Catherine Delahunty. [Interruption] Order! I do acknowledge the reaction is to an interjection. Would the member please just ask her supplementary question.

Catherine Delahunty: Certainly, I would be delighted. Will the Minister accept—[Interruption] If you want a drink, come and have one. Will he accept that if water were owned by tangata whenua and the public, overseas companies would not be profiting from the sale of water allocations in Aotearoa?

Hon CHRISTOPHER FINLAYSON: It is well acknowledged by this Government that no one owns water in this country—that is the position going back many years across administrations—but Māori have rights and interests in water that are reflected in some of the excellent Treaty settlement negotiations his colleague the Minister for Treaty of Waitangi Negotiations has negotiated.

David Seymour: If it is wrong to have property rights in water, then has the Minister considered rescinding our world-leading quota management system in fisheries?

Mr SPEAKER: I fail to see that there is a ministerial responsibility, but I will allow the Minister if he wishes to make it brief.

Hon CHRISTOPHER FINLAYSON: The Minister has no responsibility for fisheries matters.

11. Broadband—Speed

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

11. BRETT HUDSON (National) to the Minister for Communications: What recent reports has she received on improvements in internet speeds?

Hon AMY ADAMS (Minister for Communications): Two independent reports have found that the Government’s ultra-fast broadband and Rural Broadband Initiative programmes are continuing to drive significant improvement in speeds. In 2008 average broadband speeds were 2.7 megabits per second. The most recent Akamai State of the Internet Reportfound that in the past year average speeds rose 27 percent, to 9.3 megabits, with peak speeds of 43 megabits a second, meaning that there has been a tripling of average internet speeds since 2008. For rural users, the latest update from TrueNet on Rural Broadband Initiative connections has found that speeds are growing by about 7 percent per quarter. Those users under the first phase of the Rural Broadband Initiative are now able to access websites at a rate three times faster than they would otherwise have been able to, thanks to this National-led Government.

Brett Hudson: How will these better speeds benefit the people of Ōhāriu and wider New Zealand?

Hon AMY ADAMS: As the member is aware, Ōhāriu has the highest proportion of internet connections in New Zealand. For both Ōhāriu and wider New Zealand, faster broadband offers the opportunity for people to make the most of improving business productivity, provides smarter ways to receive health care, and ensures that our youngest New Zealanders are accessing the best resources anywhere in the world while studying. It connects New Zealanders with one another and with new markets across the world, and it allows our best and brightest to explore new ideas, services, and products. It is a vital part of the Government’s plan for developing a productive, competitive economy and creating more jobs for Kiwis and their families.

David Seymour: By how much has productivity in the New Zealand economy grown over the period the Minister cites?

Hon AMY ADAMS: Not being the Minister for Economic Development, I do not have those figures to hand, but if he wishes to put them down to that Minister, I am sure he can provide them.

12. Tax System—Applications to Overseas Investment Office

[Sitting date: 06 April 2016. Volume:712;Page:1. Text is subject to correction.]

12. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Land Information: Can she assure the public that the Overseas Investment Office has not approved any applications by foreign investors implicated in the Mossack Fonseca tax avoidance scandal; if so, how?

Hon LOUISE UPSTON (Minister for Land Information): The Overseas Investment Office is aware of concerns, and the Inland Revenue Department has requested information regarding one application connected with Mossack Fonseca.

Hon David Cunliffe: Are offshore trusts with New Zealand - based trustees or custodians, such as UnaEnergy Trustees, considered an overseas person by the Overseas Investment Office?

Hon LOUISE UPSTON: It is quite clear in the Overseas Investment Act as to who is an overseas person for whom we require consent for them to purchase any sensitive land or significant business assets and fishing quota. It is someone who is not a New Zealand citizen or is not ordinarily resident in New Zealand, or an entity that is 25 percent or more owned or controlled by an overseas person.

Hon David Cunliffe: I seek leave to table a media release by the Overseas Investment Office, dated 4 April 2016, entitled “Overseas Investment Office to provide clarity to custodian companies”, which remains silent—

Mr SPEAKER: Order! There is no need to add anything further. If it a media release from the Overseas Investment Office, it is freely available to members.

Hon David Cunliffe: When the Overseas Investment Office says it has taken a lighter touch in processing applications, does this include blind ignorance of potential tax evasion trusts and overseas criminals such as those potentially linked to Mossack Fonseca’s New Zealand partner companies?

Hon LOUISE UPSTON: As I have said in this House before, the Act is very clear about the fact that it is a privilege to own New Zealand land and assets. We actually have one of the more robust regimes around the world, which makes sure that we get that balance right in knowing that New Zealand is open to foreign investment, but absolutely the criteria are clear. Good character is one of those criteria, and the Overseas Investment Office looks at that criteria very significantly. More important, it is not just a condition when the application is put forward. It is an ongoing condition of the consent. So if at a later point there is ever an issue associated with someone who has been given approval, then the Overseas Investment Office can and does take action with that breach.

Hon DAVID CUNLIFFE: Can the Minister confirm that the Overseas Investment Office has in the last 5 years approved 99.85 percent of all its applications, and that it has too few staff and investigative resource even to routinely check whether the application conditions have been met; if so, why is the Overseas Investment Office pandering to the 1 percent of international high rollers who are playing fast and loose with New Zealand’s regulatory regime, as shown in the Panama Papers?

Mr SPEAKER: Either of those two supplementary questions, the Hon Louise Upston.

Hon LOUISE UPSTON: I am happy to report to the House that the Overseas Investment Office has a very strong regime. One of the parts of that is to make sure, in the very first quality control of the applications that are received—if he looks at the statistics for February alone this year, that member will see the high number that were rejected and not accepted for processing. What that does mean is that at the end of the day, of those that are accepted, yes, we will have a higher number of those approved, because those that will not get approved are kicked out at the very first touch.

ENDS

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