Prime Minister—Overseas Trusts

1. JAMES SHAW (Co-Leader—Green) to the Prime Minister: On what dates did he discuss with the Minister of Revenue his conversation with Ken Whitney on foreign trusts, and what specifically did he say to the Minister?

Rt Hon JOHN KEY (Prime Minister): There is no record of when I spoke to the Minister of Revenue, but it would have been between 27 November 2014, when the New Zealand Herald story first appeared, and 2 December 2014, when Mr Whitney emailed the Minister. I informed the Minister that there had been an approach by Mr Whitney, who acts for me in my personal capacity; that Mr Whitney was part of an industry group working in the New Zealand foreign trust industry; and that I had told Mr Whitney I was unaware of the issue in the New Zealand Herald story that he had raised, and his group should meet with the Minister.

James Shaw: Did he tell the revenue Minister to expedite his meeting with the foreign trust industry?

Rt Hon JOHN KEY: No.

James Shaw: Did he tell the revenue Minister to ditch the recommendation of the Inland Revenue Department (IRD) to review the foreign trust sector?

Rt Hon JOHN KEY: No.

James Shaw: Is he comfortable with the fact that his revenue Minister told foreign trust lobbyists, in his first meeting with them on 16 December 2014, that: “the Government had no intention of conducting a general and public review of foreign trust rules.”?

Rt Hon JOHN KEY: That would have reflected, obviously, the view in the advice that he has got. It is consistent with IRD actually saying that a review would have taken away from work that it wanted to do that was about the New Zealand tax base. But that is not what I instructed him to say, because I did not instruct him to say anything in that meeting.

James Shaw: What evidence does he have that it was Inland Revenue Department officials, and not the Minister, who recommended that there not be a review of foreign trust regulation?

Rt Hon JOHN KEY: I was not part of the meetings; I was not involved in that. My only involvement was that my lawyer at the time came to me and said that there had been a story in the New Zealand Herald. I was quite clear, and said: “I have no idea what you’re talking about, but you need to go and see the new Minister, as part of the lobby group.” They went, and that is quite standard practice. Actually, people come and approach me every day, and I point them towards the Ministers. Just as an example of that, if the member was to ever—

James Shaw: I raise a point of order, Mr Speaker. My question was: what evidence does he have about that decision? He did not address that—

Mr SPEAKER: No, I think that on this occasion he clearly did. When you said “What evidence?”, the Prime Minister was laying out the evidence that he had for the statement made.

James Shaw: Given that it was his own lawyer who asked for, and was granted, a guarantee that there would not be a review of foreign trust regulation, is he not concerned about the perception that lobbyists can influence Government policy on behalf of vested interests in New Zealand?

Rt Hon JOHN KEY: The member is misrepresenting the situation. I was asked about a story that was in the New Zealand Herald. I made it quite clear that I did not know the details of that story, nor do I handle that—that is handled by Ministers. I did what is the fully and totally appropriate thing: I told the person and their lobby group to go and speak to the Minister. That happens every day. If the member was to ever get into Government, is he saying that if Russel Norman ever came up to him and said there was an issue in relation to the environment, he would not tell that person to go and speak to the environment Minister? In New Zealand we are a small country; people know other people.

James Shaw: I raise a point of order, Mr Speaker. First of all, Russel Norman is not a lawyer—

Mr SPEAKER: Order! [Interruption] Order! If the member wishes to raise a point of order, he is welcome. Could I have the point of order, please.

James Shaw: Certainly. My point of order is that my question was whether he is concerned about the perception that lobbyists can influence Government policy—

Mr SPEAKER: No, no. There was a lead-in to the question, along the words “given that his own”—there was “given a guarantee there wouldn’t be a review”, or words to that effect, so there was quite a lot more in the question, to which the Prime Minister took the opportunity to respond.

James Shaw: Will he consider following the UK Government’s practice of publishing Ministers’ diaries so that it is transparent to the public who, at least, is lobbying whom?

Rt Hon JOHN KEY: No, but my diary and the things that I do are pretty publicly known. This was a situation where someone came up to me and asked me about a story in the paper, and I did what I think most New Zealanders would expect me to do, which was to say: “Go and speak to the Minister.”

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

Mr SPEAKER: Order! Is this a point of order?

James Shaw: Yes. My question was about publishing Ministers’ diaries, not his own diary.

Mr SPEAKER: And the very first word given by the Prime Minister was “No”, he would not consider it.

Finance Minister—Silver Fern Farms

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Finance: Does he stand by his statement on 11 November 2015 regarding Silver Fern Farms, “The parties to the deal have every incentive to ensure that it is a good deal, and actually, every incentive to ensure that it is lawful”?

Hon STEVEN JOYCE (Acting Minister of Finance): Yes.

Rt Hon Winston Peters: If it was lawful, why have shareholders taken legal action to ensure the board of Silver Fern Farms abides by the Companies Act and its own constitution by demanding a special resolution on the selling of our largest meat exporter to majority Chinese State-owned enterprise control?

Hon STEVEN JOYCE: Because I imagine that in this country we are allowed to have shareholders take approaches to the courts or to their companies, and they are allowed to do that on any day of the week.

Rt Hon Winston Peters: So if it was lawful at the time he gave that answer, why would it be lawful now for the company to carry on as though it is all too late, which is what the chief executive officer is boasting at this point in time?

Hon STEVEN JOYCE: I should clarify that I do not have direct responsibility for this company, but I may be able to help the member out. There is a press release that is headed “Correction to Mr Peters’ Misleading Statements”, released by the company today, which perhaps the member has not seen. It makes some observations about there not being a U-turn, that this particular resolution has not been set aside, and that the company is calling a shareholders meeting because it has received the requisition notice requiring it to do so. If the member has not seen a copy of it, perhaps I could supply it to him.

Mr SPEAKER: Order! That will not help. [Interruption] Order! Supplementary question—the Rt Hon Winston Peters.

Rt Hon Winston Peters: It might have fooled you, sunshine, but it will not fool me.

Mr SPEAKER: Order! Now can we have the supplementary question.

Rt Hon Winston Peters: Most certainly, Mr Speaker, because the company’s press release—

Mr SPEAKER: Order! Lead with the question.

Rt Hon Winston Peters: If section 129 of the Companies Act 1993 requires a company not to enter into any “major transaction” unless it has been approved by a special resolution, then will the Ministers ask the Overseas Investment Office to suspend determination of Shanghai Maling’s application; if not, why not?

Hon STEVEN JOYCE: No, because the supposition in the member’s question is, I understand, incorrect. Again, I think he should read the press release, because contrary to what he thinks, it is he who is being taken for a ride.

Rt Hon Winston Peters: Does the Minister from a Government that claims to be supportive of farmers think it is a good deal and lawful when shareholders were threatened with liquidation because profits were massively understated by 84 percent and debt seriously overstated in information given to the shareholders just before they voted?

Hon STEVEN JOYCE: I understand there was a meeting where this particular transaction was put to the vote, and 82 percent of shareholders of this particular company voted in favour of it. I suspect—

Rt Hon Winston Peters: A tissue of lies.

Hon STEVEN JOYCE: Well, the member says it is a tissue of lies. He has the opportunity, and I understand he has made a complaint to the relevant authorities. He should just let that complaint continue, but as far as I can see the company has voted and it has actually passed the transaction.

Rt Hon Winston Peters: What does it really say about his Government’s approach to the law, whether tax or corporate, that shareholders were told lies in a financial document so misleading that it is now the subject of a complaint to the Financial Markets Authority and in which information was corrected 25 days after shareholders voted?

Hon STEVEN JOYCE: I understand that complaint is the member’s complaint. We actually have this old-fashioned notion in this country of due process, natural justice, the law; we do not adopt what is known as the Brendan Horan approach to justice, or the Tracey Martin approach to justice. We actually have the law. [Interruption]

Mr SPEAKER: Order!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I seek an extension of time, because we like a good joke, for the Minister to carry on.

Mr SPEAKER: That is not a point of order.

Prime Minister—Overseas Trusts

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Why, on 13 April, when he told reporters that he had been approached by someone in the foreign trusts industry who was concerned that the rules for trusts were about to be tightened, did he not reveal that person was his personal lawyer?

Rt Hon JOHN KEY (Prime Minister): Because the name of the person was redacted in the information that was to be released under the Official Information Act. The member may like to note that there were six people who met the Minister; none of their names were identified in the official information.

Andrew Little: So what specifically, if anything, is inaccurate about this brief time line: first, his personal lawyer writes to revenue Minister Todd McClay claiming that the Prime Minister had told him that foreign trusts would stay protected; next, Todd McClay immediately meets the Prime Minister’s personal lawyer and says that foreign trusts will be protected; and, finally, Todd McClay directs the Inland Revenue Department (IRD) to drop its existing review of foreign trusts?

Rt Hon JOHN KEY: A more accurate reflection is that somebody who is involved in an industry lobby group, who is my lawyer, asks me a question about something that was in the paper. I did what any professional Prime Minister would do, and referred them to the Minister. I do not have a sign around me that says: “If you know me, don’t talk to me.” And, by the way, if the member ever gets into Government, is he now telling us that he will not talk to his union mates if they come and ask him a question, or send them to a relevant Minister? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I have got to ask for a little less interjection from my left.

Andrew Little: I seek leave to table two IRD documents from August and November 2014, both of which confirm that IRD is planning to review foreign trusts.

Mr SPEAKER: Leave is sought to table those two IRD documents. Is there any objection? There is no objection. They can be tabled.

Andrew Little: When the Prime Minister’s lawyer went to a junior Minister and said: “The Prime Minister says you will protect my business.”, does he think that this just might have influenced that Minister’s decision making in this case?

Rt Hon JOHN KEY: The member is making it up. That is not what I said. I did what anyone would expect me to do. If I am approached by someone, whether I know them or whether I do not, I refer them to another Minister. That is also true, by the way, when constituents come to me and ask me about IRD matters, immigration matters, or ACC matters—I write on their behalf to the Minister. But the member does not say that I should not do that, in case that junior Minister is influenced by what I do. We live in New Zealand, it is a small country, and when people ask me questions I refer them to Ministers.[Interruption]

Mr SPEAKER: Order![Interruption] Order!

Andrew Little: When he, as Prime Minister, spoke to revenue Minister Todd McClay and said: “My personal lawyer wants to lobby you about protecting his business.”, does he think that that just might have influenced Todd McClay’s decision making in this case?

Rt Hon JOHN KEY: See, this is the problem. The member loses credibility when he makes stuff up. It is a well-known and established fact that my personal lawyer is involved in trust businesses, and those are businesses established under the rules of a Labour Government. And those rules have been there for a long period of time. I did not establish those; Labour did. So Labour were the ones that set them up, not me.

Hon Annette King: You’re on thin ice there, John.

Mr SPEAKER: And so will the member be if she continues to—[Interruption]. Order! [Interruption]. Order! A reasonable amount of interjection, I will accept, but a barrage—[Interruption] Order!

Andrew Little: Does he see that New Zealanders are not surprised that we are gaining a reputation as a tax haven when the Prime Minister’s personal lawyer is able to influence Ministers to protect the tax-dodging industry?

Rt Hon JOHN KEY: New Zealand is not a tax haven. In 2013 the OECD did a review of New Zealand and gave us a fully compliant rating. New Zealand is a country that discloses information and all information, either directly to Australia or to any other inquiry we have had. The only people who think New Zealand is a tax haven are the Labour Party members, who want to propagate that myth.

Andrew Little: Can he not see New Zealanders do not like it when people with connections to the Prime Minister get special treatment and that denying this just plain out of touch?

Rt Hon JOHN KEY: Those people did not get special treatment. They are the industry group that represents an industry in New Zealand that was established under rules set up by a Labour Government, and they are quite entitled, whether they know me or not, to actually raise their points with a new Minister. That is what happens all the time. The member had dinner with the people who make Keytruda and then went out and advocated for it. Does that mean he is crooked? [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Both front benches will cease when I rise to my feet. [Interruption] Order! That is probably one interjection too many. I will have to deal with it next time.

Andrew Little: Why will he not be straight with New Zealanders about what he said to his lawyer, what he said to his Minister, and what he said to anyone else in his efforts to protect the tax-dodging industry, rather than constantly changing his story and blaming others? Kiwis deserve—

Mr SPEAKER: Order! The question has been asked.

Rt Hon JOHN KEY: I have been completely straight, and the member does not like it because it does not suit his wild conspiracy theories. Well, I am sorry; yes, I am an available Prime Minister, I do walk around, and people do talk to me, including people who know me, and there is no particular reason why somebody who knows me should not actually be able to go and talk to Ministers. That happens, and it should be that way.

Economic Growth—Reports

SCOTT SIMPSON (National—Coromandel): What reports has he received indicating continuing economic growth in 2016, low inflation for New Zealand households, and increased business activity?

Mr SPEAKER: I have a point of order—I certainly hope it is a genuine point of order.

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. Of course it is a genuine point of order. The fact is that he has not read the question properly.

Mr SPEAKER: I did not detect that it was inaccurate, but to move matters forward, I will ask the member to ask the question again

4. SCOTT SIMPSON (National—Coromandel) to the Minister of Finance: What reports has he received indicating continuing economic growth in 2016, low inflation for New Zealand households, and increased business activity?

Hon STEVEN JOYCE (Acting Minister of Finance): I have received Treasury’s Monthly Economic Indicators report. Treasury’s report of recent indicators, including solid growth in retail spending and strong tourism flows to areas such as the member’s own electorate, indicates the economy experienced reasonable growth in the March 2016 quarter. A net 18 percent of businesses expect increasing trading activity above the long-run average. The cost of living increases for New Zealand consumers remained low, at 0.4 percent in the year to March, well below average weekly wage increases of 3.1 percent.

Scott Simpson: What recent reports has he seen updating the global economic outlook?

Hon STEVEN JOYCE: The International Monetary Fund has recently released its World Economic Outlook. In this report, it has downgraded its forecast for the global economy to 3.2 percent in 2016 and 3.5 percent in 2017, which are reductions of 0.2 percent and 0.1 percent respectively. These downgrades in the global outlook reflect a softening in the outlook for advanced economies, which are, as a group, expected to grow 1.9 percent this year, and some weaknesses in emerging economies, particularly Russia and Brazil. Notwithstanding this, the IMF expects the New Zealand economy to grow 2 to 2.5 percent over the next 2 years, compared with average growth of less than 2 percent across the other advanced economies. [Interruption]

Mr SPEAKER: Order! The Minister is not helping the order of the House.

Scott Simpson: Given this outlook for the global economy, what are the expected consequences for New Zealand?

Hon STEVEN JOYCE: New Zealand’s major trading partners are concentrated in some of the emerging Asian economies these days, particularly China, as well as newly industrialised economies, and also Australia. These account for more than half of New Zealand’s goods exports. They continue to perform relatively well, with growth rates that are above the world average. But that will, of course, not always be the case, which is why the Government believes opening up new markets through the Trans-Pacific Partnership is important. New Zealand is expected to be relatively well placed to benefit from China’s rebalancing from investment to consumption, because it will raise demand for the sorts of goods that New Zealanders are more specialised in. This rebalancing will be of benefit to exporters around the country, including in the Coromandel electorate.

Scott Simpson: How will Budget 2016 deliver on the Government’s commitment to support the growing economy despite global economic uncertainty?

Hon STEVEN JOYCE: The Budget will deliver on the Government’s four priorities, which are: responsibly managing the Government’s finances, delivering Better Public Services, rebuilding Christchurch, and building a productive and competitive economy. Budget 2016 will lift the Government’s commitment to businesses, employment, and growth, alongside further support for core public services, in particular health and education, where funding for both is already at record levels. Government spending is around one-third of the economy, and so public sector productivity matters to overall growth. The Government is investing in understanding the different services and how they work, which is part of its increasing commitment to social investment in this coming Budget.

Housing Market—Auckland

5. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that we are “on the cusp of something special” given the median Auckland house price has risen by $100,000 since January?

Rt Hon JOHN KEY (Prime Minister): Yes, as it related to the many opportunities that New Zealand has under a National-led Government, which I would be more than happy to go through. They include falling unemployment in New Zealand, rising growth in New Zealand, greater opportunities for New Zealand, a wealth effect that is going across the country, rising business confidence and consumer confidence, but also, based on Real Estate Institute of New Zealand data, the median Auckland house price has increased by that amount since March 2015. That is an annual increase of just under 14 percent, which includes some months when the median price fell.

Andrew Little: Given that only one in five Aucklanders under 40 now owns their own home, does he still think there is no crisis in homeownership in New Zealand?

Rt Hon JOHN KEY: There is no question that, generally, the Auckland housing market has been rising a little faster than the Government would want, and that is why the Government has taken a wide range of steps, which include helping 12,000 people through KiwiSaver HomeStart. That is why we have seen the highest level of building consents in more than 11 years, at 9,500. That is why we have had over 120 special housing areas in Auckland. That is why the Government is trying to reform the Resource Management Act. That is why the Government has tightened up the tax rules around the brightline test and why the Government is releasing land. These are all things that this Government has done, whereas the previous Government saw house prices double under its watch and—

Mr SPEAKER: Order! The answer is very long.

Andrew Little: Is he so out of touch that he thinks most Kiwi families can save the $160,000 needed just for the deposit on a house in Auckland?

Rt Hon JOHN KEY: I think it is important to understand that a lot of first-home buyers will not go into a medium-priced house in Auckland. Many young couples will start in a one- or two-bedroom apartment in Auckland. That is consistent with large cities all over the world. There are still many homes in Auckland that are under $500,000. The Government does support them through KiwiSaver HomeStart and through good economic management, which has seen the lowest interest rates in New Zealand on display in the last 70 years.

Andrew Little: Does his latest half-baked policy of a land tax on only foreign buyers mean that his previous policies, which include discount nails, brightlines, and building houses in cemeteries, have all failed?

Rt Hon JOHN KEY: The Government has not made a decision about applying a land tax to foreigners, but what we have said is that if people were concerned about the level of overseas ownership of New Zealand houses, that would be a far more effective model than the crazy idea Labour has got of banning foreigners, because, as we know, Australia has tried that, and it did not work.

Andrew Little: Why let foreign speculators buy houses in New Zealand at all?

Rt Hon JOHN KEY: I think you would find that the bulk of people who buy houses in New Zealand, in my best guess, are people who live in New Zealand or have a connection with New Zealand. But we will have much better information on that in the next few weeks.

Andrew Little: I raise a point of order, Mr Speaker. My question was about—

Mr SPEAKER: Order! I am going to invite the member to ask that question again. [Interruption] Order! I do not need help from Dr Lockwood Smith—Dr Nick Smith. I probably do not need help from either of them.

Andrew Little: We still enjoy the help of Dr Lockwood Smith even to this day. Why let foreign speculators buy Kiwi homes at all?

Rt Hon JOHN KEY: We do not ask people specifically why they buy a property, because they buy them for a wide range of reasons. They may buy them to rent them because one day they want to move into them, or it may be that they want to holiday in them. As I said, we will have a lot better information on this in the weeks, months, and years to come, and we can make a call on whether we think this is a significant issue or not.

Andrew Little: Why will he not just stop faffing around and do what Labour would do: restore the Kiwi Dream of homeownership by banning offshore speculators and by building thousands of affordable homes for Kiwi families?

Rt Hon JOHN KEY: I think the member needs to wake up and have a look at the facts: house prices doubled under the previous Labour Government, interest rates were 11 or 12 percent, and inflation was out of control. That did not help the property market one little bit.

Horticulture Industry—Exports

6. Dr JIAN YANG (National) to the Minister for Primary Industries: What reports has he received on growth in horticulture exports?

Hon NATHAN GUY (Minister for Primary Industries): New research by Plant and Food Research shows that horticulture exports increased by 9.5 percent last year to a record $4.27 billion. Key sectors that have increased include: kiwifruit, which is up 27 percent, by $251 million; wine, which is up 6 percent, by $85 million; apples, which are up 5 percent, by $25 million; cherries, which are up 87 percent, by $24 million; and avocados, which are up 22 percent, by $22 million. With domestic and export receipts at now over $7.5 billion, when combined, they are on track to meet their target of $10 billion by 2020.

Todd Muller: In what ways is the Government supporting this extraordinary growth?

Hon NATHAN GUY: That is a very good question. The Government will continue to support this growth through research and development, and by enabling greater market access through free-trade agreements. For example, the Government is partnering with the industry on a $17 million programme called Lifestyle Wines and the $8.6 million New Zealand Avocados Go Global Primary Growth Partnership programme. The Trans-Pacific Partnership will save our fruit, vegetable, and winegrowers an estimated $50 million in tariff savings once implemented, and the Korean free-trade agreement has eliminated tariffs on wine and cherries. Apples and exports to Taiwan are up 250 percent since 2013.

Dr Jian Yang: How is our free-trade agreement with China supporting growth in horticultural exports?

Hon NATHAN GUY: That is a very good question. Total exports to China have increased by 1,400 percent, by over $350 million since 2008. I was in China recently on a very successful trip with the Prime Minister, the Minister of Trade, and the member Jian Yang supporting our primary industries. It was great to see Zespri celebrate the start of the new kiwifruit season in China, and its new status as an importer of record. It has also partnered with two major fruit producers in the Shaanxi province, the world’s largest kiwifruit-producing region.

Tax System—Overseas Trusts

7. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Revenue: Why was the review of foreign trusts proposed by IRD in 2014 not undertaken?

Hon MICHAEL WOODHOUSE (Minister of Revenue): The view at the time was that this would have required the Inland Revenue Department (IRD) to dedicate significant resources to an area that did not affect New Zealand’s revenue base, and that other issues on the tax work programme were deemed more important by both IRD officials and the then Minister. At the time, the Government made it clear that a future review was possible if it appeared that New Zealand’s regulatory settings may facilitate inappropriate behaviour in other jurisdictions, and that is what the Shewan review is.

Grant Robertson: Is it correct that in its 15 August 2013 paper, accepted by the Minister of Revenue and the Minister of Finance, IRD identified a review of foreign trusts as one of a series of initiatives that should be “a key focus” in the tax policy work programme?

Hon MICHAEL WOODHOUSE: There was a reference in that 2013 document to a review of the tax treatment of foreign trusts, at about paragraph 22, after a very, very long list of the other work that was considered high priority by IRD. It also said that the decision to proceed with any proposals for reform relating to base erosion and profit shifting needs to be evaluated more generally in the context of all of the Government’s priorities on the tax policy work programme—that is what the Government did.

Grant Robertson: Further to that answer, is it correct that in a report dated 14 November 2014 and entitled Timeline for BEPS-related tax policy work Inland Revenue lists, under the heading “Action Plan Items”, “Review taxation of foreign trusts”, with a date of December 2014 for that?

Hon MICHAEL WOODHOUSE: Yes it did, and it also included things like strengthening the non-resident withholding tax rules, which would have positively affected the New Zealand tax base; GST on online purchases, which would have positively affected the tax base, and it proceeded with those things, because that was good for the New Zealand taxpayer. The other is not and could have been negative.

Grant Robertson: When the Minister told foreign trust industry representatives in January 2015 that the Government had no plans for a review of foreign trusts, why did he not tell them that it was actually already on the IRD work programme?

Hon MICHAEL WOODHOUSE: The IRD work programme had a massive list of things that it was doing. The question of the review of foreign trusts was a footnote amongst the significant Business Transformation project, loss grouping, resident withholding tax, non-resident withholding tax, the brightline test, PAYE deductions, the business tax green paper, and many, many others. Those are the things that were proceeded with.

Grant Robertson: I seek leave of the House to table Appendix A of the IRD report dated 14 November 2014, Time line for BEPS-related tax policy work, which includes a list of 1, 2, 3—

Mr SPEAKER: Order! [Interruption] Order! The document has been well described. I will put the leave. Leave is sought to table that particular IRD time line dated 14 November 2014. Is there any objection? There is none.

• Document, by leave, laid on the Table of the House.

Grant Robertson: Is it not true that IRD had, in fact, already started a review of foreign trusts because it considered it a key focus, but only after the Prime Minister directed his close confidante to the Minister, who shut down the review? That is actually what happened, is it not?

Hon MICHAEL WOODHOUSE: In respect of the second part of that question, absolutely not.

Transport System—Rail Network

8. DENIS O’ROURKE (NZ First) to the Minister of Transport: Is the Government committed in the long term to a sustainable railway network for New Zealand?

Hon SIMON BRIDGES (Minister of Transport): Yes, because, after years of under-investment, this Government has invested nearly $4 billion in rail and is committed to investing more as appropriate.

Denis O’Rourke: With a 60 percent increase in road freight since 2000 and with thousands of additional trucks expected on State highways in coming years, how will the Government ensure that rail takes a much greater share of the national freight burden in the future?

Hon SIMON BRIDGES: I suppose we could arrest people who do not use rail, but, frankly, we are allowing these different modes to play to their strengths. Rail does have a real strength over the long-haul and bulk commodities, and in the last year it has, in fact, seen its proportion of freight as exports go up. I think that as we see more big ships and as we see more inland ports, it will continue to be able to play to the strength that it has.

Denis O’Rourke: In addition to the four options in the KiwiRail commercial review for 2014—the trimmed network, the separate islands network, the upper North Island network, and exit—will he request consideration of an expansion and improvement option for the whole country; if not, why not?

Hon SIMON BRIDGES: The member may not like the fact, but we have invested nearly $4 billion. That is comparable to what we have invested in the roads of national significance, which he and his mates next to him—the Greens—love to hate so much. We are investing, and we continue to do so with projects that stack up.

Denis O’Rourke: I raise a point of order, Mr Speaker. I specifically asked whether the Minister would—

Mr SPEAKER: Order! The question was so long, it would be very easy for the member to address any part of it. If the member asks a short, sharp question, I can help him get a straight answer. Supplementary question?

Denis O’Rourke: The question was not long—

Mr SPEAKER: Order! The member will resume his seat immediately. I have ruled. I am giving the member a chance to complete his questioning; if he does not want to, we can easily move to the next one.

Denis O’Rourke: I raise a point of order, Mr Speaker.

Mr SPEAKER: If it is a fresh point of order, I will hear it. If it is any attempt to relitigate where I have just got to, I will be asking the member to leave.

Denis O’Rourke: I am simply asking: if that question was too long—

Mr SPEAKER: I have dealt with that matter. I am asking Denis O’Rourke to—[Interruption] Denis O’Rourke will leave the Chamber. I gave him an absolute, clear warning. [Interruption] Order! The member will leave.

• Denis O’Rourke withdrew from the Chamber.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My colleague asked the question: if it was too long, then how would you have phrased it yourself? Now, can I just finish my point of order. I have barely spoken a few words—

Mr SPEAKER: Order! [Interruption] Order! The member can raise a point of order in line with the Standing Orders and I will hear it, but he had better do it succinctly.

Rt Hon Winston Peters: That is precisely what I am doing. My colleague asked the question—[Interruption]

Mr SPEAKER: Order! This is a point of order—[Interruption] Order! The member will resume his seat immediately. This is a point of order, and I want to hear it without any interjection from my right-hand side.

Rt Hon Winston Peters: My colleague asked: if the question was too long, then how would you have phrased it? I think that he was seeking some clarity, because if the question was too long, you would have ruled it out at the very start when he finished asking the question. That is why my colleague was a bit—

Mr SPEAKER: Order! The honourable member will resume his seat. I have been relatively lenient in light of the way the—[Interruption] Order! The member is very likely to be leaving the Chamber and joining his colleague. I have been relatively lenient with questions coming from New Zealand First today, but when those members ask a—[Interruption] Order! If the member interjects again while I am on my feet, he will be asked to leave. I have been relatively lenient, but when a question is as long as that, it is very difficult for me to actually decipher the specifics of the question, and, therefore, I ruled that the Minister had addressed the question. Mr O’Rourke took exception to that. I warned him that if he continued to relitigate a decision I had made, then he would be asked to leave the Chamber. He did then immediately relitigate the ruling I made.

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

Mr SPEAKER: If it is a fresh point of order—[Interruption] Order! No, the member will also resume his seat. I have ruled on that matter. The member is going to raise a fresh point of order, but if I consider in any way that it is an attempt to relitigate the decision I have just made, which the member does not have to like but must accept, I will not hesitate to ask the member also to leave the Chamber.

Rt Hon Winston Peters: First of all, it is a fresh point of order.

Mr SPEAKER: What is it?

Rt Hon Winston Peters: That is why I am raising it. It arises from your comment that you have been lenient on New Zealand First in question time today. As a matter of clarification, could you point out on what occasions and at what time have you been lenient on us?

Mr SPEAKER: That is, effectively, an allegation of bias, and that is a contempt of this House. The Rt Hon Winston Peters will also leave the Chamber. [Interruption] The Rt Hon Winston Peters will immediately leave this Chamber. [Interruption] Order!

• Rt Hon Winston Peters withdrew from the Chamber.

Air Services—India – New Zealand

9. Dr PARMJEET PARMAR (National) to the Minister of Transport: What steps has the Government made on strengthening New Zealand’s air links with India?

Hon SIMON BRIDGES (Minister of Transport): As part of the recent visit to New Zealand by India’s President Pranab Mukherjee, I had the honour of signing a new air services agreement between our two countries. The most significant change in the new agreement is that New Zealand airlines now have the opportunity to code-share with any partner airlines to six cities across India. In addition, New Zealand airlines can code-share to New Delhi, with Air India. By signing this new agreement we have further strengthened our already very strong ties and history with India.

Dr Parmjeet Parmar: What benefits will the new air services agreement with India bring to New Zealand?

Hon SIMON BRIDGES: India is one of the world’s largest and fastest-growing economies, as an emerging global super power, and with a population of 1.3 billion people it presents enormous opportunities for New Zealand. Our annual trade with India is now worth more than $1 billion, and in the year to March 2016 almost 52,000 Kiwis travelled to India and close to 60,000 Indian visitors came to New Zealand. I am very excited that the New Zealand air services agreement will boost tourism, create new trade opportunities, and strengthen the existing strong personal ties between our two countries.

Tracey Martin: Did part of the conditions requested by the Prime Minister of India include 35 scholarships paid for with taxpayers’ money for Indian students to study in New Zealand?

Hon SIMON BRIDGES: No, that is a little bit silly.

Renewable Energy—Huntly Power Station

10. GARETH HUGHES (Green) to the Minister of Energy and Resources: Does he stand by his statement that Genesis Energy’s decision to stop burning coal at Huntly is “a sign of the times and reflects the growth of New Zealand’s world-leading renewable energy industry”?

Hon SIMON BRIDGES (Minister of Energy and Resources): Yes.

Gareth Hughes: If announcing the end of coal in 2015 was “a sign of the times”, does last week’s decision to keep burning coal at Huntly mean more climate pollution, and no new renewable generation is the real sign of the times?

Hon SIMON BRIDGES: No, not at all, because as the parties to the agreement made very clear, it is a short-term solution to the security of supply to ensure that when the wind is not blowing and when it has not been raining for some time, actually, New Zealanders can have their lights on and can have their showers hot. Otherwise, there are no emissions. I would remind the member that in terms of Huntly, when Labour was in power—when his mates were in power—12 percent of our power came from Huntly. Now it is some 2.6 percent, and decreasing very sharply.

Gareth Hughes: Had the Minister received a commitment from any power company before he said last week that coal units at Huntly will be used only as back-up power supply and “I think it is going to be used very, very infrequently.”?

Hon SIMON BRIDGES: I do not need an undertaking—it is there in black and white in their press releases.

Gareth Hughes: I seek leave to table information unavailable to members from the electricity Market6 website, which shows that today Huntly has been burning coal every hour for the last 24 hours, and at near capacity, despite no—

Mr SPEAKER: I will put the leave, but if it is available on a website I honestly cannot see why it is not available to members. I will put the leave anyway. Leave is sought to table that information. Is there any objection? There is none. It can be tabled.

• Document, by leave, laid on the Table of the House.

Gareth Hughes: Is the Minister’s definition of burning coal “very, very infrequently” actually every hour for the last 24 hours, or is this just spin to hide the embarrassment of committing to burning more coal for the next 6 years only 5 days after signing the Paris climate change agreement?

Hon SIMON BRIDGES: My definition of “infrequently” is that when his party was helping the Labour Party, it was 12 percent of power; now it is 2.6 percent and going down. By the way, since we have been in office it has gone from 65 percent renewables in electricity to 81 percent. That is a very strong record of success.

Justice System—Social Investment Approach

11. JACQUI DEAN (National—Waitaki) to the Minister of Justice: What recent announcements has she made on the social investment approach to justice?

Hon AMY ADAMS (Minister of Justice): Today I announced how the Government is implementing the social investment approach to the criminal justice system. The investment approach gives justice sector organisations involved in crime prevention access to high-quality data analytics and modelling, helping them to make better-informed decisions about where to invest to make the biggest difference. It will help agencies across all areas of Government to try to prevent vulnerable young people from ever becoming offenders in the future. This builds on the social investment work under way across Government to improve the lives of New Zealanders by applying rigorous and evidence-based practices for social services.

Maureen Pugh: What do the early results from the investment approach to justice show?

Hon AMY ADAMS: Early analysis brings hard numbers to some of the long-held truths that people working in the justice sector have known. For example, analysis shows that although 11 percent of the general public have used mental health services, that figure is 40 percent for those charged in court. We also know that for children who were exposed to family violence in 1993, 44 percent of them had left school before 17; 57 percent did not get National Certificate of Educational Achievement level 2; and before the age of 19, 52 percent had received a main benefit. This sort of analysis re-emphasises the intergenerational importance of these issues, and will help us to identify the areas in the justice sector where we should target our efforts and do more of what works.

Rental Properties—Standards

12. JACINDA ARDERN (Labour) to the Prime Minister: Does he have confidence in the Minister of Building and Housing in light of the Commissioner for Children’s criticism that the Government’s Bill on rental standards “will do little for children living in cold, damp, mouldy housing”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Jacinda Ardern: Does he accept that the loophole in the Government’s bill will allow houses to be insulated to a standard from 1978, and will mean that hundreds of children will be hospitalised unnecessarily?

Rt Hon JOHN KEY: No, I do not accept that. What I do accept is that this is a Government that has insulated 320,000 homes—many of them in the last few years—and that with our upcoming residential tenancy changes a further 180,000 homes will be insulated. With the changes that we are making to the healthy homes, they will start by 1 July 2019, compared with the recommendations by Mr Little, when they will begin in 2023.

Jacinda Ardern: Does he accept, then, Philippa Howden-Chapman’s findings that all rentals should be insulated to the 2008 standard—the standard used in Andrew Little’s healthy homes bill—particularly given that Ms Howden-Chapman was the winner of the Prime Minister’s Science Prize for her work on healthy homes?

Rt Hon JOHN KEY: I think the moves that the Government is making are ones in the right direction. This is a Government that will have, effectively, seen the oversight of 500,000 homes being insulated, compared to the woeful record of the previous Labour Government, which was 50,000 homes.

Jacinda Ardern: Does he agree with Nick Smith’s response to Otago University’s findings that properly insulated homes would reduce child hospitalisations by thousands of children a year, which was that he would not adopt that policy because it would cost more than it would save; if so, how many children need to be hospitalised for his cost-benefit analysis?

Rt Hon JOHN KEY: The Government takes the issue very seriously, which is why it has insulated 500,000 homes, or will see them insulated in the next few years. But we do not think that the flimsy bill proposed by Andrew Little will work. What it will do is it will “attempt to regulate indoor temperatures”. Well, that will be people walking around other people’s lounges and bedrooms with a thermometer, measuring the temperature. And while they are—

Mr SPEAKER: Order! [Interruption] Order!

Jacinda Ardern: If the Government is taking this issue seriously, why will he not include in his Government’s bill any requirement for a heating source, when everybody knows that an insulated house still needs to be heated if you want to stop children from getting sick?

Rt Hon JOHN KEY: The Government has taken a number of steps in that area, but when it comes to private sector rentals—it has when it comes to Housing New Zealand and others—the question has to be asked about the trade-offs between the cost of those rentals, and if those rentals go up even more in cost, it will be even harder for those people to use any heating device that they have.

Jacinda Ardern: If it is down to “trade-offs”, what has changed since 2011, when the Prime Minister stated “I am prepared to commit Government resources to try to lift children out of poverty.”, and now, when he cannot even put in place decent housing standards or vote for Andrew Little’s Healthy Homes Guarantee Bill, when the majority of children in poverty are living in private rentals that are often substandard?

Rt Hon JOHN KEY: Unfortunately—the member might want to grandstand on the issue, but when the last Labour Government was in it did absolutely nothing. This Government has insulated 320,000 homes and has a programme for a further 180,000 homes.

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