Questions and Answers – March 21

Press Release – Office of the Clerk

1. SHANE ARDERN (National—Taranaki – King Country) to the Minister of Finance : What reports has he received on the economy?

WEDNESDAY, 21 MARCH 2012

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Economy—Reports

1. SHANE ARDERN (National—Taranaki – King Country) to the Minister of Finance: What reports has he received on the economy?

Hon BILL ENGLISH (Minister of Finance): Statistics New Zealand today reported on the current account for the December quarter 2011. This shows New Zealand’s position improved a little, in line with market expectations. The current account deficit narrowed to $8.3 billion, or 4 percent of GDP, in the year to December, from 4.3 percent in the year to September.

Shane Ardern: What are his expectations for New Zealand’s current account position over the next 4 years?

Hon BILL ENGLISH: In the Budget Policy Statement Treasury predicted the current account deficit would widen to more than 6 percent over the next few years. That would be driven by—one of the main factors—a lift in imports due to the Canterbury rebuild, and also an increase in business investment. Getting on top of the current account is a significant challenge. We are aided by the fact that there are record high volumes of dairy exports, so continued export performance will help. I am a bit more optimistic than Treasury, as is the Reserve Bank, which is forecasting a 5 percent rather than a 6 percent current account deficit.

Shane Ardern: What measures is the Government taking to rebalance the economy, reduce New Zealand’s vulnerability to overseas debt, and ensure we live within our means?

Hon BILL ENGLISH: This is a long-running issue in New Zealand and reflects some fundamental imbalances in our economy. In the past 3 years the Government has taken a number of steps, such as reforming the tax system, and setting the Government on a faster return to surplus in 2014-15 because that is one of the most important contributions a Government can make to lifting national savings. We will also continue to focus on the competitiveness of our businesses, because maintaining New Zealand’s competitiveness is critical to improving the current account deficit.

Shane Ardern: How does New Zealand’s present current account deficit compare with the position in the 3 years until 2008?

Hon BILL ENGLISH: The current account deficit has been affected particularly by the recession, but it has improved in recent years. It did fall to less than 2 percent in 2010, mainly because of the recession, but New Zealanders have started saving more and borrowing less. Between 2005 and 2008 the current account deficit averaged more than 8 percent per year, reflecting fast growth in Government spending and big increases in debt, as well as poor policy settings that squeezed the productive sector of the economy.

Hon David Parker: Why is Treasury asking high school kids “to propose policy options that address New Zealand’s long-term fiscal challenges,”? Is it because Treasury, the Reserve Bank, and the New Zealand Institute of Economic Research forecast a growing current account deficit, is it

because Treasury calculates that the country’s international debt will grow by $50 billion over the next 4 years under his Government’s policies, or is it because his Government is so clearly out of the ideas needed to properly rebalance the economy?

Hon BILL ENGLISH: The member may be interested to know that Treasury is doing that because of a statutory requirement put in place by his Government, which is that Treasury produce long-term fiscal estimates every 4 years. That report is coming up in the next couple of years, and Treasury is taking a broad, public education approach to compiling that report, which is required by law.

Hon David Parker: I seek leave to table a statement from Treasury saying that it is going to secondary schools to invite proposals for policy options to address—

Mr SPEAKER: Is this a media statement?

Hon David Parker: Yes, it is a statement from Treasury. It is not a political party one.

Mr SPEAKER: No, it is just a media statement for the daily media. I do not think we need to table statements for the daily media.

Ministers—Compliance with Cabinet Manual

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he expect all his Ministers to comply with the responsibilities set out in the Cabinet Manual?

Rt Hon JOHN KEY (Prime Minister): Yes. Ministers are expected to comply with the guidance set out in the Cabinet Manual and to seek advice from the Secretary of the Cabinet as necessary.

David Shearer: Did he ask Nick Smith to resign; if not, why not?

Rt Hon JOHN KEY: No; the Minister offered his resignation, and I accepted his resignation because, as the Minister said himself, he exercised poor judgment in supporting an ACC claimant while he was Minister for ACC.

David Shearer: When did he first become aware of Nick Smith having written inappropriate letters on behalf of his friend Bronwyn Pullar?

Rt Hon JOHN KEY: The first letter—the reference—I was made aware of on Monday evening, and the second letter, the one that the Minister made reference to in the House today, which was back to another former member of Parliament, I was made aware of this morning.

Rt Hon Winston Peters: When did the Prime Minister, or those in his office, know of Ms Pullar’s frustration with ACC, that she was pressing his Minister for help, and that Dr Smith had told Ms Pullar that his helping would be inappropriate? When did he first learn of that?

Rt Hon JOHN KEY: I am not in a position to answer that question. I simply do not know. I know the claimant, and in my early days as a member of Parliament I was aware, right back then, that she was frustrated with ACC. I understand she has sent significant correspondence to ACC over the years, but I am not in a position to know when the Minister was first made aware. You would need to put that question to, I guess, the ACC office.

David Shearer: Does he still stand by his statement yesterday: “If you are going to sack Ministers for what I think he would accept as an error of judgment but not a terribly significant one, you’d be sacking a lot of ministers.”?

Rt Hon JOHN KEY: Yes, and that was because in relation to the first error of judgment, when the Minister wrote a reference for the claimant, although I consider that to be unwise, and although I consider that to be an error in judgment, I did not consider it, on balance, in relation to everything else the Minister had done to be a sacking offence.

Rt Hon Winston Peters: Will the Prime Minister cause to be released the long trail of emails and correspondence between Dr Smith and Ms Pullar; if not, why not?

Rt Hon JOHN KEY: I think the Minister has made it clear that he is prepared to release those particular four letters. The member, if he wants any other correspondence, should ask for it under the Official Information Act.

David Shearer: Does he still believe, in light of today’s events, that this is “an error of judgment but not a terribly significant one,”?

Rt Hon JOHN KEY: I consider the first instance to be exactly that. I consider the second to be one too many.

Kevin Hague: Does the Prime Minister stand by the repeated assurances given in this House yesterday by the Minister for ACC, Judith Collins, that the matters concerning Dr Smith’s conduct will be covered by the Privacy Commissioner’s investigation, given that it is now clear that those matters fall well outside the powers and functions of the Privacy Commissioner?

Rt Hon JOHN KEY: I think the member is at the risk of paraphrasing the Minister, but anyway, if the member is asking whether there will be any further inquiry, I have not seen any information that would indicate to me a further inquiry is necessary. There are inquiries that will be undertaken by the police and the Privacy Commissioner, but I do not see the need for any further inquiry.

Justice Sector—Improvement of Public Services

3. JONATHAN YOUNG (National—New Plymouth) to the Minister of Justice: What steps is the Government taking to improve public services in law and order?

Hon JUDITH COLLINS (Minister of Justice): As part of the Government’s wider focus on better public services, last week the Prime Minister set two targets for improving performance in the justice sector. The first is reducing the rates of total crime, including violent crime and youth crime, and the second is reducing reoffending. Criminal offending is like a tax on every New Zealander. It has an appalling cost for victims, their families, and communities. The Government has clearly shown its commitment to improving law and order in New Zealand over the past 3 years, and further reducing crime and reoffending is a key target that will benefit all New Zealanders.

Jonathan Young: How has the Government’s focus on law and order in the past 3 years affected New Zealand’s crime rate?

Hon JUDITH COLLINS: Under this Government the public is safer than it has been for many years. Crime is now at a 30-year low. The number of people going through our courts is falling, and we are experiencing the first sustained fall in the prison population since the 1930s. This is excellent news for New Zealand. The total recorded crime rate for 2010—[Interruption] they do not like hearing this, do they—was a full 26 percent lower than its peak in 1992, and 80 percent of all serious crime is now being resolved. This Government is clearly focused on preventing crime, addressing the drivers of crime, the treatment and rehabilitation of offenders, and better support for victims. Our approach is clearly working.

Jonathan Young: What is the Government doing to achieve these targets, and why?

Hon JUDITH COLLINS: Over the last term this Government has driven more than 20 significant initiatives to improve the justice sector and to make New Zealand a safer place. These include the Policing Excellence programme, addressing the drivers of crime, making sure that the worst recidivist violent offenders are in jail, and initiatives to speed up court processes. We have and are expanding alcohol and drug treatment rehabilitation programmes. We now know that we can reduce reoffending, and we are working with iwi and community groups to deliver rehabilitation to offenders. The cycle of violence and reoffending—

Mr SPEAKER: Order! Question time is not a time for speeches.

Charles Chauvel: What steps has she taken to address the current level of widespread breaching of police safety orders and the chronic underfunding of important public watchdogs like the Ombudsman and the Judicial Conduct Commissioner, and to lift the current burglary clearance rate from below its miserable level of under 25 percent?

Hon JUDITH COLLINS: In relation to the police safety orders, of course, this Government brought them in. Under the previous Government they did not even exist. I have had a look at the breaching rates on them and, actually, they are not anywhere near what anyone else would expect.

When I was the Minister of Police I made sure we had monthly statistical indicators. They are on the police website, and I am sure that member would be improved if he had a look at them.

Local Government, Minister—Compliance with Cabinet Manual

4. GRANT ROBERTSON (Deputy Leader—Labour) to the Minister of Local Government: Will he take the same approach to compliance with the Cabinet Manual as Minister for Local Government as he did as Minister for ACC?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Local

Government: For a start, I am not the Minister for ACC, but I would simply answer yes.

Mr SPEAKER: The question is to the Minister of Local Government.

Hon GERRY BROWNLEE: That is true, Mr Speaker. I am sorry, I should have said that I have not been the Minister for ACC, but my answer remains the same, yes.

Hon Annette King: As the acting Minister, I presume, can he confirm that it took two attempts before he got his Cabinet to accept his eight-point local government reform plan paper because, one, it was rushed and incomplete with an unrealistic timetable; two, Cabinet was concerned at the need for more local government so soon after the last reform; and, third, many issues were still outstanding, with no decisions made, leaving confusion, and questions to be answered?

Hon GERRY BROWNLEE: No.

Hon Annette King: Does he agree with the Prime Minister, who said yesterday that the test as to whether a council’s activities are a public good would be “extremely broad”, and, if so, how does this match with his statement that councils should focus on things only councils are able to do?

Hon GERRY BROWNLEE: More often than not.

Hon Annette King: If boat races, bronze statues, fireworks, rugby games, cycleways, theatre, stadium, to name just a few, are core local Government businesses, can he tell the House what is not?

Hon GERRY BROWNLEE: We are going into a discussion at the moment with local government about what is appropriate.

Canterbury Earthquake Recovery, Minister—Statements

5. DENIS O’ROURKE (NZ First) to the Minister for Canterbury Earthquake Recovery: Does he stand by all his recent statements?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Generally yes, although as the seismic events and the recovery unfold, material facts will and are changing, so positions previously stated will evolve.

Denis O’Rourke: Does the Minister think it acceptable that Christchurch residents who have in many cases lost their homes and experienced thousands of earthquakes should now suffer rents often in excess of 50 percent of reasonable market rents; if so, at which point will he intervene— 100 percent, 200 percent, 500 percent?

Hon GERRY BROWNLEE: It does not matter how loud the member likes to yell out those figures; if they are not backed by some factual material they are worth nothing. What I can tell the member is that today’s newspaper has a considerable number of properties to rent in Christchurch, TradeMe has 612, and there are three agencies in there inviting people to make contact because they have more properties. I do not doubt that there are some landlords who want to create an environment where they can raise rents. I am sorry the member is helping them.

Denis O’Rourke: What are the reasons he believes the best solution to the Christchurch rental housing crisis is to leave it to the market, and, in doing so, why is he putting the interests of profiteers ahead of serving the needs of the people?

Hon GERRY BROWNLEE: Firstly, I reject both aspects of that question, but would simply say the Government is offering to buy 7,000 households in Christchurch, and so far around 3,000 have settled. They have taken a cheque for either their land or

their house, and they are moving on. That is going to create opportunities for people, both in the rental housing provision sector and in new building, and it is happening. If the member looked at the property section of today’s Press, he would be better informed than he appears to be.

Denis O’Rourke: Does the Minister not understand basic third form economics, especially that when demand outstrips supply, prices soar, and when will you do something about it?

Hon GERRY BROWNLEE: What I do understand about economics—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, I could barely hear my colleague’s very intelligent question—because I have seen—

Mr SPEAKER: Order! I am on my feet. I heard the question perfectly clearly, and the member’s description of it is his business.

Hon GERRY BROWNLEE: What I do know is that people who want to profiteer in these situations need an advocate to get the circumstances right so that they can enjoy that excess profit. The member is helping them with that.

Hon Lianne Dalziel: Can I take it from the Minister’s answer that if we were able to produce evidence of significant price-gouging in the housing market in Christchurch, he would be willing to look at intervening in those instances?

Hon GERRY BROWNLEE: The Government has already put two temporary villages in place, with a total of, I believe, 70 units. We have a further 70 units available for relocation, and we are looking at a site. I am hopeful that we will have 20-odd people relocated on that new site very, very quickly. But what I would also have to tell the member is that if she also looked at the property pages of today’s—

Mr SPEAKER: Order! I would not mind the Minister giving the member a lecture, if he answered her question first.

Hon GERRY BROWNLEE: But I did.

Mr SPEAKER: The member asked specifically whether, if the Minister was shown evidence of rent gouging—or something to that effect—the Minister would be prepared to investigate. Now—

Hon GERRY BROWNLEE: No, she said “intervene”.

Mr SPEAKER: Oh, intervene. I will invite the member to repeat her question, because I believe that the Minister did not answer her question, at all. The member is welcome to do that; she does not need to if she does not wish to.

Hon Lianne Dalziel: Well, it is just that I did not have it written down. I am going to try to do it as best I can. Do I take it from the Minister’s answer to the previous question that if we were able to produce evidence of price gouging in the Christchurch rental market, he would investigate intervening in the market?

Hon GERRY BROWNLEE: My point before was that we have intervened in the market, in what I think is a relatively significant way and in a timely fashion. I have said repeatedly that we are monitoring that situation and looking at it carefully. I think it is very important that people do inform themselves of what sorts of rents are on offer out there, and do not pick out extreme examples that happen in any market.

Conservation Estate—Prime Minister’s Statements

6. EUGENIE SAGE (Green) to the Prime Minister: Does he stand by his statement, “I am not going to do something silly with the Department of Conservation estate”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Eugenie Sage: Would allowing foreign-owned Bathurst Resources Ltd to dig up and destroy around 200 hectares of distinctive habitats on conservation land on the Denniston Plateau to mine coal be “doing something silly” with our conservation land?

Rt Hon JOHN KEY: I think the member is characterising incorrectly what might happen on the Denniston Plateau. The company in question has resource consent, as I understand it, from a historical consent that is there, but an access agreement may be required. If that is required and the

Minister of Conservation grants that, then that will be publicly notified. As part of all of that process, the company would be expected to follow the high standards for mining on conservation land.

Eugenie Sage: Well, if the Prime Minister has said that that access application will be publicly notified, why has he allowed the Minister of Conservation to back down on her promise made in 2010 that “significant applications to mine on public land should be publicly notified”—the Minister who has said that the Bathurst Resources application will not be publicly notified?

Rt Hon JOHN KEY: The Minister is not backing down from her assurances. That was made as part of the schedule 4 stocktake process in July 2010. The proposed changes are now being considered as part of the wider review of the Crown Minerals Act. It would be my expectation that once that law is passed, that will be exactly the case: when there is mining activity undertaken on the conservation estate, it will be publicly notified. But as I said to the member earlier, in the case of Bathurst Resources and its consent for the Denniston Plateau, that is a historical consent that has already been granted.

Eugenie Sage: Does he accept that his plans to officiate at the opening of Bathurst Resources’ new head office this evening may send a message that the company’s access application to the Department of Conservation, which has not yet been granted, should be granted?

Rt Hon JOHN KEY: No. What it does show is that as Prime Minister of New Zealand I support the creation of jobs in New Zealand. I am supportive of those who want to undertake mining and exploration activity in New Zealand, providing they do it in a way that balances both the economic advantages and the environmental responsibilities that come with that. In my opinion, if I did not go to visit companies that have either resource consent applications pending or access consents pending, I would not be visiting many companies in New Zealand.

Eugenie Sage: Is it commonplace for the Prime Minister to officiate at events of companies that have controversial applications that are before the courts and before another Minister in his Government?

Rt Hon JOHN KEY: It is the member’s characterisation that it is controversial; I do not see it as controversial. I do officiate at lots of companies around New Zealand, as I support the economic development of New Zealand. It is part of my ministerial activities, which are publicly listed each and every week. I personally, for one, will be proud to be at Bathurst Resources tonight as the company looks to expand its economic activities in New Zealand. I will leave the member to be standing out the front in the rain, protesting—as the Greens always do.

Eugenie Sage: How many more mining companies will the Prime Minister encourage to mine conservation land before the Government amends the Crown Minerals Act, and acts on its July 2010 promise to allow significant applications to mine on conservation land to be publicly notified?

Rt Hon JOHN KEY: It would help if the member paid attention in question time. As I have said all the way through, that was a historical—

Mr SPEAKER: Order!

Dr Russel Norman: Point of order. [Interruption]

Mr SPEAKER: Order!

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was not a gratuitous attack on the Prime Minister. The Prime Minister attacked the questioner for no particular reason, by saying that she was not listening. She was clearly listening and she was trying to engage in the debate. [Interruption]

Mr SPEAKER: Order! Members should not be commenting on a point of order. I think the member’s characterisation of his colleague’s question is perhaps a little overly pure, because I certainly heard some innuendo in the question put to the Prime Minister. I mean, the member saw me—where I believed the member had asked a very straight question, I pulled the Prime Minister up when he started to comment on what the member should do. On this occasion I felt the question did contain innuendo. Although I would not want the Prime Minister to go any longer down that

track, I think members need to try to avoid—if they do not wish to get that kind of response from a Minister—putting innuendo into a question.

Rt Hon JOHN KEY: Let me spell it out again. As part of the schedule 4 process that took place in July 2010, the Government made a commitment that it would change the Crown Minerals Act. In changing the Crown Minerals Act, we made it clear that, going forward, future mining on conservation land would be publicly notified. That law change has not taken place yet. In the case of Bathurst Resources, the Denniston Plateau is part of a historical consent. So if the member is asking me whether I am going to visit companies that have historical consents, well, to the best of my knowledge I do not have any of those in my diary. But I do not really know; I will have to go and check that, if she is really that concerned. But in future, for companies that want to mine on the conservation estate once the Crown Minerals Act is amended, then the applications will be publicly notified.

Eugenie Sage: I seek leave to table a 2-minute, 35-second video produced by the Royal Forest and Bird Protection Society of the landscapes, habitats, and species of the Denniston Plateau.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Business, Innovation and Employment, Ministry—Expected Costs of Establishment

7. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Economic

Development: What, if any, are the capital costs, write-downs and redundancy costs expected from the merger of the Ministry of Economic Development with the Ministry of Science and Innovation, Department of Labour and Department of Building and Housing?

Hon STEVEN JOYCE (Minister for Economic Development): The specific costings for the items sought by the member are not available at this time. As stated last week when the planned merger was first announced, a due diligence process is now under way, and Cabinet will receive a report next month that will provide further information. We are confident, given our recent experience with other public sector structural change, that the costs will be able to be met within baselines. We also expect savings through better coordination, better-quality advice, and giving businesses one agency to talk to, and that these will outweigh the costs.

Hon David Cunliffe: I seek leave to table a document created by the Parliamentary Library, depicting the Ministry of Science and Innovation’s shining new logo, which so far has been relevant for only 408 days. [Interruption]

Mr SPEAKER: Order! The member has—[Interruption] Order! This is a point of order. [Interruption] Order! The members have the right to refuse the tabling of a document. [Interruption] Order! Now, look, we will cut out this chipping across the House while a point of order is being considered. Let me check with the honourable member. That is a document created—

Hon David Cunliffe: From the Parliamentary Library.

Mr SPEAKER: —by the Parliamentary Library. Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Hon David Cunliffe: I seek leave to table this document created by the Parliamentary Library, depicting the Ministry of Economic Development’s new website branding, which was relevant for no more than 235 days.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.

Hon David Cunliffe: Why was a full due diligence not completed on the full costs of the merger prior to its announcement? If one was completed, who conducted the due diligence and what was the result, and if it was not completed prior, why not?

Hon STEVEN JOYCE: Because the Government took a strategic decision—

Hon Member: Oh!

Hon STEVEN JOYCE: It did. It took a strategic decision to, in principle, merge those ministries, and then a full public due diligence process. The reality, as the member knows, is that you have to go through a process and that involves a significant number of officials and people and a significant amount of time. It is appropriate that the Cabinet make a strategic decision first, and then that work is done once the Cabinet is keen to move forward.

Hon David Cunliffe: Why did the Government merge or propose to merge the Ministry of Economic Development with other entities, when it has yet to receive any advice from any of the six ministerial committees it has announced it will set up to discover an economic development strategy from amongst its laundry lists of action plans?

Hon STEVEN JOYCE: The member is just simply incorrect. The reality of the situation is that the Government has been working, as he knows, across a huge range of areas in the wider economic development space. The Government’s view, though, is that there is a real opportunity to get some real strategic go-forward in the areas of innovation, for example; in the areas of skills, which the previous Government going back many years grappled with and failed; and also in the areas of productivity and competitiveness. Actually, I note that the member himself said that there could be value in the new joined-up entity and that he did not want to take an ideological stand against it.

Hon David Cunliffe: Does he agree with commentator Colin James that the proposed restructuring is “1980s MBA-think.”, which reverses the correct order of form following function and function following strategy, and, instead, puts the organisational cart ahead of the strategic horse?

Hon STEVEN JOYCE: I think the member would be more familiar with 1980s MBA-speak and MBA-think than me. I do not agree with Mr James on that. What I do agree with is a number of stakeholders who have responded to the Government’s announcement very positively. For example, the chief executive of Business New Zealand said it will reduce levels of duplication, and that will be appreciated by many enterprises. Science New Zealand said that Crown research institutes and Science New Zealand welcome this integration: “The new Ministry will integrate and strengthen the government’s policy capability around innovation,”. The New Zealand Manufacturers and Exporters Association, which is not one that I regularly quote, said “There is no doubt that the number of ministries can be reduced and this should improve operational efficiency and help cut operating costs.”

Child Health—Infant Immunisation and Rheumatic Fever

8. Dr PAUL HUTCHISON (National—Hunua) to the Minister of Health: What progress is being made in relation to the Government’s key result of increasing infant immunisation rates and reducing the incidence of rheumatic fever?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Great progress. As you are aware, 92 percent of all 2-year-olds are fully immunised—up from just over 70 percent back in 2007, and district health boards are on track to meet the 95 percent target in June this year. We are also investing $24 million to significantly reduce rheumatic fever rates in vulnerable communities. The Third World disease is serious and after years of promises and inaction by the previous Government we are determined to do something about it.

Dr Paul Hutchison: What new action is the Government taking to further increase infant immunisation rates and reduce the incidence of rheumatic fever?

Hon JO GOODHEW: Building on the target’s success, we are introducing a new target from 1 July 2012—[Interruption]

Mr SPEAKER: Order! I apologise to the Minister. Some interjection is OK, especially if it is humorous, but rheumatic fever among some parts of our community is important and I would quite like to hear the Minister’s answer.

Hon JO GOODHEW: Building on the target’s success, we are introducing a new target from 1 July 2012 that 95 percent of 8-month-olds complete their scheduled vaccinations by the end of 2014. Early immunisation protects vulnerable children against polio, whooping cough, hepatitis B, and pneumococcal disease. The Minister is advised that, as of 16 March this year, 101 schools are signed up to the programme, which covers more than 35,000 children. More than 1,000 kids have been swabbed so far to prevent them from having rheumatic fever.

Medical Equipment, Subsidised—Glucose Testing

9. Hon MARYAN STREET (Labour) to the Minister of Health: Does he support Pharmac’s provisional decision to engage Auckland company, Pharmaco, to be the sole supplier of new diabetic meters?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: The Minister supports the work Pharmac is doing within its significantly increased medicines budget to deliver the best possible services for New Zealanders, including access to medicines. To make a change like this, Pharmac has to enter into a provisional agreement, as it has with Pharmaco, and then undertake a very thorough consultative process. Pharmac is now considering the 3,000 submissions it has received.

Hon Maryan Street: Does he see any difference between engaging a sole supplier of a medical device without consumer testing that allows people with a chronic illness to manage their condition, and engaging a sole supplier of a pharmaceutical that has known effects on known symptoms?

Hon JO GOODHEW: The Minister is very aware of how important this matter is to people with diabetes, and can assure them that Pharmac is considering every submission. This, in fact, is not new territory. Back in 2005, when Pharmac began supplying meters and testing strips, it put in place new funding criteria, which are still in place today. At the time, Diabetes New Zealand said 40,000 people would be affected, and the then Minister of Health, Annette King, said in this House that there would always be debate about which products ought to be used and which ones ought to be subsidised. I am advised that this settled down after—

Mr SPEAKER: Order! I just urge Ministers, if they are not clear on answering a question asked, not to go on too long in giving an alternative answer.

Hon Maryan Street: I raise a point of order, Mr Speaker. I asked, in fact, whether there was any difference, in the Minister’s view, between engaging a sole supplier of a medical device and engaging a sole supplier of a pharmaceutical.

Mr SPEAKER: I invite the Associate Minister to answer. I realise the Associate Minister is not the Minister.

Hon JO GOODHEW: Without understanding to which other particular example the member refers, I am simply able to answer based on the consultation process that is currently under way with Pharmaco, and to say that I cannot compare the two. Therefore, that is my answer.

Hon Maryan Street: Why was the CareSens meter not consumer tested to discover how useful a diabetic meter that is not backlit is to a type 1 diabetic who is having a hyper event in the middle of the night, and why would such a meter be preferable to the well-established Accu-Chek meter, which is backlit?

Hon JO GOODHEW: I am not able to comment on what meters have been tested or have not been tested; that will, in fact, be a matter for Pharmac. But I am able to comment on the fact that this particular process is a thorough consultative process where all of the submissions will be considered, and any concerns—which may mirror the member’s concerns—will be addressed at that time.

Hon Maryan Street: Is he at all mindful of the fact that this proposal by Pharmac has caused great consternation amongst the 150,000 people who use such meters, and is there any part of this diabetes debacle for which the Minister accepts any responsibility, given that he is the Minister of Health?

Hon JO GOODHEW: As I have already outlined to the member, there have been processes before about which large numbers of people were very concerned. In fact, 40,000 people with diabetes in the past were very concerned. I am advised that if a new company is selected, there will be training provided in the use of its meters, and opportunity for patient engagement. But, in fact, I remind the member that the decision has not been made. This is a consultation process, and perhaps the member is jumping the gun.

Welfare Reforms—Reports on Future Focus

10. PESETA SAM LOTU-IIGA (National) to the Minister for Social Development: Has she received any reports on the Future Focus welfare changes in 2010?

Hon PAULA BENNETT (Minister for Social Development): Yes. I have seen reports that say that since Future Focus changes in September 2010, 52,300 people who were on the unemployment benefit have gone through the reapplication process. As a result 12,481 people cancelled their benefit. Of these, 6,479 did not complete the reapplication process, 2,459 cancelled for other reasons, but 3,389 told Work and Income that they had actually found work and should not have been receiving the benefit anyway.

Peseta Sam Lotu-Iiga: Has Future Focus had an impact getting young people off welfare?

Hon PAULA BENNETT: Yes. It is having an impact on the entire welfare population and on youth in particular. In February this year, main benefit numbers were 4.2 percent lower than for the same month last year. That is 14,411 fewer people on welfare, and last month we had 2,920 fewer young people on benefits than in January. We will continue our focus, and the next stage of reforms, I am confident, will also make a significant difference.

Jacinda Ardern: Can she confirm that the number of people in receipt of main benefits has increased since her Future Focus reforms were introduced, including those on the domestic purposes benefit, and has increased in total by almost 80,000 since she came into office?

Hon PAULA BENNETT: That member chooses to wear blinkers, but actually we went through the worst recession that we have seen. Hence we have had such an increase in people on benefits. I think it is an important point to make that when we came into office, we had a system that was able to support people. Her colleague was making allegations such as that there would be 24,000 more people on the unemployment benefit in Christchurch, but here we are, a year later, and there are only 100. Actually, we have held, I think, and supported those who needed it most, but we have also managed to move people into work and have done an outstanding job with that.

Jacinda Ardern: I raise a point of order, Mr Speaker. I asked a very straight question: whether the Minister could confirm that benefit numbers have increased since Future Focus was introduced in 2010.

Hon PAULA BENNETT: Actually, the last part of her question was around the 80,000 more since I have been the Minister, and that is the part of the question that I answered.

Mr SPEAKER: It would have been helpful, perhaps, had the Minister not criticised the questioner right at the outset of answering her question. The question was a fair enough question, and the Minister did answer the last part of the question. The question did not criticise the Government. It just asked whether the Minister could confirm certain figures, and to accuse a member of being blinkered because they ask a question is not reasonable. Does the member have a further supplementary question? I am prepared to offer the member a further supplementary question should she choose to use one, because I was not happy about her being accused of being blinkered.

Jacinda Ardern: Can the Minister confirm that the number of people in receipt of main benefits has increased since her Future Focus reforms were introduced?

Hon PAULA BENNETT: I have the unemployment benefit figures in front of me, and in the last 12 months, I can assure the House, they have gone down by 7,837.

Foreign Affairs and Trade, Ministry—Meeting of Heads of Missions

11. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: Have New Zealand heads of mission overseas been recalled to a meeting in Wellington on 2 April, and if so what is the cost of holding this meeting?

Hon MURRAY McCULLY (Minister of Foreign Affairs): No head of mission has been recalled. The member should know that that term has a particular connotation in the diplomatic community, and it does not apply in this instance. It is now clear that significant modifications are called for to the change proposals circulated to Ministry of Foreign Affairs and Trade staff. To the extent that large-scale outsourcing arrangements are not proceeded with, different arrangements involving enhanced responsibilities—

Hon Phil Goff: I raise a point of order, Mr Speaker. I implied no such connotation in the use of the word “recall”. Recall, to most New Zealanders, would mean “to call back to New Zealand.” I therefore ask you to ask the Minister to answer my question, which did not have the connotations he alleged.

Mr SPEAKER: Order! I have got to accept the Minister’s interpretation of a question. However, the question was very specific and did not invite the Minister to carry on with the information he was providing to the House. The Minister has denied that heads of mission overseas have been recalled to a meeting in Wellington. He has denied that. That leaves, I would have thought, the questioner with very good supplementary question material. But the Minister should not go on with the rest of the information he was providing, because the primary question did not ask anything about that. It asked whether or not heads of mission had been recalled to a meeting in Wellington on 2 April, and if so, what the cost is of holding this meeting. It did not ask about other arrangements, at all. The Minister has interpreted the question in the way he did, but there is, I would have thought, plenty of room for supplementary questions.

Hon Phil Goff: Is the ministry bringing back its heads of mission from overseas on 2 April, and if so, what is the cost of doing that?

Hon MURRAY McCULLY: It is now clear that significant modifications are called for to the change proposals—

Hon Phil Goff: I raise a point of order, Mr Speaker. We are hearing a regurgitation of the previous answer. It is not answering a very simple and direct question.

Mr SPEAKER: Order! I think the member’s complaint is a fair point of order. The question was very specific. It asked whether heads of mission were being brought back to Wellington for a meeting on 2 April. I do not want to get it wrong. What I will do, in the circumstances, is invite the Hon Phil Goff to repeat his question.

Hon Phil Goff: Have heads of mission been called back to New Zealand to a meeting in Wellington on 2 April, and, if so, what is the cost of doing that?

Hon MURRAY McCULLY: The chief executive has signalled to heads of mission that they can expect an invitation to a meeting in Wellington in April to discuss their roles in the change process. This has been necessitated by the fact that large-scale outsourcing proposals involved in the Ministry of Foreign Affairs and Trade consultation process will not be proceeded with. Many, but not all, heads of mission are likely to attend. I am advised that the process is likely to cost around $200,000. Given the key role that our heads of mission will play in achieving $25 million a year in operating economies, that does not appear to me to be unreasonable.

Hon Phil Goff: Is the Minister telling the House that he is bringing back most heads of mission, at the cost of at least $200,000, to tell them that his restructuring proposals are not going to go ahead in the form that he proposed, because they are unworkable?

Hon MURRAY McCULLY: Let me be very clear about this. I have not asked the heads of mission to come to Wellington. The chief executive has invited heads of mission to come to Wellington for the meeting. I have indicated to the chief executive that I support him in issuing that invitation. The proposals that have been put out to staff for consultation clearly require significant

modifications, and those modifications will involve an enhanced role for those heads of mission. [Interruption]

Mr SPEAKER: Order! Before I call the Hon Phil Goff for a further supplementary question, I take his supplementary questions to be serious. I ask his colleagues to enable the Minister to be heard.

Hon Phil Goff: Has the Minister allowed to be spent millions of dollars on consultants for the change process, 34 staff to be listed in his staff directory as being in the change programme office, and now several hundred thousand dollars to be spend to bring the heads of mission back, all to tell them that the proposals that he has been labouring on for over a year are not going ahead?

Hon MURRAY McCULLY: The chief executive circulated detailed proposals for change, because the Ministry of Foreign Affairs and Trade needs to undergo significant modernisation to ensure, for a start, that its footprint comes close to matching the significant changes that have taken place in New Zealand’s trade and economic interests. The member might like to reflect on the fact that Mr Allen confronts this task because that member was asleep on the job when he was the Minister of Foreign Affairs and Trade.

Hon Phil Goff: Is the Minister now telling the House that it is all Mr Allen’s fault, and that, in fact, Mr Allen did not consult with him closely at every step of the way about the direction of the change and the fact that he, as Minister, expected $40 million in cuts from his ministry?

Hon MURRAY McCULLY: I have made it very clear that the proposal circulated to ministry staff comes from ministry management, and not from me. Any concerns that I had about those proposals were made known to the management prior to that consultation process. Many of those concerns have been reflected in the feedback from heads of mission and from staff. Now that that process is drawing to a close, I want to facilitate decisions that will ensure further work can take place in those areas in which productive change can occur, but also ensure that debate can be curtailed in those areas where it would only be destructive for it to continue.

Hon Phil Goff: Does this Minister take no responsibility for the restructuring proposals and the $40 million in cuts, and are those $40 million of cuts in this document all a figment of the imagination of the Ministry of Foreign Affairs and Trade?

Hon MURRAY McCULLY: I can confirm that a figure of $25 million of economies was sought in a letter sent to the chief executive by Treasury and by the State Services Commission. Certainly, in part the proposals that have been put forward by the Ministry of Foreign Affairs and Trade management team are an attempt to meet that request from Treasury and the State Services Commission. They are also, though, a significant attempt to modernise a ministry that has escaped change for many decades. I invite the member to consider whether, in part, this is necessitated by the neglect of previous Ministers like himself.

Hon Phil Goff: Are the Minister and the Government expecting the Ministry of Foreign Affairs and Trade to make savings of $40 million per year by 2014, which it states in its briefing to him it is required to do?

Hon MURRAY McCULLY: The member is confused. The briefing to the incoming Minister was written by the Ministry of Foreign Affairs and Trade without knowing who had been elected as the Government, and who the Minister being appointed was. The figure that I refer to is a figure of $24 million, which is contained in a letter from the Secretary to the Treasury and the State Services Commissioner to the Secretary of Foreign Affairs and Trade, and that is the request that I have told him I support.

Climate Change—Effect on Sea Levels

12. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Is he concerned by a recent report of an international team of scientists that, even with a two degree celsius rise in average global temperature, future generations could face sea levels of up to 12 to 22 metres higher than at present?

Hon KATE WILKINSON (Minister of Conservation) on behalf of the Minister for Climate

Change Issues: Yes. The estimates of sea level rise in this report are in line with estimates from the science community over the past few years. But I note that the author himself puts these estimates in context by stating that such changes could take centuries or millennia and that “The current trajectory for the 21st century global rise of sea level is 2 to 3 feet …”.

Dr Kennedy Graham: In light of that reply, is the Minister concerned that the Government’s current guidelines for local councils on sea level rise for 2100 are 28 percent lower than the level estimated by the scientists; if so, will he inform the local government and environment Ministers that we have now got it wrong?

Hon KATE WILKINSON: The current guidelines for local authorities that they consider the consequences of a mean sea level rise of at least 0.8 metres is in line with the findings of the report for sea level rise out to the end of this century. The lead author of that report just mentioned, himself said: “The current trajectory for the 21st century global rise of sea level is … (0.8 to 1 metre) …”. This is in line with the Government guidance.

Dr Kennedy Graham: Working on the understanding that the guidelines actually were 0.5 to 0.8—so, not excessive of 0.8—is the Minister concerned that no consideration appears to have been given to the prospect of sea level rise in the rebuild of Christchurch, given that a city’s life cycle is over centuries, and will the Minister now act on my report of August 2011 that the rebuild should account for a sea level rise of 2 metres by 2100, bearing in mind the report of the conference in Berlin, which suggested by consensus a sea level rise of 0.9 to 1.6?

Hon KATE WILKINSON: The Ministry for the Environment has provided guidance to all local councils regarding planning for an expected increase in sea levels. In terms of the specific report the member refers to, I would encourage the member to make a representation to the local councils if he feels that any specific factors do need closer attention.

Dr Kennedy Graham: How can it be, more broadly, when the global economy was projected by the OECD last week to quadruple by 2050, and, without new mitigation policies, global energy demand to be 80 percent higher, and 85 percent reliant on fossil fuels, and emissions 50 percent higher, that the Minister can repeatedly assure this House that every Government, including New Zealand, is doing enough to combat climate change?

Hon KATE WILKINSON: The member is correct: climate change is a global issue, and a global response is needed. New Zealand is committed to fulfilling our international responsibilities. New Zealand is a small player, but we are doing our fair share, and our guidance will continue to be informed by sound science.

Dr Kennedy Graham: I seek leave to table two documents. The first is a report by the Geological Society of America in Geology online, dated 19 March, headed “Implications of global sea level for Antarctica deglaciation”.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection. Document, by leave, laid on the Table of the House.

Dr Kennedy Graham: The second document is an OECD report, 2012, of last week: OECD Environmental Outlook to 2050: The Consequences of Inaction.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

ENDS

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