Questions and answers – March 6

Press Release – Office of the Clerk

1. DAVID BENNETT (National—Hamilton East) to the Minister of Finance : What reports has he received on the Government’s financial position?
(uncorrected transcript—subject to correction and further editing)

TUESDAY, 6 MARCH 2012

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Government Financial Position—Reports

1. DAVID BENNETT (National—Hamilton East) to the Minister of Finance: What reports has he received on the Government’s financial position?

Hon BILL ENGLISH (Minister of Finance): Treasury today issued the Government’s financial statements for the 7 months ended 31 January. They show core Crown tax revenue was $946 million below the pre-election update. Total revenue was $1.4 billion lower, offset by lower core Crown expenses of $1.2 billion. This has led to the operating balance before gains and losses being about $470 million below forecast. These numbers include recognising the expenses of the severe earthquake in Christchurch on 23 December.

David Bennett: What implications do the monthly accounts have for the Government’s commitment to get its finances back in shape and return to Budget surplus in 2014-15?

Hon BILL ENGLISH: Generally, monthly accounts do not make much difference, because the numbers fluctuate, often, over timing issues. However, the lower tax revenue in the last monthly accounts is consistent with probably collecting less tax in this financial year than was expected in the pre-election update. This reinforces the need for the Government to stay disciplined with its spending and to stick to its plan to get back to surplus by 2014-15, so we can start dealing with debt, which will rise from net debt at the end of 2008 of about $8 billion to a peak in 3 years’ time of around $70 billion.

David Bennett: Why is it important to get back into surplus and start repaying debt?

Hon BILL ENGLISH: The Government has just got to follow the same processes as many households, businesses, and other organisations. Through the tougher times we had been running up debt. As the economy picks up and our outlook improves, we need to tighten up, to save more—as New Zealand households are—and to start repaying that debt. As we have been saying for some time, that is going to be quite a challenge over the next few years, particularly to keep delivering good public services, and improving them, at the same time as spending the same, or less, money.

David Bennett: What steps has the Government taken to responsibly manage its finances and reduce the build-up in debt?

Hon BILL ENGLISH: We have set aside the Canterbury Earthquake Recovery Fund of $5.5 billion to make sure that there is a strong commitment to the rebuilding of Christchurch, but that there is not a blank cheque from the taxpayer for that rebuild. We have also over the last 3 years reprioritised about $9 billion of low priority spending to more important, more effective services, and we have prepared the Public Service to change the way that it delivers services over the next few years. We have also committed to selling minority stakes in some State-owned enterprises, which will raise between $5 billion to $7 billion over the next 3 to 5 years, which will avoid the need to go to overseas lenders and borrow even more money than we already are.

Hon David Parker: Is the Minister more proud of the worsening Government deficit, which at $12 billion for the year is worse than was predicted in the Pre-election Economic and Fiscal Update, or the widening current account deficit, which leads to more overseas debt and more asset sales to foreigners?

Hon BILL ENGLISH: I am proud of the way that the John Key – led Government has found its way through some very difficult circumstances. We have not overreacted to the sharp recession, we have maintained public services and support for New Zealand’s most vulnerable, but, at the same time, we have put in place the plans to get on top of our fast-rising debt. As I said before, net debt in 2008 was about $8 billion, it is currently around $50 billion, and it will rise by a further $20 billion over the next 3 or 4 years. That is fast enough.

Hon David Parker: Which is the worst testament of his Government’s management of the economy: the increase in the Government deficit to $12 billion or the widening current account deficit, which leads to more overseas debt and more asset sales to foreigners every year?

Hon BILL ENGLISH: The worst testament would be if we had adopted some of that member’s policies on the way through, but we did not.

State-owned Assets, Sales—Prime Minister’s Statements

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements on the sale of State-owned assets?

Rt Hon JOHN KEY (Prime Minister): Yes, and in particular I stand by my statement that opponents of the mixed-ownership model need to explain to New Zealanders why it would be better to borrow an extra $5 billion to $7 billion from overseas lenders.

David Shearer: Which provisions in the Mixed Ownership Model Bill meet his commitment that “mum and dad will be at the front of the queue …”?

Rt Hon JOHN KEY: That is not necessarily in the legislation, because the Government has complete control of the book-building process. That has been the clear instruction to the investment bankers. I know why that member is asking that question. This is the reason: because he knows that it will be incredibly popular with—

Mr SPEAKER: Order! The question was a perfectly fair question and did not deserve that last part of the answer.

Chris Hipkins: He hasn’t answered it.

Mr SPEAKER: Order! We will come back to that member’s leader—the Leader of the Opposition—for a supplementary question.

David Shearer: I raise a point of order, Mr Speaker. I actually asked which provisions in the bill meet his commitment about mum and dad investors.

Mr SPEAKER: I think in fairness—[Interruption] Goodness me. I do not think we need some of these interjections when I am on my feet. What the right honourable Prime Minister said in his answer was that in his view the legislation did not require such provisions, because the Crown had control over certain events. That was the way he answered, and it was a perfectly reasonable answer to the question, I think. The last part of the question was what I was unhappy with, because the question was a perfectly fair question and did not deserve that last part of the answer.

David Shearer: Does he stand by his commitment in the Television New Zealand leaders’ debate last year that the mixed-ownership model would have “85 to 90 percent of the entire company owned by New Zealanders. That is my commitment to them tonight as Prime Minister.”?

Rt Hon JOHN KEY: Yes, that is my expectation.

David Shearer: Which provision in the bill gives effect to his commitment as Prime Minister to New Zealanders that 80 to 90 percent of State-owned enterprises being sold would remain in New Zealand hands?

Rt Hon JOHN KEY: As I said, that is not required, because the book build is the important process; that is how you determine who gets the shares or not. I would note that there is a great deal

of scepticism from the Opposition that New Zealanders will want to buy these shares, despite the fact that they are actually sitting on $100 billion in deposits at the moment. Interestingly enough, Port of Tauranga, back in April 2008, had 66.5 percent of its shares owned by New Zealanders; today it is 70 percent.

David Shearer: Is it correct that under the current provisions of the bill half a dozen foreign investors could legally purchase all the listed shares?

Rt Hon JOHN KEY: No, because the limit is 10 percent, 6 times 10 is 60, and the Government is keeping 51 percent.

Mr SPEAKER: Dr Russel Norman. [Interruption] Order! Please, both front benches, I have called Dr Russel Norman and I want to hear his question.

Dr Russel Norman: Which provisions of the legislation to establish the partially privatised companies will prevent those companies from selling individual major electricity-generating assets?

Rt Hon JOHN KEY: Well, there are no provisions that do that, but, to the best of my knowledge, the last time that happened was under a Labour Government, when there was a company 100 percent owned by the Government. It was called Southern Hydro and Labour flogged it off.

David Shearer: Why does he believe he has a mandate to sell our assets, given his clear promise to New Zealanders before the election that 85 to 90 percent of the ownership would remain in New Zealand hands, yet this bill that his Government has tabled contains no provisions for that?

Rt Hon JOHN KEY: Unlike the previous Labour Government, which was not always transparent, a National Government—

Grant Robertson: I raise a point of order, Mr Speaker. Although that question had some political loading in it, I do not believe that starting an answer in the way he did fits with the rulings that you have previously given.

Mr SPEAKER: I think it is a fair point. It would be helpful if the Prime Minister did not start the answer that way. But I think the member has acknowledged that there was a bit of political loading in the question, and so some political content in the answer can be expected. I ask the Prime Minister to maybe not start the answer that way, please.

Rt Hon JOHN KEY: In January of 2011 I gave a speech outlining clearly the Government’s intention in relation to the mixed-ownership model. We then went through the course of all of 2011, and the then Labour Opposition raised the question of a mixed-ownership model during that year. We then had an election where the entire Labour Party campaign was “Don’t sell assets” under Phil Goff. To the best of my knowledge, the Labour Party campaigning against the mixed-ownership model delivered the worst result in Labour’s history. By the way, votes for the National Party, which campaigned for mixed ownership, went up.

Dr Russel Norman: Does the Prime Minister accept—[Interruption]

Mr SPEAKER: Order! I want to hear Dr Russel Norman’s question.

Dr Russel Norman: Thank you, Mr Speaker. Does the Prime Minister accept that election campaigns are fought on a multitude of issues, that parties win or lose votes on a multitude of issues, and that every poll done on this specific issue shows that the majority of New Zealanders do not support the plan to partially privatise the assets?

Rt Hon JOHN KEY: I accept that voters’ votes are for a variety of different reasons. I think voters who voted for National in the last campaign did so because they knew that we could manage the economy better than Labour and the Greens, they knew that we would have a better jobs programme than Labour and the Greens, they knew that we would run the health system better than Labour and the Greens, they knew that we would run the police force better than Labour and the Greens, and they knew that we would look after education services and demand standards better than Labour and the Greens. So I accept that there is a multitude of reasons, but you would have to say election 2011 was very much on the mixed-ownership model, and, on that basis, more people voted for National than in the previous election.

Rt Hon Winston Peters: If the Māori Party is against these sales, and if the United Future party campaigned in its television and other advertising on water being sacrosanct and kept in the hands of the public, where does he get his majority from?

Rt Hon JOHN KEY: We get that from the parliamentary majority: 59 plus 1 plus 1 equals 61. But there have been a variety of times in our history when we have looked at selling assets under the mixed-ownership model. For instance, in 1998 here is the prospectus for Auckland Airport, signed off by the then Deputy Prime Minister and Treasurer, the Rt Hon Winston Peters, who sold Auckland Airport and who in 2008 campaigned—

Mr SPEAKER: Order!

Dr Russel Norman: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I want to hear Dr Russel Norman’s question.

Dr Russel Norman: Thank you, Mr Speaker. Does the Prime Minister accept that the polls that have been done, which show 60-plus percent opposition to his partial privatisation plans, are accurate, or does he believe that there is some mistake and he actually has a mandate for his privatisation plans?

Rt Hon JOHN KEY: I think there is a difference between an electoral mandate and what a poll might say. I accept that on a variety of different issues there are strongly held views. I remember the Green Party being strongly in favour of changes to the smacking legislation in New Zealand, and the polls being vehemently opposed to that change.

Dr Russel Norman: Mr Speaker—[Interruption]

Mr SPEAKER: Order! I want to hear the supplementary question.

Dr Russel Norman: Thank you, Mr Speaker. Does he believe that it is short-sighted to deal with the Government’s current Budget issues—in part of the Government’s own making—by privatising assets that have been built up by generations of New Zealanders, and that this Government is just a guardian of before passing them on to the next generation?

Rt Hon JOHN KEY: No. The mixed-ownership model is there for a variety of extremely sound reasons. For a start-off, it is to give New Zealanders an opportunity to have some quality assets to invest in. This is actually what opponents of the mixed-ownership model are saying: they are saying it is OK for the New Zealand Superannuation Fund to be the custodian of $17 billion worth of New Zealanders’ assets, and to invest in just about every single Australian energy company, but it is not to be allowed to invest in New Zealand energy companies, with the exception of Contact Energy. Secondly, the Government wants to expand the balance sheet, not contract the balance sheet, and in 5 years’ time we will have $22 billion more of assets. Thirdly, I do not know whether the member watches TV, but if he does he will see countries that are highly indebted, like Greece, and realise that that is not the right way to be going.

Rt Hon Winston Peters: I seek to table two reports. One is to do with Auckland Airport, which National sought to sell to foreigners, and we forced—

Mr SPEAKER: Order! The member will resume his seat for the moment. The member must identify the source of the document before describing what is in it.

Rt Hon Winston Peters: Mr Speaker, can I ask you: is it not the rule that you can, before the close of day, provide the evidence? And this evidence is the New Zealand Herald of that time.

Mr SPEAKER: That is quite correct. The member would have until the close of today’s sitting day to table the documents, if the House were to grant leave, but before members describe the contents of a document, they are to describe the source, in case the source is not the kind of source of documents we put before the House. So the member is perfectly at liberty to seek leave, but we must know the source of the document first.

Rt Hon Winston Peters: The source of the document is the New Zealand Herald the day after the sale.

Mr SPEAKER: No. We do not table newspaper clippings.

Freshwater Management—Fresh Start for Fresh Water Funding

3. JACQUI DEAN (National—Waitaki) to the Minister for the Environment: How much funding has the Government committed to the Fresh Start for Fresh Water clean-up fund for the projects announced at the Bluegreens Forum at the weekend for the Manawatu River and the Wairarapa, Wainono and Waituna Lagoons?

Hon Dr NICK SMITH (Minister for the Environment): The Prime Minister announced funding on Saturday totally nearly $8 million, made up of $5.2 million for the Manawatu River, $1 million for the Wairarapa lagoon, $800,000 for the Wainono Lagoon in the member’s electorate, and $785,000 for the Waituna Lagoon clean-up in Southland. This brings clean-up funding for our first 4 years in Government to a total of $101 million, as compared with $17 million for the preceding 4 years under the previous Government. That is a six-fold increase and it shows the level of commitment this Government has to clean water in New Zealand.

Ian McKelvie: What reports has the Minister received on actual impacts on water quality arising from the Government’s clean-up programme?

Hon Dr NICK SMITH: The most dramatic improvements we have seen have been in the Rotorua electorate with the Lake Rotoiti scheme. Its measured eutrophic levels have reduced—

Hon David Cunliffe: Whose decision was that? Labour’s decision.

Hon Dr NICK SMITH: Who provided the funding? That is what speaks, I would say to the member who is interjecting, and this Government has committed more money to freshwater cleanups than in the history of New Zealand. We have seen stunning results, with Lake Rotoiti being the cleanest it has been in decades, and that is the sort of result we want to extend to the other seven programmes we have under way.

Prime Minister—Statements

4. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his recent statements?

Rt Hon JOHN KEY (Prime Minister): Yes, especially the one I said to my wife when I told her I loved her.

David Shearer: Supplementary—[Interruption]

Mr SPEAKER: Order! I want to hear the supplementary question. [Interruption] Order! I am on my feet. Ministers would be wise to recollect that if they include material in their answers they can be questioned on it.

David Shearer: Does he stand by his statement yesterday in relation to the disestablishment of a consul position in the New Zealand embassy in Cairo that no decisions have been made yet?

Rt Hon JOHN KEY: Yes, and that is why we are going through a consultation process.

David Shearer: Does the new Ministry of Foreign Affairs and Trade structure disestablish the position of consul in the Cairo embassy?

Rt Hon JOHN KEY: That is yet to be determined.

David Shearer: I seek to table a document, part of the Ministry of Foreign Affairs and Trade change document of 23 February this year, which shows that the position in the Cairo embassy is now no longer there.

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.

David Shearer: Why is he not being upfront with New Zealanders and acknowledge that the role of consul in Cairo, as with other similar positions overseas, is being disestablished, meaning that New Zealanders in difficulty will not have the guarantee of one of their own citizens protecting their interests?

Rt Hon JOHN KEY: I think it is very important that the member understands what is happening. The Ministry of Foreign Affairs and Trade has put out there, as he is well and truly, or should be, aware, a document that looks at a proposed new structure. No final decisions have yet been made. The member knows that.

David Shearer: Should there be a New Zealander on the ground in Cairo to perform consular duties currently undertaken by Barbara Welton, or should New Zealanders be satisfied with an 0800 number patched through to Wellington?

Rt Hon JOHN KEY: There will certainly be people on the ground in Cairo. For instance, the ambassador will be there. We are not looking to close that operation. Secondly, we do fly people in all the time. The member will be aware, if one just looks at Africa, for instance, how sparsely we are represented there, and we fly people around those environments. When it comes to 0800 numbers, Australia and Canada use 0800 numbers. The reason for that is it is so much more convenient for people to be able to get one source from which support can then be dispatched.

Rt Hon Winston Peters: Have the events in Algeria in recent days, involving a trained, skilled, and courageous diplomat, caused the Prime Minister to have any change of heart over making such diplomats redundant and, in some cases, replacing them with National Party hacks?

Rt Hon JOHN KEY: I reject the latter part of the member’s question. In terms of the former, the Ministry of Foreign Affairs and Trade is going through a consultation process at the moment. What is true is that there will be changes—we do not know what those changes are yet—but it is also true that there needs to be a modernisation of the Ministry of Foreign Affairs and Trade.

David Shearer: Will the jobs currently performed by the consul in Cairo continue to be performed by a New Zealander, as he said was his expectation yesterday?

Rt Hon JOHN KEY: It is my expectation that the ambassador would be a New Zealander.

David Shearer: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! This is a point of order.

David Shearer: That was a very straight question. I actually specifically asked whether the current jobs will be performed by the consul in Cairo, not by the ambassador.

Hon Gerry Brownlee: That is not the question you asked.

Mr SPEAKER: Order!

Hon Gerry Brownlee: That is not the question you asked. Straighten yourself up.

Mr SPEAKER: Order! I say to the Leader of the House that the Speaker does not need to be straightening himself up. It is a point of order being considered.

Hon Gerry Brownlee: You always look pristine. My apologies.

Mr SPEAKER: Goodness me, we had better try to—[Interruption] What I will do is invite the member to repeat his question because there is some dispute over the question, and I did not hear that bit of it clearly myself.

David Shearer: Will the jobs currently performed by the consul in Cairo continue to be performed by a New Zealander, as he said was his expectation yesterday?

Rt Hon JOHN KEY: That is yet to be determined by the head of the Ministry of Foreign Affairs and Trade. But, as I said yesterday, it is my expectation that New Zealanders will get the representation that they need.

Mining—Review of New Zealand Minerals Royalty Rates

5. CATHERINE DELAHUNTY (Green) to the Minister of Energy and Resources: Will the Review of New Zealand Minerals Royalty Rates ensure that royalties are paid on all mines in New Zealand?

Hon PHIL HEATLEY (Minister of Energy and Resources): The review will make sure that the returns that apply to new permits for Crown-owned minerals will provide Kiwis with a fair financial return from the development of their minerals, and will be internationally competitive. I

expect that permits that have already been awarded will remain subject to the rates that applied to them when they were awarded.

Catherine Delahunty: Just to clarify, is he saying he will continue to allow our largest mine company, OceanaGold, to dig up over $300 million a year worth of Crown-owned gold from its Macraes Mine in Otago without paying any royalties?

Hon PHIL HEATLEY: The original Macraes Mine now pays a royalty, following the expiration of its old mining licence.

Catherine Delahunty: Will he continue to allow mining company Newmont Waihī Gold to pay no royalties on New Zealand’s third-largest mining operation, the Martha Hill mine?

Hon PHIL HEATLEY: That zero-royalty rate was negotiated under the previous Labour Government in 1987. I have no idea what was going through its mind.

Catherine Delahunty: Given that Newmont Waihī Gold has paid no royalties on its opencast mines since 1987, will the Government use the review to address this anomaly before the proposed Martha Hill mine expands and progresses?

Hon PHIL HEATLEY: Should there be an expansion to the Martha Hill mine, then there will be a renegotiation of royalty rates. In regard to the first part of the question, she would have to ask the Labour Government of 1987.

Catherine Delahunty: Will the review look at the extremely low level of clean-up bonds for our largest mines, given their potential for huge environmental and economic damage?

Hon PHIL HEATLEY: I expect that under the review of the Crown Minerals Act we will be looking at the environment, health and safety requirements, the royalty regime, and other matters that will ensure severe improvement in the management of mines going forward.

Catherine Delahunty: Does he agree that the tiny Tūī Mine, which is costing the country more than $16 million to clean up, shows that bonds, where they exist, must be increased to cover all potential costs to the taxpayer?

Hon PHIL HEATLEY: That is a matter that I wish to see discussed through the review of the Crown Minerals Act. We will take on board all sensible suggestions, and I am sure we will go forward with them.

Catherine Delahunty: Supplementary question—or have I run out?

Mr SPEAKER: I believe the member has had five.

Catherine Delahunty: I seek leave to table the 20 largest mines, their bonds—

Mr SPEAKER: Order! The Parliamentary Library is the source of this document?

Catherine Delahunty: It is.

Mr SPEAKER: I thank the member. And the document is?

Catherine Delahunty: It is The largest mines in New Zealand currently operating, and their royalties and bonds.

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.

Broadband, Ultra-fast—Roll-out to Schools

6. COLIN KING (National—Kaikōura) to the Minister for Communications and

Information Technology: What progress has been made to improve access to broadband in New Zealand schools?

Hon AMY ADAMS (Minister for Communications and Information Technology): Yesterday the Prime Minister, the Minister of Education, and I announced the roll-out of ultra-fast broadband to a further 693 schools throughout the country. This means that by July next year 410,000 students at 1,500 schools across New Zealand will have access to fibre under the $1.35 billion Ultra-fast Broadband Initiative or the $300 million Rural Broadband Initiative. This progress

in schools, alongside that being made in hospitals, businesses, and homes, will see New Zealand becoming one of the most connected countries in the world.

Colin King: What further progress can be expected for students and schools in their access to better broadband?

Hon AMY ADAMS: In just a few years, by the end of 2015, 97.7 percent of schools and 99.9 percent of students will receive ultra-fast broadband, enabling speeds of 100 megabits per second. The remaining schools in the most remote locations of New Zealand will receive a high-speed wireless or satellite connection. This is a game-changer for New Zealand schools and will fundamentally improve the way our children learn.

State-owned Assets, Shares—Prioritisation of Individual New Zealanders

7. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Why is there no provision in the Government’s asset sales legislation to ensure preferential treatment for individual New Zealand buyers despite the Prime Minister’s promise that “Kiwi mums and dads will be at the front of the queue”?

Hon TONY RYALL (Minister for State Owned Enterprises): There is no need to include any such provision in the legislation, because the Government controls which types of buyers will get the shares. During the share allocation process the Government will ensure widespread New Zealand ownership, such that 85 to 90 percent of shares will be held by New Zealand investors.

Hon Clayton Cosgrove: So is the Minister asking this Parliament to vote for legislation that does not include any guarantee that mum and dad investors will not have the first crack at the shares, and asking the public to simply trust the Government, when there is no mechanism to ensure Kiwis will be at the front of the queue and the Minister knows it?

Hon TONY RYALL: The people of New Zealand know that this Government is determined to ensure widespread public ownership of these companies, and we will achieve that through the share allocation process. The Government has made it clear that retail investors will be at the front of the queue.

Hon Clayton Cosgrove: What specific provisions are there in his legislation to limit the number of shares that could be owned by foreigners, in light of his concession last week that up to 30 percent of the shares sold would end up in overseas ownership?

Hon TONY RYALL: If I was to reflect on what the member is saying, last week we indicated for the Government’s shareholding that we are expecting that maybe 10 to 15 percent of the ultimate ownership would be held by foreign investors. And we are determined to make sure that there is strong, widespread New Zealand involvement in these share floats.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I asked the Minister what specific provisions there are in the legislation to limit the number of shares, etc. It was a specific, straight question—what specific provisions—and I got some gobbledegook about percentages—

Mr SPEAKER: Order! The member was doing reasonably well until that point, but I am afraid the point of order ran totally off the rails there. The member has asked that, and the Minister has already answered that there were no specific provisions to do that. Keeping asking I do not think is going to change the answer a great deal. Does the member have a further supplementary question?

Hon Clayton Cosgrove: Has the Minister seen the comments by Mr Dennis Barnes, Chief Executive of Contact Energy, who was reported today as saying that the return on electricity industry assets was “at a level that commercial investors shouldn’t continue to invest in”, and does this reinforce the view of the vast majority of New Zealanders that selling State-owned enterprises to the private sector will result in increased power prices in order to gain increased returns?

Hon TONY RYALL: There is no self-interest whatsoever in that comment from the chief executive of Contact Energy. What I would reflect is that while these companies were under 100 percent Government ownership under that party opposite, electricity prices went up by 72 percent in a few years. I think that is crocodile tears from that member opposite.

Exclusive Economic Zone and Continental Shelf (Environmental Concerns) Bill—Iwi

Concerns

8. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister for the Environment: Have Iwi Māori raised any issues with him about the proposals in the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Bill; if so, what?

Hon Dr NICK SMITH (Minister for the Environment): The bill is currently before the Local Government and Environment Committee. Approximately 18 iwi have made submissions on the bill, and I have seen those submissions. They are strongly supportive of the Government putting in place a proper regime for protecting the exclusive economic zone, but they also set out improvements that they would like to see made to the bill in regard to things like Treaty provisions. The Government also has a relationship agreement with iwi specifically on this issue, an initiative that has been taken in response to representations by the Māori Party. The iwi involved are discussing issues on both the bill and the regulations that will flow from it.

Te Ururoa Flavell: How will customary interests for Māori in the exclusive economic zone be recognised and protected, when the only considerations for the Environmental Protection Authority are economic and environmental factors?

Hon Dr NICK SMITH: There are two quite specific provisions of the bill. The first of those is clause 26, which, again, is a provision that comes from the advocacy of the Māori Party. It provides for a Māori advisory committee, and it requires the Environmental Protection Authority to be informed, from a Māori perspective, of any applications in the exclusive economic zone. There is also a provision in clause 46 of the bill that states that the Environmental Protection Authority is required to notify iwi authorities, customary marine title groups, and protected customary rights groups directly of any applications within the exclusive economic zone.

Te Ururoa Flavell: How does the Minister plan to prevent the further erosion of Māori rights over our moana throughout the process of granting mostly large multinational companies consents in the exclusive economic zone and continental shelf?

Hon Dr NICK SMITH: The first point I would make is that currently anybody doing an activity in the exclusive economic zone or extended continental shelf does not require any sort of consent, so to argue that there is some erosion, I think, is incorrect. What this bill is going to do is to require a proper process for those. In respect of the point about the companies that may be involved in using resources, this is a country that needs more jobs and more exports. Māori have a strong interest in the growing economy and in ensuring that New Zealand takes up these opportunities— albeit in a way that is respectful of Māori and of the quite legitimate environmental interests.

Foreign Affairs and Trade, Ministry—Job Cuts and Operational Savings

9. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: Why is the Government requiring the Ministry of Foreign Affairs and Trade to find operating savings and make cuts of $40 million a year?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) on behalf of the Minister of Foreign Affairs: It is not.

Hon Phil Goff: I seek leave of the House to table a page from this document, which is the briefing to the incoming Minister—the undeleted aspect of the document that the Minister released. That sets out that operating savings of $40 million a year are being required by the Government, contrary to what the Minister answered.

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

Hon Phil Goff: When the Minister is requiring savage cuts from his ministry, why is he intending this week to spend $26,000 to fly his delegation from Bangkok to Burma, when a commercial flight would take the whole of the delegation for $6,000, and is this his idea of leadership by example?

Hon CHRISTOPHER FINLAYSON: The Minister is acting on the advice of the New Zealand Ambassador. The ambassador has provided that advice based on his own experience travelling in Burma. The ambassador’s note to the Minister’s office outlines the reasons for taking this particular mode of transport. The underlying bottom line is clear: if he is not able to take the charter, he should not bother going.

Hon Phil Goff: Is the justification of safety being the reason for this extravagant spending sustainable, when the ministry’s own travel advisory for the area that the Minister intends to go to is the same as for Fiji, where thousands of New Zealanders go each year without the protection and assistance that the Minister will get?

Hon CHRISTOPHER FINLAYSON: It is not extravagant spending, for the reasons I outlined in the previous question.

Hon Phil Goff: If sacking 300 employees—nearly one in four of the ministry’s staff—achieves only half the cuts that the Government requires, what further cuts does he intend to make to find the other $20 million that National wants?

Hon CHRISTOPHER FINLAYSON: The underlying premise of the question is wrong. The Minister is not sacking anyone. There is a document out for consultation. He is keeping a very close eye on it, and in due course decisions will be made. It would be helpful if the member focused on the facts rather than hyperbole.

Hon Phil Goff: Is it correct that the secret ministry document that has been released to staff shows that he intends, under this proposal, to halve the number of staff in Cairo; if so, is it not true that Mihi Pūriri, if she had got into the trouble that she is facing now over custody with her children, was dealing under the proposed regime, would not get the assistance that she got from Barbara Welton; she would have got an 0800 number and an Algerian contractor?

Hon CHRISTOPHER FINLAYSON: Again, the underlying premise of the question was wrong. There is no secret document. A document has gone out for consultation, and one of the issues that arises is the nature of the consular advice that will be able to be provided in Cairo after the consultation has taken place.

Hon Phil Goff: I seek leave to table page 305 from the ministry document, showing that the number of staff in Cairo is intended to be halved.

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

Hon Phil Goff: Does he agree with the cable that he has received from his High Commissioner in Singapore, who asks whether the intended 40 percent cut in New Zealand’s effort in Singapore in the document is in line with the Government’s goal of enhanced engagement with Singapore and ASEAN, and agree that the Government’s action, from the high commissioner, “is equivalent to a major reduction in our foreign policy effort”?

Hon CHRISTOPHER FINLAYSON: The Minister has not had an opportunity to read that cable. He will give it his considered view and then answer the member accordingly.

Auckland Council—Financial Management

10. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Local Government: Does he have confidence in the financial management of the Auckland Council?

Hon Dr NICK SMITH (Minister of Local Government): As I advised the member last Thursday, financial management of the Auckland Council is the responsibility of its elected mayor and council. I would again invite the member, if he has concerns, to directly raise them with the council, or if he is dissatisfied with that response, then to lay a complaint with the Auditor-General.

Rt Hon Winston Peters: Has he received any reports in respect of section 32A of the Local Government (Auckland Council) Act of 2009, which enables the Minister to exercise the power in section 254 of the Local Government Act 2002, and, in particular, section 254(2)(b) and (c), which

relate to identifiable mismanagement of resources, and a significant and identifiable deficiency in the management or decision-making processes of that local authority?

Hon Dr NICK SMITH: There are, in the Auckland Council reform, transitional provisions, but they are there as a last resort. For instance, the Government is giving consideration to a transitional provision around the rating transition that Auckland is working its way through. Those transitional provisions were never intended to be about the day-to-day running of the Auckland Council, which rightly rests with the mayor and council.

Rt Hon Winston Peters: Has the Minister, in respect of the last question, received any reports that Deloitte, acting as both supplier of services and auditor of them, is in breach of section 254 of the 2002 Local Government Act?

Hon Dr NICK SMITH: No.

Rt Hon Winston Peters: Has the Minister received, had communicated to him, or requested any reports that Deloitte, a supplier of services to the Auckland Council and its auditor, contrary to section 254 of the 2002 Act has provided free overseas travel and gifts to the council’s chief financial officer, commonly called Deloitte McKenzie?

Hon Dr NICK SMITH: The employment of both the chief executive of the Auckland Council and its chief financial officer is the responsibility of the Auckland mayor and council, and if the member has got concerns that there has been any financial impropriety—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. As you so delicately pointed out last week, he is being asked whether he has got any reports, and last week he received that report, and he has to bring himself up to date.

Mr SPEAKER: Order! The Rt Hon Winston Peters is correct. The Minister was asked whether he has received any reports on a certain issue, and it would be helpful if the answer were to address that point in the question.

Hon Dr NICK SMITH: To my knowledge, no, I have not had any reports drawn to my attention in regard to the issues the member raises.

Youth Unemployment, Auckland—Work Experience Initiative

11. MELISSA LEE (National) to the Minister for Social Development: How is Government working with the Auckland Council and the Auckland Chamber of Commerce to support young Aucklanders into employment opportunities?

Hon PAULA BENNETT (Minister for Social Development): I am pleased to announce a joint initiative between the Auckland Council, the Auckland chamber of commerce, and the Ministry of Social Development, which are working together to place Work and Income Limited Service Volunteer graduates in positions within Auckland Council departments, council-controlled organisations, and local businesses. This initiative is one that I think just makes perfect sense. So you are combining those graduates from the Limited Service Volunteer programme, a preemployment programme where they have gained the motivation and some of the skills, then sealing that, really, by putting them into work experience.

Melissa Lee: How many young Limited Service Volunteer graduates benefited from this joint initiative?

Hon PAULA BENNETT: There will be 230 available places this year, with the goal of working towards all Auckland-based Limited Service Volunteer graduates from Hobsonville over the next few years. I understand that the Auckland Council already has plans for a dozen young people to start this month, with 50 placements over the first 3 months and up to 230 work experience places over the next 12 months. I certainly want to thank the work of the Auckland Council, the Auckland chamber of commerce, and, of course, my own ministry.

Police Resourcing—Job Cuts and Operational Savings

12. KRIS FAAFOI (Labour—Mana) to the Minister of Police: Is it correct that “Police bosses are considering laying off staff and closing some stations in an effort to save $360 million over the next three years” as reported in the NZ Herald?

Hon ANNE TOLLEY (Minister of Police): There is no savings target. However, it is my expectation that the New Zealand Police, like all other State sector agencies, will manage within its budget. I have been clear with police that to continue their good work reducing crime, we want to see increased front-line services. I am advised that the commissioner has no intention of losing front-line staff, but is considering consolidating functions like finance and human resources. However, this is still subject to review processes and consultation with staff. I am also advised that the commissioner is considering a range of options where improved mobility of front-line staff could provide a better service to communities, but no decisions have been made.

Kris Faafoi: Has she seen a proposal outlining Budget savings in the order of $360 million over the next 3 years; and if so, does that proposal recommend laying off front-line staff, the closure of police stations, and reducing resourcing to police?

Hon ANNE TOLLEY: Budget decisions, of course, are always announced on Budget day, but I can assure the House that this Government has put 600 extra police on the front line. We have reduced crime, and we have set a further target of a reduction in crime of 13 percent. The police are making important changes through Policing Excellence, which will increase front-line police hours with a much greater emphasis on preventing crime—

Mr SPEAKER: Order! I think I let the Minister go on a reasonable length of time because she said at the start of her answer that she was not going to talk about Budget proposals, and then went on to give quite a further lengthy answer.

Kris Faafoi: I raise a point of order, Mr Speaker. My question pretty much clearly asked whether or not she had seen a proposal outlining what I had said in that supplementary question, and I do not think I have had—

Mr SPEAKER: Order! The Minister, in fairness, said that she was not going to the Budget proposal and that Budget proposals are announced on a certain date and she was not gong to go down that track. So I think that was a fair answer to the question.

Kris Faafoi: Can she commit to ensuring that the number of front-line police staff will not fall and that current police stations will not close as a result of Budget cuts due to be announced?

Hon ANNE TOLLEY: What I can commit to this House is part of this Government’s policy is that front-line policing hours will increase, that crime will reduce in our communities, and that there will be fewer victims of crime.

Kris Faafoi: I raise a point of order, Mr Speaker. My supplementary question referred to ensuring that the number of front-line police officers would not fall, not to front-line hours.

Mr SPEAKER: Order! I think that is probably—I am not sure I heard the Minister answer it, correctly. I think she said the front-line services would not be reduced.

Hon Members: Hours.

Mr SPEAKER: It was hours, was it? But think, in fairness, that is a reasonable answer to the question, because obviously individuals work hours. I think it is a reasonable answer to that question.

ENDS

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