Questions and Answers – March 8

Press Release – Office of the Clerk

1. MAGGIE BARRY (National—North Shore) to the Minister of Finance : What reports has he received on the economy?
(uncorrected transcript—subject to correction and further editing)

THURSDAY, 8 MARCH 2012

QUESTIONS FOR ORAL ANSWER

QUESTIONS TO MINISTERS

Economy—Reports

1. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What reports has he received on the economy?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: The Reserve Bank today issued its Monetary Policy Statement for March 2012. The bank notes the domestic economy is showing signs of recovery, household spending appears to have picked up over the past few months, and a recovery of building activity is under way. The Reserve Bank expects growth in the near-term to remain reasonably modest, but this is projected to gather pace as the Canterbury rebuild accelerates and underlying investment recovers. The Monetary Policy Statement projects annual real production GDP growth of 1.8 percent, 3.1 percent, 3.7 percent, and 2.4 percent for the March years of 2012, 2013, 2014, and 2015 respectively. This is slightly stronger than the bank predicted in its December Monetary Policy Statement.

Maggie Barry: What is the Reserve Bank’s assessment of the global economic situation, and how might that impact on New Zealand?

Hon STEVEN JOYCE: The Reserve Bank says the risk of a significant near-term deterioration in global economic conditions has moderated since its December Monetary Policy Statement. However, risks remain. It is projecting reasonable growth by our main trading partners, and that is broadly consistent with its December Monetary Policy Statement and Treasury’s recent forecasts. Australia and China are expected grow at around 3.3 percent and 8.5 percent a year respectively over the next 3 years. This will help underpin growth in this country, with our trade and investment moving towards these fast-growing parts of the world.

Maggie Barry: What is the Reserve Bank’s outlook for New Zealand’s current account position, and how does this compare with the position in the 3 years to 2008?

Hon STEVEN JOYCE: The Reserve Bank projects the current account deficit to widen moderately over the next 4 years as imports and inward investment pick up and the Canterbury rebuild gathers momentum. The Reserve Bank forecasts the deficit to be 4.3 percent, 4.1 percent, 4.8 percent, and 5.1 percent of GDP for the March years 2012, 2013, 2014, and 2015 respectively. The good news is that these deficits are significantly smaller than the average of more than 8 percent of GDP in each of the 3 years to 2008.

Hon David Parker: Does the Monetary Policy Statement show a lower growth forecast compared with Treasury’s lowered Budget Policy Statement last week?

Hon STEVEN JOYCE: Yes, the Reserve Bank Monetary Policy Statement predicts a slightly lower nominal GDP increase, because of the expected lower inflation that the Reserve Bank is predicting over the next few years.

Whānau—Whānau Integration, Innovation and Engagement Fund

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Māori Affairs: Is he satisfied with the financial management of the Whānau Integration, Innovation and Engagement Fund, administered by Te Puni Kōkiri?

Hon David Cunliffe: Nice tie!

Hon Dr PITA SHARPLES (Minister of Māori Affairs): Nice tie? I thank the member for his question. I guess he has given up on local government—

Mr SPEAKER: Order!

Hon Dr PITA SHARPLES: Sorry. Yes, absolutely, Mr Peters, I am satisfied, given that the Minister for Whānau Ora empowers Māori and is tūturu Māori.

Rt Hon Winston Peters: Congratulations, by the way.

Hon Tau Henare: Thank you.

Rt Hon Winston Peters: How can he have confidence in the financial management of the Whānau Integration, Innovation and Engagement Fund when those handing out the funds are also receiving them?

Hon Dr PITA SHARPLES: I am happy to report to the member, as the responsible Minister, that I was assured by Audit New Zealand’s 2010-11 audit report on the ministry, which rated the management control environment as good and our financial information systems controls as very good.

Hon Tau Henare: What reports has he received on Te Puni Kōkiri’s financial management?

Hon Dr PITA SHARPLES: Well, I did receive that report on the audit, but we also had a report on the fund itself, the one in question, the “WIIE” fund, by KPMG, which was an independent audit that we sought, and it goes like this: “The systems and processes to administer the WIIE fund were effective in complying with policy direction set by the Government. Te Puni Kōkiri front-line staff are working well, with whānau making inquiries about the fund and Te Puni Kōkiri’s contract information and monitoring system for the WIIE fund is effective.”

Rt Hon Winston Peters: Is he aware of a serious conflict of interest involving members of Ngā Kaitiaki o Ngāti Kauwhata administering funds from the Whānau Integration, Innovation and Engagement Fund to members of their own whānau in Ngā Kaitiaki o Ngāti Kauwhata?

Hon Dr PITA SHARPLES: I am not aware of that. If the member would like to write to me, in triplicate, I would be happy to look at that. I can advise him that everyone is contracted to the group—

Hon David Parker: You do have to read things three times to understand them.

Hon Dr PITA SHARPLES: Ha, ha! So it will be replied to.

Rt Hon Winston Peters: Would the Minister explain to the House, in triplicate, if he likes, exactly how the $1,400 spent on food by Ngā Kaitiaki o Ngāti Kauwhata could possibly have contributed to “building whānau knowledge, skills, and capabilities”, as Whānau Ora boasts?

Hon Dr PITA SHARPLES: Mainly it was intelligent food that they ate and it gave them a lot of activity there. The reality is that food is part of any Māori gathering where you are doing things to progress the whānau, and you should know that, unless Ngāti Wai have different customs.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. First of all, he suggested that you should know that, and that really is wrong, and the second thing is that he then attacked my iwi, which is famous for—

Mr SPEAKER: No, no, order! The member is quite right; the Minister should not have said “you should know that,”, but members should not raise that; that is up to the Speaker.

Hon Dr PITA SHARPLES: I apologise.

Rt Hon Winston Peters: Point of order—

Mr SPEAKER: I thank the Minister. Is this a further supplementary question?

Rt Hon Winston Peters: No, Mr Speaker. I want to seek leave to table a document.

Mr SPEAKER: Leave is sought to table a document.

Rt Hon Winston Peters: These are minutes and information from Te Puni Kōkiri behind the questions of today.

Mr SPEAKER: So the document is from Te Puni Kōkiri?

Rt Hon Winston Peters: That is right.

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.

Economy—International Liabilities

3. Hon DAVID PARKER (Labour) to the Minister of Finance: What is the projected growth, if any, of New Zealand’s international liabilities under this Government’s policies, and what are the components of those liabilities?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: According to the Pre-election Economic and Fiscal Update issued in October last year, New Zealand’s net international liabilities are forecast to increase from 73 percent of GDP as at September 2011 to just over 77 percent of GDP by 2016. One of the main components of this is an expected increase in imports and investment from offshore connected with the Canterbury rebuild. The relatively high exchange rate combined with weaker world demand for our export goods and services are also factors predicted in the Pre-election Economic and Fiscal Update. In contrast to the period of high current account deficits in the mid-2000s, where net international liabilities hit 83 percent of GDP, household and domestic saving is now increasing. Another positive factor is the Government’s commitment to return to Budget surplus by 2014-15.

Hon David Parker: Do the projections of the current account deficit, which the Reserve Bank projects will rise back up to 5 percent, and Treasury projects will increase back up to 6.9 percent, show that the current account deficit problem remains unsolved?

Hon STEVEN JOYCE: No. Both those numbers are predicted to increase, as the member said, by both the Reserve Bank and Treasury, but to nowhere near the levels they were at in the 3 years prior to this Government coming into office, where they peaked at an average of 8 percent—the balance of payments deficit of GDP. So even though it is predicted to rise, it is largely because of imports associated with the Canterbury rebuild, and it is not projected to return to previous levels.

Hon David Parker: Is the current account deficit projected for every year of the forecast period under his Government’s policies funded by selling more assets to foreigners and borrowing more money from overseas?

Hon STEVEN JOYCE: Obviously, the current account deficit is funded by a net increase in international liabilities, and they can be across a range of factors. It is difficult to isolate any single one.

Todd McClay: How have New Zealand’s net international liabilities been tracking over the last 10 years?

Hon STEVEN JOYCE: That is a very interesting question. In March 2002 New Zealand’s net international liabilities were 67 percent of GDP. By 2008 they had deteriorated to around 83 percent of GDP, which is quite high by global standards. This was the product of some misdirected Government policies that encouraged borrowing, spending, and housing speculation. It left the economy lopsided and the current account deficit around 8 percent of GDP for the years 2006 to 2008. Since 2008 New Zealand’s net international liabilities have improved significantly to 73 percent of GDP as of September 2011. Although they are forecast to increase over the next 4 years for the reason I outlined in my answer to the primary question, they will still be well below the levels of 2008.

Hon David Parker: Does not the fact that the Minister acknowledges that net international liabilities from here on will continue to go up until the end of the forecast period, combined with the

current account deficit rising, show that we have not cured the fundamental imbalances in the New Zealand economy?

Hon STEVEN JOYCE: I think the member confuses a relative position with an absolute position. So relatively they will be increasing, but in an absolute sense they are much lower than they were when that Government left office. So he is in there digging himself further into a hole, and showing that actually the previous Government’s attitude to foreign debt and international liabilities was considerably worse than the current Government’s.

Hon David Parker: Why is it his Government’s policy to encourage the sale of productive farmland and shares in our power companies to foreign buyers and to encourage more overseas borrowing, to fund our current account deficit, rather than consider other policies that address the fundamental imbalances in our economy?

Hon STEVEN JOYCE: I have to say that is a little rich coming from the Opposition, because over Labour’s term in office it boosted net international liabilities significantly, and showed absolutely no concern about that. The reality is that there was a complete misrepresentation in the member’s question—at least one—and that was the suggestion that we are seeking to sell assets overseas, which of course is not the case whatsoever. The important point is that the only way you can improve that position is to improve the position of New Zealand companies competing in international markets, and that means making those companies more competitive, and that means the sorts of policies this Government is doing to improve things, like amending the Resource Management Act to allow resource use, and encouraging the capital markets to keep Government debt down to get the Government books back into balance—all things off the top of my head that the current Labour Party Opposition opposes.

Water Quality, Lakes and Rivers—Effect of Livestock

4. EUGENIE SAGE (Green) to the Minister for the Environment: Is water quality in New Zealand being negatively affected by livestock in rivers and lakes?

Hon Dr NICK SMITH (Minister for the Environment): Yes. That is why I welcome the progress in getting more rivers and lakes fenced. Just this last weekend the Prime Minister announced at the Bluegreens Forum another $8 million of funding for improving water quality. Included in this package is a one-third contribution for farmers to fence 200 kilometres of New Zealand’s most polluted river and its tributaries in the Manawatū.

Eugenie Sage: Is it acceptable that as of June 2012 only two regional councils will prohibit intensively farmed livestock from accessing rivers and lakes?

Hon Dr NICK SMITH: I do think there is a real challenge for our regional councils to meet their requirements under the new national policy statement that this Government put in place last year that requires councils to set limits, and included in that is the issue of fencing waterways. Further to that, the Land and Water Forum, which is a very constructive engagement of a broad range of groups, is due to report back to the Government this month on the other steps that are required to ensure that we properly do set limits in the measures to protect water quality.

Eugenie Sage: Given the ad hoc way in which regional councils try to control water quality degradation from stock access, will he not provide national consistency by implementing a national environmental standard to keep livestock out of rivers?

Hon Dr NICK SMITH: I am open-minded about using the additional tool of a national environmental standard, but my concern more generally around water quality is that there have been highly polarised arguments between different groups. I think the fact that we have 58 groups engaging in the Land and Water Forum and actually coming to agreement at a national level about the measures that are required, in my view is the constructive way forward. This month I am due to receive the report on the very issue that the member is rightly concerned about.

Eugenie Sage: If the Land and Water Forum does recommend a national environmental standard on riparian fencing for stock, will he implement that, or will it be like the national policy statement

that the forum recommended, which will be substantially different from that which the forum recommended?

Hon Dr NICK SMITH: I must set the record straight for the member. The Government did respond consistently with the Land and Water Forum around the national policy statement, except in the area where the Crown Law Office advised us that we would be acting unlawfully. It is not my habit, as a Minister, to do that knowingly. It is a hypothetical question about the way in which we will respond to the Land and Water Forum, but I want to reassure the member that this Government is firmly committed to that collaborative process, and, providing those measures are practicable, then quite clearly we would want to advance the forum’s recommendations.

Jacqui Dean: What reports has the Minister received on progress in improving water quality in Canterbury, before and after the appointment of commissioners?

Hon Dr NICK SMITH: Yes, I have received reports, and they show that in the period prior to 2009 Canterbury had one of the worst records of compliance with resource consents, and in fact it was deteriorating in the previous year. I also note that in the year since commissioners were appointed, compliance rates for resource consents improved to 59 percent in the first year and again to 65 percent in the year later. In fact, it is interesting to note that the biggest improvement in compliance rates of resource consents of all the councils in New Zealand has been since we appointed commissioners in Canterbury.

Hone Harawira: Does the Minister believe that the sale of New Zealand power companies to overseas interests before Māori claims to fresh water have been settled will have a negative impact on water quality in New Zealand, particularly given that those overseas interests are likely to be more concerned about the value of their investment than the quality of the water in our rivers and lakes?

Hon Dr NICK SMITH: The first point I would make is that there is no evidence as to the nature of the ownership affecting the way in which those property owners affect water quality. In fact, we should note that CraFarm Group, which has been the subject of significant controversy, was a New Zealand – owned company and had an appalling record in terms of its management of fresh water. Can I further reassure the member that the Government is very committed to engagement with the Iwi Leaders Group around water, and to improving the involvement that iwi have in the management of New Zealand’s water resources. I think that is shown by our commitment in the Rotorua lakes, on the Waikato River, and in the further four programmes we announced at the weekend, where iwi are actively involved in water clean-ups.

Eugenie Sage: Given that industry has already taken some initiative to promote the fencing of streams, why will he not back that up by implementing a legally binding national environmental standard under the Resource Management Act, to keep farmed deer, farmed cattle, and dairy cows out of our waterways?

Hon Dr NICK SMITH: As I said to the member earlier, the Government is open-minded about a national environment standard. The tension that I draw to the member’s attention is that there is a disadvantage to a national environment standard when you have got very geographically different areas around the country. Sometimes it is better to have stuff being determined regionally and locally; on the other hand, there is the argument for just one set of rules nationwide. We will be listening very closely to the advice from the Land and Water Forum on what the best way forward is, but can I reassure the member this Government is firmly committed to improving New Zealand’s freshwater management and quality.

Eugenie Sage: I seek leave to table two photographs emailed to me by Northland citizen Millan Ruka of stock beside the Wairua River, and another Northland river.

Mr SPEAKER: Leave is sought to table these photographs. Is there any objection? There is objection.

Prison, Wiri—Public-private Partnership

5. Dr CAM CALDER (National) to the Minister of Corrections: What progress has been made on the proposal to build a public-private prison at Wiri?

Hon ANNE TOLLEY (Minister of Corrections): Today the Minister of Finance and I announced that the Government has chosen a consortium of companies to design, finance, build, operate, and maintain the new 960-bed prison at Wiri. Construction will start in the second half of this year, once the 25-year contract has been finalised. The prison is expected to open in 2015. The new prison at Wiri will help meet growing demand for prisoner accommodation in Auckland. The new prison will not only get better results but also is excellent value for the taxpayers.

Dr Cam Calder: What are the advantages of using a public-private partnership to build and operate the prison at Wiri?

Hon ANNE TOLLEY: This is a great deal for the taxpayers, because the maximum cost of the contract is capped at a level equivalent to 10 percent less than procuring the prison through traditional means, and the contract with the provider will have strong performance incentives ensuring we receive a superior service to that provided by publicly run prisons, or we pay a lower price. The provider will need to achieve lower recidivism rates than the average for publicly run prisons to receive incentive payments. It will also face financial penalties if it fails to meet shortterm rehabilitation and reintegration measures.

Hone Harawira: What reports has she seen regarding the increased recidivism rates amongst Native Americans in public-private prisons in the United States, and can she tell the House what support the Māori Party has given for public-private prisons like the one at Wiri that are expected to follow the same trends?

Hon ANNE TOLLEY: In answer to the first part of that question, no, but I would dispute the member’s assertion. Actually, this contract that we are talking about today will take a fundamentally different approach. It is strongly focused on results and particularly focused on results for Māori offenders, and we are requiring the contractor to provide better results than the State system. This approach of incentivising a contractor to focus on results is beyond the immediate scope of the service, like recidivism. This is an international first.

Charles Chauvel: Supplementary question—[Interruption]

Mr SPEAKER: Order! I have called Charles Chauvel.

Charles Chauvel: What are the locations around New Zealand of the existing State-owned prison units that she described today as “very old and coming to the end of their viable life” and that “will need to close”?

Hon ANNE TOLLEY: No prisons will need to close as a direct result of the decision announced today. However, it is well known that some of our prisons are very old. Some of them were built in the 19th century and are coming to the end of their useful life. I am not going to give specific locations—

Charles Chauvel: I raise a point of order, Mr Speaker. I asked a very direct question. I asked the Minister not about which prisons were going to close but about which existing State-owned and State-run prison units that she described today as “very old and coming to the end of their viable life” and that “will need to close”, and I do not think the Minister is in a position to refuse to give that information.

Mr SPEAKER: I accept the member’s point. That was indeed the question he asked. The Minister should either answer it or declare that it is not in the public interest to do so, but that was a very straight question.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! A point of order has been raised.

Hon Gerry Brownlee: I think that when a Minister stands up and attempts to give some context to the questioner’s question—in other words, not dismissing it but accepting it as a valid question—

but then goes on to say “I am not going to release that today.”, it is reasonable to assume that there is a good public interest requirement being met in not answering that question directly.

Charles Chauvel: Point of order.

Mr SPEAKER: I do not think I need to hear any more. If the Minister is indicating that she believes that it is not in the public interest to answer that question, that is the end of the matter.

Hon ANNE TOLLEY: If I had been allowed to finish, I would have said that we are obliged to carry out consultations with staff, and I do not wish to pre-empt that.

Grant Robertson: But you just thought you’d say it this morning.

Hon ANNE TOLLEY: And I did say today publicly that an announcement would be made soon.

Charles Chauvel: I raise a point of order, Mr Speaker. With respect, that still does not address the question, which was phrased deliberately and directly and independently of any need to consult with the staff, because the Minister’s statement, which I will seek leave to table, identifies the clear fact that there are units that need to close—

Mr SPEAKER: Order! The member has heard the Minister’s full answer there, and I think that has to be accepted. The Minister is saying that, in her opinion, it is not in the public interest to name any such units prior to consultation with those involved in, I believe, operational staffing of those units. That is a perfectly reasonable answer. The member can seek leave to table documents—that is fine—but that is a perfectly reasonable answer.

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

6. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Foreign Affairs: Will proposed changes to the Ministry of Foreign Affairs and Trade undermine its ability to carry out its role in promoting New Zealand’s trade, security and consular interests?

Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations) on behalf of the Minister of Foreign Affairs: No. The proposals for change put forward by the Ministry of Foreign Affairs and Trade’s senior management are just that: they are proposals. The Minister is aware that some staff hold the view that some aspects of the proposals could impact adversely on New Zealand’s representational interests overseas, so the Minister has therefore stated that he and the Government will carefully examine the proposals in parallel with staff consultation, to ensure that no initiatives having any adverse impacts are adopted.

Hon Phil Goff: What is the Minister’s response to this cable from his Ambassador to Argentina, dated 2 March, which describes his Government’s proposal to cut his staff from 11 to four as “Armageddon-like” and utterly “unsustainable”, and says that the lack of staff will stop him carrying out core duties like pursuing a free-trade agreement with the three countries he represents New Zealand in, plus Brazil—a huge trade bloc?

Hon CHRISTOPHER FINLAYSON: As I have already indicated to the House, the Minister is aware that some ministry staff hold the view that some of the proposals could impact on New Zealand’s capacity to advance its diplomatic interests. For that reason the Government is carefully considering the proposals. Initiatives that are judged to have the potential to impact negatively on New Zealand’s diplomatic interests will not be entertained by the Minister.

Hon Phil Goff: When senior ambassadors like those in Argentina and Singapore are all telling him, on the record, that the slash-and-burn cuts will result in “a major reduction in … [New Zealand’s] foreign policy effort”, will he listen to them, or will he just get his chief executive officer to send out instructions to all ambassadors that they are not to express their concerns in cables to him, as happened yesterday?

Hon CHRISTOPHER FINLAYSON: My advice to that member is to listen very carefully to answers, because if he had listened to the previous answer he would have heard me say, on behalf of the Minister, that he will be listening very carefully to those members of the diplomatic community who do have concerns. They are proposals for change. He must listen to answers.

Hon Phil Goff: If the Minister is telling the House now that he wants to listen to them, why were ambassadors told yesterday—instructed—not to express their concerns to him in cables?

Hon CHRISTOPHER FINLAYSON: I am not sure what instructions were issued, but I would have thought that if such an instruction was issued it was very good, because it would end up in the malignant hands of that member.

Mr SPEAKER: Order! The Hon Chris Finlayson will—[Interruption] Order! There will be no more interjection. The Hon Chris Finlayson will get to his feet and withdraw and apologise for that last totally unacceptable comment.

Hon CHRISTOPHER FINLAYSON: I withdraw and apologise.

Hon Phil Goff: In the light of the shambles this is now becoming, does he now agree— [Interruption] Shall I wait for them to stop?

Mr SPEAKER: Order! There will be some silence, but the member must recognise that if he makes inflammatory comments in a question, there will be a reaction: there will be noise.

Hon Phil Goff: In the light of the responses he is getting, does he now agree with this comment: “Few problems are solved by significant reorganisations—in fact, many more tend to be created. It is easy to underestimate the amount of energy and inspiration soaked up by institutional change as well as the loss of personal and institutional knowledge.”, that being a quote from Mr Key talking to the New Zealand Public Service Association (PSA) in September 2008?

Hon CHRISTOPHER FINLAYSON: The Minister and I would totally agree with everything the Prime Minister says—

Rt Hon Winston Peters: That’s what yes men do.

Hon CHRISTOPHER FINLAYSON: —but I would say this yet again, Mr Peters: the Minister is aware that some ministry staff hold the view that some of the proposals could impact on New Zealand’s capacity to advance its diplomatic interests. For that reason the Government is carefully considering those proposals. Initiatives that are judged to have the potential to impact negatively on New Zealand’s diplomatic interests will not be entertained by the Minister.

Hon Phil Goff: I seek leave of the House to table a speech from Mr John Key to the PSA congress on 24 September 2008.

Mr SPEAKER: Order! These speeches are all readily available to members.

Women on Boards—Government Policy

7. LOUISE UPSTON (National—Taupō) to the Minister of Women’s Affairs: What commitment is the Government willing to make to increase the number of women on State sector boards?

Hon JO GOODHEW (Minister of Women’s Affairs): Today, on International Women’s Day, I can remind members of the Government’s campaign commitment at the last election to increase the percentage of women on State sector boards to 45 percent by 2014. International evidence shows a positive correlation between women in leadership and corporate performance, so there are sound reasons to strive for this. More women in governance will help build a better future for women, their families, and New Zealand.

Louise Upston: Why has the Government chosen this target for State sector boards?

Hon JO GOODHEW: The number of women on State sector boards has remained around 41 to 42 percent for the last 7 years. The Government wants a challenging but achievable target. This is just that, but it will be challenging. In order to achieve 45 percent, nearly 50 percent of all new appointments over the next years will need to be women. This is not an easy target, but with the commitment of this Government and the help of my colleagues it is a realistic and achievable goal.

Dr Megan Woods: Why has she dropped the target for women on State sector boards down to 45 percent from the previous target of 50 percent, and why is she promoting just 10 percent as being the target for private sector boards?

Hon JO GOODHEW: Our Government has not had a stated objective of 50 percent. We believe that 45 percent is realistic and achievable. I would say to that member that if simply setting a target of 50 percent meant that it would happen, then the previous Labour Government may well have tried to do that but it did not achieve it. It sat between 41 and 42 percent for the last 7 years.

Earthquakes, Canterbury and Christchurch—Progress of Recovery

8. DENIS O’ROURKE (NZ First) to the Minister for Canterbury Earthquake Recovery: Is he satisfied with the rate of progress of the Christchurch earthquake recovery?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): I am satisfied there is progress on the recovery, but I will always be impatient for that progress to be more speedy.

Denis O’Rourke: What is the Minister’s response to the subject of an email received by me from a Christchurch homeowner in the orange zone, which includes these words: “This farce continues to puzzle the residents and many independent experts who cannot fathom the continuing delay.”, and “The Englebert Humperdinck song ‘Please Release Me, Let Me Go’ has never been more apt.”?

Hon GERRY BROWNLEE: The email was clearly written to the member and he is quoting from it, I hope, accurately. What I think he is expressing is the frustration that some people have. There are 658 or so homes still left in the orange zone, and there are about 2,500 in the white zone. I have always said that we are moving as quickly as possible to get a sound decision for those people. In the end, you are talking about what for most will be their whole-of-life asset—the one asset that they accumulate the most during their lives. So you cannot deal with that in any trite fashion. I have also made it clear that as we come to the end of the process the decisions become more difficult because some of the more obvious damage is not so obvious. But I have also indicated that we want to have most of those decisions made by the middle of this year.

Denis O’Rourke: What actions will the Minister take to more effectively communicate with Christchurch residents on the future of their land and homes?

Hon GERRY BROWNLEE: I think the communication, despite the criticism from those who are political opponents of the Government, has been adequate. I think that the fact of the matter is that it does not matter how many times you tell someone something, they will often not want to take on board the message. The message here is we are doing our best on behalf of those residents whose properties are so badly damaged.

Denis O’Rourke: I seek leave of the House to table correspondence sent to me by a Christchurch resident, stating that the song “Please Release Me, Let Me Go” has never been more apt in regard to the Minister’s handling of the quake recovery.

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

Denis O’Rourke: I seek leave of the House to table the lyrics of the song—

Mr SPEAKER: Order! [Interruption] Order! The House will come to order, or some National backbench members will be in trouble, like—I thank members. That is totally unnecessary.

Hon Lianne Dalziel: Has he seen the letter from the Parklands action group about the serious insurance implications its members are facing, with one saying that if they have to rebuild on that site, they cannot guarantee insurance; another saying that some areas will not be able to be rebuilt for 4 years or more; one saying they can guarantee insurance only for that customer, which means they can never sell their property without guarantee of insurance; and, of course, the other one, which the Minister will be familiar with, which is the guarantee for only 2 years’ cover, which was the IAG deal for the AMI sale? And what is his reply?

Hon GERRY BROWNLEE: In the case of Parklands, post the seismic events of 23 December, we have been conducting a review there. We have had discussions with that group, and they have accepted that we are going to need to take a little more time to make a proper decision. All of the

factors that are in that letter, and many others, are matters that are part of that ongoing consideration.

Hon Lianne Dalziel: Has he received a report from the Canterbury Earthquake Recovery Authority on the recent meeting it held with Brooklands residents who want information about why they were red-zoned; and will he bring the Prime Minister back to Brooklands, as he did on 12 September 2010, as the community would now like them to do?

Hon GERRY BROWNLEE: I am aware that there has been a discussion with the Brooklands community by people in the Canterbury Earthquake Recovery Authority. The member points out one of the problems that you do get in these situations—that is, here is a community that has been made red, and there are some people in that community who want to go back to being green. The member speaking before quoted the song “Please Release Me”—people who are orange who want to go red and will not want to go green. It is a very, very complex situation. I am disappointed that there were not more questions on that at the select committee hearing yesterday.

Hon Lianne Dalziel: I raise a point of order, Mr Speaker. The question that I asked him was about the Brooklands residents who wanted the information about why they were red-zoned. It was not a question about the correctness of the decision; it was about why the decision had been made in their case, and they have asked the Prime Minister and the Minister to come back and explain it to them. That was the question I asked.

Mr SPEAKER: I accept that the question had more than one part to it, and the Minister certainly responded to the first part of the question about Brooklands residents. I accept that he probably did not say why they had been red-zoned, but he may not have that information with him today, because the primary question did not indicate that the focus would be in that exact area. If the Minister had any information on why they were red-zoned, it would be helpful, but I do not expect—

Hon GERRY BROWNLEE: I think it is important for the House to hear that the information or the criteria by which the decisions are made have been published on the website for quite some time. In essence, that land is no longer capable of sustaining residential occupation and the infrastructure that is required for successful residential occupation. It does not matter how much the member might like to say that she knows better; that is the advice the Government got from its engineers and the advice that we have acted on. In the end the choice is there for people in Brooklands to either sell to the Government their whole property, or sell to the Government just their land and deal with their insurer over a rebuild somewhere else. Those are good options for people in the circumstances.

Mr SPEAKER: I thank the Minister.

Hon Lianne Dalziel: Colleagues were suggesting I seek leave to table the Cabinet paper, but it is available on a website, so they can see that for themselves that it does not say that—

Mr SPEAKER: We are not going to do that. Question—

Hon Lianne Dalziel: —but I seek leave to table a letter from the Brooklands Stayers, and it is addressed to the Prime Minister, inviting him and the Minister for Canterbury Earthquake Recovery to come to Brooklands, as they did before.

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.

Hon Lianne Dalziel: I further seek leave to table the letter of 7 March 2012 to Minister Brownlee from the Parklands action group, setting out the different insurance issues, together with the individual insurance company notices explaining the difficulties that they now face.

Mr SPEAKER: Leave is sought to table those documents. Is there any objection? Oh, there is objection in that case.

Hon Lianne Dalziel: Eh?

Mr SPEAKER: There is objection in that last case.

Greenhouse Gas Reduction—Submission to United Nations

9. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: Did New Zealand meet the 28 February deadline for its submission to the United Nations on increasing the level of ambition in global greenhouse gas mitigation, as agreed by parties in the Durban Platform for Enhanced Action; if not, why not?

Hon Dr NICK SMITH (Minister for Climate Change Issues): The agreement in Durban was for an invitation for the 195 member countries to submit views on options for increasing ambition globally for reducing emissions, and did not amount to a deadline. I note that only three submissions were received by 28 February. New Zealand will be contributing its views this month, and that will be in good time for the next round of international negotiations, to take place in Bonn in May.

Dr Kennedy Graham: Given that it was, according to the Minister, an agreement for an invitation, but that paragraph 8 said “submit by 28 February”, is he concerned that in ignoring the 28 February request and invitation, this Government conveys the message that New Zealand does not care about the imminence and magnitude of climate change?

Hon Dr NICK SMITH: Quite clearly, the fact that only three submissions were received by 28 February from the 195 countries that were represented in Durban hardly suggests that those countries thought it was the rigid deadline in the way in which the member presents it. I can absolutely assure the member that this Government takes those international negotiations very seriously. I have to say that this House should be very proud of the contribution of the Minister responsible for those international negotiations. Tim Groser is playing a very pivotal role and this country is punching well above its weight in ensuring progress is made.

Dr Kennedy Graham: Setting aside what our weight is, has the Cabinet been informed of the recent United Nations Environment Programme report stating that to have a likely chance of staying within the 2 degrees Celsius threshold, global emissions in 2020 will need to be 12 gigatonnes below the projected level of 56?

Hon Dr NICK SMITH: Certainly, I and my colleague the Minister responsible for International Climate Change Negotiations have received many of those reports. Cabinet is currently giving consideration both to the issues that flow from Bonn as well as to the amendments that will need to be made to the emissions trading scheme. I would also point out that New Zealand is going to comfortably meet its Kyoto obligations around emissions, and that is something that was not the case prior to our putting the emissions trading scheme in place.

Dr Kennedy Graham: Interpreting the answer to be no, I seek leave to table the United Nations Environment Programme report The Emissions Gap Report 2011.

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: Given that the United Nations Secretary-General has told the Security Council that climate change “not only exacerbates threats to international peace and security; it is a threat to international peace and security” and “Minimalist steps will not do,”; does he agree that bigger reductions by New Zealand than currently announced are essential?

Hon Dr NICK SMITH: Certainly, we have made a commitment in the negotiations to a target of a reduction of between 10 percent and 20 percent on our 1990 emissions, subject to a number of conditions, on some of which progress was made in the latest negotiations in Durban. What this Government will not do is to make a big bold promise about emissions reductions, like the previous Government, and let emissions continue to grow up uncontrolled. That does nothing for the credibility of dealing with this very serious issue.

Dr Kennedy Graham: In light of the heightened concern over the mitigation gap, will the Government now accept the Secretary-General’s earlier call for a 30 percent to 40 percent cut for 2020, in recognition that that is not too big and bold?

Hon Dr NICK SMITH: I have seen no credible plan that would enable New Zealand by 2020 to reduce its emissions to 30 to 40 percent below 1990 levels—and, remember, levels since 1990 grew very substantially in the later years—without completely decimating the New Zealand economy, and the New Zealand Government here is not going to do that.

Dr Kennedy Graham: I seek leave to table the Green Party’s document dated August 2009, Getting There, which conveyed a credible—

Mr SPEAKER: Order! This document is already available to all members. We will not waste time doing that.

Dr Kennedy Graham: Recognising the comment by the Alliance of Small Island States, which did manage to get its submission to the United Nations, that “Enhancing mitigation ambition is essential in order to minimize adverse and potentially catastrophic effects for all countries, and is particularly critical to preserving the viability and survival of small island developing states …”, does the Government believe that its current pledge will avert such a catastrophe and ensure their survival?

Hon Dr NICK SMITH: There is a critical issue for those small island States, and New Zealand recognises that, and it was a subject of significant discussion at the Pacific Islands Forum we chaired in Auckland last year. But I remind the member that New Zealand’s portion of greenhouse gas emissions globally is 0.2 percent, and if anybody in this House thinks that New Zealand by itself can solve this problem, they are in my view very misled. What is more, I would say that New Zealand is making more progress than most in changing our emissions profile.

Dr Kennedy Graham: I seek leave to table the submission by the Republic of Nauru on behalf of the Alliance of Small Island States, pointing out the degree of their concern on this matter.

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.

Economy—Government Policy

10. DARIEN FENTON (Labour) to the Minister of Labour: Does she stand by her answer to Written Question No 00916 (2012) that “the Government is focused on building a more competitive economy, which will lead to more jobs and higher wages”?

Hon KATE WILKINSON (Minister of Labour): Yes, I do, actually.

Darien Fenton: Actually! Will the Government’s plans to remove collective bargaining rights help rest home workers on $13.16 an hour get higher wages, or will they instead help international businesses like Macquarie Group, which owns the Oceania Group rest homes, increase their million dollar profit margins?

Hon KATE WILKINSON: Our collective bargaining policies are not about removing rights; they are about improving the processes around collective bargaining, reducing the likelihood of protracted disputes, and ensuring that the bargaining process is fair to both parties.

Darien Fenton: How will the Government’s public sector job cuts and wage freezes make New Zealand’s economy more competitive if they result in thousands of lost work hours in the form of proposed widespread public sector industrial action?

Hon KATE WILKINSON: The Government is committed to actually building our economy and having an effective and efficient Public Service. It is tough times, but can I say that if that member’s party was in Government, they would be repealing our 90-day trial period provisions, which would put in jeopardy 13,000 jobs; they would be increasing—

Mr SPEAKER: Order! The Minister has no responsibility for what the Labour Party might do.

Darien Fenton: If her Government is committed to higher wages, why is it refusing to pay an increase to front-line firefighters, who have been in negotiations since August last year, or do not front-line workers feature in her idea of a more competitive economy and higher wages?

Hon KATE WILKINSON: The pay for firefighters is not within my responsibility.

Darien Fenton: Does the Government’s focus on building a more competitive economy include shedding front-line workers such as police and nurses, doubling its spending on consultants, and telling public servants to take a bath, pray, or get a pet?

Hon KATE WILKINSON: Our priority is to build a stronger economy.

Defence Force—Reports

11. JOHN HAYES (National—Wairarapa) to the Minister of Defence: What updates can he give on new Defence Force capability?

Hon Dr JONATHAN COLEMAN (Minister of Defence): I am pleased to announce that tomorrow sees the official launch of the NH90 helicopter, which represents a significant upgrade for our military capability. The New Zealand Defence Force will have eight NH90s to replace the Iroquois helicopter fleet. These new NH90 helicopters are the most advanced and capable helicopter that the air force has ever had.

John Hayes: How will the new NH90s improve the capabilities of the New Zealand Defence Force?

Hon Dr JONATHAN COLEMAN: The NH90s will considerably improve the New Zealand Defence Force’s ability to conduct military, counterterrorism, disaster relief, search and rescue, and other operations. There will also be better integration with our key defence partners, especially Australia, and they offer a marked improvement in range and endurance over the existing Iroquois helicopters. This milestone illustrates that we are delivering on the plan laid out in the defence white paper. Like other defence forces around the world we are reprioritising our resources to provide up-to-date capability for a 21st century Defence Force. The NH90 is an outstanding example of the modernisation process so far.

Press, Free—Government Broadcasting Policy

12. CLARE CURRAN (Labour—Dunedin South) to the Minister of Broadcasting: Is he confident that current Government broadcasting policy upholds the standards of an independent and free press; if so, why?

Hon CRAIG FOSS (Minister of Broadcasting): Of course I have confidence in this Government’s policy, which upholds the standards of an independent and free press as established in the Broadcasting Act 1989, and which provides a robust broadcasting standards and compliance regime.

Grant Robertson: I raise a point of order, Mr Speaker. Well, it is a primary question and it does have two parts. The second part was not addressed by the Minister.

Mr SPEAKER: The member raises a fair point. It is a primary question that was asked, and the Minister answered the first part—that he is confident—but he did not actually say why.

Hon Phil Goff: Because he doesn’t know.

Mr SPEAKER: Order! I invite the Minister to clarify that part. The party asking the question did not perceive that to be answered, and I must confess I did not either.

Hon CRAIG FOSS: Well, Mr Speaker, I will re-give my answer, if you like. Of course I have confidence that this Government’s policy upholds the standards of an independent and free press as established in the Broadcasting Act 1989, which has remained relatively unchanged since then. That provides a robust broadcasting standards and compliance regime. That is why.

Grant Robertson: I raise a point of order, Mr Speaker. Just repeating the same answer that you ruled was not satisfactory does not actually answer the second part of the question. [Interruption]

Mr SPEAKER: Order! I may be wrong here, but I thought the Minister actually added a little bit towards the end of that—[Interruption] Order—and argued that because the regime as set out in the Act was, in his view, being complied with and had not been changed, that was why he had confidence in the upholding of the standards. So I believe he did answer that question.

Clare Curran: How was it upholding the standards of a free and independent media for Television New Zealand (TVNZ) to direct its Fair Go journalists not to report stories that criticised their advertisers?

Hon CRAIG FOSS: TVNZ is an entity is its own right, and, as I noted the other day, I am quite comfortable that Fair Go has always given its participants a fair go.

Clare Curran: How is it upholding the standards of a free and independent media for a Minister of the Government, the Prime Minister, to appear on Radio Live during the election period to run his own programme but to pretend it was not political, although taxpayer-funded staff in his office drafted letters to the authorities for Radio Live?

Hon CRAIG FOSS: That is an incredibly long stretch. If that member wants to talk about freedom of press and influence, I suggest she talks to her colleagues who were the architects of the Electoral Finance Act, which—

Mr SPEAKER: I am not sure that supplementary question asked anything about the Electoral Finance Act. In answering the question, all the Minister said was “That is an incredibly long stretch.” I do not think that represents much of an answer, at all. Before the member gets into attacking the Opposition—and I have no problem with his doing that in this political House—he should at least give a good answer first.

Hon CRAIG FOSS: I understand that member raised those issues with the Broadcasting Standards Authority at the select committee last week, and has discussed those issues. The Broadcasting Standards Authority is an independent and separate entity from the Government. This member, this Minister, or this Government does not influence or try to influence decisions of the Broadcasting Standards Authority. I note that members on the other side were the architects of an Act that the Press Council itself described as having a “chilling effect” on public debate in New Zealand.

Clare Curran: How was it upholding the standards of a free and independent media for a Minister of the Government, the Prime Minister, to call in the police to hound news agencies over the tea tapes after the Prime Minister’s media stunt went wrong?

Hon CRAIG FOSS: I think that member also raised those questions at the select committee, and the Broadcasting Standards Authority, I think, responded to those questions.

Chris Hipkins: I raise a point of order, Mr Speaker. The question was a relatively clear one. It is quite possible that the Minister could have answered that he does not have responsibility, but he could at least answer.

Mr SPEAKER: If the member seriously wanted me to require the Minister to answer, I do not think “hounding journalists”, when a matter is just referred to the police, is appropriate language to ensure that the Speaker seeks a comprehensive answer from a Minister. Again, the remedy is in the questioner’s own hands.

Clare Curran: How was it upholding the standards of a free and independent media for the National Business Review, under his Government, to be invaded and threatened by the Serious Fraud Office over South Canterbury Finance, without even a warrant being sought?

Mr SPEAKER: I am not sure this Minister has any responsibility for the Serious Fraud Office. I would have to rule that question out of order. This Minister has no responsibility for that, as far as I am aware—I may be wrong there. But the member does have another supplementary question.

Clare Curran: How was it upholding the standards of a free and independent media for the Prime Minister’s electorate chair, Stephen McElrea, to be making funding and operational decisions about television programmes paid for by the taxpayer, after having complained about a programme that he felt did not suit the National Party, in which he is a prominent office holder?

Hon CRAIG FOSS: I note that decisions regarding programmes and working groups of New Zealand On Air are made unanimously, so the disgraceful accusations and aspersions that that member puts on individuals of New Zealand On Air reflect on every member of New Zealand On Air, of whom three were appointed by the previous Labour Government.

ENDS

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