Questions and Answers – August 12

Press Release – Office of the Clerk

1. SCOTT SIMPSON (NationalCoromandel) to the Minister of Finance : What reports has he received on recent developments in the international economy, and how will these affect the New Zealand economy?
Questions to Ministers

Economy—International Economic Development

1. SCOTT SIMPSON (National—Coromandel) to the Minister of Finance : What reports has he received on recent developments in the international economy, and how will these affect the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): As a small, open economy, there are always events in a global economy that we need to pay attention to. There is a recent report, for instance, that says that the Government of Greece has struck an outline deal with creditors on the proposed terms of a bailout package. This would bring some more stability to the European Union, a necessary but not sufficient condition for stronger growth in the EU, which is a market for 12 percent of New Zealand’s goods and services exports. Other reports indicate a more sustained recovery in the United States and slightly stronger domestic activity in Australia, and that the equity market in China has settled in the past 2 weeks, although risks remain elevated. Overall, the picture for New Zealand’s key trading partners is for growth of between 3.5 and 4 percent over the next 2 years, and that is an environment in which well-placed New Zealand firms can continue to grow and thrive.

Scott Simpson : What is Treasury’s latest assessment of international economic developments, and what implications might these developments have for New Zealand?

Hon BILL ENGLISH : Treasury reports that the data from our trading partners in July was broadly positive, with employment growth in manufacturing services in the US, the UK recovery continuing, and both UK and US monetary policy now expected to tighten, which is actually a positive sign for growth prospects in their economies. Australian employment grew by 2 percent in the year to June, although unemployment also increased slightly. Overall, Treasury concludes that risks arising from Greece and China have receded somewhat and that there has been an improvement in the outlook for our trading partners. That is positive for the New Zealand outlook.

Scott Simpson : What factors are supporting the New Zealand economy as a whole in the wake of the decline in dairy prices?

Hon BILL ENGLISH : I think, fundamentally, that it is the pressure that has been on New Zealand’s export industries through a period when the exchange rate was very high—up to 88c against the US dollar. Export businesses had to become much more efficient simply to survive, and they did. Today the Kiwi is buying closer to 65c, a 25 percent reduction, which is assisting those businesses to be more competitive at a time when they have certainly earned it. The ANZ’s measure of our commodity prices in New Zealand dollars is down 7.3 percent in the past year. This has all been driven mainly by dairy, but it makes the point that even though dairy prices have fallen significantly, the overall commodity price index has fallen only 7.3 percent. Of course, alongside that, interest rates and the exchange rate look like they are continuing to fall.

Grant Robertson : In light of his answer to the question before last—that the risk from China’s slowdown has receded—how then does he explain reports from China that there been has been not only an 8 percent year-on-year drop in exports but also an 8 percent year-on-year drop in imports, and that people reporting on the Chinese economy are suggesting that the crisis is far from over?

Hon BILL ENGLISH : What I was reporting to the member was Treasury’s latest assessment of those developments. Although I said that Treasury concludes that the risks from China have receded, of course, on any given day, in such a large, complex economy as China, there is always evidence for the view that it is going to slow down considerably—whether you think it is the provincial debt levels or the overinvestment in property and infrastructure. Nevertheless, Treasury’s view is that China’s outlook is reasonably positive.

Grant Robertson : In light of that answer then, does he prefer Treasury’s advice to that of Sharon Zollner from ANZ, who said “It is a sea of red across the entire commodity complex, which is not telling us anything good about global growth, and resource-hungry China in particular.”?

Hon BILL ENGLISH : I think that you are referring to a comment by the ANZ. It is the ANZ’s commodity index that shows, actually, the fall in the last 12 months has been—

Grant Robertson : A sea of red—that’s what she said.

Hon BILL ENGLISH : Well, a 7.6 percent decline in the New Zealand dollar value of New Zealand commodities is, I might say with respect, not a sea of red, although I have noticed a tendency among bank economists recently to compete for making the most outrageously negative comment. But, of course, they have to go a long way to be more negative than the finance spokesman for the Opposition.

Scott Simpson : What sectors are supporting growth in foreign earnings for the New Zealand economy?

Hon BILL ENGLISH : The non-dairy sectors make up 80 percent of the value of our foreign exchange earnings in a typical year—80 percent. This includes information and communications technology, international education services, horticulture, high-tech manufacturing, and inbound tourism. They can all reasonably be expected to play an increasing role in propelling growth in the economy in the year ahead. The potential for further growth in inbound tourism, for instance, is significant. A Statistics New Zealand accommodation survey published this morning found that national guest nights were up for the 15th consecutive month and that 10 of 12 regional areas had more guest nights, with the South Island’s guest nights up 3.8 percent and the North Island’s up 2.7 percent. I can understand why more people want to go to the South Island than the North Island.


2. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health : If Government health expenditure has not kept up with all inflationary pressures, as he admitted 2 weeks ago, what impact has this shortfall had on patients?

Hon Peseta SAM LOTU-IIGA (Associate Minister of Health) on behalf of the Minister of Health : When National came into Government in 2008, the total health budget in the Budget was $11.8 billion. This year the health budget is a record $15.9 billion. This additional investment of over $4 billion in tight times is seeing more patients being seen faster and being treated. National is increasing and managing the health budget, whereas Labour blew—

Mr SPEAKER : Order! [Interruption] Order! That part is unnecessary to the answer.

Hon Annette King : Why did the Minister say in the House on 23 July that no data was ever collected showing the number of patients returned to their GP without being seen by a specialist, when district health boards have been collecting such data for years, and it now shows large increases in the number of people not getting seen after referral by their GP?

Hon Peseta SAM LOTU-IIGA : Sorry, Mr Speaker, I just did not catch the last part of that question. Could she please repeat it.

Mr SPEAKER : I am going to invite the member to repeat the whole question.

Hon Annette King : From the beginning?


Hon Annette King : Why did the Minister say in the House on 23 July that no data has ever been collected showing the number of patients returned to their GP without being seen by a specialist, when district health boards have been collecting such data for years, and it now shows large increases in the number of people not getting seen after referral by their GP?

Hon Peseta SAM LOTU-IIGA : If he said that at the time, then that statement stands.

Hon Annette King : Why have the number of patients returned back to their GP without being seen by a specialist increased in the Waikato District Health Board from 793 in 2010-11 to nearly 3,000—

Dr David Clark : How many?

Hon Annette King : —3,000—in 2014-15, if there is sufficient funding?

Hon Peseta SAM LOTU-IIGA : I do not have those figures to hand in terms of the Waikato District Health Board. But what I do know, and what the member knows, is that over the last 6 years this Government has spent more than $257 million at the Waikato District Health Board. In fact, that has funded over 124 more GPs in the front line, and that has also led to 422 more nurses.

Hon Annette King : Why has the number of patients returned to their GP without being seen by an ear, nose, and throat specialist in the Waitematā District Health Board almost doubled in the past 3 years alone?

Hon Peseta SAM LOTU-IIGA : Again, I do not have that particular figure to hand, but what I can say about the Waitematā District Health Board is that we have spent $310 million more in that district health board, and that has led to 195 more doctors being hired.

Joanne Hayes : Does he think that increased funding alone is enough to guarantee better services to patients?

Hon Peseta SAM LOTU-IIGA : It is a good question. New Zealand has had two similar periods of increased health spending recently. In the last 7 years, the health budget has increased by $4 billion, as I said in the primary answer. That has resulted in 60,000 more first specialist assessments, 50,000 more elective surgery operations, and 400,000 children benefiting from free GP visits and faster treatment for cancer. In the other period that I am referring to, it resulted in fewer first specialist—

Mr SPEAKER : Order! There is no need to carry on.

Hon Annette King : If there is sufficient funding in health, why in nine district health boards alone have nearly 80,000 patients been refused first specialist assessments since 2010-11, in almost the same period of time as the health funding has not kept up with inflationary pressures, as the Minister said in the House?

Hon Peseta SAM LOTU-IIGA : I do not know which nine district health boards that member is referring to, but what I can say in terms of first specialist assessments—

Hon Annette King : I’ve got the figures.

Hon Peseta SAM LOTU-IIGA : Well, you can tell us if you want—table it. What I can say is that there has been an increase in 60,000 first specialist assessments since this Government took the Treasury benches.

Hon Annette King : Does he believe that delays in patients getting a specialist assessment and access to diagnostic procedures can lead to irreversible and potentially fatal outcomes for patients; if not, why not?

Hon Peseta SAM LOTU-IIGA : In respect of the delays, that member has not tabled anything or any evidence—

Hon Annette King : I raise a point of order, Mr Speaker. It is not what I have tabled. I asked a question about whether he believed delays—

Mr SPEAKER : Order! I am going to invite the member to repeat the question for the benefit of the Minister.

Hon Annette King : Does he believe that delays in getting a specialist assessment and access to diagnostic procedures can lead to irreversible and potentially fatal outcomes for patients; if not, why not?

Hon Peseta SAM LOTU-IIGA : I am not aware of these delays or what the member is referring to in terms of the types of outcomes that she has outlined.

State-owned Enterprises—Financial Returns

3. DAVID SEYMOUR (Leader—ACT) to the Minister for State Owned Enterprises : Is he happy with the financial returns the taxpayer is achieving from State-owned enterprises; if so, why?

Hon TODD McCLAY (Minister for State Owned Enterprises): Can I congratulate the member on his member’s bill, which will bring enjoyment to even the Green Party. The performance of State-owned enterprises is a mixed picture. Although a number of them are performing well and returning reasonable dividends to the Crown, others are not. It is the Government’s expectation that State-owned enterprises are well managed, are low risk, that they focus on their core business, and that they generate a return for the taxpayer.

David Seymour : In light of the $500 million collapse in equity value in Solid Energy since 2011, does he acknowledge that not selling the company was a terrible mistake?

Hon TODD McCLAY : Solid Energy is a company that is in a very difficult position. It has around half a billion dollars’ worth of debt, and about $320 million of that debt is interest bearing and owed to banks, some of which matures next year. Equally, the coal price was around $370 a tonne a few years ago; this week it hit $85 a tonne. The company and the banks are working constructively towards a solution.

David Seymour : Why have the dividends from New Zealand Post fallen from a yield of 5 percent through 2005-2008 to only 1.5 percent since, and how is this acceptable for what is clearly not an investment in a growth company?

Hon TODD McCLAY : There are a number of State-owned enterprises that face changing and challenging circumstances. If we look at the example the member has given, which is New Zealand Post, there are now 265 million fewer items posted than 10 years ago. In fact, there were 80 million fewer letters posted last year than the year before. New Zealand Post is working through these issues. The Government is supportive of the work that the board is doing, but it is our expectation that it works constructively so that it provides a very good service to the public, and, equally, gets to a stage where it returns a better dividend to the Crown.

Internal Affairs, Minister—Confidence in Department

4. RON MARK (Deputy Leader—NZ First) to the Minister of Internal Affairs : Does he have confidence in his department?

Hon PETER DUNNE (Minister of Internal Affairs): Yes, I do.

Ron Mark : Did the Department of Internal Affairs advise the Minister to strip the citizenship of 27 fraudulent refugees when their fraudulent claims were discovered?

Hon PETER DUNNE : I raise a point of order, Mr Speaker. I seek your indulgence. The answer that I am about to give, in the interests of giving all the facts, may be slightly longer than usual, and I just seek your indulgence for that.

Mr SPEAKER : Thank you for the warning. The Minister can proceed.

Hon PETER DUNNE : Perhaps it would be useful for the House and the member if I just outlined the history of this situation very briefly. We are talking about people who came to New Zealand, in the main, between 1994 and 2000. They were granted refugee status at that time. That is a matter for the Immigration Service. Subsequently, ironically under a New Zealand First Minister of Internal Affairs, most of their citizenships were approved in the late 1990s. They have been citizens since that time, and many have had their own children, who are now citizens by virtue of being born in New Zealand. I am advised that at no time have any of them come to the attention of authorities as being problematic. An investigation by Immigration New Zealand in the early 2000s revealed that some of them may have obtained their residencies fraudulently; I emphasise the word “may”—it was never definitive. A subsequent approach before my time as Minister was made to the Department of Internal Affairs by Immigration New Zealand, requesting that the citizenships be withdrawn. Following legal advice and the precedent of other cases, the Department of Internal Affairs concluded that that was not only not appropriate from a natural justice point of view but it was also, given the uncertainty of the circumstances, a very uncertain set of circumstances to be following. In a number of cases, the persons affected would have been rendered Stateless by the decision to remove passports. That is the full background of the case, and I appreciate your indulgence in being able to explain it.

Ron Mark : In appreciating that long explanation I still will ask the question. Can the Minister reiterate to the House, then, and make clear to the House, why in his decision not to intervene recently did he claim that it was because of an operational matter, when he had full powers to intervene under section 17(2) of the Citizenship Act, which would have allowed those people due process through the courts?

Hon PETER DUNNE : I was actually advised some time around a year ago of this course of events and the actions that had been taken, and in the circumstances I deemed those to be appropriate.

Ron Mark : Can the Minister explain his department claiming that it acted on humanitarian grounds, when a decision to cancel citizenship would have meant that it was able to avail itself of the processes of the courts and to prove that case? Did he not think that that was the appropriate course of action—

Mr SPEAKER : Order! The question has been asked.

Hon PETER DUNNE : I think I have answered that question in my first supplementary answer. There was no guarantee, given the circumstances of these cases, that legal actions could have been pursued successfully, and in any case these people have been resident in New Zealand for a very long time, have been operating effectively as model citizens, and have their own children who are citizens—

Clayton Mitchell : You can’t shift the responsibility on to anybody else.

Hon PETER DUNNE : And if that noise to my right would be quiet for a moment, the responsibility that I accepted was that in the circumstances the appropriate actions have been taken for humanitarian and other reasons.

Ron Mark : Can the Minister advise the House, then, about what steps he has taken to identify whether this is just the tip of an iceberg, bearing in mind that these fraudulent refugees have been accessing welfare, and whether or not that has allowed them to use family reunion processes to bring more refugees in, who, on that basis, should not have been brought into the country?

Hon PETER DUNNE : All of those questions actually relate to immigration and are matters for the Minister of Immigration. What I can advise the member of is that this case has highlighted an issue that the Department of Internal Affairs has addressed, and that was that at the time there was no requirement on any of these applicants to indicate that the applications that they made were made with the full information of the other facts. That is—

Clayton Mitchell : This situation requires your full ministerial attention.

Hon PETER DUNNE : Again, the empty vessel to my right proves the validity of the old proverb. The reality is that I have acted. We have tightened up the procedure. This situation would not occur now because people are required to disclose their previous circumstances, and anything that is fraudulent is then immediately drawn to the attention of the police.


5. STUART SMITH (National—Kaikōura) to the Minister for Economic Development : What reports has he received on how New Zealand’s industries have diversified since 2008?

Hon STEVEN JOYCE (Minister for Economic Development): I have received a number of reports showing that New Zealand’s industries have diversified significantly since 2008—for example, the wine industry, where wine exports have nearly doubled from just under $800 million in 2008 to $1.4 billion this year. Beef export revenues have grown from $1.8 billion in 2008 to $3.1 billion in the year to March 2015. Information and communications technology sector exports have more than doubled to $930 million in 2014. Despite the cut-and-paste negative rhetoric of some commentators in this House, it is examples like these that shows that this Government is getting the settings right in order to encourage growth in diversification of the New Zealand economy.

Stuart Smith : How are Government programmes and policies contributing to this diversification and growth?

Hon STEVEN JOYCE : They are achieving a huge amount. One of the key initiatives to further diversify the economy is to boost research and development investment in different sectors. The Callaghan Innovation centre that we have set up is investing a substantial amount of new spending in research and development grants, and just today I announced the availability of another 233 positions for research and development student grants this summer. The interesting thing is that when you compare business spending in research and development in New Zealand with, perhaps, Australia—we have a grant scheme and Australia has a tax credit scheme—the research and development here is skewed far more heavily towards high-tech sectors such as information and communications technology and high-tech manufacturing. Nearly 42 percent of business research and development investment in New Zealand is now in the manufacturing sector, and computer services make up another 25 percent of business research and development investment. That suggests that we are going to see further diversification and growth in these sectors in the years ahead.

Stuart Smith : What has been the impact of this diversification on the economy?

Hon STEVEN JOYCE : We have seen quite dramatic employment growth in these industries. For example, the information and communications technology industry has grown by around 6,200 jobs in the past year. Far from being in crisis, the manufacturing industry is employing 24,500 more people today than it was a year ago, and it is the largest it has been in 7 years. We are also seeing growth in other industries, with 50,000 more people employed in construction in the past 2 years. That is the highest level it has ever been. There are 20,000 more jobs in retail in the past 12 months, and, in fact, over 4½ years, we have seen 199,000 more people in work.


6. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does he have a “Plan B” for the New Zealand economy, as has been called for by ANZ Bank Chief Economist Cameron Bagrie, or is he satisfied with the prospect of rising unemployment, declining GDP growth and shockingly low business confidence as described by the Westpac Quarterly Economic Overview?

Hon BILL ENGLISH (Minister of Finance): In answer to the member’s second question, this Government is never satisfied with the state of the economy. In answer to his first question, plan A is an economy that can continuously adapt as circumstances change, as illustrated by the fact that in the light of lower commodity prices the exchange rate has dropped significantly and interest rates are now falling rather than rising. But at the same time it is important that the Government continues to deal with the long-term issues around productivity and economic resilience. So we have a programme of microeconomic reform supporting growth through 350 actions in the Business Growth Agenda, including, just for instance, reducing ACC levies by around $2 billion a year, extending ultra-fast broadband to 80 percent of New Zealanders, and delivering more skills that are relevant to industry through initiatives like the ICT Graduate Schools. Recent reports from Treasury and the Reserve Bank suggest that they see the economy growing at around 2 to 2.5 percent—moderate, sustainable growth that will probably persist despite the excessive rhetoric of some of our bank economists.

Grant Robertson : In light of that answer, if it is all going so well, why is the chief economist calling for a plan B, and why has Federated Farmers joined him in calling for a plan B for the economy?

Hon BILL ENGLISH : Probably for the same reasons why the caucus has not yet called for plan B in the form of Grant Robertson.

Mr SPEAKER : Order!

Hon BILL ENGLISH : In fact—

Hon Steven Joyce : That’s plan E.

Hon BILL ENGLISH : Plan E, sorry.

Mr SPEAKER : Order! We will have the answer to the question.

Hon BILL ENGLISH : The adjustments that will help underpin sustainable, moderate growth in this economy are under way, and at the same time the Government is persisting with a programme of microeconomic reform, such as, for instance, the roll-out of ultra-fast broadband, which actually is working, because people are subscribing now. It is enabling them not just to have more entertainment but also to run better, more productive, and more internationalised businesses.

Grant Robertson : In light of that answer, is Westpac economist Dominick Stephens correct when he says that the latest survey of business confidence has seen the biggest single decline in a 3-month period for the last 15 years?

Hon BILL ENGLISH : He may well be. It would be a decline from the highest level for a long, long time. In any case, when you look at the Westpac forecasts they are consistent with those of the Reserve Bank and Treasury, which show a path to moderate, sustainable growth of between 2 to 2.5 percent.

Grant Robertson : In light of that answer, can the Minister confirm that the Westpac forecast in fact foreshadows growth of 1.8 percent below the 2 and 2.5 percent that he and the Prime Minister told the House yesterday we can expect?

Hon BILL ENGLISH : I think that number appears in the calendar-year forecast as opposed to the standard version, which is the March-quarter forecast. But for a member who regards sending a tweet as work, I am surprised he got to that level of detail.

Grant Robertson : Is Dominick Stephens correct that the Canterbury rebuild has peaked 9 months earlier than expected and will no longer be contributing to growth from this year, and from 2017 will actually become “an outright drag on GDP.”?

Hon BILL ENGLISH : I gather there is some contest of opinion over whether the Canterbury rebuild has peaked, but if it is news to that member that it will peak at some time, everyone else has known that since the day the rebuild started. It was always going to peak one day, and I think the good news is that as we get through the very successful Canterbury rebuild, overseen by Minister Gerry Brownlee, the economy is resilient to international shocks, the right adjustments that we would hope would underpin further growth in jobs and incomes are occurring, and there actually is not a good reason to panic in the way that that member is panicking.

Grant Robertson : So for the sake of clarity, can he confirm that he does not think he needs to change anything about his approach to the economy, despite the fact that the people he is accusing of panicking include two major bank economists and Federated Farmers, and he can confirm once and for all for the House that he is always right and everyone else is wrong?

Hon BILL ENGLISH : No. In general we would pay more attention to what is happening for those who are out on the economic playing field rather than those who are sitting in the grandstand watching it, which is where they are. The Government has a programme that is designed to be adaptive in a continuous way, and that is exactly what is happening. The exchange rate is falling, interest rates are falling, and there will be adjustments in businesses and households all around New Zealand because we fundamentally believe that when the pressure comes on a bit, the last person you would go to is the Labour Party finance spokesman. People who are running their own businesses and households are in a far better position to make the judgments about what changes need to be made with support from the Government with its investment in infrastructure and in research and development and its focus on a level playing field for taxation—

Mr SPEAKER : Order!

Hon BILL ENGLISH : —with strong focus on innovation.

Rt Hon John Key : Can the Minister confirm, if he does have the right plan B for the economy, whether he will be writing it himself or will he just cut and paste it and plagiarise it—

Mr SPEAKER : Order! That question will not help the order of the House. Question—

Hon BILL ENGLISH : Mr Speaker—

Mr SPEAKER : No, I have ruled it out.

No. 7 to Minister

METIRIA TUREI (Co-Leader—Green): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I seek leave to have this question transferred back to the Prime Minister, to whom it was originally directed.

Mr SPEAKER : No, we are not even putting that leave. It has been discussed on many occasions—the Government has the right to determine where the question goes. If the member wants an answer, she should proceed to ask it. [Interruption] Order! A little less noise would be helpful.

Intelligence Agencies—Legislative Framework

7. METIRIA TUREI (Co-Leader—Green) to the Minister in charge of the NZ Security Intelligence Service : Does he stand by the Prime Minister’s statement regarding the legislative framework of New Zealand’s intelligence agencies that “there are a range of deficiencies that they have identified”?

Hon CHRISTOPHER FINLAYSON (Minister in charge of the NZ Security Intelligence Service): Yes, although the Prime Minister made that statement about the New Zealand Security Intelligence Service Act 1969, not—as the member said—“the legislative framework of New Zealand’s intelligence agencies”.

Metiria Turei : What specifically are those deficiencies?

Hon CHRISTOPHER FINLAYSON : The particular deficiency that I would identify is that the Act was last comprehensively reviewed in 1969 and is expressed in 1969 language. It also focuses very heavily on issues of warrants and authorisations, and it may not accurately reflect all of the current work of the agency.

Metiria Turei : Do these deficiencies mean that the SIS is currently engaged in activities that are not authorised by the law?

Hon CHRISTOPHER FINLAYSON : No. The word “deficiency” does not signal, necessarily, a contravention of the law; it suggests the inability to do something that it would otherwise be useful to do. It may also, in my opinion, suggest the difficulty of applying language drafted in 1969 to modern technology. These are matters for the reviewers to consider, and I am sure both reviewers are going to do a very professional and competent job.

Metiria Turei : So what did the Director of Security mean when she said that “The authorising framework for all of that work is not in the legislation …”?

Hon CHRISTOPHER FINLAYSON : Well, the director could have been referring to, for example, an ordinary, everyday activity of an employee of the SIS in talking to people, and it may be that it is adequate to spell out in the legislation all the various activities of SIS employees when undertaking their tasks.

Metiria Turei : Will the Minister rule out any expansion and extension of the SIS’s current powers to spy on New Zealanders?

Hon CHRISTOPHER FINLAYSON : I think “spying on New Zealanders” is pejorative. What the SIS is doing, in actual fact, is ensuring that all New Zealanders can enjoy the liberties that they were entitled to from the day they were born. What I am going to do, for the benefit of the honourable member, is wait until the review by Dr Cullen and Dame Patsy Reddy has been completed, and then I hope to be able to see legislation drafted that reflects modern conditions and is expressed in modern language.

Metiria Turei : Will the Minister rule out any expansion and extension of the powers of the Government Communications Security Bureau (GCSB) to spy on New Zealanders?

Hon CHRISTOPHER FINLAYSON : Well, I could repeat myself, and I probably will, for the benefit of that member, who does not seem to have listened to the previous answer. The purpose of the GCSB is not to spy on New Zealanders but is, as expressed in its legislation, to safeguard the liberties of New Zealanders, particularly against foreign threats. This Government has undertaken a review of all the intelligence legislation to ensure that it is up to date and that both agencies serve their core purpose of operating under the rule of law to protect and enhance the freedom of all New Zealanders. Moreover, any agency that has great powers must necessarily be properly supervised by Parliament and by the inspector-general.

Domestic Violence—Announcements

8. ALFRED NGARO (National) to the Minister of Justice : What recent announcements has she made regarding New Zealand’s domestic violence laws?

Hon AMY ADAMS (Minister of Justice): Last week I launched the discussion paper strengthening New Zealand’s legislative response to family violence to take a comprehensive look at the Domestic Violence Act and the intersection between domestic violence, the Care of Children Act, the Crimes Act, the Bail Act, and the Sentencing Act, with a view to starting a comprehensive rethink of how our system of laws deals with the scourge of family violence. As justice Minister, reducing family violence is my top priority.

Alfred Ngaro : How significant an issue is family violence in New Zealand?

Hon AMY ADAMS : The rate of family violence in New Zealand is horrific. Despite crime rates in New Zealand falling to a 30-year low, family violence statistics are stubbornly high. In 2014 police responded to more than 100,000 incidents, and, on average, every year 14 women, seven men, and eight children are killed as a result of family violence. Nearly half of all New Zealand’s homicides and reported violent crimes are related to family violence, and on average 41 percent of police response time is spent on family violence. These are staggering statistics and they are only the ones we know about. We know that as much as 80 percent of family violence may go unreported. Although the Government cannot solve the whole problem, we are committed to finding better ways to address it.

Alfred Ngaro : What else is the Government doing to address family violence?

Hon AMY ADAMS : The review is just one part of the work under way. Other initiatives include establishing a Chief Victims’ Adviser to the Government, whom I expect to be appointed later this year. There are also projects under way to speed up court cases, to improve judges’ access to information, for intensive case management practices, and for portable safety alarms for high-risk victims. The social development Minister and I have also launched a new work programme to ensure that Government agencies work in an integrated way to address family and sexual violence, identifying gaps and duplications in services, and making improvements to help break the cycle of family violence.

Housing, Auckland—Prime Minister’s Statements

9. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing : Does he agree with the Prime Minister that Aucklanders are getting wealthier because their house prices are going up?

Hon Dr NICK SMITH (Minister for Building and Housing): I agree with the full statement of the Prime Minister, where he also stated that the rate of increase is not sustainable, that growing supply is critical to containing ongoing increases, and that new measures like the Government’s tax changes would ensure that people buying in property for profit would pay their fair share. The PM’s statements are much more accurate than the shonky figures from the members—

Mr SPEAKER : Order! That will not help the order of the House.

Phil Twyford : Why does he believe that Aucklanders would prefer to see the paper value of their houses increase rather than their children and grandchildren being able to achieve the dream of owning their own homes?

Hon Dr NICK SMITH : This Government is absolutely committed to people owning their own home, and that is why on 1 April we launched the HomeStart scheme, which is going great guns in helping thousands of New Zealanders get into their own home. I remind the member that the biggest increase in house prices, where houses were significantly less affordable than they are today, actually occurred during the 9 years of the previous administration.

Phil Twyford : Given the Prime Minister’s statements, what does he say to the half of the population who are locked out of the housing market under his policies and who are not generating paper wealth from skyrocketing house prices?

Hon Dr NICK SMITH : I would say to those people that this Government has the most comprehensive programme of housing reforms that has been seen by any Government in more than a generation: the support from HomeStart, the Auckland Housing Accord and special housing areas, and the social housing reforms. And I would draw attention to the fact that over the last 3 years the rate of housebuilding in Auckland has increased from 4,000 per year to over 8,000 per year, showing that we are getting the new houses that New Zealand needs.

Phil Twyford : Is this political calculation—that enough voters are happy with skyrocketing house prices—why his Government has done nothing meaningful to tackle the causes of the housing crisis and why it prefers to roll out an endless procession of grudging half measures and tinkering and dabbling that makes no difference?

Hon Dr NICK SMITH : It is rich for the member to describe them as half measures, because when we passed the special housing areas legislation to open up new areas in housing, that member put my face on a billboard all over Auckland, saying that I was going too far. He cannot have it both ways. Equally, this is the member who complains when interest rates go up and complains when interest rates go down. The truth is that the member is the member for moaning not solutions.

Trans-Pacific Partnership Agreement—Investor-State Dispute Settlement Provisions

10. Dr RUSSEL NORMAN (Green) to the Minister of Trade : Does he have any concerns about the inclusion of investor-State dispute settlement provisions in the Trans-Pacific Partnership Agreement, provisions which allow multinational companies to sue governments in secretive offshore tribunals; if so, what are those concerns?

Hon TIM GROSER (Minister of Trade): I would have a number of concerns about signing up to an investor-State dispute settlement provision in any trade agreement that did not protect the right of future Governments to regulate in the public interest, that allowed non-transparent and unfair procedures to apply, or that would encourage frivolous claims by foreign corporations that would have no merit in the legal sense. Happily, I can inform the House that this Government will not be signing an agreement that does not meet any of those basic political and judicial tests.

Dr Russel Norman : How can he be confident that investor-State dispute settlement provisions do not put New Zealand at risk, when the German Government is currently being sued under investor-State dispute settlement for $7 billion for trying to phase out nuclear power plants, by a company called Vattenfall, a company that has already used investor-State dispute settlement threats to stop the German Government from putting environmental regulations on a new coal-fired power plant?

Hon TIM GROSER : I will not go into the entrails of that particular dispute, which is not, in fact, an attempt by the company to stop a democratically elected German Government from shifting its policy on nuclear power; it is about the financial implications of that decision. The reality is that we will not be signing up to an agreement that does not cover the basic interests of New Zealand.

Dr Russel Norman : Has the Minister seen the June report from the Australian Productivity Commission, a commission established by the Conservative Prime Minister John Howard, in which the Australian Productivity Commission has opposed the inclusion of investor-State dispute settlement provisions in trade agreements, including the Trans-Pacific Partnership explicitly, because of concerns about investor-State dispute settlement on the ability of the Australian Government to regulate?

Hon TIM GROSER : No, I have not seen that particular report personally, but what I am aware of is that the Australian Government—and, of course, I am in closest consultation with my counterpart Australian Minister—is arguing for exactly the same balanced approach to investor-State dispute settlement provisions as is the New Zealand Government.

Fletcher Tabuteau : What assurances can the Minister give that decisions made in secret, in a secret tribunal under investor-State dispute settlement, will be fair, given that the Tribunal consists of only three highly paid corporate lawyers with no actual presiding judge?

Hon TIM GROSER : As is always the case in these Trans-Pacific Partnership – related questions, when the full detail is put out into the public domain, the people of New Zealand will be able to see for themselves that the defences that I, the Prime Minister, and other Ministers have made are, in fact, entirely credible and that this will protect New Zealand from exactly those sorts of frivolous claims.

Fletcher Tabuteau : Can the Minister explain how he can be comfortable that once corporate lawyers make a ruling against New Zealand within the secret investor-State dispute settlement tribunal, there is no right of appeal for the New Zealand Government?

Hon TIM GROSER : We are just going around in circles here. When the full provisions are out in the public domain, people will be able to see for themselves that there are very carefully thought through safeguards that will protect the interests of New Zealand. I would also like to point out that on the latest international net investment liability statement of New Zealand, we have about $170 billion of foreign investment in other countries. We have a very strong material interest in ensuring that our investors are treated properly by Governments whose procedures may not always be up to the same high standard.

Hon David Parker : Will the Minister undertake that the Trans-Pacific Partnership and its investor-State dispute settlement clauses will not prevent a future New Zealand Government from banning the sale of New Zealand homes to foreign buyers from Trans-Pacific Partnership countries?

Hon TIM GROSER : It is not the Government’s policy to engage in such a ban. We are negotiating on the basis of this Government’s policy.

Hon David Parker : I raise a point of order, Mr Speaker. That clearly was not my question.

Mr SPEAKER : Can I—[Interruption] Order! On this occasion I am going to allow the member to repeat that question for the benefit of the Minister.

Hon David Parker : Will he undertake that the Trans-Pacific Partnership and its investor-State dispute settlement clauses will not prevent a future New Zealand Government from banning the sale of New Zealand homes to foreign buyers from Trans-Pacific Partnership countries?

Hon TIM GROSER : No, I am not going to give that assurance, but what the agreement will say on that is still under negotiation. It may interest the member, at the time when I am in a position to answer that more fully.

Dr Russel Norman : What did the Australian Productivity Commission get wrong in its report from June this year, when it said, with regard to investor-State dispute settlement provisions, that they give foreigners substantive appeal rights that are not available to domestic firms, that they risk impeding domestic regulatory reform, that they lack transparency, and that they have inadequate parliamentary scrutiny?

Hon TIM GROSER : Well, the last time I looked at it, the New Zealand Government does not control the Australian Productivity Commission. The basic position of the Australian Government is to ensure that investor-State dispute settlement provisions will be properly balanced and will absolutely protect the Australian public interest. It may well be that some types of investor-State dispute settlement provisions do, in fact, have those consequences, but I do not believe that the Australian Government will be signing up to provisions that have those effects.

Dr Russel Norman : Why is it that the European Union Trade Commissioner is now refusing to agree to exactly the same kinds of investor-State dispute settlement provisions that are proposed to be in the Trans-Pacific Partnership, because the European Trade Commissioner said “We want the rule of law, not the rule of lawyers.” and that these investor-State dispute settlement provisions are not fit for purpose in the 21st century?

Hon TIM GROSER : Well, I have had the benefit of talking to the commissioner about this issue, and what I can say to the House is that this is a process that is under evaluation internally in Europe. They have not put forward any specific proposals; they have put forward some concepts, which I think are extremely interesting, and we will see how that transpires in a negotiation between the European Union and the United States.

Exports, Beef—Reports

11. JACQUI DEAN (National—Waitaki) to the Minister for Primary Industries : What recent reports has he seen on growth in beef exports?

Hon NATHAN GUY (Minister for Primary Industries): Recent reports show that beef prices are currently at record highs and that New Zealand exporters look set to fill our US beef quota for the first time in history. Rabobank is forecasting that US demand for New Zealand beef will be positive for the next 3 to 4 years, due to an anticipated shortage of beef exports from Australia due to drought, and with the US herd still rebuilding. These high beef prices are also offering some relief for dairy farmers who are culling low-performing cows.

Jacqui Dean : What initiatives is the Government undertaking to support our red meat sector?

Hon NATHAN GUY : The Government will continue supporting the red meat sector through an extensive programme of research and development and increasing trade market access. The red meat portfolio is the largest in the Primary Growth Partnership with a total committed investment of around $357 million between industry and the Government. One example is the FoodPlus programme, which already has 12 new value-added products commercialised. One health product sold out within days when trialled in the US. According to research by Beef and Lamb New Zealand our free-trade agreements with China and Taiwan helped save $161 million in lower tariffs last year for the sector. Earlier this year we signed the free-trade agreement with Korea, which will progressively make beef and lamb exports tariff-free. This is going to be worth around $17 million in beef exports. I congratulate Minister Groser on his work in this area.

Ron Mark : Why then, given the Food and Agriculture Organization found that overall prices of meat have stabilised, has the Minister been missing in action when it comes to the farmer-led solutions advanced by Meat Industry Excellence?

Hon NATHAN GUY : No, I have not been. I am well engaged with rural communities. I am well engaged with farmers on this particular issue. What I have said is that if there is a clear strategy that links processes and farmers together, my door is always open. I do not see a clear strategy at this point, but I am heartened to see that farmers have the opportunity to mobilise and get on the boards of the two co-ops that the farmers own and control. Further discussions are under way that could lead to some rationalisation in the red meat sector in the future. We wait with interest.

Ron Mark : So having previously encouraged Meat Industry Excellence and all members of the industry to collaborate, talk, and resolve issues, is his inaction such as we are seeing the reason that the Ministry for Primary Industries is ranked 14th in this Government’s Cabinet?

Hon NATHAN GUY : Oh, how ridiculous! If New Zealand First members cared about our rural communities, they would not be protesting outside today with those Trans-Pacific Partnership protesters.

Ron Mark : I raise a point of order, Mr Speaker. That did not address the question. That did not address the question.

Mr SPEAKER : Order! The member needs to go back and carefully look at his question. When he accuses a Minister of inaction he is likely to get the response that he got.

Foreign Affairs, Minister—Statements

12. Hon DAVID PARKER (Labour) to the Prime Minister : Does he stand by his statement today that Hon Murray McCully was saying “he didn’t want the lawyers brought in to be talking about compensation because the deal was never about compensation and he didn’t want lawyers going in there saying that”, given that Cabinet noted the “settlement for the long running dispute” was part of the purpose of the $4 million payment to a Saudi investor; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes. I note that the reference to the settlement of the dispute was one of several things noted in the Cabinet paper with regard to the $4 million. The paper also noted that the $4 million recognises the intellectual property that the Saudi investor brings to the platform and the services and in-market networks he will contribute.

Hon David Parker : Is he aware that a month after Mr McCully’s statement that he did not want any financial contributions to be treated as compensation, Mr McCully further directed officials to find “the appropriate mechanism to meet Al-Khalaf’s concern for compensation, possibly through a joint venture”; if so, why does he still say the $4 million cash payment has nothing to do with compensation?

Rt Hon JOHN KEY : I am not aware of that particular statement, but I am sure it is contained in the 900 pages of the documents released. But the reason I say that is that it is correct. That is because there was a long-running dispute, started by the previous Labour Government, which this Government took responsibility for fixing up. There were many reasons why we addressed it. Some of them were the free-trade agreement, some of them were our relationship with Saudi Arabia, and some of them were to showcase New Zealand products.

Hon David Parker : I seek leave to table the document that shows that Minister McCully directed officials to find “an appropriate mechanism”—

Mr SPEAKER : Order! The date of the document?

Hon David Parker : It is 19 April 2012, and it is a briefing note of the Ministry of Foreign Affairs and Trade.

Mr SPEAKER : Leave is sought to table that particular note. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Hon David Parker : If the payment was in no way compensation, why did he tell the media in May that “The view of the Cabinet was that there was a case the investor had put up that we may have to fight that in the court, but there was probably a faster way of trying to resolve that.”? Did he mislead the public in May, or did he mislead the public this morning?

Rt Hon JOHN KEY : No, they are one and the same thing.

Hon David Parker : Why did he not answer the repeated questions on Morning Report this morning about what value New Zealand received for the money paid to the Al-Khalaf Group—in particular, the $4 million cash payment upfront?

Rt Hon JOHN KEY : The member needs either to re-listen to the tape or to go and read the full transcript. I absolutely answered the question. But what I did very accurately was start by saying: “This was a mess created by Labour.” Unfortunately, Susie Ferguson did not want to hear it any more than the Labour Party did. But the problem is it is true.

Hon David Parker : How can he say that the transaction was so routine that Treasury did not need to be consulted, when the arrangement was so unusual that the chief executive officer of the Ministry of Foreign Affairs and Trade had to go and try to explain its unique nature to the Auditor-General?

Rt Hon JOHN KEY : The member will have to show us where I said it was so routine.

Hon David Parker : Is it not now clear that the $4 million cash payment to Al-Khalaf was dressed up as a joint venture in order to get around the Public Finance Act, and does that not mean that Minister McCully broke the law?

Rt Hon JOHN KEY : No. The official advice was quite clear that it was quite lawful and within the delegated authority that the Ministry of Foreign Affairs and Trade has.


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