Questions and Answers – August 13

Press Release – Office of the Clerk

1. Dr RUSSEL NORMAN (Green) to the Minister of Trade : Does he stand by his statement that the $6.2 billion investor-state dispute settlement action initiated by the Swedish power company Vattenfall, is not, in fact, an attempt by the company to stop a …
Questions to Ministers

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

1. Dr RUSSEL NORMAN (Green) to the Minister of Trade : Does he stand by his statement that the $6.2 billion investor-state dispute settlement action initiated by the Swedish power company Vattenfall, “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”; if so, why?

Hon TIM GROSER (Minister of Trade): Yes, because I have no new information that changes my understanding of the case.

Dr Russel Norman : Does he believe that John Key would agree to implement any policy that would cost New Zealand taxpayers $6.2 billion as a result of the Minister of Trade giving multinational companies the right to sue the New Zealand Government, as is happening in Germany?


Dr Russel Norman : Therefore does it not follow from his answer that the $6.2 billion case by Vattenfall in this case would put pressure on a democratically elected Government not to make a decision such as phasing out nuclear power?

Hon TIM GROSER : This is stretching the limits of hypothetical questions to ludicrous extremes. We do not have a policy of wishing to encourage nuclear power and the provisions that we would agree to would be quite different from the provisions in this agreement.

Dr Russel Norman : Does he agree that these investor-State dispute settlement clauses can have a chilling effect on the willingness of a Government to regulate and make decisions by hanging over them a billion-dollar threat that if the Government makes this decision it will have to make a massive payout to the multinational company negatively affected?

Hon TIM GROSER : It may assist members if I explain that I have received advice from our international trade lawyers, who, given their track record, are as good as anybody’s in the world, that the agreements that are pursuant to the energy charter under which this case is proceeding are, in their view, old-fashioned, very poorly drafted, and not the types of provisions that they would recommend to any New Zealand Government to adopt.

Dr Russel Norman : I raise a point of order, Mr Speaker. I would ask the Minister, if he is reading from an official document, that in that case he table that document.

Mr SPEAKER : Well, that is very easily resolved. Was the Minister quoting from an official document?


Dr Russel Norman : Has the Government done any analysis on the financial implications to the Government from investor-State dispute settlement provisions in light of the statements from the Australian Productivity Commission just in June when it said investor-State dispute settlement provisions create “potentially large unfunded contingent liabilities, which are dependent on decisions by international arbitration panels.”?

Hon TIM GROSER : The Government will be producing a national interest analysis, in conformity with existing practice, at the end of the negotiation when we know exactly what type of an agreement we are looking at. A number of factors will go into that equation, but we will do that at the right time.

Dr Russel Norman : Is it not the case that the purpose of investor-State dispute settlement clauses or corporate sovereignty clauses is to restrict the space in which democratically elected Governments can regulate and that is why the United States is forcing them into every single one of the agreements that it is currently negotiating: the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the General Agreement on Trade in Services?

Hon TIM GROSER : Well, that is certainly not my interpretation of the purpose of the agreement. The purpose of the agreement is to protect legitimate foreign investors from actions that might undermine entirely their property rights and at the same time to ensure that we preserve adequate space for democratically elected Governments—well, any Government actually—to regulate in the public interest.


2. DAVID BENNETT (National—Hamilton East) to the Minister of Finance : What reports has he received on the resilience of the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): I have seen a recent report from Fitch Ratings—one of the three ratings agencies—which says that the New Zealand “economy and banking sector are relatively well positioned to weather a cyclical downturn in the dairy market,”. Fitch Ratings does not expect lower milk prices in the short term to affect the ratings of the New Zealand Crown or the major banks. Although the dairy downturn is of concern, there is a reasonably significant headwind to the economy. The Fitch report suggests that the New Zealand economy is well positioned to manage, supporting a broadly positive medium-term outlook. It says there are risks for the economy in bank balance sheets, should the dairy market downturn persist through to 2016. However, the consensus expectations that it refers to are for milk prices to find a floor and recover later in this season.

David Bennett : What does Fitch Ratings say are the potential consequences of the dairy price fall for the New Zealand banking sector?

Hon BILL ENGLISH : Fitch Ratings says New Zealand banks are in a relatively healthy position and should be able to manage this decline without an impact on their credit rating. It says that since 2008-09 banks have underwritten better-quality business. Their exposures are well covered by collateral, exposures above 70 percent loan-to-value ratios appear manageable, and, because of regulatory activity by the Reserve Bank, capitalisation has improved significantly since the last downturn. So the banks, according to this analysis, are well placed, and we welcome the positive steps that the banks are taking alongside Fonterra to support dairy farmers.

David Bennett : What are the consequences of the recent devaluation of the Chinese yuan for the New Zealand economy?

Hon BILL ENGLISH : There is always going to be volatility in the currencies of the countries New Zealand trades with and in the New Zealand dollar, which has of course fallen 25 percent against the US dollar in the last year. China’s recent devaluation shows its ongoing commitment to gradually liberalising its financial markets, and that is positive for the long-term growth outlook of China, although of course a devaluation in the shorter term appears to be a response to softening in the economic outlook for China. Of course, that will pose some small extra challenge for the competitiveness of our exports to China.

David Bennett : What reports has he received on the performance in other sectors of the economy?

Hon BILL ENGLISH : Of course, New Zealand has a range of sectors and activities across its economy besides the dairy sector. Earlier today BNZ released the performance of manufacturing index. The performance of manufacturing index for July was 53.5. Readings above 50 indicate expansion. So it is lower by 1.6 points than in June, but it still continues a run of moderately strong results. The New Zealand manufacturing sector has now been in expansion for 34 consecutive months. The indication is that that expansion is likely to continue. Business New Zealand says the fall in the New Zealand dollar is now driving positive sentiment in the manufacturing sector, which is leaning against the negative impact of lower dairy prices. Today’s performance of manufacturing index result indicates support for future growth, although at a more moderate level than the economy was previously running.

Dr David Clark : Why are exports dropping, and why are they borrowing so much money?

Mr SPEAKER : Order! Supplementary—

Grant Robertson : We could have that one; I don’t mind.

Mr SPEAKER : I will have this one. Grant Robertson—supplementary question.

Grant Robertson : Now that 75 percent of major company chief executive officers have joined well-known left-wingers Cameron Bagrie and Federated Farmers in calling for a plan B for the New Zealand economy, will he now concede that plan A is not working?

Hon BILL ENGLISH : No, and I might note that although many of them called for a plan B, not one of them was able to say what plan B should be, which, in that respect, is not a lot different from the finance spokesman for the Labour Party. But, nevertheless, most of those chief executive officers are, of course, all running adaptable, flexible businesses, which is consistent with plan A for the New Zealand economy—an economy that can deal with fluctuations in commodity prices and still deliver more jobs and higher incomes to its households.

Workplace Health and Safety—Health and Safety Reform Bill

3. IAIN LEES-GALLOWAY (Labour—Palmerston North) to the Minister for Workplace Relations and Safety : Will all New Zealand workers have the right to have a health and safety representative when they request one under the Health and Safety Reform Bill?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister for Workplace Relations and Safety : All employers must ensure that workers are involved in health and safety in their workplace, and there will be no exceptions, but the bill does improve the flexibility of the worker participation provisions. Not all businesses will be required to have an official health and safety representative.

Iain Lees-Galloway : Will agriculture be defined as a high-risk industry for the purposes of the bill?

Hon STEVEN JOYCE : The Minister has made it clear that he will be talking further about the high-risk sectors and who will be in the high-risk sectors before the bill is passed finally through the House.

Iain Lees-Galloway : Given that of the nearly 300 people killed at work in the last 5 years, 101 of those—one in three—were agricultural workers, why is he even considering not defining agriculture as high risk?

Hon STEVEN JOYCE : The Minister is giving consideration to a number of matters, including the fact, as I am sure the member will be aware, that agriculture is one of New Zealand’s biggest industries but that it has had a tally level that is unacceptable, most of it around quad bikes. The New Zealand Government and WorkSafe are working very closely with the agricultural sector, which knows that this issue has to be changed in regard to quad bikes.

Clayton Mitchell : Will this Government help small and medium sized businesses with their ever-increasing compliance costs by funding health and safety representative training for small and medium sized businesses?

Hon STEVEN JOYCE : I think it is important to note that one of the core roles of an employer is providing health and safety training for its workers. I think that most employers, including small businesses, would recognise that. But the member will know that the Government is being very careful to make sure that the administrative burden on small businesses is not excessive as a result of this bill and is, in fact, where possible, reduced.

Iain Lees-Galloway : Is his failure to make a decision about whether or not agriculture is high risk because of the pressure he is under from Federated Farmers and members of the National Party caucus to turn a blind eye to agriculture’s appalling safety record?

Hon STEVEN JOYCE : No, and I reject the assertions in his question.

Iain Lees-Galloway : Does he think that refusing to give a straight answer is good enough for people like Linda Sewell, who just wants decent First World health and safety laws after her 21-year-old son Tom was killed on his first day of orchard work, when the quad bike he was riding but had not been trained to use crashed into a ditch?

Hon STEVEN JOYCE : Obviously, we are very concerned about any workplace issues with injury and death, and our condolences go to that family and many others, which is why, in fact, the Government and this House are spending so much time on modernising and developing new workplace safety legislation and the accompanying regulations. I appreciate that the member wants to force the Minister’s hand in terms of what industries are defined as high risk, but he is taking his time to work through it carefully and will report to the House in due course.

Investment—Government Measures to Encourage

4. Dr PARMJEET PARMAR (National) to the Minister for Economic Development : What is the Government doing to encourage more investment throughout New Zealand?

Hon STEVEN JOYCE (Minister for Economic Development): There have been very significant investment flows recently, both internally and through international investment into New Zealand businesses, which helps grow jobs and incomes. Last month I announced the creation of a new strategy to attract more international business investment. The New Zealand Investment Attraction Strategy is being led by a team from New Zealand Trade and Enterprise, the Ministry of Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade, Callaghan Innovation, and Treasury. They are working with the private sector to create a pipeline of strong, investable opportunities and to promote them. Attracting more investment will enhance our export markets and international linkages, introduce new technologies and processes, create more skilled jobs, and increase regional economic activity.

Dr Parmjeet Parmar : What are some recent examples of investment in New Zealand?

Hon STEVEN JOYCE : There has been a substantial amount of new investment in New Zealand in just the past couple of years, both domestically and from international sources. For example, last year in the forestry processing industry, Oji Holdings of Japan made a billion-dollar investment in Carter Holt Harvey’s pulp, paper, and packaging holdings, adding to its interests in Pan Pac Forest Products in Napier, and it is investing in developing those. In the dairy industry, we are seeing around $2 billion worth of new investment in the value-added section of manufacturing—for example, Westland Milk Product’s construction of a new $102 million dryer for nutritionals in Hokitika and a UHT plant in Rolleston, and new investments by Fonterra in areas such as cream cheese, UHT, and mozzarella cheese. Filipino company Universal Robina Corporation has invested nearly three-quarters of a billion dollars through its purchase of Griffin’s, and it is investing further in that plant. It is these sorts of investors that help economic growth across New Zealand.

Dr Parmjeet Parmar : What other measures is the Government taking to encourage more New Zealand businesses to invest and grow?

Hon STEVEN JOYCE : With the likes of Tait Communications, Wynyard Group, and Gallagher Group, we are seeing a number of innovative Kiwi companies competing successfully on a world stage for Government contracts, and that is set to grow, with New Zealand today acceding to the World Trade Organization’s Agreement on Government Procurement. That will guarantee New Zealand companies access to bid for around $1.7 trillion in annual overseas Government contracts across 43 member countries, including the US, Canada, Japan, and the European Union. This is a very significant agreement and, along with our other trade agreements, is an important part of the Government’s goal of growing investment and growth in New Zealand companies.

Dr Parmjeet Parmar : What reports has he seen of other potential policy approaches to international investment?

Hon STEVEN JOYCE : I have seen a number of reports. Interestingly, they all come from the same source, and all on the same day, but say different things. The first report stated that the last thing we needed was more foreign ownership. That was followed up in record time, less than an hour later, by a report saying that the country was built on foreign investment and that we needed more of it. Sadly, this is the sort of high-speed flip-flopping that we are starting to—

Mr SPEAKER : Order! I have heard enough of that answer.

Dr David Clark : After 7 years, does he consider that investment in New Zealand has been successful, when exports as a percentage of GDP have dropped since his Government took office and are projected to drop further still?

Hon STEVEN JOYCE : Firstly, one of the reasons why they have dropped is the statistical change from Statistics New Zealand, which has equally affected the member’s party’s performance when they were in office as well, because it actually applies, I think, to just about every year since 1995. The good news for the member is that we have set a target for 2025. That requires around $160 billion to $200 billion worth of additional investment in our export sectors. This Government is committed to achieving this. The Opposition, as we found out yesterday, has no idea what it thinks about international investment.

Dr David Clark : In respect of his 2025 growth target, does he accept the Hon Bill English’s statement that growth would need to double to reach it; if so, what is he doing about that that is not already in his Business Growth Agenda, because that does not seem to be working?

Hon STEVEN JOYCE : I suggest that the member actually listen to the first three answers to the question this afternoon, because I have just announced an investment attraction strategy that we are working on together to increase the already growing pace of international investment. [Interruption] Of course Mr Clark does not listen, because he is too busy yelling out something like “He’s the worst MP in 50 years.”

Foreign Affairs, Minister—Statements

5. Hon DAVID PARKER (Labour) to the Minister of Foreign Affairs : When the Ministry of Foreign Affairs and Trade stated on 19 April 2012 that they were “finding an appropriate mechanism to meet Al Khalaf’s concern for ‘compensation’ (possibly through the joint venture)”, did ‘compensation’ mean compensation or have some other meaning like “not compensation”?

Hon TIM GROSER (Acting Minister of Foreign Affairs): I am very glad that the member asked the question in very precise terms, because he is, in fact, quoting the words used by Mr Al Khalaf, not Mr McCully. Mr McCully has made it clear right throughout this whole negotiation that the New Zealand Government was not prepared to enter into a compensation agreement but was seeking a broader partnership agreement, and that is the net effect.

Hon Damien O’Connor : Then does he agree with the Prime Minister, who told New Zealanders yesterday on national radio: “the deal was never about compensation.”?


Hon David Parker : Was the Auditor-General provided with, prior to the payments to Al Khalaf being made, copies of the document referred to in the substantive question and the 5 March 2012 briefing note of what the Minister said when the Minister noted that he would not want any financial contribution to be treated as compensation as this would involve a plethora of lawyers and bureaucrats?

Hon TIM GROSER : My understanding is that the Auditor-General, when she became involved, asked a series of questions that were entirely correct and legitimate. They were provided with answers, and at the end of the process, the Auditor-General said that she was satisfied with the legality of the export, with the fact that it was within appropriations, and that the business case was improved.

Hon David Parker : Can he assure the House and the public that Treasury was provided with all relevant documents relating to the $4 million cash payment prior to it being paid?

Hon TIM GROSER : All the information that I am sure Treasury was asked for was provided. I would just like to quote to you from the final communication from the New Zealand Treasury to the Ministry of Foreign Affairs and Trade, which is in the papers: “We are now generally comfortable with the business case.” It is dated 3 December 2013.

Hon David Parker : I seek leave to table the Treasury document, which is on the day of the noting of the $4 million payment to Mr Khalaf, where Treasury says that it has not been supplied with the business case from Deloitte.

Mr SPEAKER : The member is seeking to table a page of the Treasury report. I am just unsure it is—

Hon David Parker : It is the pre-Cabinet briefing from Treasury, dated 18 February.

Mr SPEAKER : Leave is sought to table the pre-Cabinet briefing from Treasury, dated as the member just said. Is there any objection to that being tabled? There is not. It can be tabled. Document, by leave, laid on the Table of the House.

Hon David Parker : Does he believe that the control agencies of Government, including Treasury and the Auditor-General, were properly informed about the true nature of these payments?

Hon TIM GROSER : I am sure that the Minister and his officials went through all the necessary channels.

Fletcher Tabuteau : Was the Minister informed of the meeting between Mr George Assaf and the former Minister of Agriculture, the Hon David Carter, on 21 January 2009; if not, why not?

Hon TIM GROSER : I am not privy to precisely when the Minister was informed of which conversations, but most certainly the Minister was informed of the general position of the Ministers in the new, incoming Government and worked his way through the issues as matters progressed.

Hon David Parker : When the Minister of Foreign Affairs approved the Ministry of Foreign Affairs and Trade providing compensation, possibly through the joint venture, does that not prove that the joint venture documents are a sham, designed to cover the true nature of those payments?

Hon TIM GROSER : I would have to listen very carefully to the way the phrase was used, but I think, from the way that the member put the question, that the answer would have to be that I reject the assertion. The Minister has been completely consistent throughout: that we were seeking a partnership. We were not prepared to enter into a compensation agreement. Mr Al-Khalaf, who is the most important meat trader in the Middle East, is very important to this country, and I am confident that this partnership will, in the long run, prove to be of considerable benefit to our country.


6. MARK MITCHELL (National—Rodney) to the Minister of Trade : What is the Government doing to reduce what some commentators are saying is an overdependence on trade with China?

Hon TIM GROSER (Minister of Trade): The Government is doing numerous things. Mr Joyce has just announced one such measure. Another measure was announced by me, in my capacity as Minister of Trade, about the information technology agreement in Geneva that will cover tariff elimination on over a billion dollars of exports. We are negotiating numerous agreements, including the ASEAN Regional Comprehensive Economic Partnership agreement, which I will be going up to in the week after next. We are negotiating the Trans-Pacific Partnership agreement, which is $28 trillion of GDP. I look forward to the entire House supporting the passage of the Korea free-trade agreement, which will provide additional options to China for our great exporting community.

Mark Mitchell : What reports has he seen on the benefits of our current trade agreements?

Hon TIM GROSER : Numerous, but I will just pick the most recent, which is the agreement with Taiwan. It is interesting that when the analysis of what this would do came out with a figure of $78 million of tariffs, which is the narrowest measure of trade benefits, it said that that would occur at the end of the full phase-in of the trade agreement, which goes as far as 12 years, from memory. We exceeded that in trade growth in the first 10 months of the agreement. That is how beneficial free-trade agreements are to New Zealand.

Mark Mitchell : What other trade agreements is the Government pursuing to lift New Zealand exports?

Hon TIM GROSER : In addition to the ones that I have instanced in the Asia-Pacific, we are also hopeful—it will be difficult to achieve—that we will establish the beginning of a negotiation with the EU for a free-trade agreement. The Government has prioritised the Pacific alliance—this very new and interesting group in Latin America. So the Government is moving ahead on literally multiple fronts.

Solid Energy—Annual Report

7. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises : What was Solid Energy’s debt in 2008/09 and what was it in the latest annual report?

Hon TODD McCLAY (Minister for State Owned Enterprises): As at 30 June 2009 the company held $50 million of bank debt on its balance sheet. Currently, it has bank debt of $320 million, but its full exposure is closer to $0.5 billion. The falling international coal price means that Solid Energy is not viable in its current form, and there is no prospect of it being able to be in a position to repay or refinance this bank debt.

Hon Clayton Cosgrove : Will the Government now admit that it was wrong in 2009, when it wrote to Solid Energy demanding higher dividends, which eventually totalled $164 million, and forced Solid Energy to raise its debt levels by hundreds of millions of dollars when international best practice for coal companies is to have near zero debt?

Hon TODD McCLAY : No, I do not accept that. Indeed, for Solid Energy it has been quite some period of time since it did not have debt at all. This is a very challenging industry. It has been for a period of time. A previous board made investment decisions at a time when the coal price was much higher than it is today. Indeed, it was at the top of the price then, and since then, successively year by year, that price has come down. Unfortunately, this company, with the changing circumstance of coal prices, is no longer sustainable in its current form.

Hon Clayton Cosgrove : I seek leave to table a letter dated 28 May 2009 from the then Minister for State Owned Enterprises, which notes the Government wanting Solid Energy—

Mr SPEAKER : Order! [Interruption] The document has been described. Leave is sought to table that particular letter dated 20 May 2009. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Richard Prosser : Given those answers, does he have faith in Treasury’s oversight group, the Crown Ownership Monitoring Unit; if so, why?

Hon TODD McCLAY : Yes, I do, and that group and others in Treasury have gone under a reform over a period of time. Certainly this Government is more focused on State-owned enterprises than any Government has been previously. The reason for this is that we expect them to be well managed, to be low risk, to focus on their core responsibilities and activities, and to return a fair dividend for the taxpayer. There are State-owned enterprises, however, that have not focused on their core activity responsibilities. That is one of the challenges we faced with Solid Energy.

Hon Clayton Cosgrove : Given that the fall in coal prices impacted companies around the world and they have survived by focusing on their core business, why did the Government, which was receiving monthly reports on the state of Solid Energy from 5 June 2012, cheer it on as it burnt through money on risky ventures and racked up an unsustainable level of debt, and then block all parliamentary inquiries into what went wrong?

Hon TODD McCLAY : Solid Energy is not the only coal company in the world in its current situation. Indeed, there is a company in Australia that was bought by an American group a few years ago for close to $1 billion. Two weeks ago it was sold for $1. All over the world coal companies are facing similar challenges to Solid Energy. The announcement that has been made by the board today gives a greater opportunity for those people employed by Solid Energy to keep their jobs and for trade suppliers to Solid Energy to continue to be paid and for them to continue their business activity.

Hon Clayton Cosgrove : I seek leave to table an Australian Mining report of 12 August 2015, which is entitled—

Mr SPEAKER : Order! I just need the source of the document—[Interruption] Order! I just need the source of the document.

Hon Clayton Cosgrove : The Australian Mining newsletter: “Coal exports breaking records in”—

Mr SPEAKER : On the basis that it may not be freely available—[Interruption] Order! It is a simple question that I have put to the Hon Clayton Cosgrove. Is it easily obtainable by members if they wish to seek it?

Hon Clayton Cosgrove : I found it. I do not know if it is easily obtainable—

Mr SPEAKER : Then it is easily obtainable. I will not be putting the leave.

Hon Clayton Cosgrove : Why has no one been held accountable for Solid Energy’s unprecedented collapse in that no Minister has resigned or been sacked for being asleep at the wheel and taking no action, despite years of repeated warnings from their own officials; none of the then board were fired for a complete lack of governance; and no members of senior management were removed or disciplined despite outlandish spending and reckless decision-making—in fact, the only people who lost their jobs were the men and women at the coalface?

Hon TODD McCLAY : The member is simplifying a very complicated situation with Solid Energy. Indeed, the current board is a different board from the one he was speaking of. It made investment decisions around Solid Energy that have created some of these challenges. Also, the senior management team at Solid Energy is different. They have been working as hard as they can over the last 2 years to ensure that this company has a future and to ensure that people can go to work tomorrow, and it is a very challenging situation. They have worked hard, really, to recognise the hard work not only of that team but of the people who work for Solid Energy in all regions of New Zealand.

Hon Damien O’Connor : Having destroyed over $1.7 billion of company value, accrued $320 million worth of debt—

Mr SPEAKER : Order! Can I have the question, please? [Interruption] Order! The question.

Hon Damien O’Connor : —injected $128 million of taxpayers’ money, and destroyed the jobs of over—

Mr SPEAKER : Order! [Interruption] Order! The member will resume his seat. I have called for the question. The member continues to outline information that may be—[Interruption]—facts, if the member wants to call them that. That is not necessary for the question. It is creating disorder. I have two choices: either to stop now and not allow the question, or to give the member one chance to rise and ask his question. I will do that, but if it is going to be supplemented with a whole lot of information that the member thinks is relevant and I do not, he risks the question being ruled out of order.

Hon Damien O’Connor : Can I start again,?

Mr SPEAKER : Yes, the member can start again, but if I do not hear the question very quickly, it will be ruled out of order and we will be proceeding.

Hon Damien O’Connor : In light of all those facts, is the Minister now comforted—[Interruption] He cannot hear it.

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. You cannot say “Can I start again?” and then refer to a question that has been ruled out of order.

Mr SPEAKER : Order! I had not ruled it out of order. The member is getting to his question—“is the Minister”—and then he got interrupted. Would the member please proceed with his question.

Hon Damien O’Connor : In light of all the facts laid down in the House this afternoon, is the Minister comforted by the fact that his Government’s asset sales programme is now back on track?

Hon TODD McCLAY : No, those are not the facts, but I do agree with the member and recognise his concern for coal mining workers in the area he represents, as the Government is. What I would say to him and others who are listening is that the proposal announced today is the very best opportunity for people in these regions to keep their jobs. However, over the next 5 weeks the administrator must engage with creditors around the country. They will be asked to vote on this proposal. Should they vote on it, then there is a future for some of these assets. If they vote against it, then the only alternative is likely to be liquidation, and that is not something that the Government is hopeful for, and I know that member is not, on behalf of his constituents.

Broadcasting, Minister—Statements

8. CLAYTON MITCHELL (NZ First) to the Minister of Broadcasting : Does she stand by all her statements?

Hon AMY ADAMS (Minister of Broadcasting): Yes.

Clayton Mitchell : Given that the Minister stated yesterday that rugby is our national sport, why will this Government not support New Zealand First’s policy of free-to-air live coverage of games of national significance?

Hon AMY ADAMS : Because only the most infantile analysis would not understand that that would come with significant negative consequences for New Zealand.

Clayton Mitchell : In light of the Minister’s answer, does she think it is fair that Kiwis are behind the eight ball compared with Australia and Britain, which guarantee their sports fans, under law, free live coverage of games of national significance?

Hon AMY ADAMS : Mr Speaker—

Mr SPEAKER : Order! No, I am just waiting for New Zealand First to settle.

Hon AMY ADAMS : You will be waiting a long time. The New Zealand market is very different from that of Australia and Great Britain. I do not think New Zealanders would want to see our national sports teams reduced to a situation of such poverty that they would be made up only of people who could not get contracts overseas.

Clayton Mitchell : Why, when New Zealand taxpayers already fork out $2.9 million to support netball and $3 million for rugby, must they then pay again to watch their national teams in both world cups?

Hon AMY ADAMS : The member is simply wrong. New Zealanders can watch it for free on Sky and they can watch it live at a number of venues.

Clayton Mitchell : Given that the Prime Minister wants to see the silver fern on the flag, why has he not already allowed New Zealanders to see our Silver Ferns for free on our State-owned TV for the Netball World Cup?

Hon AMY ADAMS : New Zealanders can see it for free on free-to-air television.

Energy Sector—Trends and Growth

9. BRETT HUDSON (National) to the Minister of Energy and Resources : What recent reports has he received on energy trends and growth in New Zealand?

Hon SIMON BRIDGES (Minister of Energy and Resources): Yesterday the annual review of the energy sector, Energy in New Zealand 2015, was released. It shows that in 2014 renewable energy made up nearly 40 percent of New Zealand’s total primary energy supply. This is a record high and places us third in the world behind only Iceland and Norway. Also in 2014 renewable electricity generation hit just under 80 percent, the highest level since 1996. These are fantastic results, showing that we are making real gains, transitioning to a lower carbon energy future, and making the most of our country’s renewable advantage.

Brett Hudson : What insights does Energy in New Zealand 2015 reveal about resource development last year?

Hon SIMON BRIDGES : Energy in New Zealand 2015—the report that I have been referring to—shows that oil and gas exploration was up in 2014, with over $2 billion spent here by operators; the highest ever level of expenditure in this country. This is a great result and shows that the Government’s approach to encouraging exploration and development is a real success. Energy diversity is the key to achieving energy security, affordability, and sustainability, which is why we take a long-term view, with a mixed and a balanced approach, pursuing opportunities in both renewable and non-renewable energy.

Overseas Investment—Overseas Investment Office

10. STUART NASH (Labour—Napier) to the Minister for Land Information : Has she received information from the Overseas Investment Office which confirms the statement of the Minister of Economic Development that “We have not been as effective as other countries in ensuring that overseas investment into New Zealand has provided the additional benefits”?

Hon LOUISE UPSTON (Minister for Land Information): I agree with the Minister for Economic Development’s statement that there has been lower overseas investment in comparable countries, and there will be many things that we can learn from how those countries are attracting overseas investment. However, any application for sensitive land that comes through the Overseas Investment Office must provide examples of substantial and identifiable benefits to New Zealand. The Overseas Investment Act strikes an important balance between ensuring sensitive New Zealand assets are adequately protected while facilitating foreign investment that provides benefits to New Zealand. We cannot be Fortress New Zealand if we want an economy that is internationally competitive and better placed to deliver higher incomes and better services to New Zealand.

Stuart Nash : Can she confirm that since the start of 2012 to the end of 2014 the Overseas Investment Office has approved 296 consents for the sale of sensitive land to foreign investors and turned down exactly zero?

Hon LOUISE UPSTON : I am not going to confirm the exact statistics that the member has discerned, but what I would say is to explain that there is a process for the receipt of Overseas Investment Office applications. Not all of them are then put forward for assessment. So there is a pre-assessment process that ensures only high-quality applications are considered. Once accepted for assessment, applications go through a rigorous assessment process as the Overseas Investment Office assesses the applications against the criteria. In recent times, three have been declined.

Stuart Nash : I would like to table a document that shows since the beginning—

Mr SPEAKER : Order! I know what it will show. We just need the source of the document.

Stuart Nash : The Parliamentary Library.

Mr SPEAKER : No. That is available to all members.

Stuart Nash : How many jobs have been created by the 716 successful foreign investors in sensitive New Zealand land who promised to create jobs as part of their consent application, or does the Overseas Investment Office not keep statistics on this?

Hon LOUISE UPSTON : Each individual application is considered according to the criteria that are set out in the Overseas Investment Act. Actually, this side of the House strengthened those requirements in 2010 with the ministerial directive. In addition to that, in 2012 the High Court counterfactual test ensured that New Zealand receives benefits.

Stuart Nash : I raise a point of order, Mr Speaker. You probably know what it is about. It is a very clear question. How many jobs—

Mr SPEAKER : And I think the way forward is for the question to be repeated for the benefit of the Minister.

Stuart Nash : Sure, I am happy to do that. How many jobs have been created by the 716 successful foreign investors in sensitive New Zealand land who promised to create jobs as part of their consent application, or does the Overseas Investment Office not keep statistics on this?

Hon LOUISE UPSTON : Although the Overseas Investment Office does not aggregate data on the lists of benefits successful applications will have for New Zealand, every single application has to show measurable and identifiable benefits to New Zealand. This includes the number of jobs.

Stuart Nash : What is the value of increased export receipts promised by the 358 successful overseas investors in sensitive New Zealand land who promised to increase export receipts as part of their consent application, or does the Overseas Investment Office not keep statistics on this?

Hon LOUISE UPSTON : I am more than happy to take the House’s time going through some of the answers that have already been provided to that member through written questions. As I said before, the Overseas Investment Office does not aggregate data. There is an assessment on every individual application to make sure that any approvals provide benefits, whether that is exports or jobs, to New Zealand.

Stuart Nash : In light of those answers, why does this Government not think that it is important or seem to care about the value, or lack of it, created by the sale of New Zealand farmland to foreign investors?

Hon LOUISE UPSTON : I did make it very clear in my opening answer to the first question that there is a high test, and we have also said that in the ministerial directive letter we put tougher measures in place. There is an important balance here that this Government is very conscious about. Foreign investment is vital to New Zealand, as Minister Joyce pointed out in his earlier answer today, but equally, in terms of any approvals of any sensitive assets, including land, New Zealanders want us to make sure that there are substantial and identifiable benefits for them.

Welfare—Benefit Sanctions

11. JAN LOGIE (Green) to the Minister for Social Development : What actions, if any, has the Ministry of Social Development taken to ensure the well-being of children in families subjected to benefit sanctions, given that sanctions of sole parents have increased by 19.98 percent in the last year?

Hon ANNE TOLLEY (Minister for Social Development): I am not sure where that member is getting her figures from, or her maths, but they certainly do not match any of the figures that I have received from the Ministry of Social Development. Sole parents are expected to be available for and looking for work, to care for their children, and to keep Work and Income updated on their progress. Beneficiaries receive a number of notifications before a sanction is even put in place. Beneficiaries with children can never be sanctioned for more than 50 percent of their main benefit, and they continue to receive the full amount of any supplementary assistance. In fact, under this Government fewer people are having their benefit stopped because of sanctions, and there has been a 34 percent reduction in suspensions and cancellations since 2011.

Jan Logie : I raise a point of order, Mr Speaker. This was a question on notice that was authenticated in the response to—

Mr SPEAKER : Order! [Interruption] Order! It is quite appropriate for a Minister to then dispute the figures that the member has provided as authentication for that question to be accepted—quite acceptable.

Jan Logie : So what, if anything, is the Minister doing to address the fact that two-thirds of sanctions have been for missing one appointment, which then halves a family’s income, throwing children’s lives into chaos as parents struggle to pay for rent and power.

Hon ANNE TOLLEY : Well, in fact, that is not true. That is not correct, and there is no way that a sanction of that nature would be applied for missing one appointment. In fact, the member is correct that the most common reason for a sanction is missing appointments, but it is not too difficult to expect people to turn up for a pre-arranged appointment. If they cannot make it, Work and Income people do go out and meet people in their own homes. A telephone call will actually avoid any further action.

Jan Logie : Does the Minister believe children’s warmth and security of housing should ever be put at risk due to their parent missing an appointment because Work and Income had not processed their paperwork, they missed a bus, or there was a death in their family?

Hon ANNE TOLLEY : What I can assure that member is that if any of those issues are raised with Work and Income by the applicant, they will be taken into account. Work and Income is there to support those solo parents and to make sure that their children get the very best start they could possibly get in life.

Jan Logie : I raise a point of order, Mr Speaker.

Metiria Turei : I raise a point of order, Mr Speaker.

Mr SPEAKER : Who wants to go first?

Metiria Turei : It is pretty clear from the question that the Minister was asked whether she believes a child should ever be put at risk—

Mr SPEAKER : Order! Can I just have the point of order.

Metiria Turei : —and that was not addressed in her answer.

Mr SPEAKER : If the member is referring to the last supplementary question that was asked, it was very clearly addressed. The member took the opportunity of quoting three reasons why a sanction may be imposed, and the Minister took the opportunity of saying that if Work and Income knew of those three reasons, it would not impose the sanction. The question has definitely been addressed. [Interruption] Order! If the member wants to stay and continue her line of questioning, she had better adhere to the Standing Orders.

Jan Logie : Is the Minister still hoping to achieve her Better Public Services target of a 25 percent reduction in the number of people receiving a main benefit, despite the stormy economy ahead, by making life so stressful and precarious that people are coming off benefits even if they have no job to move into?

Hon ANNE TOLLEY : This Government is determined to ensure that all New Zealanders have the opportunity to live full and successful lives. That includes people who are reliant on a benefit, and the children in those homes. We know that the best way out of poverty for those parents and children is through work. So we are definitely focused on achieving that 25 percent reduction and helping those people live better lives.

Jan Logie : Why is the Minister intent on holding the line that getting people off a benefit will improve child poverty, when the household income survey released today shows that despite a drop in the number of children in beneficiary households there are now an additional 45,000 New Zealand children living in poverty?

Hon ANNE TOLLEY : I would absolutely dispute the last statement that that member made. It is a gross and serious misrepresentation of the report that was released today.

Primary Sector—Technologies and Agricultural Products

12. TODD BARCLAY (National—Clutha-Southland) to the Minister for Food Safety : What announcements has the Government made that will help our primary sector have greater access to the latest technologies and agricultural products?

Hon JO GOODHEW (Minister for Food Safety): This week the Agricultural Compounds and Veterinary Medicines Amendment Bill was introduced to the House. The bill will increase the data protection period for companies registering innovative agricultural products. It means that our primary sector will have better access to the new products that it needs in order to manage plant and animal pests and to keep farm animals healthy.

Todd Barclay : How will this bill increase New Zealand’s access to agricultural products?

Hon JO GOODHEW : The New Zealand market is a small one, and suppliers need time to recover their product development costs before their data can be accessed by competitors. This bill will encourage overseas suppliers to register new products, while still allowing for robust competition in the New Zealand market place.


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