Questions and Answers – December 4

Press Release – Office of the Clerk

1. JAMI-LEE ROSS (National—Botany) to the Minister of Finance : What reports has he received on the competitiveness of New Zealand’s business sector?


1. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What reports has he received on the competitiveness of New Zealand’s business sector?

Hon BILL ENGLISH (Minister of Finance): I have received the World Bank’s report Doing Business 2013, which assesses how easy it is to do business in 185 economies around the world. Overall, New Zealand is rated the third-easiest economy for doing business, behind Singapore and Hong Kong. We are ahead of the US; the United Kingdom, in seventh place; Australia, in 10th; and Japan, in 24th. Through the Business Growth Agenda and other measures, the Government is working hard to help New Zealand businesses be more competitive so that they can invest further and employ more people.

Jami-Lee Ross: How does the World Bank measure New Zealand and other economies in assessing the ease of doing business? [Interruption]

Mr SPEAKER: Order! Order! The Minister has not even opened his mouth.

Hon BILL ENGLISH: The World Bank assesses 10 specific areas in respect of ease of doing business. They include starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. The World Bank confirms that New Zealand, across these 10 different dimensions, has an excellent environment for doing business, but, of course, it needs to improve so that we can provide more jobs for more New Zealanders.

Jami-Lee Ross: What other reports has the Minister received regarding the performance of New Zealand businesses?

Hon BILL ENGLISH: The performance of our businesses matters, because the key to more jobs is businesses that are willing and able to provide those jobs. The latest ANZ Business Outlook survey shows an improvement in business confidence in the context of a reasonably flat second half of the year, with a net 26 percent of businesses expecting general economic conditions to improve. Businesses’ own-activity expectations are a bit higher, with a net 32 percent of respondents expecting more activity in their business over the coming year.

Jami-Lee Ross: What steps is the Government taking to help improve the competitiveness and productivity of New Zealand businesses?

Hon BILL ENGLISH: The Government is relentlessly focused on the competitiveness and productivity of our businesses. Over the past 4 years we have reformed the tax system by lowering taxes on business and increasing consumption tax and tax on property investment. We have reduced red tape, invested heavily in modern infrastructure, and increased investment in science and innovation. We have set out this extensive programme in the documents published as part of the Government’s Business Growth Agenda.

Trans-Pacific Partnership—Minister’s Statements

2. ANDREW WILLIAMS (NZ First) to the Minister of Trade: Does he stand by his statement on the Trans-Pacific Partnership that “It’s going to be big. It’s going to be significant and it’s going to help New Zealanders find well-paid jobs”; if so, on what evidence does he base this claim?

Mr SPEAKER: Is some Minister going to answer the question?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister of Trade: Yes, he stands by that statement. If concluded, the Trans-Pacific Partnership will be New Zealand’s largest free-trade area. It includes four of our top 10 trading partners, it is home to 650 million consumers, and it represents US$21 trillion of the global economy. Collectively the group takes nearly 40 percent of New Zealand exports and, of course, it includes the US, with which a free-trade agreement has long been a top foreign policy priority for successive New Zealand Governments.

Andrew Williams: How can he reconcile the necessity for secrecy regarding the Trans-Pacific Partnership, yet at the same time make claims that the agreement will provide jobs for New Zealanders?

Hon BILL ENGLISH: Well, it is hardly a secret that there are negotiations. I think there are 500 people from—how many countries—

Rt Hon John Key: 11.

Hon BILL ENGLISH: —eleven countries turning up in Auckland, and it seems to be pretty well-known. The fact is we think a free-trade agreement would be a good idea. We are willing to conduct the reasonable process of negotiation in good faith with our negotiating partners to achieve that agreement. We understand Opposition parties are opposed to the jobs that would flow from a free-trade agreement. That is their policy position; it is not ours.

Hon Clayton Cosgrove: Will he have as a negotiation bottom line the protection of existing New Zealand intellectual property law, and will he ensure that New Zealand’s position is not simply the adoption of the intellectual property laws of the United States of America?

Hon BILL ENGLISH: That issue, along with a number of others, I am sure, will be a matter of pretty intensive negotiation, because it is pretty clear that the parties are negotiating from different starting positions.

Andrew Williams: Are there any specific aspects of the Trans-Pacific Partnership agreement that could erode or limit New Zealand’s sovereignty; if so, what are they?

Hon BILL ENGLISH: No, not in an unacceptable way. The fact is that when we are doing agreements with other countries, both we and they often have to give up some aspect of their policy that they did think was important but they give it up in order to achieve the larger benefits of free trade. So this is a process that is not without compromise, but it certainly will not be a compromise on our sovereignty.

Andrew Williams: How will the Trans-Pacific Partnership affect the Overseas Investment Act in regards to prohibiting performance requirements and industry incentives for the film industry?

Hon BILL ENGLISH: I am not sure whether particularly that second statement is correct, but the Government is not planning any changes to the Overseas Investment Act.

Hon Clayton Cosgrove: Will he have as a negotiation bottom line, and can he give us an assurance, that there will be no erosion of Pharmac’s position in New Zealand in respect of medical drug purchase and distribution?

Hon BILL ENGLISH: The Government’s approach will be articulated in precise terms through the negotiation, but we share with the previous Government a strong desire to maintain the effectiveness and the independence of Pharmac.

Andrew Williams: Is the Minister saying that the film industry will be totally unaffected and that current industry subsidies will not be affected by the Trans-Pacific Partnership agreement?

Hon BILL ENGLISH: I would not want to prejudge the way the negotiations would go over the next 12 months or so, but the process does allow for the kind of arrangements that the New Zealand Government applies to the New Zealand film industry.

Andrew Williams: Will the Minister assure the House that this Government will not sign the Trans-Pacific Partnership agreement unless the US removes subsidies from its agricultural sector?

Hon BILL ENGLISH: It is certainly a long-term aim of the New Zealand Government to see those agricultural subsidies eliminated. The same discussion has been going on for 50 years with the European Union, and at different times we have made progress. So it is very important in this negotiation that we see progress, but again in the spirit of good faith with our negotiation partners, I would not want to pre-empt the result of it.

Prime Minister—Statements

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement “…You can trust us. If we say we’re going to do something we do it. If we don’t, we don’t … that’s why I’ve stuck to my guns and I haven’t campaigned on one thing and done something different.”?

Rt Hon JOHN KEY (Prime Minister): Yes. That is why we campaigned on delivering a whole range of policies that have made New Zealand a better place, including putting 600 more police on the streets, bringing in tougher bail laws, increasing elective surgery by 35,000 operations a year, shortening cancer patient waiting-times, funding Plunket 24/7, funding Herceptin, and boosting front-line services, including 800 more full-time permanent staff doctors and 2,000 more nurses in our district health boards.

David Shearer: Does he stand by his statement: “And I think New Zealanders will judge me on not just how I respond to the big issues of the day but also how I treat people who are marginalised and in need.”; if so, what will he do to address inequality, which has increased to the highest level ever, under his Government?

Rt Hon JOHN KEY: Yes, I do stand by that statement. If you look at the Government’s record, despite the very difficult economic times we have actually run a deficit that has protected the most vulnerable people. That has included substantial Working for Families payments without adjustments. That has included a programme for rheumatic fever. That has included programmes in a number of areas to help those who are down on their luck. So no one can really argue that this Government, in very difficult economic times, has not made great strides to try to assist those who are least well off.

David Shearer: Does he stand by his statement: “… I am proud to be the Prime Minister who takes responsibility for the fact that unemployment capped at 7 percent in this country,”, and why is he now not taking responsibility for the fact that it has exceeded 7.3 percent?

Rt Hon JOHN KEY: Well, for a start-off, I do take responsibility, and, secondly, what I can say is that we live in a world where the international conditions are difficult—we accept that. But the Government can and does do things that are within its control. As examples of the things that we have done to try to create more jobs, we have brought in the 90-day trial period, which has created more than 13,000 jobs; we have introduced the starting out wage to lower the barrier to work for our youngest workers; we have clarified the status of an independent contractor, which saw 3,000 people working on The Hobbit movies, we have set a 9-month time for consenting projects of national significance, we have vigorously pursued free-trade agreements, we have reduced the cost to business of the emissions trading scheme, we have increased investment in infrastructure, we have reduced—

Mr SPEAKER: Order! I think the Prime Minister has given a sufficient answer.

David Shearer: Has he kept his promise on early childhood education that “We will keep 20 hours and maintain existing subsidies and controls.”?

Rt Hon JOHN KEY: Yes, 20 hours remains.

David Shearer: Does he regret standing in Westpac Stadium saying: “… the equivalent of this entire stadium—and more—leaves every year to live permanently in Australia … I’m convinced we can give them a reason, and a purpose, to stay …”, given that the only stadium in the country that could now host the numbers leaving is Eden Park?

Rt Hon JOHN KEY: Yes, I do stand by that. If one looks overall at migration over the period of time that National has been in office, there are more people in New Zealand than there were beforehand. We are having a little bit of a flood, but nothing more serious than we have seen internationally. If we do want to send a lot of people overseas, I guess the way to do it is to have more inflation, a capital gains tax, basically give Working for Families payments to beneficiaries, and have Russel Norman as the Minister of Finance, which I understand is only millimetres away. The Green Party made a—

Mr SPEAKER: Order!

David Shearer: Given New Zealand has the highest unemployment rate in 13 years, with the highest emigration rate ever, the worst inequality ever, and a fiscal policy that is based on selling New Zealand’s assets, does he stand by his statement that if he left tomorrow, he will leave the country in better shape than he found it?

Rt Hon JOHN KEY: Yes. And a couple of things: I am not leaving tomorrow, but, then again, I am not the one facing a vote in February.

Trans-Pacific Partnership—Investor-State Dispute Provisions

4. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement regarding investor state disputes procedures proposed in the Trans-Pacific Partnership agreement that “An exclusion solely for Australia and not for everybody else is unlikely to be something we would support”; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes. This statement simply reflects the reality that an international trade negotiation is a reciprocal process with give and take on all parts. Negotiating parties, including New Zealand, are unlikely to agree that special treatment, such as an exclusion from investor-State dispute settlement procedures, applies to one party but not to the other parties. I would also note that trade agreements are about finding a balance of benefits for everyone, and the benefits New Zealand could gain from a successful Trans-Pacific Partnership negotiation will be very significant indeed.

Metiria Turei: Will New Zealand open itself up to litigation from firms based in the Trans- Pacific Partnership countries should we sign up to the investor-State dispute settlement procedures, which Australia has rejected?

Rt Hon JOHN KEY: Well for a start-off, I do not think it is actually correct to say that Australia has rejected them. What is true to say is that there are different countries bringing different perspectives to the negotiation, but when a final Trans-Pacific Partnership agreement is agreed, all parties are likely to sign up. In terms of the first point, no, I do not think that is of concern because investor-State dispute settlement procedures allow a safeguard for New Zealand. New Zealand has already signed two free-trade agreements that include investor-State dispute settlement procedures. They were done under a Labour Government. They were the China freetrade agreement and the ASEAN-Australia-New Zealand Free Trade Agreement. They include the very safeguards that would protect New Zealand under those provisions. They also, I might add, protect New Zealand companies when they invest overseas. That is the very purpose of the investor- State dispute settlement procedure requirements.

Metiria Turei: Can the Prime Minister guarantee that there will be no chilling effect on New Zealand’s environmental policy from these procedures given that in Germany that Government was forced to water down environmental controls on coal-fired power stations or face being sued for more than US$2 billion for breach of investor-State provisions?

Rt Hon JOHN KEY: As I said, I think that is unlikely. As I have said in regard to my earlier answer, fundamentally New Zealand does make sure that, and has ensured in the past, there are safeguards when it comes to investor-State dispute settlement provisions.

Metiria Turei: How does the Prime Minister propose to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Peru the Government is being sued for $800 million because it regulated to stop the severe lead poisoning of children by Renco Group’s metal smelter?

Rt Hon JOHN KEY: I am simply not aware of the provisions in Peru, but I can tell you the way that New Zealand legislates and goes about these free-trade agreements, and it is very careful to give itself the safeguards that we would think make sense. I think if one goes and has a look overall and takes a step back, then the purpose of New Zealand engaging in the Trans-Pacific Partnership is to sign an agreement that would lift economic growth and provide jobs and opportunities for New Zealanders. On the best forecasting that we have so far seen off a basic prediction out to 2025, that is worth about US$2.9 billion to the New Zealand economy. I think that is a prize worth going after, and I think New Zealand should continue down the negotiations. The same kinds of fears that the Green Party and New Zealand First want to raise in the House are the very same ones that were argued against the China free-trade agreement. I suspect they would have been the same kinds of arguments made against CER. They were the same kinds of arguments put against the ASEANAustralia- New Zealand Free Trade Agreement. Is anyone in this House, other than the Minister of Finance in waiting, seriously saying that we should rip up our China free-trade agreement and everything else?

Metiria Turei: How exactly does the Prime Minister intend to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Ecuador Chevron Oil has used investor-State procedures to stop that Government from taking action to recover clean-up costs for the dumping of 16 billion gallons of toxic waste into the drinking water of 30,000 people?

Rt Hon JOHN KEY: It has finally, after a few months now, all come clear to me: the reason that the Green Party wants to follow the policies of Argentina in printing money is it clearly gets all of its ideas from Latin America.

Metiria Turei: I raise a point of order, Mr Speaker. The question was a straight question, and asked for—[Interruption]

Mr SPEAKER: Order! A point of order is being heard.

Metiria Turei: I asked the Prime Minister how he intended to guarantee against a chilling effect on New Zealand policy, and gave an example—

Mr SPEAKER: I will let the member repeat her question.

Metiria Turei: How does the Prime Minister intend to guarantee that there will be no chilling effect on New Zealand’s health policy, given that in Ecuador Chevron Oil used investor-State procedures to stop the Government taking action to recover clean-up costs for the dumping of 16 billion gallons of toxic waste into the drinking water of 30,000 people?

Rt Hon JOHN KEY: As I have said in numerous answers to numerous questions from the member, there will be safeguards in the New Zealand law.

Metiria Turei: Does the Prime Minister have any concerns that Philip Morris could use the investor-State procedures in the Trans-Pacific Partnership to sue New Zealand, given its actions in Australia and the veiled threats made by its spokesperson in New Zealand, Chris Bishop; if not, why not?

Rt Hon JOHN KEY: Firstly, you cannot stop anybody suing you, but because someone sues you, it does not mean that they will win. There are plenty of examples in this House of that. Secondly, as I said earlier, we are looking at and will ensure that if investor-State dispute settlement takes place as part of the Trans-Pacific Partnership negotiations, there will be safeguards, so that will allow us to do that. I go back to my earlier point that, in the end, the Trans-Pacific Partnership will be a free-trade agreement that binds the same rules on all 11 countries. Now the member will

be aware that Australia as of 1 December went into its programme of plain packaging. It is not in any way concerned about doing that and continuing to be part of the officials group and continuing to negotiate as part of the Trans-Pacific Partnership. That tells you that it must believe that the two policies are compatible. If it did not, it would not have introduced plain packaging or it would not be sitting around the table at the Trans-Pacific Partnership, which just shows you that the member, like Jane Kelsey, spends a whole lot of time fearmongering, and is fundamentally wrong.

Metiria Turei: Why is the Prime Minister willing for New Zealand to sign up to the parts of the Trans-Pacific Partnership that our closest and largest trading partner is completely unwilling to sign up to, because that Government wants to protect its rights to legislate for public health and the environment?

Rt Hon JOHN KEY: As I said in numerous answers to numerous questions, the Trans-Pacific Partnership would have the same rules applying to all parties. So in the end, if agreement cannot be reached amongst those 11 parties in relation to investor-State dispute settlement rules, which apply to every country—that includes Australia, New Zealand, Mexico, Canada, the United States, Peru, and others like Singapore, Brunei, you name them—then we will not have those provisions in there. But I take a step back and say, yes, of course there will be a bit of give and take on all these different rules. New Zealand will make sure it safeguards its provisions. I think we should actually congratulate the Ministry of Foreign Affairs and Trade, because in my opinion it has a world-class negotiating team, which has done a first-class job for this country on numerous examples in the past, and it will continue to do so in the future. And the overall prize of all of this is more jobs. I go back to what I said on TV on Monday morning—when I picked up the New Zealand Herald on Monday morning the first thing I saw was yet another Green MP, Catherine Delahunty, opposed to jobs, and opposed to growth, and that is why Russel Normal wants to be the Minister of Finance.

Dr Russel Norman: I raise a point of order, Mr Speaker. We have repeatedly had to put up with the Prime Minister answering very simple, straight questions with attacks on the Green Party. He should just answer the question. [Interruption]

Mr SPEAKER: Order! Which National member is volunteering to leave, if they keep up that noise when I am on my feet? That is enough. The member’s complaint is not unreasonable. The Prime Minister should not have put that last bit in. We do not want to carry on down that track any further.

Metiria Turei: I seek leave to table an Official Information Act response from the office of Tim Groser, setting out the talking points in relation to Australia’s refusal to engage in the investor-State dispute resolution process for the Trans-Pacific Partnership.

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

Student Loans—Repayment Rates

5. SIMON O’CONNOR (National—Tāmaki) to the Minister for Tertiary Education, Skills

and Employment: What progress has the Government made to improve the viability of the Student Loan Scheme?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): The Government is making very good progress. The latest student loan scheme annual report shows the overall cost of lending has fallen by 17.5 percent over the last 3 years. The cost has fallen from 47c per dollar in 2009 to 39c in the dollar in 2012, and the report projects it to drop to 37c in the dollar next year. That is a significant improvement, but one we are working to improve further. The Government remains committed to interest-free student loans but it is important that the scheme is affordable long term for students and for taxpayers and sustainable for the country.

Simon O’Connor: What progress is the Government making to get students debt-free faster?

Hon STEVEN JOYCE: I am happy to report an 11 percent increase in student loan repayments in 2011-12 to $767 million, which is up from $691 million in 2010-11. Further, the median repayment time for those who left study in 2008 is 6.7 years, which compares with 7.4 years for those who left study in 2003. For 2008 leavers who remain in New Zealand the median repayment time is down to 5.5 years. Through Inland Revenue we are also targeting overseas-based borrowers who are not meeting their repayment obligations. To date we have gained back just under $20 million through the latest campaign, which accounts for $12 for every dollar spent on the project. Those gains have freed up money for reinvesting in quality tertiary education provision and enabling the Government to improve our overall fiscal position.

Simon O’Connor: How is the Government ensuring students are in the best position to repay their loans?

Hon STEVEN JOYCE: As part of our changes to tighten the student loan scheme, the Government has moved to ensure that student loans are used effectively by people to obtain qualifications that enable them to earn enough to pay their loan back and contribute to this country. This has coincided with a continuing uptrend in performance. Course completion rates have risen from 77 percent in 2009 to 82 percent last year, while qualification completion rates over the same period have increased from 62 to 71 percent. It shows the tertiary sector is responding well to our signals to focus on performance and deliver better value for taxpayers’ money.

Grant Robertson: In light of that answer, what does he say to the 55-year-old woman who came to my electorate office having lost her job and who is wanting to retrain but is unable to do so because he and his Government have taken away the eligibility for people aged over 55 to borrow the living costs of their loan, or does he not think she has got a contribution to make to New Zealand’s economy?

Hon STEVEN JOYCE: Actually, that person over the age of 55 can continue to borrow from the student loan scheme for their course fees—that is correct.

Grant Robertson: But not for living costs.

Hon STEVEN JOYCE: Not for their living costs—that is correct. Of course, somebody who has lost their job and is unable to get a job is able to qualify for welfare support, but they can do student borrowing through the student loan scheme for their fees.

Work and Income—Funding Assistance for Job Seekers

6. JACINDA ARDERN (Labour) to the Minister for Social Development: How many times, if any, has the Transition to Work Grant, or similar funds, been used by Work and Income New Zealand to purchase tickets to Australia for job seekers who have found work there?

Hon PAULA BENNETT (Minister for Social Development): I cannot answer the question. The grant has been in place since 2007. Because it is not the policy intent or acceptable practice, there is not a place to put it in our system, so I would have to manually go back through the last 5 years, and in the last 3 hours I have not had time to do that.

Jacinda Ardern: Is there any way to know with certainty how the discretionary Transition to Work grant of up to $1,500 has been used by Work and Income managers?

Hon PAULA BENNETT: Since September this year any decisions around grants to move people or anything else have been escalated to head office. That has happened quite recently. There are in the system places, obviously, where you put what the grants are for. I can give the member some details on the average grant, which is $363 a week. We have had more than 500,000 of them in the last 5 years, so there is a lot. Some are for clothing costs; we help dress people. Some are for childcare costs while someone goes for an interview. [Interruption] I am trying to answer this question.

Jacinda Ardern: Is there anything in the Transition to Work policy that would rule out the fund being used to purchase tickets to Australia?

Hon PAULA BENNETT: Well, except that it is not the policy intent, and that is very clear to staff.

Jacinda Ardern: Can she assure the House that the discretionary Transition to Work grant has never been used to purchase or contribute to one-way fares to Australia for job seekers who have an offer of employment there?

Hon PAULA BENNETT: As I have said, no, I cannot, particularly because it has been around since 2007. So it was actually introduced under the previous Labour Government. The legislation is actually silent on that, and I cannot give a guarantee, that far back, as to whether or not that has happened.

Jacinda Ardern: Does she know what is going on with her own front-line services, given that I have been informed of a meeting where Work and Income managers confirmed that Work and Income had offered financial assistance to job seekers to travel to Australia to take up employment?

Hon PAULA BENNETT: If the member has evidence of that, I would be very interested in seeing it. It is not my expectation. It is not the expectation of the policy intent. However, it is case managers who distribute it. It has been made very clear to them that they should not be paying for any airfares overseas, and, as far as I have seen to date, I do not have evidence of that.

Jacinda Ardern: Will she investigate whether or not, and how often, the Transition to Work grant has been used to purchase tickets to Australia for job seekers?

Hon PAULA BENNETT: Absolutely, because I would be very unhappy to see that as common practice.

Primary Growth Partnership—Successful Bids

7. SHANE ARDERN (National—Taranaki – King Country) to the Minister for Primary

Industries: What announcements has he recently made on boosting innovation in the New Zealand primary sector?

Hon DAVID CARTER (Minister for Primary Industries): Yesterday I announced that the Government’s Primary Growth Partnership is to fund half of an $87 million innovation programme proposed by one of New Zealand’s leading meat exporters, ANZCO Foods. The programme will identify opportunities to create new, high-value food ingredients and health care products. This announcement lifts the total Government-industry investment in the Primary Growth Partnership to $665 million—further proof of this Government’s commitment to lift economic growth through primary sector innovation.

Shane Ardern: Why is the Government focusing on increasing innovation and improving productivity in the primary sector?

Hon DAVID CARTER: This Government has set an ambitious target of increasing exports from 30 percent to 40 percent of GDP. As the primary sector makes up 72 percent of New Zealand’s merchandise export and is the backbone of the New Zealand economy, increasing innovation and improving productivity are essential means of achieving this target.

Shane Ardern: Has the Primary Growth Partnership been successful in providing innovation funding to a wide range of firms and sectors?

Hon DAVID CARTER: Yes, it certainly has. Thanks to this collaborative Government-industry approach, we have projects under way across a complete range of sectors, from dairy to arable, to red meat, to wool, to forestry, to seafood, to aquaculture, and to mānuka honey. Over $300 million of Government funding has been committed to a wide range of firms, such as Zespri, Comvita, and Brownrigg Agriculture. Even the Young Farmers organisation is involved in the Beef and Lamb project.

New Zealand – Australia Migration—Statement

8. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his statement regarding migration to Australia “What’s the point of standing in the airport crying about

it?”; if so, how many people have left permanently for Australia since he took office in November 2008?

Hon BILL ENGLISH (Minister of Finance): As I said in answer to the same question from the member on 24 July, 25 July, 26 July, and 1 August, yes. My full statement was “What’s the point of standing in the airport crying about it? We’ve just got to compete. They can pay more but it’s hot and there’s lots of flies. We pay less but you can go for a bike ride at lunchtime.” Statistics New Zealand reports 173,715 people migrated to Australia in that time period. I note that in this period 59,000 people migrated from Australia to New Zealand, leaving a net outward migration of 114,000. There are signs that this migration is levelling off. I note that in the 9 years to October 2008, despite benign economic conditions, 310,000 people left for Australia.

Hon David Parker: Given that more than 173,000 people have left for Australia since he took office in 2008, and the year to October 2012 saw 53,695 Kiwis leave, does he agree that his Government has failed to fulfil its 2008 promise to reduce the number of people leaving for Australia?

Hon BILL ENGLISH: No. I think the reason that there has been higher out-migration has been pretty straightforward. Australia had a once-in-a-century boom in its resource prices. That means that up until recently it has been sheltered from the effects of the global financial crisis. The outmigration is directly proportional to the fact that Australia’s growth rate was higher than New Zealand’s. Over the next few years they look to be pretty similar, and that is why the out-migration is likely to slow down and the number leaving Australia to come to New Zealand, which was 59,000 in the 4 years that the member referred to, is likely to increase.

Hon David Parker: Is he aware that the 173,715 New Zealanders who have left for Australia represent 4 percent of New Zealand’s total population, which is more than the population of Hamilton, more than the population of Napier and Hastings combined, and equivalent to Dunedin and Invercargill combined?

Hon BILL ENGLISH: I would believe those numbers if they came from Statistics New Zealand and not from the Opposition spokesman on finance; in this case I would have to divide them by seven to get it right. But he is probably right.

Hon David Parker: Does he agree that the New Zealanders leaving for Australia in record numbers are doing so because of low wages and a lack of jobs in New Zealand; if not, why are 54,000 Kiwis leaving for Australia every year?

Hon BILL ENGLISH: As I explained to the member, and which I think he knows, in around 2007 Australia experienced a once-in-100-years more than doubling of its commodity prices. That gave Australia a large, unexpected increase in income, and that has meant high wages, which have attracted New Zealanders. Over the next few years our growth rates are pretty similar, around 2.5 to 3.5 percent, and I would expect that those flows will slow down a bit. The main thing for us to do is to focus on the competitiveness of our businesses so that they can, for instance, grow their businesses and exports to Australia, and can employ more New Zealanders to do so.

Hon David Parker: Why has the wage gap between Australia and New Zealand continued to widen—using the purchase price parity figure that the Prime Minister prefers to use, it is now $27.73 a week wider under his Government—after he campaigned in 2008 to narrow the gap?

Hon BILL ENGLISH: We could argue about how to measure the wage gap. As the member will know, because of New Zealand’s tax changes our after-tax incomes are actually much closer to Australia’s than those figures would indicate. Actually, when you look at the Australian figures, it is surprising. If you take out the Western Australia wage rates, it makes a significant difference. In fact, if you take out Western Australia growth rates, the Australian and New Zealand economies and wages have grown at pretty similar rates through the last 3 or 4 years. Last year Western Australia grew at 14 percent. That is almost one and a half times the growth rate in China, and, frankly, we are going to have to focus very hard on competitiveness of our businesses to be able to match the enormous wages paid in Western Australia.

Todd McClay: In light of recent migration trends and their impact on the housing market, what reports has the Minister received detailing alternative approaches to housing?

Hon BILL ENGLISH: Migration trends do have a significant impact on housing. Just how many houses those migrants might need, of course, depends on whether you get your numbers wrong by 700 percent, as became apparent in the answer to a question in the House last week, where our spokesperson pointed out that building 100,000 houses over 10 years requires one house to be built every hour, night and day, for an entire decade. The Opposition spokesman on finance, however, thinks that that adds up to 600,000 houses, not 100,000 houses.

White Paper for Vulnerable Children—Expert Advisory Group on Information Security

9. TIM MACINDOE (National—Hamilton West) to the Minister for Social Development: What announcements has she made on the Expert Advisory Group on Information Security, who will oversee the development of the initiatives in the Government’s White Paper for Vulnerable Children?

Hon PAULA BENNETT (Minister for Social Development): Today we have announced the appointment of the former Governor-General the Rt Hon Sir Anand Satyanand to lead the Expert Advisory Group on Information Security. The Vulnerable Kids Information System and the new risk predictor tool are vital in strengthening protections for vulnerable children. The group will ensure these tools are secure and easy for front-line professionals to use while also balancing privacy and security considerations.

Tim Macindoe: What will the expert group focus on in regard to the Vulnerable Kids Information System, known as ViKi, and the risk protector tool?

Hon PAULA BENNETT: Well, this group will oversee the entire implementation, but there are particular issues with the implementation, I think, that I have asked them to really centre in on. When you are looking at that information, it is who has access to it, what kind of information is stored, should you know if your name is on it or your child’s is, how long should we keep it, and can you access it in 20 years. These are the sorts of difficult but, I think, really important things that this group needs to investigate.

Tim Macindoe: How will the Vulnerable Kids Information System and the risk predictor tool work to protect vulnerable children better from abuse and neglect?

Hon PAULA BENNETT: The most vital part of the whole information system is that it is putting the pieces together from different professionals, so that you know what children are in there, what everyone knows about them, and you can put it together. For all of the cases that I have seen—whether they be coroners’ reports, to the Mel Smith inquiry on children, to the evidence from both overseas and locally—if you see a child who has been hideously abused or even killed, if a professional had been able to put all of the pieces together, I believe they would have acted differently. This tool does that.

Schools, Food—Prime Minister’s Statements

10. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she agree with all of the statements the Prime Minister has made regarding food in schools?

Hon HEKIA PARATA (Minister of Education): Yes, I do agree with all the Prime Minister’s statements, as everyone does who is ambitious for this country.

Chris Hipkins: Does she stand by the statement that if the Government does not take action to provide food in schools “we are effectively punishing children for the sins of their parents.”, or does she stand by the alternative statement that “the fundamental responsibility lies with the parents of those children to feed them.”—the first one made before the National Government was elected, and the second one made after?

Hon HEKIA PARATA: Yes, both are right, and I completely agree because the full statement that was made in 2007 was that we need to “challenge the business community to work with us in

backing a programme of providing food in low-decile schools for kids in need.” In fact, Fonterra and Sanitarium have stepped up to that challenge and provide 35,000 breakfasts a week to 534 schools, feeding 22,000 students. Since we came into Government in 2009 we have provided $940,000 of funding to KidsCan for their Food for Kids programme, so both are correct.

Chris Hipkins: Does she stand by the statement: “it’s a fact that kids can’t and don’t learn if they are constantly hungry. Their brains don’t develop properly and they can’t stay focused in the classroom.”; if so, exactly what, in addition to the funding for KidsCan, has the Government done to increase the provision of food in schools?

Hon HEKIA PARATA: This Government has increased and improved the Fruit in Schools programme. When we came in, Labour was funding it at $12 million, of which almost $6 million was going on administration. We have made it more efficient, but we have now—[Interruption] We have made it more efficient, and we are providing fruit to—let me see—480 decile 1 and 2 schools currently participating, being about almost 97,000 children.

Nikki Kaye: What is the Government doing in this area?

Hon HEKIA PARATA: First and foremost, I would like to acknowledge all the parents and families who work really hard to ensure that their children have the food that they need. What the Government does is supplement that, as I have already indicated, through the Fruit in Schools scheme—nearly 97,000 students—since 2009 and $940,000 to KidsCan for 4,500 children a day in 223 schools. And we make available, through the Ministry of Social Development, special-needs grants for families, much of which goes on food and which was $46 million in 2011, and, of course, our Government invests billions in the welfare system.

Chris Hipkins: Is the Minister suggesting that giving a child a piece of fruit at morning tea time is sufficient nutrition for them to be able to maintain their focus on learning during the day?

Hon HEKIA PARATA: As I said, this supplements, first and foremost, what parents, families, whānau, and aiga provide for their children. But in some cases it might be. There are children who do have fruit for breakfast. In fact, under the previous administration its Healthy Eating – Healthy Action programme was trying to make our children eat fruit for breakfast.

Chris Hipkins: Why does the Government believe that spending $562,000 on sports funding for private schools is more important than fulfilling the Prime Minister’s pre-election promise to provide food in schools for vulnerable kids, given that the funding provided for KidsCan is barely half that amount?

Hon HEKIA PARATA: It is not an either/or; we provide both. Why do we think it is legitimate? Because, in fact, although private schools make up 3.5 percent of our schooling system, each year they contribute $168 million net to our education system.

Drugs, Psychoactive—Animal Testing

11. MOJO MATHERS (Green) to the Associate Minister of Health: Other than the LD50 test, will he rule out other animal tests for the pending psychoactive substances testing regime?

Hon PETER DUNNE (Associate Minister of Health): With regard to psychoactive substances, I have directed the Ministry of Health to develop a regulatory regime consistent with international best practice and avoiding animal testing wherever possible. The standards for approval for psychoactive substances will be set by an independent expert committee to be established early next year.

Mojo Mathers: Why is there not a single non-animal testing option included in the Ministry of Health’s testing regime recommendation paper dated March 2012?

Hon PETER DUNNE: There have been a number of alternative options proposed. They are all to be considered by the expert committee. I should make the point that the material that was the subject of the release last week, which got the weekend publicity, was neither ministry advice nor Government policy. They were comments contained in a report from an independent toxicologist.

Mojo Mathers: How does he reconcile that omission with the purpose set out in Part 6 of the Animal Welfare Act to “replace animals as subjects for research, and testing by substituting where appropriate, non-sentient or non-living alternatives:”?

Hon PETER DUNNE: I am not attempting to reconcile the two statements for this reason. The material that the member refers to, which was the basis of the publicity at the weekend, was neither official advice to the Ministry of Health nor a statement of Government policy, but a statement by an independent toxicologist. The expert committee that I referred to in my original answer, in developing the standards for approval, will obviously be guided by all relevant pieces of legislation, including the legislation to which the member has referred.

Mojo Mathers: I seek leave to table the Ministry of Health report from March 2012, which outlines the proposed safety testing regime and it is called Regulations governing the control of novel psychoactive drugs defining parameters associated with toxicity.

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

Mojo Mathers: So will he now commission a report into non-animal options for safety testing of new recreational drugs?

Hon PETER DUNNE: Can I repeat for the member’s benefit my original answer. I have directed the Ministry of Health in developing the regulatory regime consistent with international best practice to look at avoiding animal testing wherever possible. As I said earlier, the precise regime will be developed by the independent expert committee, which will be established early next year.

Earthquakes, Canterbury and Christchurch—Repair and Rebuild of Residential Homes

12. NICKY WAGNER (National—Christchurch Central) to the Minister for Canterbury

Earthquake Recovery: What progress is the Government making with rebuilding and repairing residential homes in Christchurch?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): The Government is making considerable progress with the repair and rebuild of residential homes damaged by the Canterbury earthquakes. The Earthquake Commission, through the Fletcher programme, has repaired 28,058 homes. This means that nearly one-third of the homes damaged with under $100,000 of value in that damage have been completed. Total payouts by the commission for building, land, and contents claims now exceed $4 billion. Southern Response, which handles 6,651 claims for the AMI bailout, has settled 1,838 claims. More important, over 99 percent of customers’ assessments have been completed. Southern Response is scheduling 1,000 builds and rebuilds in this next construction season into 2013. All land in Canterbury has now been zoned. Over 7,800 properties have gone red and over 180,000 properties have been zoned green. Insurers are reporting a gearing-up of resources to deliver rebuilds and repairs in the year ahead. In addition, the horizontal infrastructure repair and rebuild under the Stronger Christchurch Infrastructure Rebuild Team is now invoicing $40 million a month across multiple civil construction sites.

Nicky Wagner: What has been the acceptance of the red zone offer for homeowners on the worst-affected land?

Hon GERRY BROWNLEE: To date, of the 7,022 people who have received the Crown offer, 6,369 homeowners have signed a sale and purchase agreement with the Crown. The Canterbury Earthquake Recovery Authority has already settled 5,173 properties. This is a very positive and strong response.

Hon Lianne Dalziel: Will he allow people living in perfectly habitable houses in the residential red zone to remain there for a bit longer, given that their new properties will not be ready to move

into by the final settlement date of 30 April next year—one of the requests that was made in the open letter to the Prime Minister today?

Hon GERRY BROWNLEE: Given that to do that there would have to be maintenance of access and also infrastructure to those homes, it would need to be assessed on a case by case basis but I would have to say it is unlikely.

Hon Lianne Dalziel: I seek leave to table the open letter to the Prime Minister of New Zealand from the representatives of seven groups in Christchurch that rallied on Saturday.

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

Hon Lianne Dalziel: I seek leave to table three letters: one dated 1 November from me to the Minister for Canterbury Earthquake Recovery as a follow-up from the cross-party forum, where all parties raised concerns about those in the red zone who will not have properties ready to move into by 30 April; a reply from the Hon Gerry Brownlee on 19 November; and my subsequent plea to him to reconsider of 21 November.

Mr SPEAKER: Leave is sought to table those documents. Is there any objection? [Interruption] Order! Is there any objection? There is objection. There is objection.


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