Questions and Answers – July 29

Press Release – Office of the Clerk

1. JAMI-LEE ROSS (NationalBotany) to the Minister of Finance : How has the New Zealand economy been affected by recent international economic developments?Questions to Ministers

Economy—International Economic Developments

1. JAMI-LEE ROSS (National—Botany) to the Minister of Finance : How has the New Zealand economy been affected by recent international economic developments?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance : Tēnā koe, Mr Speaker. There are a range of international events that have an impact on our economy. Some of those are positive; some of those are negative. The best news on the international economy is the strength of the US, which is in the best shape it has been in for 7 years. Recent events in Europe and Asia could have implications for New Zealand, although Greece at least seems to have settled down for the time being. Of course, the international dairy price is now around 40 percent lower than it was at its recent peak in March, although this is offset somewhat by the recent fall in the exchange rate. For the dairy sector, times are turning out tougher—and perhaps for longer—than industry experts were forecasting earlier this year. A fall in prices of that magnitude on a sector that makes up around 20 percent of our exports will have flow-on effects to growth.

Jami-Lee Ross : How is the fall in the exchange rate affecting other sectors of the economy?

Hon STEVEN JOYCE : The exchange rate is now down around 25 percent against the US dollar compared with this time last year. That is supporting all exporters, not just dairy. Industries that were forced to become more efficient when the exchange rate was US88c are now, of course, more profitable with the exchange rate at US65c. The lower exchange rate will, for example, benefit the information and communications technology sector, which has been growing at the rate of 9 percent a year since 2008 and now contributes around 1.7 percent of GDP. Information and communications technology exports have grown at 14 percent a year over the last 6 years and now exceed $930 million. It will also help international education, which is worth $2.85 billion annually to New Zealand. The number of international students enrolled to study in New Zealand grew 13 percent last year, which is the highest level since 2004.

Jami-Lee Ross : What other factors are supporting solid, sustained economic growth?

Hon STEVEN JOYCE : The Reserve Bank recently cut interest rates to 3 percent, and there are widespread expectations that there will be further reductions. As well as, of course, helping businesses and families with their debt, the lower interest rates make it easier for businesses to borrow and finance expansion. We have a number of industries that are in expansion at the moment. The tourism industry, for example, is now worth 7 percent of GDP. More people are coming to New Zealand, staying longer, and spending more. Last year international visitor numbers increased by 7 percent to just under 3 million people, which is up 18 percent on 2008. Visitor spending increased by 13 percent to reach $7.45 billion. That is expected to further increase over the next few years.

Jami-Lee Ross : What else has the Reserve Bank had to say about the outlook for the New Zealand economy?

Hon STEVEN JOYCE : In a speech today the Governor of the Reserve Bank highlighted several factors that are supporting economic growth. These include the lower interest rates I mentioned, continued high levels of migration and labour force participation, ongoing growth in construction, and continued strength in the services sector. Indeed, the BNZ services index for June indicated solid growth in the services industry, and it makes up around two-thirds of our economy. In the speech the governor also set out the bank’s view that the economy is growing at around 2.5 percent per year. That is consistent with the sustainable growth rates this Government is expecting.

Chris Hipkins : I raise a point of order, Mr Speaker. I just have a quick question for you—

Mr SPEAKER : Order! No, it is not a question for me; it is a point of order.

Chris Hipkins : No, no, it is a question for you, Mr Speaker.

Mr SPEAKER : Order! The member started by saying he had a question for me. This is a time for the Opposition and members of Parliament to question Ministers. If the member has a point of order, I am only too happy to listen to it.

Chris Hipkins : I have a question of order for you, Mr Speaker. My question of order for you is whether, in light of the leeway given to the Minister in his answers, Opposition members will be given leeway today in the length of their questions.

Mr SPEAKER : That will depend on the circumstances at the time. I was expecting, perhaps, an Opposition question at that stage, but—

Grant Robertson : Well, why not?

Mr SPEAKER : Well, I did not get one, did I?

Grant Robertson : Only too happy to oblige, Mr Speaker. Does the Minister agree with Graeme Wheeler in his speech today that global dairy prices have some time more to go down, or does he agree with that other industry commentator John Key that they will “come right some time soon”?

Hon STEVEN JOYCE : I think a number of people, including the Reserve Bank Governor, have sought to estimate future dairy prices in recent times. One thing that is important to notice for the member though is that the New Zealand dollar has tracked reasonably closely to international dairy prices and that has had the effect of mitigating the lower dairy prices.

Grant Robertson : In light of his comments on the dairy industry, does he support the view of Tim Groser that the Government should sign the Trans-Pacific Partnership agreement only if there is “commercially meaningful access” for the dairy industry into other markets; if so, what would that entail?

Hon STEVEN JOYCE : The member is showing a certain amount of naivety if he suggests we negotiate a trade agreement from the floor of any Parliament, let alone this one. This Government will support the Trans-Pacific Partnership agreement if it brings net material benefit to this country, as every other trade deal has—every other trade deal has. Of course, that used to be the view of the New Zealand Labour Party.

Prime Minister—Trans-Pacific Partnership

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : Does he stand by his statement that “it is highly unlikely, actually, that the Government will have to pay any more through Pharmac. But on the basis that it had to pay a tiny bit more, the Government would fund that increase”?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement, which was, as the member outlines, ending with: “the Government would fund that increase because actually what would end up happening is that the Government would earn a lot more revenue through tax revenue.”

Andrew Little : Why does he say that patent extensions under the Trans-Pacific Partnership agreement will cost only a tiny bit more, given that Pharmac says that buying generics saves an additional $40 to $50 million dollars every year? Is that what he means by a tiny bit?

Rt Hon JOHN KEY : I am confident with Pharmac that the structure will remain in place if New Zealand becomes a signatory to the Trans-Pacific Partnership agreement, and also that for the most part it will be able to continue to buy generics. But on the basis that it ends up having to buy patented drugs for a little bit longer—you will accept that Pharmac has quite an aggressive stance in the way it negotiates. It is quite capable of negotiating even better deals potentially across a wide number of drugs, and I am not convinced it would actually pay a lot more. If it did pay a little bit more, then the Government would fund that and New Zealanders would pay the same amount.

Andrew Little : Has he heard of the cancer drug Glivic, which Pharmac used to spend $40 million a year on before it came off patent, reducing the cost to $2 million a year; and does he understand that if the Trans-Pacific Partnership agreement extends patents by 7 years, it would cost Pharmac an extra $84 million a year just for that one medicine?

Rt Hon JOHN KEY : Yes, and I have also heard of Herceptin, which this progressive Government in the end got Pharmac to fund. Actually, the way to get Pharmac to fund even more drugs is to have a wealthier economy, and therefore, if you are doing more economic activity and you are earning more, you have more to put into your health system. Show me a country around the world that has a First World health system but that does not have a First World economy.

Andrew Little : Can he guarantee that Pharmac will still be able to purchase lifesaving medicines that Kiwis need, like Glivic, when the cost of buying them increases by hundreds of millions of dollars; and, if so, what else is going to be cut from the health budget, which he has already underfunded by $1.7 billion to meet these new expenses?

Rt Hon JOHN KEY : Let us get a few facts right. The dodgy Labour numbers on health are about as accurate as the dodgy Labour names of Chinese buyers in Auckland. Secondly, it will not be hundreds of millions of dollars. There may be a very small cost increase, and if there is, the Government will fund that. Let us just test this for one second: is the Labour Party now telling us it would like to pull out of the New Zealand – China free-trade agreement, which has had massive impacts on the New Zealand economy? No, but somehow when they could do one with the United States, they think it is a bad idea.

Andrew Little : I seek leave to table a copy of the report from Infometrics from June this year confirming that the real cut in health spending to date has been—

Mr SPEAKER : Order! Before I put the leave, I just want to check with the member whether that document is freely available to members if they want it.

Andrew Little : No, it is not. It is not on the website.

Mr SPEAKER : I will accept the member’s word and put the leave. Leave is sought to table this Infometrics document. Is there any objection to it being tabled? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Andrew Little : Why would he sign a deal that restricts free trade and lifesaving medicines and, according to our negotiators, is not going to achieve free trade for our dairy exports?

Rt Hon JOHN KEY : What a load of nonsense! The Trans-Pacific Partnership started its negotiations under Helen Clark, who basically said that it would be a good thing for New Zealand if we could get a free-trade agreement. Phil Goff, when he was not wandering his way to Riyadh telling them porkies about our sheep deals—

Mr SPEAKER : Order! [Interruption] Order! I think I can anticipate the point of order. The member will stand and withdraw that comment.

Rt Hon JOHN KEY : OK, I withdraw, but—

Hon Members : And apologise.

Mr SPEAKER : Order! On this occasion I will decide that. The member will stand, withdraw, and apologise.

Rt Hon JOHN KEY : I have done it.

Mr SPEAKER : And apologised?

Rt Hon JOHN KEY : I apologise.

Mr SPEAKER : Thank you. [Interruption] Order! The House will now settle.

Andrew Little : Given that it is clear that the Trans-Pacific Partnership agreement will make medicine more expensive for New Zealand taxpayers, why cannot he just be straight with New Zealanders and tell us who will miss out, who will pay more, and what will be cut from the already ailing health sector?

Rt Hon JOHN KEY : It is not at all clear that it will make medicines more expensive, but in the event that it makes it slightly more expensive for Pharmac, the Government will fund that, because what is absolutely clear is it will create enormous benefits for New Zealand businesses. This is the chance to have a free-trade agreement with the United States and Japan. I will tell you what this feels like—the Labour position on The Hobbit. They opposed it and turned up at the premiere. It is just like the Skycity convention centre. They opposed it, but they turned up in the corporate box.

Health, Public—Threats

3. KEVIN HAGUE (Green) to the Minister of Health : What advice, if any, has he sought or received on threats to public health in New Zealand?

Hon Dr JONATHAN COLEMAN (Minister of Health): Tēnā koe, Mr Speaker. I have received a wide range of advice on threats to public health in New Zealand. This includes the Greens’ suggestion that health officials should consider homeopathy to treat the deadly Ebola virus.

Kevin Hague : Who will pay the extra cost of medicines arising out of the Trans-Pacific Partnership agreement, as the Prime Minister conceded yesterday? Will it be patients, other health services, or taxpayers?

Hon Dr JONATHAN COLEMAN : I think that the Prime Minister covered this very extensively in the previous question. The fact is that the public will not pay any more for their medicines. The prescription charge remains the same, and the key to all this is that the Trans-Pacific Partnership agreement is going to mean that we have got a wealthier, stronger economy, which means, actually, that we can afford a better health system all of the time. There might be a slight increase in patent extensions, but, as the Prime Minister has said, the Government will pay for that. In the end, the benefits of this deal vastly outweigh any details like that.

Kevin Hague : What advice has he given the Prime Minister and the Minister of Finance about the probable extra cost of medicines if the Trans-Pacific Partnership agreement were signed as currently drafted?

Hon Dr JONATHAN COLEMAN : The point is that you do not know what is in the agreement at the moment, and the fact is that we do not know exactly what might happen in terms of patent extensions, because it has not been signed. That is the key point.

Rt Hon John Key : Has the Minister seen any reports on the amount of funding going into health in Budget 2015, and does he think that we as a country would have more money or less money to put into health if we were no longer in a free-trade agreement with Australia, China, and many other countries?

Hon Dr JONATHAN COLEMAN : I have seen—well, it is more than a report; it is a fact—that we have got a record amount going into health: $15.9 billion. At the Budget, $400 million went in, and, actually, if we did not have free-trade agreements with all of those countries that the Prime Minister mentioned, we would be far weaker as an economy and we would not be able to afford the first-class health—[Interruption]

Mr SPEAKER : Order! I apologise to the Minister.

Chris Hipkins : I raise a point of order, Mr Speaker. Is it now in order to ask the Minister of Health questions about the implications of trade agreements?

Mr SPEAKER : Order! Can I suggest that the member have a good look at the question. The question also asked whether the Minister had seen any reports about more investment into health. That was the start of the question, and it is certainly in order to ask that of the Minister of Health.

Kevin Hague : Given the Minister’s confidence, will he now guarantee that he will not raid the rest of the health budget to pay for the extra costs that Pharmac would incur as a result of signing the Trans-Pacific Partnership agreement?

Hon Dr JONATHAN COLEMAN : It is not a case of raiding the health budget. We have put an average of $500 million of new money into the health budget every year. It is at record levels. But, more important than ever, we are delivering better services than ever. So the member has nothing to worry about.

Kevin Hague : What does he say to New Zealanders who will not have access to the latest cutting-edge medicines because their cost has risen beyond Pharmac’s reach—“Let them eat milk powder.”?

Hon Gerry Brownlee : I raise a point of order, Mr Speaker. I would observe that the Minister answered the questions, giving the other side a bit of a whipping, but a question like that cannot be a question about something—a Minister cannot be responsible for something that has not happened.

Mr SPEAKER : Order! No, the Speakers’ rulings are quite clear on this. A hypothetical question can be asked. It gives the Minister a very wide range in answering the question, as he will have on this occasion. The question was: what will he say to New Zealanders etc. when drugs potentially cost more? It is a very hypothetical question, but I am certainly not ruling it out of order.

Hon Dr JONATHAN COLEMAN : What I would say is that we have spent $800 million through Pharmac each year. We are providing more medicines than ever before. If the Greens were in power—do not forget that their co-leader Metiria Turei did not even realise that we had a free-trade agreement with Australia. So, I mean, on trade they have zero credibility.

Chris Hipkins : I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER : Order! [Interruption] Order! This is a point of order and it will be heard in silence.

Chris Hipkins : Thank you, Mr Speaker. Is it now in order for members raising points of order to give a commentary on how they think question time is going, before raising their point of order, as the Leader of the House did in his point of—

Mr SPEAKER : Order! The member is now getting to the stage where he is starting to trifle with the Speaker with his points of order. Any member can raise a point of order. That was a hypothetical question, and Mr Brownlee took the opportunity to question whether it was in order. I ruled that it was in order. It has since been answered.

Grant Robertson : I raise a point of order, Mr Speaker. The issue that I have with Mr Brownlee’s point of order was that it was introduced with a statement that was designed to create disorder in the House. When members on the Opposition benches have done similar things, you have threatened to throw them out. Why did you not do that for Mr Brownlee?

Mr SPEAKER : Because I did not perceive, for one minute, that it was raised in an effort to make disorder. Further supplementary questions? [Interruption] Order! I just want to give the member a very forewarning after yesterday. He is able to freely raise a point of order, but if it is in any way attempting to litigate what we have already ruled on, then I pre-warn the member that I will be dealing with it very, very severely.

Kevin Hague : Can the Minister guarantee that if New Zealand legislates or adopts policy to improve public health, we will not be subject to costly investor-State dispute settlement procedures?

Hon Dr JONATHAN COLEMAN : If you look at every trade agreement we have ever had, investor-State dispute settlement has been a part of that, and so have safeguards. It has never caused us a problem in the past, and that is exactly central to the Trans-Pacific Partnership.

Kevin Hague : Well, if the Government is not concerned about the chilling effect of investor-State dispute settlement on regulation to protect public health, will he now immediately proceed to pass the plain packaging bill through its remaining stages—a bill that his Government placed on ice because it was afraid of precisely such action—

Mr SPEAKER : Order! This is becoming a very long question. The essence of it can be answered. The Hon Dr Jonathan Coleman, in so far as there is ministerial responsibility.

Hon Dr JONATHAN COLEMAN : What I am really concerned about is the chilling effect of the Green Party’s nonsense on New Zealand’s long-term economic prospects.

Kevin Hague : I raise a point of order, Mr Speaker. It was a pretty straightforward question about a piece of legislation for which this Minister has responsibility. There was no political sting in it.

Hon Dr JONATHAN COLEMAN : Point of order!

Mr SPEAKER : No, I do not need any assistance.


Mr SPEAKER : I will hear the Minister, on this occasion.

Hon Dr JONATHAN COLEMAN : I do not actually have responsibility for that legislation. Sorry, the member has his facts wrong. It is actually the—

Mr SPEAKER : Order! And that could have been the way—[Interruption] Order! Mr Faafoi, I am on my feet and ruling on a point of order. The Minister could well have chosen to answer the question in that way. That might well have been more helpful. But the problem with the question is that it was a very long question and that it was also loaded with use of the word “chilling”. If the member could ask only short, sharp supplementary questions, then I can assist the member to get an answer addressing that question.

Schools, Auckland—Growth

4. Dr JIAN YANG (National) to the Associate Minister of Education : What investment is the Government making in Auckland schools to manage growth?

Hon NIKKI KAYE (Associate Minister of Education): Tēnā koe, Mr Speaker. Last week the Government confirmed that 51 schools will receive more than 230 new classrooms over the next 18 months to help meet increasing rolls in Auckland. Last August the Prime Minister and the Government announced it would invest $350 million over 4 years to get ahead of demand in our biggest city. Projections indicate there could be 100,000 school students in Auckland over the next 30 years. These new, modern classrooms are another example of our National-led Government investing in young people in Auckland.

Dr Jian Yang : What other work is under way to ensure appropriate schooling infrastructure in Auckland?

Hon NIKKI KAYE : As well as new classrooms, the $350 million accelerated growth funding announced in 2014 provides for nine new Auckland schools by 2018. Two of these have already been confirmed in Kūmeu and Scott Point. Additionally, eight major school redevelopments have been announced so far in Auckland, at The Gardens School, Bayfield School, Warkworth Primary School, Freemans Bay School, Sherwood School, Ellerslie School, Koru School, and Southern Cross Campus.

Prime Minister—Statements

5. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister : Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes, and just in case the member was up all night wondering what the answer was to yesterday’s question that I did not get to answer, the answer was yes as well then.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. What happened to the rule about not relitigating your rulings?

Mr SPEAKER : Strictly speaking, the member who raises the point of order is absolutely right. It would have been far more helpful to the order of the House if the Prime Minister had just answered the question without referring to any incident yesterday.

Rt Hon Winston Peters : I was right then, as well. [Interruption] Lighten up, chaps. Why, when he said in 2010, and these are his famous words, “I’d hate to see New Zealanders as tenants in their own country.”, has he then proceeded to remove, through policies and trade deals, all powers that this Parliament has to stop that very thing happening?

Rt Hon JOHN KEY : I am not entirely sure what the question is, but the answer is that it is nonsense what the member said.

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. Can I repeat the question?

Mr SPEAKER : In this case I think I have to allow it. If the Prime Minister had just, without referring to the question—[Interruption] Order! I am going to allow the member to repeat his question.

Rt Hon Winston Peters : Why, when he said in 2010 “I’d hate to see New Zealanders as tenants in their own country.”, has he then proceeded to remove, through policies and trade deals, all powers that this Parliament has to stop that very thing happening?

Rt Hon JOHN KEY : In answer to the first part of the question, because it is true; and in answer to the second part of the question, the member is talking nonsense.

Rt Hon Winston Peters : Is it not a fact that after the China free-trade agreement, and now the Korean free-trade agreement, this Parliament does not have any power to ban Chinese or Koreans from buying up Kiwi land and homes?

Rt Hon JOHN KEY : The advice I have had is that because Labour negotiated the most-favoured nation status in the China free-trade agreement, as a result of the Korean free-trade agreement, yes, the member is right—we would not be able to ban Koreans and ultimately Chinese nationals from buying residential property in New Zealand.

Mr SPEAKER : Order! I just need a—[Interruption] Order! [Interruption] Order! I am still on my feet trying to get some silence from my left.

Rt Hon Winston Peters : Has he not admitted already that one of the consequences of the Trans-Pacific Partnership agreement negotiations thus far will be that the power of Parliament to ban the sale of houses and land to non-residents in Trans-Pacific Partnership agreement nations will be completely and utterly extinguished?

Rt Hon JOHN KEY : I would not want to say that today, because the Trans-Pacific Partnership has not been concluded. There may be implications in terms of bans, but as the Government said, and as I said during the weekend, actually, we do not favour a ban on the sale of residential property or land. We think there are far better ways of addressing it. Actually, when one looks at the list of countries that actually have bans, it is very small, and the bans do not work. When you look at the countries that do not have extensive restrictions and that have policies similar to New Zealand’s, it is a very, very long list.

Rt Hon Winston Peters : Is he happy to go down in history as the leader who did his best to hand over the powers and rights of this Parliament to foreign Governments, and to put the “Welcome, foreign buyer” sign up for Kiwi land and homes?

Rt Hon JOHN KEY : Well, I think history will remember me for many things, I am sure, but not that. If the member really did have to wait 24 hours to ask that question—gosh, it must not have been much of a wait, really.

Rt Hon Winston Peters : Is it not a fact, Prime Minister, that the Government’s present public relations softening-up strategy is because as Prime Minister, on the Trans-Pacific Partnership agreement, he has utterly sold this country out?

Rt Hon JOHN KEY : No. Up until very recently, actually, both Labour and National could see the enormous benefits of having a free-trade agreement with the first and fourth-largest economies in the world. Both Labour and National could see that for our companies large and small around New Zealand, being able to compete in those very, very large and wealthy markets without our hands tied behind our backs would be an enormous success. Both Labour and National have seen over the history of time that free trade has massively advanced this country. The only parties that believe, from what we can see, in the Neanderthal policies that the member is promoting are New Zealand First and the Greens. And frankly, even though they hate each other, they deserve each other.

Mr SPEAKER : Question No. 6—

Rt Hon Winston Peters : I raise a point of order, Mr Speaker. This House will be, first of all, disorderly and brought into disrepute if a Prime Minister is allowed to get up and say that one party hates another party or its members. That surely is not parliamentary for a start—

Mr SPEAKER : Order! [Interruption] Order! The member has now had his say, but when I look at the question and the accusation that another party is selling out the country, it gives a fair amount of licence for the answer that has been given.


6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health : Has core Crown health expenditure kept up with health demographics and inflation growth since 2009/10?

Hon Dr JONATHAN COLEMAN (Minister of Health): Core Crown health expenditure has risen by $3.3 billion to a record $15.6 billion under this Government. In tight economic times this increase covers all demographics and most, but not all, inflationary pressures. Under this Government it is all about delivering results that matter for patients, rather than pouring money in with little to show for it, as happened between 1999 and 2008.

Hon Annette King : Is he saying that Treasury’s own figures from the Fiscal Strategy Model, which shows in Budget 2010 a real cut of $210 million; Budget 2013, which records a further cut of $120 million; Budget 2014, which records an additional cut of $210 million; and Budget 2015, which shows a total cut of $485 million, are all wrong and he is right?

Hon Dr JONATHAN COLEMAN : No. What I am saying is Mrs King is, again, deliberately mis—ah, yes—misrepresenting the true situation. Labour is all about—

Hon Trevor Mallard : I raise a point of order, Mr Speaker. It has long been ruled by Speakers that members are not allowed to accuse, in this House, members of deliberately misleading the House, as the member just did.

Mr SPEAKER : Order! The Minister then quickly corrected himself and said “deliberately misrepresenting” the House. I think that in this case it is effectively saying that the Minister is disputing the figures that were given. I do not see anything wrong with that, at all.

Hon Annette King : Well, in light of that answer, when will he stop denying Treasury’s own numbers on health demographics and inflation, which show that this Government has cut the health budget in real terms in four of its six Budgets and has created a cumulative shortfall of $1.7 billion, and that in this year real health spending will be almost half a billion dollars less than it was in 2009-10—figures that come from Infometrics, not from Labour or from me?

Hon Dr JONATHAN COLEMAN : The first thing is that Labour has a long history of commissioning reports that back up its own political arguments. The other thing is that we are putting in more money than ever—so $1.7 billion of new money over 4 years in the Budget. But, more important than that, we are focused on results and we are delivering the services that New Zealanders need. So there are more immunisations, more doctors, more operations, and more appointments. Frankly, it is a better health service than the Labour Government presided over.

Hon Annette King : What services have been cut or reduced as a result of the continual underfunding in four out of six Budgets since 2009?

Hon Dr JONATHAN COLEMAN : The issue is that you have constantly got to reprioritise funding in health to actually make sure it is delivering results. So my priority is changing models of care, getting more services out into the community, and keeping New Zealanders well for longer. I do not think that that Minister had any priority when she was in charge of health. [Interruption]

Mr SPEAKER : Order! Stand and ask the supplementary question.

Hon Annette King : Who is right: the Minister of Health, who has cut health spending in four out of the last six Budgets and says that there are no problems, or the over 1,000 health workers and patients who have written to me in just the past day telling us their stories of what his cuts mean to them—missing out on the health care that they need?

Hon Dr JONATHAN COLEMAN : The problem with this member is that she spends half her time looking for leaked documents and the other half making up numbers and statements. The fact is that we are delivering—

Hon Annette King : I raise a point of order, Mr Speaker. I take exception to the Minister’s saying that I make up the numbers.

Mr SPEAKER : Order! I am not about to intervene on this occasion.

Simon O’Connor : What reports has he received about Crown health expenditure?

Hon Dr JONATHAN COLEMAN : I have seen reports that under this Government Crown health expenditure has delivered 44,000 more elective operations, 50,000 more appointments, 5,000 more doctors and nurses, and faster cancer services, such that no one now needs to go to Australia. I have seen another report of a doubling of the health budget delivering 2,000 fewer operations, 6,000 fewer appointments, and jet-loads of patients flying to Australia for cancer treatment, and that happened when Mrs King was the Minister.

Electricity Market—Competition

7. BRETT HUDSON (National) to the Minister of Energy and Resources : What recent reports has he received on competition in the residential electricity market?

Hon SIMON BRIDGES (Minister of Energy and Resources): Yesterday the Electricity Authority released a review of the performance—

Hon Trevor Mallard : Pricing has gone up six times the rate of inflation.

Hon SIMON BRIDGES : —right, well, we will come to that—of the residential electricity market in 2014, which showed that the market is more competitive than ever. More than 385,000 consumers switched retailers, with average savings of more than $160 a year. Households were being supplied by one of 27 retail brands in 2014, a new high, and more and more New Zealanders are choosing to switch to small and medium sized retailers. As a group, these retailers grew by 23 percent last year. This is great news for consumers.

Brett Hudson : What impact is this increasing competition having on power prices?

Hon SIMON BRIDGES : Well, having heard some murmurings from the Opposition, I am glad to answer that very question. The latest CPI figures show 0 percent annual change in electricity prices paid by households. This is the lowest annual increase since 2001. This is evidence that enhanced retail competition is benefiting consumers. More electricity retailers and brands and innovative offerings and deals are making a real difference for Kiwi households. Of course, it remains essential that consumers continue to consider their electricity options and shop around for the best deal.

Brett Hudson : How are the regions benefiting from competition in the electricity market? [Interruption]

Hon SIMON BRIDGES : It is great to see all this interest. I look forward to some supplementary questions. All regions in New Zealand saw an increase in the number of retail brands on offer last year.

Rt Hon Winston Peters : Northland didn’t improve.

Hon SIMON BRIDGES : For example, Mr Peters, in Northland, which is the fastest-growing region in terms of new connections, it had the largest increase in available brands, with five entering the region in 2014. For most regions, switching remains strong. Gisborne had a big year with the highest switching activity, the highest increase in switching, and high savings available. An average—

Mr SPEAKER : Order! It is getting to the stage—now I am giving a warning to Dr Megan Woods. If we continue to hear that level of loud interjection, I will be asking her to leave the Chamber. Would the Minister want to complete his answer?

Hon SIMON BRIDGES : Only to say that I look forward to the supplementary questions.

Partnership Schools—Te Kura Hourua ki Whangaruru

8. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education : Does she stand by her Government’s commitment that if partnership schools don’t succeed “the Government will be just as quick to close them down as we have been to establish them”; if so, how much taxpayer money is expected to be received by the Whangaruru partnership school between 28 May 2015, the date the Ministry recommended the termination of its contract, and 1 January 2016?

Mr SPEAKER : My office has been advised this answer may be slightly longer than normal.

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes; the decision to allow Te Pūmanawa o te Wairua to continue operating was made in the best interests of the kids. These are not just any kids; these are some of the most vulnerable kids in our country, who face a bleak future if they are unable to gain educational qualifications. I want to give them every chance possible to do that. The Ministry of Education did not recommend termination of the school’s contract, but it did advise me, following the specialist audit, that the grounds for termination existed should I choose to do so. As I have already stated, to terminate in the middle of the school year would not be in the best interests of these kids. Te Pūmanawa o te Wairua will continue to operate under its contract and will therefore receive $412,000 per quarter. This is the money that would have been spent had these kids attended other schools. In addition, the kura may receive up to $129,000, following discussions with the Ministry of Education, which will allow for implementation of its remedial plan and to fund external expertise. Finally, the board of the school is very aware that I have reserved the right to terminate the agreement before the end of the year if I am not satisfied students are receiving the standard of education they deserve and need.

Chris Hipkins : Did she receive and read the report from the Ministry of Education dated 28 May 2015 that states: “We recommend that the Minister of Education … agree to issue, under clause 25 of the Agreement, the Sponsor with the attached notice proposing termination of its Partnership School Agreement;”; if so, how does she reconcile that with the comment that she just made, saying that she never received a recommendation to close the school?

Hon HEKIA PARATA : I did read that report, and the reason the member has it is that I made it publicly available. At the time that the ministry was writing that report, on 28 May, the ministry was concerned that those who were in charge of the school were resistant to the kinds of changes that were needed to ensure that these kids were given a better education. Since then, the board chair has been changed. Since then, they have accepted the appointment of a trustee with an education focus. Since then, there is an appointee who will deal with the business side of things. Since then, there is a new educational leader. Am I prepared to go further for these 39 kids in the hope that they might get a better education? Yes.

Chris Hipkins : So she did get a recommendation—

Mr SPEAKER : Order! Just ask the supplementary question.

Chris Hipkins : Did she receive advice from the Ministry of Education: “The Ministry considers that the performance failures are not capable of remedy.”; if so, what evidence did she rely upon when she made the decision to ignore that advice and keep the school open?

Hon HEKIA PARATA : Yes, and the answer—the very full one I just gave to the first supplementary question—explains why I chose to take a different course of action. At the time that advice was proffered, it was clear that the governance and management of the school were not delivering what was required for the kids. Now I am satisfied that with the new governance and the new educational leadership we will have more optimism that these young people will get educational qualifications. [Interruption] And your colleagues crowing beside you, who have seen Pasifika education go up under this Government because we have gone the extra leg, should be applauding that rather than crowing over there.

Chris Hipkins : If the well-being of the students in question are indeed the Minister’s primary concern, did she receive and read the advice from the Ministry of Education: “The Ministry already has measures in place to transition students attending the school to other schools.”; if so, why is she saying she needed to keep the school open in order to give those kids an education?

Hon HEKIA PARATA : Yes, I both received and read—and considered and deliberated and discussed—the report of 28 May, and I made the decision I made based on the answers I have already given in the previous two supplementary answers.

Chris Hipkins : Why should the public of New Zealand have any more confidence in her decision to ignore the advice from the Ministry of Education to close the school than they did in her decision to ignore the Ministry of Education’s advice not to open the school in the first place, given the litany of failure that has followed?

Hon HEKIA PARATA : I completely understand that the member cannot differentiate between advice given in one set of circumstances and advice given in another set of circumstances. But I think the public should have confidence that this Government has been prepared to go the extra mile for kids who are the most vulnerable. This has been demonstrated not just in the education sector but across our whole social sector approach. We are prepared to make bigger efforts, because we want these most vulnerable kids to get the best chance possible.

Chris Hipkins : Can she now guarantee that every taxpayer dollar the school has received as well as the $1 million more that they are expected to receive for the remainder of this year will be spent appropriately and for the benefit of students’ education?

Hon HEKIA PARATA : As with the other $10.8 billion in Vote Education that is entrusted to boards of trustees across the country, I cannot make guarantees of that nature, but I am confident that every school sets out to do the best that it possibly can, and I expect that of this school, and we will be monitoring it. [Interruption] We will be monitoring—what a sad sack those members are.


9. TODD MULLER (National—Bay of Plenty) to the Minister for Building and Housing : What further progress has the Government made to deliver on its policy of delivering more houses in areas of need?

Hon Dr NICK SMITH (Minister for Building and Housing): The Government has announced further special housing areas in Auckland, in Tauranga, and in Queenstown. These bring the national total to 118 with a capacity for 49,000 new homes. The new greenfield developments at Glenbrook and Drury are particularly significant, increasing the supply by over 1,800 homes. These are beyond the metropolitan urban limit and are possible only because of this Government’s legislation. Both these areas were recommended by the Auckland Council and refute the claim that no greenfield developments are still being progressed.

Todd Muller : What reports has he had on the level of building and construction activity?

Hon Dr NICK SMITH : Today I have released the National Construction Pipeline report, produced by the Building Research Association of New Zealand and Pacifecon. It forecasts the strongest sustained growth in building activity in 40 years, with $200 billion of work in residential, commercial, and infrastructure work over the next 6 years. It projects a peak in 2016-17 of $37 billion, which is 30 percent higher in real terms than the last peak in 2007 or the previous peak prior to that in 1997 by 85 percent.

Todd Muller : How does the National Construction Pipeline report in respect of Auckland housing compare with last year’s report?

Hon Dr NICK SMITH : This report projects the building of 80,000 homes in Auckland over the next 6 years. This compares with just 30,000 over the last 6 years and indicates a massive housing building boom in Auckland. The report is significantly more optimistic than last year’s report in showing a 26 percent increase in the projection of new houses to be built in the years through to 2020. It further confirms that the efforts of the Government and councils to grow supply are working.

Phil Twyford : What possible chance has he of reducing the shortage of houses in Auckland by 2017, as he promised the other day, when the current build rate is 5,000 a year short of what is needed to keep up with population and the Productivity Commission predicts a shortfall of 60,000 homes by 2020, up from 32,000 today?

Hon Dr NICK SMITH : I would firstly state the record, and that is that when Labour left office we were building only 300 houses a month in Auckland. We are now doing more than double that. But I would also bring the member’s attention to the report released today by the Building Research Association of New Zealand. Its projection for the number of houses to be built over the next 6 years is 80,000 homes in Auckland. That will be the largest number of homes built in any 6-year period in Auckland’s entire history.

Mt Eden Corrections Facility—Management

10. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections : Does he stand by his answer during Oral Question No. 9 yesterday that “No, I have not received any reports” which contradict the official account of the number of attackers in the Littleton serious assault case?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Tēnā koe. I stand by what I actually said in the House yesterday, which was that I had received no reports that contradict the press release of Ray Smith on 23 July. The press statement is backed up by the key interim findings of the chief inspectorate’s report, and, as I have said consistently, those matters are covered by a wide review into prisoner violence in Mt Eden Corrections Facility, which I announced on 19 July.

Kelvin Davis : So what reports on the incident has he received, and who was it who briefed him?

Hon Peseta SAM LOTU-IIGA : I received a report on the incident by my corrections staff. That was given to me in the last week.

Kelvin Davis : Is he aware that prisoner Littleton’s sister has released a tape in which Alex Littleton states: “There were three that were attacking me, and one was on the door. Serco know this. I told them all of this. They even wrote it all down. They’ve got all the names, too. I named all the people to them that actually did it.”?

Hon Peseta SAM LOTU-IIGA : I am not aware of that tape, but what I can say is that the statement by the chief executive was in regard to the allegation by that member of dropping. For the sake of clarification, and in the public interest, Mr Smith released key interim findings of that report: that Mr Littleton fell over the balustrade and was then attacked by one offender at Mt Eden prison. What I accept is that, sadly, Mr Littleton was attacked and he suffered injury.

Kelvin Davis : I seek leave to table an excerpt of the transcript of the tape recording between prisoner Littleton and his sister in which he makes this statement, recorded on Thursday, 23 July this year.

Mr SPEAKER : Order! The document has been described. I think that on this occasion I will put the leave, and it will be for the House to decide. Leave is sought to table this particular transcript. Is there any objection? There is none. It can be tabled. Document, by leave, laid on the Table of the House.

Kelvin Davis : Why has it taken him until this week to be briefed on this serious issue when it has been raised for months now?

Hon Peseta SAM LOTU-IIGA : I am not aware that it has been raised for months—[Interruption] Well, hang on—what I am aware of is that the member did write, in a letter of 10 March, but did not detail an offender’s name. However, as I said at the time to the member, the matter was subject to an investigation by a New Zealand inspector. I am happy to table the member’s letter.

Kelvin Davis : How is it that he seems always to be the last person to know about these issues? Does he care, or is he OK with sticking his head in the sand and letting corrections try to sort it all out by themselves?

Hon Peseta SAM LOTU-IIGA : I categorically reject that assertion.

Horticulture Industry—Growth

11. SARAH DOWIE (National—Invercargill) to the Minister for Primary Industries : What recent reports has he received on the growth of the New Zealand horticulture industry?

Hon NATHAN GUY (Minister for Primary Industries): Tēnā koe, Mr Speaker. A recent release by Statistics New Zealand shows that the annual value of fruit exports reached an all-time high of $2 billion in the year ended June 2015. This is an increase of 20 percent, or $330 million, compared with the previous year—fantastic news. I attended the Horticulture New Zealand conference in Rotorua last night, and I can confirm that the industry is, indeed, in good heart. By 2019 the Ministry for Primary Industries estimates that the export revenue for horticulture is expected to grow to around $4.5 billion, which works out to be around 16 percent growth over the next 4 years.

Sarah Dowie : What is the Government doing to support this growth of the horticulture industry?

Hon NATHAN GUY : Alongside an extensive programme of research and development, the Government is also supporting the horticulture industry through new and existing free-trade agreements. It is estimated that our horticulture export growers pay, on average, around $38,000 each year in tariffs to other countries. Our free-trade agreement with Korea will see 45 percent of tariffs removed for kiwifruit growers and also significant benefits in tariff reductions for buttercup squash growers. In the first year, our free-trade agreement with Chinese Taipei has seen big tariff reductions for apple, cherry, and kiwifruit exports.

Social Development, Minister—Statements

12. DARROCH BALL (NZ First) to the Minister for Social Development : Does she stand by all her statements?

Hon ANNE TOLLEY (Minister for Social Development): Tēnā koe, Mr Speaker. Yes, with the exception of one answer to a supplementary question asked by that member on Thursday, 23 July, which I corrected in the House yesterday.

Darroch Ball : When she stated in the House yesterday “I was making the point in the interview that I would be open to the private sector delivering some social services if it can be shown it delivers better results.”, was she including Serco as a possible private provider in that statement?

Hon ANNE TOLLEY : When I made that statement in the House yesterday I was making the point that this Government is open to working with a whole range of people if they are going to get better results for New Zealanders. In the interview, the interviewer raised with me Serco, which is a private provider, but I repeat again I have had no conversations with Serco.

Darroch Ball : In light of that answer, given Serco’s—

Hon Member : You weren’t even listening to the answer.

Darroch Ball : I heard enough.

Mr SPEAKER : Order! [Interruption] Order! I do not want interjection coming from my right-hand side, and would the member simply rise and ask the supplementary question.

Darroch Ball : In light of that answer, given Serco’s poor international record and the current corrections debacle, will she give her 100 percent guarantee that Serco will not be part of her privatisation plans for New Zealand’s social services; if not, why not?

Mr SPEAKER : The Hon Anne Tolley—either of those supplementary questions.

Hon ANNE TOLLEY : I have no plans to privatise social services in New Zealand.

Darroch Ball : Is it not true that with her dealings in the privatisation of corrections, and specifically with Serco in the past, it was her intention from the start to have Serco run child protection services in New Zealand; if not, what other companies have she actually spoken to in regard to her planned child protection contracts?

Mr SPEAKER : The Hon Anne Tolley—either of those two supplementary questions.

Hon ANNE TOLLEY : I repeat: I have not spoken to any private providers about providing child protection services. What I repeat in this House is that this Government is determined to get services for vulnerable children and families that actually work and change their lives. Unlike that member, we are focused on results, and whoever can deliver the results, those are the people whom we are willing to deal with.

Jan Logie : When the Minister said yesterday, regarding the possibility of offering Serco a social services contract “I think with any of them … actually the quality of the contract is the really important thing”, was she saying that the track record of an organisation is irrelevant?

Hon ANNE TOLLEY : I did not make that statement in the House; I actually made that when I was asked a question outside the House. The quality of the contract actually is absolutely important, in the sense of the fact that it has to be focused on delivery of results. For the providers it has to give long-term guarantees that if they meet those criteria they will continue to get the contract, and that is of huge import to our NGOs for the professional development of their staff. Of course, if things go wrong, then the Government, which is paying the bill, needs to be able to get in to see exactly how many clients that organisation is working with and how that organisation is working on the ground with those clients.

Mr SPEAKER : Order! The answer is going on for too long.

Jan Logie : I raise a point of order, Mr Speaker. Apart from the length of that—

Mr SPEAKER : Order! Just raise the point of order.

Jan Logie : —I listened very carefully and did not hear an answer about track record.

Mr SPEAKER : I listened to the answer as well and it addressed the question that was asked.

Jan Logie : Why has she not ruled out contracting Serco to provide social services for New Zealand children, considering its overseas track record of significant contract failure, falsification of hundreds of health records, the sexual abuse of women by guards in its UK prisons—

Mr SPEAKER : Order! Bring the question to conclusion.

Jan Logie : —and putting children in cages in Australia?

Hon ANNE TOLLEY : I repeat: I have had no discussions with Serco about providing services in the social sector.

Jan Logie : Will the Minister now rule out offering Serco any social service contract?

Hon ANNE TOLLEY : Should this Government decide to go out to the market with services that it wants provided to make a difference in the lives of vulnerable children and New Zealanders, we will examine very carefully all the offers we get and we will be focused on getting results for those families.

Jan Logie : I seek leave to table a photo of children held in detention—

Mr SPEAKER : No. Order! That is attempting to make a political point; it is not a valid point of order.


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