Questions and Answers – Sept 15

Press Release – Office of the Clerk

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : What did he mean by his statement, we want Housing New Zealand to be doing the best job it can?
Questions to Ministers

Housing New Zealand Corporation—Prime Minister’s Statements

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister : What did he mean by his statement, “we want Housing New Zealand to be doing the best job it can”?

Rt Hon JOHN KEY (Prime Minister): I meant that we want Housing New Zealand to be doing the best job it can. I went on to say that Housing New Zealand “will continue to be by far the biggest provider of social housing in New Zealand. But the experience of countries like Australia and the United Kingdom is that having non-government organisations involved in social housing, alongside the Government, is a better way of doing things.” That is why the Government is trying to get community housing providers involved in running social housing and not leaving it all up to Housing New Zealand.

Andrew Little : Does it help Housing New Zealand to do the best it can when he is already taking $118 million out of Housing New Zealand, and is he planning on taking any more out this financial year?

Rt Hon JOHN KEY : If the member is talking about the dividends that are paid, then under the Crown Entities Act all surpluses have to be returned to the Government. That is the law. We have never requested more than that. That has been in the order of, in recent times, about $100 million off an asset base of $20 billion. Last year alone we spent $398 million on maintenance and upgrades—40 percent more than the highest year under Labour.

Andrew Little : In light of that answer, why does Housing New Zealand’s statement of performance expectations show the Government taking another $336 million out in this financial year than capital contributions to the Crown?

Rt Hon JOHN KEY : The member would need to direct that to the Minister responsible for HNZC.

Andrew Little : Given that Housing New Zealand is reducing its planned maintenance due to budget constraints, why is he taking a total of $454 million out of Housing New Zealand this year?

Rt Hon JOHN KEY : I do not believe that Housing New Zealand has budget constraints.

Andrew Little : Why does he continue to use Housing New Zealand as a cash cow, while refusing to fix homes that are killing New Zealand children?

Rt Hon JOHN KEY : It is a very interesting cash cow—one that you give more cash to than you take off.

Andrew Little : Is not this the truth: his Government is asset stripping Housing New Zealand to the tune of $454 million, while Kiwi children are dying in cold, damp State houses?

Rt Hon JOHN KEY : That is far from being the truth. The reality is that under this Government we have tidied up the abysmal state that we found Housing New Zealand in. I know that members over there are looking down. They are hanging their heads in shame at how little they did. We have spent $30 million on providing heating in about 10,000 properties. We have installed thermal curtains in 18,000 homes since February 2013. We have retrofitted insulation to 53,400 homes. We have spent more on maintenance, 40 percent more, than the absolute highest point ever under Labour.

Andrew Little : If State housing is a priority for him and his Government, why are there over 3,000 families on the waiting list; children dying in cold, damp homes; and a shortage of State houses?

Rt Hon JOHN KEY : That is the very point about why the Government is expanding income-related rents, not just to Housing New Zealand homes. Actually, the social housing sector can provide stock that can be used to help those people in need.

Hon Trevor Mallard : If Housing New Zealand is going so well, why did one of my constituents have to ring Housing New Zealand seven times over a period of 6 months after their contractor left a hole in the ceiling and the roof, so that all the hot air was leaving, her children got sick—

Mr SPEAKER : Order! The member will resume his seat. The question has been asked. It does not need to be that long.

Rt Hon JOHN KEY : The member knows that he needs to direct those specific questions to the Minister. I do not have that information; I am not responsible for that. But what I can say is that any issues that might be there under Housing New Zealand now are far fewer than they were when that member was a Minister in Government.


2. Dr PARMJEET PARMAR (National) to the Minister of Finance : How is the Government’s programme of economic reform supporting the resilience of the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): It is certainly not to declare a crisis and panic when dairy prices fall. The Government’s approach is to support the resilience of the economy through responsible fiscal management, a floating exchange rate, sustained investment in infrastructure and education, and supporting diversification and investment in research and development through the Business Growth Agenda. As a result of this programme, we are seeing higher household savings, more moderate borrowing growth, a smaller current account deficit, and improvement in New Zealand’s net liabilities offshore, all of which improve the resilience of this economy to external shocks.

Dr Parmjeet Parmar : How does our economic resilience compare internationally?

Hon BILL ENGLISH : It compares pretty well, provided we stick to the policy that delivers the following four factors: a broadly balanced Government budget, net debt less than 40 percent of GDP, economic growth greater than 1.5 percent, and interest rates high enough to reduce them. New Zealand meets all of these criteria, and only four other OECD countries do. So by this measure we have a pretty resilient economy compared with most developed countries.

Dr Parmjeet Parmar : What recent report has he received showing growth in the New Zealand economy, despite recent falls in dairy prices?

Hon BILL ENGLISH : Reports show continued expansion of manufacturing and services, which together make up three-quarters of the New Zealand economy. The BNZ-Business New Zealand Performance of Manufacturing Index showed the sector expanded in August, the 35th straight month of expansion since the Labour Party called the manufacturing crisis. The BNZ-Business New Zealand Performance of Services Index showed that services, which make up two-thirds of the economy, are growing at their fastest rate in over a year. So these are positive indications that, outside of the dairy sector, the economy is growing moderately.

Chris Hipkins : I raise a point of order, Mr Speaker. I want to draw your attention to Speaker’s ruling 197/5, which you have also referred to in the past, about Ministers not bringing a political party into an answer where they have not been involved in the questioning. You indicated at the beginning of question time today that you intend to set a higher bar for questions and for answers, and so I want to get some reassurance from you that you are also going to be enforcing that Speaker’s ruling, because repeatedly throughout his answers today the Minister of Finance has been referring to policies of the Labour Party—and, we could argue, misleadingly—and if that is going to be the nature of the debate, then I think your higher standards are going to be difficult to enforce.

Mr SPEAKER : I certainly had not picked up any drawing in—I may have missed it, but I had not realised that the Minister was continually bringing in an Opposition party through those answers. I thought the answers were reasonable, but I will certainly keep a more vigilant watch in the future.

Dr Parmjeet Parmar : What options does the Government have to support the economy, should economic growth end up being lower than expected?

Hon BILL ENGLISH : The Government continually updates its plans, depending on changing circumstances. In the past, we have increased spending and supported New Zealand families through the global financial crisis and the Christchurch earthquakes, and then tightened our belts when times were better to get back into a position where we could deal with further shocks to the economy. At the moment, growth is around 2 to 2.5 percent, and we do not believe the kinds of measures we pursued after the global financial crisis are currently warranted. But, of course, if significant global risks eventuate, then we may have to consider them.

Prime Minister—Statements

3. FLETCHER TABUTEAU (NZ First) to the Prime Minister : Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Fletcher Tabuteau : Why did his Government reject an invitation from Silver Fern Farms within the past year to discuss potential investment?

Rt Hon JOHN KEY : I do not have any details of where that invitation was sent. The member needs to direct the question to the Minister who received it.

Fletcher Tabuteau : Can he not see the irony of taxpayers forking out $145 million to the Chinese-led Asian Infrastructure Investment Bank while a Chinese State-owned enterprise seeks control of our largest beef exporter and our second-largest export industry?

Rt Hon JOHN KEY : New Zealand has made a capital contribution to the Asian Infrastructure Investment Bank, like we do to the World Bank and others—it is on call—and, actually, it can be used for projects around the region that New Zealand companies may well be involved in. [Interruption]

Mr SPEAKER : That is the sort of interjection I was talking about earlier. If the member on my right-hand side wants to be going early, I can assist.

Richard Prosser : What material difference in circumstances supports his statement “it’s not really a matter for the Government” in relation to taxpayer support for Silver Fern Farms, as opposed to his Government’s corporate welfare given to overseas-owned MediaWorks, which received a $49.8 million taxpayer loan, which, the Minister Amy Adams said, “took the financial pressure”—

Mr SPEAKER : Again, that question is too long. The member needs to refine it. The Prime Minister can answer.

Rt Hon JOHN KEY : Firstly, Silver Fern Farms is not asking the Government for money. It is in the process of looking to, obviously, raise more capital, and one of the interested parties clearly has been a Chinese entity. In relation to MediaWorks, I happen to remember that some time ago that was done to a range of entities. It was to allow them during the global financial crisis, for all of those licence holders, to basically pay, over time, their licences at above commercial rates, and the Government actually made money on the deal.

Richard Prosser : What material difference in circumstances supports his statement “it’s not really a matter for the Government” in relation to taxpayers’ support for Silver Fern Farms, as opposed to what some commentators have described as his Government’s treasonous $12 million bribe to a Saudi billionaire to support a farm we do not even own?

Rt Hon JOHN KEY : In the first instance, as I said earlier, when it comes to Silver Fern Farms, it is not asking the Government for money. When it comes to the agribusiness hub in Saudi Arabia, we see that as an opportunity, actually, to potentially strengthen and further opportunities for New Zealand companies in the very big market of the Middle East.

Fletcher Tabuteau : I seek leave to table a written answer received only today confirming that Mr English declined an invitation from Silver Fern—

Mr SPEAKER : Order! Can I just clarify that when the member says he has received it today, is the member saying it has not yet been published?

Fletcher Tabuteau : That is correct.

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

Unemployment—Rate Forecast

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance : Does he agree with the forecast of the Reserve Bank that unemployment will rise to 6.1 percent by March next year; if so what new action, if any, will he take to avoid this happening?

Hon BILL ENGLISH (Minister of Finance): The Reserve Bank is independent. It is not a matter of whether I agree or disagree with its forecasts; those are its forecasts. By way of example of the Government’s action to improve employment, today we released an update of the export markets work stream of the Business Growth Agenda, the latest step in a programme of reform designed to support businesses to invest another dollar and hire another person and to back that up with confidence in the stability and credibility of the Government’s leadership on the economy. The effects of this have been to see 69,000 more jobs in the last year and the average wage now $10,000 higher than in 2008.

Grant Robertson : Does he still stand by his statement in the Budget that unemployment will fall below 5 percent in 2016?

Hon BILL ENGLISH : That now looks unlikely because the economy is a bit softer since then, mainly because of the substantial drop in the terms of trade, so it would not make sense to stand by forecasts that were made in different circumstances.

Grant Robertson : In light of that answer, then, is it acceptable to him that there are now 13,000 more people unemployed than in September last year, when he was re-elected?

Hon BILL ENGLISH : Of course it is undesirable—there is no doubt about that. The Government, starting 4 years ago on welfare reform and following through to the investment approach we are now applying, has probably a more sophisticated approach to the non-working population and Government support for it than any previous New Zealand Government. The member could do well to study that policy, because it is a worthwhile one for the Labour Party to adopt.

Grant Robertson : Is he comfortable that under the Reserve Bank scenario more than 150,000 people will be unemployed, and is this not a sign that he should adopt some new policies to deal with this?

Hon BILL ENGLISH : Of course we are uncomfortable with people being unemployed. It happens that New Zealand has one of the highest proportions of its working-age population available for work and in work of all developed countries. So we have proven to have very good job-producing capacity, but, of course, we do not think that that is enough. That is why, for instance, we are refreshing the Business Growth Agenda, which is an ongoing iterative process with the business community to build its confidence in investing in new jobs.

Grant Robertson : So the summary of his answers today is that he has no new plans to do anything to see unemployment get down to levels that he promised New Zealanders they would have?

Hon BILL ENGLISH : No, and I think the member would agree that that is a fairly lazy summary. In fact, some new plans have been issued today by the Minister for Economic Development, on top of any number of others issued in just the last couple of months.


5. JAMI-LEE ROSS (National—Botany) to the Minister for Economic Development : How is the Government helping New Zealand businesses to grow their exports?

Hon STEVEN JOYCE (Minister for Economic Development): This morning my colleagues Murray McCully, Tim Groser, and I launched the updated export markets work stream of the Business Growth Agenda. The report lays out an ambitious trade development programme over the next year, to strengthen existing relationships in China and the EU while also making the most of significant opportunities in South-east Asia and Latin America. As part of our trade strategy, we will be working closely with industry to develop a longer-term policy for other key and growing markets. The updated export markets work stream sets out an ambitious programme for further growth, not just in the economy generally but also in investment and, importantly, in jobs.

Jami-Lee Ross : What is the Government doing to strengthen our relationships with South-east Asia, China, the EU, and Latin America?

Hon STEVEN JOYCE : As part of the 40th anniversary of the ASEAN – New Zealand relationship, we are working hard on a new strengthened framework with South-east Asian nations to mark this milestone event and further raise our exports in this growing part of the world. In China we are working on an upgrade to our free-trade agreement. We are pursuing the launch of a free-trade agreement with the European Union, while also continuing negotiations on the multilateral Trans-Pacific Partnership and the ASEAN Regional Comprehensive Economic Partnership agreements. In Latin America we are developing a new partnership with the Pacific alliance countries, a trade block which consists of Mexico, Peru, Colombia, and Chile. As part of that commitment, Minister McCully announced that next year we will be opening a new embassy in Bogotá, the capital of Colombia, to grow our presence in South America and serve as a base for New Zealand Trade and Enterprise and Education New Zealand in that region.

Jami-Lee Ross : What other measures are contained in the updated report to help grow New Zealand’s exports?

Hon STEVEN JOYCE : The export markets update contains a total of 23 new projects. Alongside the ambitious trade strategy I have already mentioned, the report sets out the importance of maximising the benefits to exporters of existing trade agreements, like the new Korean free-trade agreement; developing the world’s most efficient and cost-effective border management system to support trade and people flows; to grow New Zealand Trade and Enterprise’s portfolio of companies; to grow international education and tourism further; and to develop and grow our international marketing brand. These are all designed to increase economic activity and job growth in the New Zealand economy.

Flag Referendum—Process

6. JAMES SHAW (Co-Leader—Green) to the Prime Minister : Does he stand by his statement made yesterday on the flag referendum that “I’ve been very strongly of the view I think it’s in New Zealand’s interests to change, and I, you know, I hope the political parties can see past the petty politics of that”?

Rt Hon JOHN KEY (Prime Minister): Yes, and can I commend the member on such a stylish tie.

James Shaw : Would he also say that it is in New Zealand’s interests to see past the petty politics that are preventing cross-party consensus on climate change?

Rt Hon JOHN KEY : The Government is always happy to have discussions about climate change but—

Andrew Little : Do you like his tie now? How’s the tie looking now?

Rt Hon JOHN KEY : Thank you. My wife bought it for me, and I quite like it too.

Mr SPEAKER : Order!

Rt Hon JOHN KEY : The Government is always happy to have discussions about climate change but we have over the years developed policies that we believe are in the right interests of New Zealand. We are going off to the 21st conference of the parties in Paris with those settings. But, you know, in reality, even if we had a discussion with the Green Party, we would never reach anywhere near its level of ambition because that is at the very outer edge of what I think most people would find acceptable.

James Shaw : What is his response to Treasury advice from October last year that calls for greater policy certainty around climate change and says: “Probably the most significant [step] would be to secure a greater degree of political party consensus about climate targets and ETS settings.”?

Rt Hon JOHN KEY : I do not recall that specific bit of Treasury advice but I would just caution the member about having Treasury as his poster child, because let me assure you that Treasury’s advice to the Government as I best recall was to have a far less aggressive target than the one the Government actually set. It pointed out that the per capita cost to New Zealand was significantly greater than other countries, and from memory, at one point I think it was at least suggesting that New Zealand’s target should not be a reduction but should be an increase of the 1990 rate.

Hon Simon Bridges : Treasury poster boy.

James Shaw : I think he does a disservice to Treasury.

Mr SPEAKER : Order! I know that it was a response to an interjection on my right. It would be helpful if the member would now just ask his question.

James Shaw : I seek leave to table an Official Information Act request from Treasury received by my office yesterday with official advice on important decisions on climate change.

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

James Shaw : Would he agree with Waikato University management school’s 2013 business survey which found that: “Lack of Government leadership has seen companies stop measuring their carbon footprint or put their carbon strategies on hold.”, and is it not now time for this Parliament to show this climate leadership?

Rt Hon JOHN KEY : No.

James Shaw : Why has the Government chosen to act unilaterally when it comes to setting climate change policy targets, rather than build a cross-party consensus like David Cameron’s Conservative Government in the United Kingdom?

Rt Hon JOHN KEY : I have not looked at the process that David Cameron has gone through in the UK but in terms of the Government’s position, as the member will accept, there are a wide range of implications as a result of the climate change target that is set. We believe we have set that in broadly the right place. We are going off to Paris, and we will see what happens as a result of those negotiations.

James Shaw : If, as the Treasury advice says, the business community itself has called for political party consensus, why does he insist on playing petty politics with climate change?

Rt Hon JOHN KEY : Firstly, I am not sure that they have, and, secondly, I think the member confuses a consensus in consultation with agreement. I can assure you that if the member wants to see the Treasury advice, I am sure that somewhere along the line it can be dragged out of the files, but the Treasury advice, as I best recall it, was to do significantly less than the proposal that the Government is taking to Paris.

James Shaw : Why does he believe that it is important to get cross-party support for changing the flag but it is unnecessary for climate change? Where is the statesman in you, Mr Key, when it comes to the climate?

Rt Hon JOHN KEY : Well, look, here is an old-fashioned thing: we went to the election with a set of policies and, as the Government, we carry them out. We are just calling out political parties that went to the Government with the same policy and now cannot work out what they want to do other than play petty politics.

Andrew Little : Supplementary question, Mr Speaker. [Interruption]

Mr SPEAKER : Order! Mr Brownlee’s memory might be shorter than mine.

Andrew Little : Will he accept my offer, made publicly, to meet to discuss ways in which he and I and the rest of this Parliament can restore public confidence in the flag referendum process in order to achieve a result that he wants and that many New Zealanders would also like to see?

Rt Hon JOHN KEY : I am more than happy to meet with the member, but the point I would be making publicly is the same point I would make to him now, and that is that I am not going to agree to a yes or no referendum—this Parliament voted that down. But most important, actually, is there are now, I think, a couple of million New Zealand voters who are quite interested in this process and are interested in potentially weighing up the options. But if they want to decide that they want to change the flag, they ultimately need to know firstly what they are going to and, secondly, in reality, we accepted the best advice we could get from the officials, which was that unless you have a contender against the current New Zealand flag, you are very unlikely to get 50 percent or more of the people involved. The whole way through, actually, we have gone through a consultative process. If the member wants to do that, we are more than happy to have the discussion.

Prime Minister—Statements

7. RON MARK (Deputy Leader—NZ First) to the Prime Minister : Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Ron Mark : Does he stand by his statement yesterday: “There was a process and that Red Peak, like all the other flags, went through that process. I’m not the head of the committee.”; if so, why is he now considering a fifth design?

Rt Hon JOHN KEY : In answer to the first part of the question, the answer is yes. In answer to the last part of the question, in an act of conciliation, and the like, I have tried to say to the Labour Party that if it wants to actually honour its election pledge, and actually go out there and back a fair and even process—in other words, man up to the words that it went—

Mr SPEAKER : Order! The question has been answered.

Ron Mark : What has persuaded him to corrupt the process that his Government passed into legislation in this House?

Rt Hon JOHN KEY : Absolutely nothing. But I am known as a person who is reasonable and fair, and if the Labour Party wants to come around and have a nice cup of tea and talk about how there could be a fifth flag on the ballot paper, and then run a fair, reasonable process—because its members privately go out, I am sure, and tell people, that they want a change of flag—then I am happy to do it.

Ron Mark : Does he consider the Red Peak design his saviour for his failed flag change project?

Rt Hon JOHN KEY : I think the process that we are going through of considering whether the New Zealand flag should change is actually a good one. I think it is an issue about national identity and national pride and about whether we as a young, multicultural country at the bottom of the world want to demonstrate to the world that we can have a new, iconic flag that represents who we are. You know, I understand that some political parties take a different view on these matters.

Ron Mark : On a different statement, does he stand by the statement he made in the House when he announced the deployment of troops to Iraq that “The deployment will be reviewed after 9 months and will be for a maximum 2-year period.”; if so, can he tell the House why, after less than 5 months, he is now considering deploying an extra platoon of infantry to Iraq?

Mr SPEAKER : Either of those two supplementary questions, the right honourable Prime Minister.

Rt Hon JOHN KEY : I have no knowledge of that at all. We made a commitment that we would have around about 150 people, or slightly fewer than that, in Iraq, and, as I understand it, that number is going to be consistently maintained.

Economy, South Island—Reports

8. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development : What concerns, if any, does he have about the state of the South Island economy, given the ANZ Regional Trends report shows that it shrank by 0.8 percent in the June quarter?

Hon STEVEN JOYCE (Minister for Economic Development): The ANZ report does not, in fact, measure economic growth, but ANZ’s own composite mix of confidence measures and a selected range of other indicators. Therefore, the ANZ report cannot determine either positive or negative growth. Secondly, it is important that even in the measure of ANZ that particular quarter was a negative one, but prior to that it has been very strong. Most interestingly, he highlights the South Island economy, when by most measures the South Island economy has been seen to be very strong. For example, unemployment at the end of the June quarter in the South Island economy was just 3.9 percent. So I do not have the sorts of concerns that Mr Clark is suggesting I have, but, of course, we are always continuing to work and improve in all regional economies.

Dr David Clark : Will the South Island enter recession in the September quarter? [Interruption]

Mr SPEAKER : Order! I did not catch that. I will ask the member to start again, and could I ask for less interjection from my right-hand side.

Dr David Clark : Will the South Island enter recession in the September quarter?

Hon STEVEN JOYCE : The measure that the member uses for the June quarter is not an economic growth measure, so, by definition, if he is using that series it cannot help him determine either growth or a recession. But I would note that the South Island economy has been particularly strong. For example, in the BNZ – BusinessNZ Performance of Manufacturing Index, out just last week—

Dr David Clark : Point of order.

Hon STEVEN JOYCE : —the Canterbury region, which includes Nelson, Marlborough, and the West Coast—

Mr SPEAKER : Order! I apologise to the Minister; I have a point of order.

Dr David Clark : I raise a point of order, Mr Speaker. It was an incredibly straight question—I do not think they come much straighter than that—and the Minister has not addressed it and is—

Mr SPEAKER : Order! The member needs to be a bit more familiar with Speakers’ rulings. He is hoping for a yes or no answer to his question—

Dr David Clark : Or an “I don’t know”.

Mr SPEAKER : Or “I do not know”. He has got no right to demand those three options. I think the Minister was making a genuine attempt to give an answer, and if the Minister wishes to continue he can.

Hon STEVEN JOYCE : In the performance of manufacturing index for August, for example, which is in the September quarter, the wider Canterbury region was at 54.6 and the Otago-Southland region was at 64.6. So that and the employment figures and a number of other indicators suggest that no, the South Island is not entering a recession.

Dr David Clark : Is it correct that there has been a 22 percent—[Interruption]

Mr SPEAKER : Order! That interchange between both front benches is exactly what I am talking about. I made a fairly definitive ruling. If it needs to be reinforced I can do so by asking members to leave the Chamber. I hope it does not get to that.

Chris Hipkins : Point of order.

Mr SPEAKER : Point of order, Dr—Chris Hipkins.

Chris Hipkins : I raise a point of order, Mr Speaker. Not quite yet, Mr Speaker—maybe one day. The issue that I wanted to raise with you is where Ministers begin answers basically saying they do not have the information or they perhaps cannot give a full answer to the question, and then say “But what I can say is”—or words to that effect—and go on to address a whole lot of other issues, or pick off a relevant topic but not one that actually addresses the question.

Mr SPEAKER : Order! The point of order?

Chris Hipkins : And so therefore the point of order is, consistent with your earlier ruling today, that I am sure you would rule those to be out of order in the way that you have been much stricter on questions, as well.

Hon Gerry Brownlee : Speaking to the point of order—

Mr SPEAKER : No, I do not need any assistance on this one. If the member had listened, or goes back and reviews Hansard, as I would suggest, the question was: will the South Island enter a recession? It was interrupted by the questioner himself, but if the member would go back and listen, particularly to the latter part of the answer, the Minister said he did not think the South Island would enter a recession. He cannot be more direct than that in answering a question. I think the member should be actually congratulating the Minister on this occasion.

Dr David Clark : Is it correct that there has been a 22 percent increase in South Island unemployment in the past year?

Hon STEVEN JOYCE : I do not have the member’s numbers to hand, but I can tell him that as at the end of June this year unemployment in the South Island was 3.9 percent, which is low unemployment by anybody’s reckoning right across the OECD.

Dr David Clark : Is it correct that employment in Canterbury fell by 5,000 people in the last quarter alone?

Hon STEVEN JOYCE : Again, I do not have that figure to hand but I can tell the member that Canterbury unemployment is the lowest in the country, at 3.3 percent in June of this year. If the member is looking for a challenge I suggest he look somewhere else.

Dr David Clark : Apart from being a family member of a senior Earthquake Commission executive, how are young people in the South Island meant to find jobs when unemployment is rising and the economy is slipping into recession?

Hon STEVEN JOYCE : Ignoring the first part of the question, unemployment in the South Island is 3.9 percent. In Canterbury it is 3.3 percent. Those are some of the lowest numbers on record. The member may try to seek a crisis out of those numbers but actually he truly needs to go away and think up a new target. Mind you, if he wants to declare a crisis, I am sure the economy will roar away—

Mr SPEAKER : Order! I have heard enough.

Welfare—Sole Parents

9. STUART SMITH (National—Kaikōura) to the Minister for Social Development : What is the Government doing to support sole parents off benefits and into study?

Hon ANNE TOLLEY (Minister for Social Development): In July we aligned the accommodation supplement and the accommodation benefit. This means that sole parents who take up full-time study are now eligible to receive the same rate of accommodation support that they would on a main benefit. I am pleased to report that 598 applications have been approved in just the first 2 months and the majority of these students are now receiving between $60 and $225 per week, depending on their circumstances. Previously the maximum they could receive under the student support system was $60 a week.

Stuart Smith : What are the benefits of tertiary education for people on benefits?

Hon ANNE TOLLEY : Each year we see approximately 20,000 clients exit a benefit to take up full-time study. Research shows that those completing level 4 qualifications or above were between 9 and 19 percent more likely to get work within 5 years of starting their study. Beneficiaries who completed levels 1 to 3 qualifications were 5 percent more likely to be employed within that same period. We also know that on average beneficiaries with a tertiary qualification spend 6½ years less on a benefit. This Government is focused on providing a range of options to improve the employment prospects of young people in New Zealand.

Mt Eden Corrections Facility—Serco’s Management

10. DAVID CLENDON (Green) to the Minister of Corrections : How many Specific Deductions were issued to SERCO, and then withdrawn, since SERCO took over management of Mt Eden Corrections Facility; and what is the amount of each of those withdrawals?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Since Serco took over the management of Mt Eden Corrections Facility in 2011, I am advised that Corrections has issued a total of 55 performance notices to Serco. Seven have been withdrawn, and the total amount of the withdrawals is $275,000.

David Clendon : Does the Minister approve of Corrections’ decision to excuse the $100,000 fine that was imposed when Serco failed to take back razors that had been issued to inmates; if so, why?

Hon Peseta SAM LOTU-IIGA : That is not part of the fines that were actually withdrawn as part of the seven that I referred to in the primary answer.

David Clendon : I seek leave to table a reply to an Official Information Act request from Corrections, which shows a specific deduction to the tune of $100,000, withdrawn in the 2014-15 year around the issue of safety razors.

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

David Clendon : Given that at least 14 performance notices were issued in the 2014-15 year alone, why have none of these doubled as a final notice so that the contract with Serco can be terminated?

Hon Peseta SAM LOTU-IIGA : Those notices that have been issued are still subject to a reply. It would be imprudent at this point to issue any of those types of final notices while there is due process required in those circumstances.

David Clendon : Does the Minister still have confidence in Serco?

Hon Peseta SAM LOTU-IIGA : My confidence in Serco, as I have already said in this House, is dependent on the review that is currently taking place by the chief inspectorate into the incidents at Mt Eden prison.

Earthquake Commission—Home Repairs in Christchurch

11. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission : Can he confirm that, based on the MBIE survey findings, EQC expects to remediate one-third of homes with “jack and pack” repairs in Canterbury; if so, what will the costs to EQC be?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): No. Of the 69,000 homes in the repair programme, 3,600 had repairs completed that required specialist technical input, and 2,100 of these have now been identified as having the “jack and pack” repair method applied to them. Clearly, not all of these will be problematic, but all of them are being checked. Until these checks are made, a definitive number cannot be known, although the Earthquake Commission in some communications has taken, or made, a generous estimate. These repairs fall under Schedule 1 of the Building Act and do not require consents. The cost of further remediation is estimated at between $500 and $1,000 per property, but this will not, in most cases, come at a cost to the Crown.

Dr Megan Woods : Has he met with representatives from the building industry to discuss potential liability issues for those repairs?

Hon GERRY BROWNLEE : The liability for those repairs, as has been stated by the managing director of Fletcher Residential will fall, in the first instance, on the contractors who failed to do those repairs properly. So the $500 it might cost them to fix it or the up to $1,000 it may cost them to do the work properly, as they have already been paid for it, will be on them.

Dr Megan Woods : I raise a point of order, Mr Speaker. My question was has the Minister met—

Mr SPEAKER : I am going to invite the member to ask the question again.

Dr Megan Woods : Thank you. Has he met with representatives from the building industry to discuss potential liability issues for those repairs?

Hon GERRY BROWNLEE : I have most certainly met with Fletchers, which runs the programme. That is the appropriate level of engagement. What I have been assured of by both Fletchers and the Ministry of Business, Innovation and Employment is that these are at the lesser concerning end of any scale, and that where there is a failure of some kind it is expected that the repair would be somewhere between $500 and $1,000, and that will fall on the contractor who has failed to meet the standard in the first instance.

Dr Megan Woods : What deadline, if any, has he set for the completion of the reassessment and repair of those homes?

Hon GERRY BROWNLEE : The process—I think it is worth knowing—for the assessment of those 2,100 properties is that they will have some form of below-floor inspection and then a programme will be put together for the individual repair of those houses. I do not think it particularly useful to put an artificial date out there for when they could be completed. Deadlines, I have found in most things relating to the Canterbury earthquake recovery, have not worked well for the people who do want to ensure that they get a good job.

Dr Megan Woods : In light of foundation specialist Bevan Craig’s statement that this is the very diluted tip of a very big iceberg, is he concerned that a thousand more homeowners may be living in homes with other shoddy repair work?

Hon GERRY BROWNLEE : No, and I think it would be—

Denis O’Rourke : Should be.

Hon GERRY BROWNLEE : No, and I think it would be—well, some people live in two homes, of course, even though they are attached. [Interruption]

Mr SPEAKER : Wind it up.

Hon GERRY BROWNLEE : Well, you should not judge a house by its mailboxes—that is the thing. No, and I think it is inappropriate for the member to conflate two different types of damage that might have occurred to the house. So the issue that we are talking about, and I think she is talking about, is subfloor “jack and pack” as a method. I do not believe that the concerns that some are expressing are around foundation repairs.

Dr Megan Woods : When 30 percent of repairs are defective in one review, Cantabrians are increasingly expressing concern about the wider Earthquake Commission repair programme, and the allegations of nepotism at the Earthquake Commission are rife, what will it take for him to start taking this seriously and launch an independent inquiry?

Hon GERRY BROWNLEE : I have taken the issue of repairing houses in Canterbury seriously since 7 September, when we had the first meeting about those issues. There have been a large number of houses that are damaged. Many of them are over-cap, but 69,000 fall under the $100,000 repair cap set by the Earthquake Commission. I do not believe that the excitement that some want to generate about a small amount of failure to meet a compliance that might cost between $500 and $1,000 to fix if found to be defective is a reason for an inquiry of the nature that the member seeks.

Electricity Market—Smart Electricity Grid Development

12. SIMON O’CONNOR (National—Tāmaki) to the Minister of Energy and Resources : What recent reports has he received on smart electricity grid development in New Zealand?

Hon SIMON BRIDGES (Minister of Energy and Resources): I recently received the first year-end report from the Smart Grid Forum, which was established last year by the Government to help to understand and advance smart meter electricity development in New Zealand. It is a forum that brings together academics, industry, consumers, and officials. It found that the Government’s market-led approach relying on consumers and customers within a competitive market provides the necessary focus as well as the agility to help exploit smart grid technologies. The forum did recommend measures to help consumers understand and compare new technologies, and also a way to monitor and report on the risks of transitioning to a smarter grid. I will be looking at ways to implement those recommendations.

Simon O’Connor : What will be the focus of the Smart Grid Forum’s future work?

Hon SIMON BRIDGES : I have asked the forum to continue its work, and I have sought its views on two issues in particular: first, how New Zealand is progressing relative to other countries, and what might be done to accelerate developments, and, second, how smart grid developments might help to meet our emissions reduction targets. I want to thank the forum for its work to date, and I look forward to continuing working with it. There is no doubt that in the future our electricity system will look very different from how it looks today. New technologies are already giving consumers greater choice. We need to ensure that we capture the benefits of technological advantages in New Zealand.


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