Questions to Ministers
Parity with Australia—Growth of Wage Gap
Hon PHIL GOFF (Leader of the Opposition) to the
Prime Minister: Why does he continue to deny that during his term as Prime Minister the wage gap between Australian and New Zealand workers has grown, when both the figures he tabled in the
House last week and the Parliamentary Library figures he referred to in his answer yesterday show that it has?
Hon GERRY BROWNLEE (Acting Prime Minister)
: Despite the claim made by the Leader of the Opposition, the Parliamentary Library figures the Prime Minster received and tabled yesterday show that between 2008 and 2009 and 2009 and 2010 the weekly wage gap between New Zealand and Australia, if measured in absolute dollars, increased slightly from $213 to $219 a week, and, if measured as a percentage gap, decreased slightly from 20 to 29 percent. The truth is that over the short term these sorts of comparisons are very sensitive to assumption and methodologies. This Government is happy to be judged on its longer-term record, which can only be better than the last Government’s record.
Hon Phil Goff: Can the Prime Minister tell us how the absolute dollar differs from the ordinary dollar that people spend in the shop each week when ordinary New Zealanders know they have fewer of them to pay for prices that are going up?
Hon GERRY BROWNLEE: The answer is not as difficult as the Leader of the Opposition might think. For example, at the moment inflation in Australia is currently running at over 3 percent—
Hon Phil Goff: I raise a point of order, Mr Speaker. I think you will recall that the question asked how the absolute dollar varies from the ordinary dollar.
Mr SPEAKER: If I recollect, the question asked how the Minister explained something—the difference between an absolute dollar and an ordinary dollar. The Minister has to have a little bit of licence in how he explains something.
Hon GERRY BROWNLEE: The Leader of the Opposition does not like it when his argument starts to be deconstructed. The reality is that in Australia at the moment inflation is running at over 3 percent, contrasted with New Zealand’s current inflation rate of about 1.8 percent. So although it might look like Australians are getting bigger wage increases, that is not necessarily the case. It simply once again shows how difficult it is to compare figures between our two countries. The reality is that the performance under the previous Labour Government was an utter shocker.
Hon Phil Goff: I raise a point of order, Mr Speaker. I listened patiently for the Prime Minister to explain how an absolute dollar differs from an ordinary dollar, but I do not think he made any reference to it.
Mr SPEAKER: I accept that that was the question asked and that the Minister was asked to explain the difference, and the Minister, in responding, talked about the impact of inflation on dollars. Certainly, inflation affects the value of dollars, and when one is talking about absolute or ordinary dollars inflation does have an impact. It was a reasonable answer to the question asked.
Hon David Parker: I raise a point of order, Mr Speaker. I know that the Speaker has ruled that we cannot seek leave to table New Zealand press statements, but am I correct that we can seek leave to table foreign newspaper statements?
Mr SPEAKER: Yes.
Hon David Parker: I seek leave to table the article from the
Sydney Morning Herald
entitled: “NZ wage gap with Australia widens”, which begins: “Australian workers are being paid even more than their Kiwi cousins since National became the government.” [Interruption]
Mr SPEAKER: I ask the honourable member to resume his seat. [Interruption] When the Speaker is on his feet there must not be that kind of interjection, and I will not repeat it because I do not want it to be on the record. All round there was far too much noise while I was considering the leave. Leave has been sought to table an article from the
Sydney Morning Herald. I think that is not readily available to all members, and I
put the question to the House. Leave is sought to table that document. Is there any objection? There is objection.
Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. I point out that the article concerned is a New Zealand Press Association document picked up by the Australian newspaper.
Mr SPEAKER: If a member seeking leave to table a document describes it wrongly, that is quite a serious matter, because it is a formal situation being put to the House for the House to make a decision. There are proper ways of dealing with that, but it is not by way of a point of order to allege something in the way the Leader of the House just did. He should not do that.
Hon Rodney Hide: My question—
Hon Darren Hughes: 2025.
Hon Rodney Hide: I hope that member is grown up by then.
Mr SPEAKER: The member will resume his seat.
Hon Phil Goff: How does the Prime Minister expect the wage gap with Australia to close when the figures just released show that 53 percent of all New Zealand wage and salary earners did not get any wage rise last year and when figures in the Budget show that inflation will be hitting 6 percent?
Hon GERRY BROWNLEE: I think the question that the Leader of the Opposition asks and the information he refers to is interesting, but it goes to the heart of the problem of trying to compare like with like. There is no such thing. I want to tell the member that it will be the initiatives in the Government’s Budget that will create growth; initiatives such as tax reforms, investment in infrastructure, the research and development package, reforms of the labour market, skills and education, cutting red tape and regulation, extra trade agreements, a reformed Resource Management Act, the International Growth Fund, and focused resources on the front line. All those programmes and all those efforts will lead to the growth that will see New Zealanders’ wages rise.
Hon Phil Goff: I raise a point of order, Mr Speaker. The question was straightforward. It asked how he expects the wage gap to close when 53 percent of workers in New Zealand did not get a wage rise last year. No effort was made to answer that question.
Mr SPEAKER: If that was exactly the question the member asked—and I must trust him on that—I invite the Hon Gerry Brownlee to focus on the question, because I do not believe there was a lot of extraneous matter in the question. I invite the honourable Leader of the Opposition to repeat his question so there can be no doubt.
Hon Phil Goff: How does the Prime Minister expect the wage gap with Australia to close when last year 53 percent of all New Zealand wage and salary earners did not get any pay rise at all?
Hon GERRY BROWNLEE: The point I make, again, is that the Government’s programme, which was well articulated in the Budget and has been well articulated by a range of Ministers since, is designed to see the economy growing, and it will give New Zealanders the confidence that this Government knows where it is going. They know that the previous Government did not know where it was going, and that is why it was kicked out of office.
Hon Rodney Hide: Has the wage gap between New Zealand and Australia ever blown out to over 30 percent; if so, in what years did that blowout occur?
Hon GERRY BROWNLEE: Yes, the wage gap between Australia and New Zealand was never as high as 30 percent until the year 2003-04. Using the same series of numbers that the Leader of the Opposition himself used in the House the other day—[Interruption]
Hon Rodney Hide: I raise a point of order, Mr Speaker. I asked a question. We cannot hear a thing.
Mr SPEAKER: I think the member makes a perfectly fair point. I realise that these matters are hotly debated, but the Hon Rodney Hide asked a fair question and he deserves to hear the answer, as does the House. I must say that even the Speaker was struggling to hear the answer. I ask members to be a little more reasonable.
Hon GERRY BROWNLEE: Using the same series of numbers that the Leader of the Opposition used in the House the other day, I say that the wage gap between Australia and New Zealand was never as high as 30 percent until the year 2003-04. Since then, it has been over 30 percent in 2004-05, 2005-06, 2006-07, and 2007-08. The wage gap peaked at 37 percent in 2005-06, and it is currently 29 percent.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. I ask that the Minister table the official statistical document from which he was just quoting.
Mr SPEAKER: I have to ask the honourable Minister whether he was quoting from an official document.
Hon GERRY BROWNLEE: The source document is from the New Zealand Parliamentary Library. It is available to all members of Parliament.
Mr SPEAKER: I think that library documents are not normally considered to be official documents.
Hon Phil Goff: What are the targets or milestones to achieve income parity with Australia by 2025, which his Minister for Economic Development told the House last week that he had?
Hon GERRY BROWNLEE: I understand that the Minister for Economic Development told the House last week that he was considering such matters.
Hon Phil Goff: I raise a point of order, Mr Speaker. I can, if necessary, table what the Minister for Economic Development said last week. I asked what the milestones were that the Minister said in the House last week that he had. That answer did not address that question.
Mr SPEAKER: If I recollect the Minister’s answer, last week he told the House that he would be considering the issue of milestones. In fact, if the member were to look at today’s question sheet, one of his own colleagues is asking the Minister for Economic Development how he has got on with his consideration. So I think there is some verification that that is, in fact, what the Minister said.
Hon Phil Goff: Further to the point order, Mr Speaker; in answer to the primary question to the Minister for Economic Development last week: “Does he have targets or milestones to achieve income parity with Australia by 2025?”, the answer very clearly was “Yes”. I am now asking the Prime Minister what those milestones were that his Minister for Economic Development referred to. I think that the Acting Prime Minister should know that.
Hon GERRY BROWNLEE: I invite the member to set that down as a question for the Minister for Economic Development. [Interruption]
Mr SPEAKER: I cannot hear members asking questions from the back of the House if we have loud interjections across the front of the Chamber. I ask members to respect that.
Hon Sir Roger Douglas: Why is it important that New Zealand lifts its economic performance, and does he believe that the Government is on track to achieve its concrete goal of closing the income gap with Australia by 2025; if so, why?
Hon GERRY BROWNLEE: Yes, it is important to lift New Zealand’s economic performance, because that is how we raise the living standards of New Zealanders, improve public services, and give people genuine opportunities and choices in their lives. In answer to the second part of the member’s question, yes, there is a considerable
gap between the incomes of New Zealanders and Australians now, but we think we have made good progress in starting to turn round the economy and taking steps to make it more competitive. I have well established today that the constant claims by the Labour members that the gap has got worse, by its own measure, is wrong. It is now 29 percent; it was 37 percent at one point under them.
Hon David Parker: Could the Minister please tell the House what were the two statistical series provided to him by the Parliamentary Library that he used in answer to the question from Mr Hide, being the statistical series for Australian wages and the statistical series for New Zealand wages?
Hon GERRY BROWNLEE: I do not have that information with me in the House.
Mr SPEAKER: The question asked from what series the Minister was reading. The Minister may care to answer further, but it seemed to me to be a different series altogether. Would the Minister care to confirm that, because he was asked which series it was. I invite the Minister to further answer.
Hon GERRY BROWNLEE: Thank you for your invitation, Mr Speaker, to answer further. I do not have the series in front of me. I have the analysis of those series, which is not uncommon when answering questions.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. The Acting Prime Minister recently told us that he was quoting from a document from the Parliamentary Library. If that was the case, the document will clearly state the series. They always do. They indicate the source of the statistics. Either the Acting Prime Minister was telling the truth this time—
Mr SPEAKER: The member will resume his seat; he will not make that kind of allegation. The Acting Prime Minister has told the House that the material he is quoting from is an analysis—a further analysis of those series—and that is where the matter stands. That is what the Acting Prime Minister has told the House, and that is where the matter now stands. Members can ask further questions about it to elucidate exactly what the analysis is, but they cannot question it by way of point of order.
Hon Phil Goff: Why did he tell the House yesterday that the employment rate in New Zealand is higher than in Australia when the statistics show that exactly the opposite is true?
Hon GERRY BROWNLEE: Because I believe that to be the case.
Hon Phil Goff: I seek leave to table the statistics I have just referred to, the source being the Australian Bureau of Statistics, June 2010, which shows the employment rate in Australia is higher than it is in New Zealand, in contradiction of the claim by the Prime Minister.
Mr SPEAKER: I am not sure how a document from the Australian Bureau of Statistics would show New Zealand unemployment.
Hon Phil Goff: The document is compiled from both the Australian Bureau of Statistics, June 2010, and the New Zealand household labour force survey—
Mr SPEAKER: So the source of the document is?
Hon Phil Goff: Those are the two sources of the document.
Mr SPEAKER: But the document—
Hon Phil Goff: The document I have is a compilation from the statistics that can be demonstrated from both of those sources.
Mr SPEAKER: Leave is being sought to table a document. I am trying to establish who put the document together.
Hon Phil Goff: The document was put together by my office from the series of statistics I mentioned. They can be verified.
Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection.
Hon Trevor Mallard: Was the document from which the Acting Prime Minister was quoting when replying to Mr Hide’s supplementary question a document from the Parliamentary Library or a document prepared in his office?
Hon GERRY BROWNLEE: As I made clear before, it was a document prepared in my office.
Hon Darren Hughes: I raise a point of order, Mr Speaker. In response to your earlier quizzing of the Acting Prime Minister about whether it was an official document and therefore required to be tabled in the House if the Minister used it during his answer, he said no, because it was from the Parliamentary Library. You said that that is not normally considered official advice and therefore could be accessed by any member. The Opposition has used more supplementary questions than we had intended today in direct response to you saying that if members are not happy with the answers they can probe with further questions. We are trying to elucidate from the Minister what series he has been using in his statistics. A Parliamentary Library document would show that; they always do—that is clear to all members who use the library. It would be available to members. If it is official advice he has had prepared in his office, that is not easily available to members, and that is what has to be tabled. Either way—
Mr SPEAKER: No, no—
Hon Darren Hughes:—the information should be—
Mr SPEAKER: Order!
Hon GERRY BROWNLEE: Mr Speaker—
Mr SPEAKER: I will hear the Hon Gerry Brownlee.
Hon GERRY BROWNLEE: The series available from the library and all the statistics available from the library are available online. What I have is analysis of that online information. There is one sheet here that the Prime Minister tabled yesterday, sourced to the Parliamentary Library. I am more than happy to table it today. It is condemning of the Opposition’s argument.
Mr SPEAKER: There will be no more of that. The Hon Darren Hughes is not really raising a valid point of order. Even if the document is prepared in the Minister’s office, the Minister is not required to table a document prepared to assist him in answering a question. A Minister is required to table only official documents from Government departments. The member seemed to be concerned that the Opposition may have had to waste supplementary questions in pursuing an issue, but I am not sure they were wasted.
Hon David Parker: I raise a point of order, Mr Speaker. I ask you to reflect on the issue as to whether an official document is no longer official because it comes from the Parliamentary Library. With respect, I suggest that if an official document such as a data series is obtained by a member from the Parliamentary Library, it is a normal way for that source to come forward. It really remains an official document whether it comes from the Parliamentary Library or direct from the Government department. I ask you to reflect on that.
Mr SPEAKER: No, I do not need to reflect for long on that. Official documents are official documents prepared by Government departments. The Parliamentary Library is not a Government department, and material that is prepared in Ministers’ offices to assist them with answers does not constitute an official document, either. I will hear the Hon David Parker further.
Hon David Parker: It seems to me that whether the data series is photocopied in the library, photocopied in a ministerial office, or photocopied in a Government department, it remains an official document. It is a data series that the House should have tabled if the Minister was relying upon it, and the way in which it is copied for the Minister seems to be a process issue rather than—
Mr SPEAKER: The matter is not to do with whether a document has been copied; the matter is to do with the source of the document. If the Parliamentary Library puts together a data series, it is not an official document because it has been put together by the Parliamentary Library. If the Ministry of Economic Development had put together a document for Cabinet and the Minister was quoting from that, it would have to be tabled. If the Department of the Prime Minister and Cabinet had put together a document for official purposes, that would have to be tabled. But documents prepared by the Parliamentary Library are not official documents. I will hear the Hon David Parker further, but not a lot further.
Hon David Parker: With respect, Mr Speaker, the difficulty arises from new technology, because the only way the library now presents these official statistics is by downloading them from the Statistics New Zealand website and providing them by email link to us. It is exactly the same as the old photocopy of a piece of paper that was the official statistic. So I suggest again, Mr Speaker, that perhaps you might reflect on that.
Mr SPEAKER: No. Statistics publications are available to all members. This provision for Ministers to have to table documents they are quoting from does not cover just ordinary statistics releases, because those are available to all members. So I see no issue here. There has been a longstanding requirement in the House, when Ministers are quoting from official documents, for those to be tabled. Having been a Minister for 9 years, I do not have any great difficulty in discerning what an official document is.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. This is a separate point of order, because I think that you and Mr Brownlee have invited us to get the particular document on which the Minister was relying from the Parliamentary Library. The problem that I would like to put to you, Mr Speaker—possibly more in your role as the chair of the Parliamentary Service Commission—is that it would be most inappropriate for the library to supply to us something that was supplied to another member and indicated that another member had asked for it. I think that it would be wrong for us to go to the library—fair enough, we can ask—but it would be very wrong for them to supply a document saying “This is the document on which the Minister was relying.” That is the problem we have in trying to chase this one down.
Mr SPEAKER: We are not going to take further time on this. It is quite clear to me as the Speaker that the document from which the Minister was quoting was not an official document. Therefore, there is no requirement on the Minister to table it. I accept that there might have been some confusion about the exact source of the document, but that is not a matter for a point of order. Members pursued that matter by way of supplementary questions and got some further information about that.
Telecommunications—Mobile Phone Termination Rates
PESETA SAM LOTU-IIGA (National—Maungakiekie) to the
Minister for Communications and Information Technology: What decision has he made regarding the regulation of mobile phone termination rates?
Hon STEVEN JOYCE (Minister for Communications and Information Technology)
: This morning I announced my decision to accept the Commerce Commission’s recommendation to regulate mobile termination rates. Under the Telecommunications Act I am required to make the decision that best promotes competition for the long-term benefit of users of telecommunications services. After extensive consultation and analysis of submissions, I believe that this decision will provide for more competition, leading to more choice and better prices for consumers.
Peseta Sam Lotu-Iiga: What do these changes mean for consumers?
Hon STEVEN JOYCE: The Commerce Commission will shortly begin its legislative process to set prices and other non-price terms that mobile carriers must offer. Once that has gone through, competition for consumers will be increased in the mobile marketplace, which will assist over time to achieve lower prices for consumers than would have occurred otherwise.
Clare Curran: Given his logical decision to regulate on mobile termination rates, what is the basis of his illogical decision to give a regulatory free pass to the coming new fibre network for 10 years?
Hon STEVEN JOYCE: I am not sure how that relates to the primary question.
Mr SPEAKER: Well, at least the primary question was included in the further question asked, but I accept that the further question asked went beyond the scope of the primary question. If the Minister does not have the information to answer it, it is perfectly reasonable to say that, because it did—
Hon Shane Jones: Cop out.
Mr SPEAKER: If the Minister does not have—
Hon Members: Welcome back, Shane.
Mr SPEAKER: I have no idea what happened then, and I apologise to the House for that. But I ask whether the Minister has the relevant information.
Hon STEVEN JOYCE: I think the reality is that mobile termination rates and ultra-fast broadband are not in the scope of the same question, but if the member would like to repeat the supplementary question, I would be happy to have a crack at an answer for it.
Mr SPEAKER: If the member wishes to repeat the question, she may, but I stress that it should be within the scope of the primary question.
Clare Curran: Given his logical decision to regulate on mobile termination rates, what is the basis of his illogical decision to give a regulatory free pass to the coming new fibre network for 10 years?
Mr SPEAKER: Having listened to the question again—and I gave it the benefit of the doubt first time round—I say that the member cannot include in her question a claim that some decision was illogical. That is outside the Standing Orders and, given that the subject matter is way beyond the primary question to do with mobile termination rates, I cannot expect the Minister to answer that.
Hon David Cunliffe: I raise a point of order, Mr Speaker. Quite often in this House members provide descriptions of policies or ministerial actions in questions that are not ruled out of order. I seek your guidance and submit to you that oftentimes words used by members of the Opposition are harsher than whether something is logical or illogical. In this case—
Mr SPEAKER: I do not need to hear this further. Had the question been absolutely within the scope of the primary question, I would not have objected; I would have let the Minister deal with it. But given that the subject matter of that part of the question was way outside the primary question, I felt that it went beyond what is reasonable, and that is why I have ruled it out.
Hon David Cunliffe: I raise a point of order, Mr Speaker. I am sorry to bother the Speaker further, but that goes precisely to the matter at issue that my colleague has asked about, which is whether the use of regulation, which the Minister has upheld in his—
Mr SPEAKER: No, the member will resume his seat. The member is now starting to debate the issue and he cannot do that by way of point of order. I have ruled the question out. It was clear from the way the Minister tried to answer the question that the question bore a very marginal relationship to the primary question asked. I invited the member to repeat the question to see whether she could bring it further within the scope
of the primary question. She did not. She repeated the part of the question that really is outside the Standing Orders, and that is why I have ruled it out.
Income Gap—Parity with Australia and Other Countries
Hon JIM ANDERTON (Leader—Progressive) to the
Prime Minister: Is the gap between our wages and wages in Australia and other parts of the world getting wider; if so, why is this occurring?
Hon GERRY BROWNLEE (Acting Prime Minister)
: The Government does not monitor wage movements around the world. However, we do monitor incomes using GDP per capita, and on that basis it is very clear that New Zealand has fallen behind many other developed countries. The last year for which we have consistent data is 2008, when New Zealand slipped from 20th to 22nd on the OECD ladder. This decline was in no small part due to mismanagement by the previous Government.
Hon Jim Anderton: Will the increase in GST in New Zealand, which will raise it to 50 percent higher than it is in Australia, make the wage gap with Australia narrower or wider?
Hon GERRY BROWNLEE: The after-tax wage gap between Australia and New Zealand after 1 October will be narrower.
Hon Jim Anderton: Will wages rise faster than prices this year?
Hon GERRY BROWNLEE: That question will best be answered in the light of history. It is the light of history that is so condemning of the economic policies that the member’s Government ran for 9 years.
Hon Jim Anderton: I raise a point of order, Mr Speaker. I think that is about—
Mr SPEAKER: Is this a point of order?
Hon Jim Anderton: Yes, it is. That is about the shortest question that I have ever asked in my whole history in this House—[Interruption]
Mr SPEAKER: A point of order is being considered.
Hon Jim Anderton: I think it therefore deserves to be given an answer, rather than to have a discussion about history.
Mr SPEAKER: When a member asks a question about the future and whether something will happen in the future, there is no precise answer to that. The member is experienced enough to know that.
Hon Jim Anderton: Was the net tax cut last year zero for all employed New Zealanders who earn under the average wage—that is, 64 percent of all employed New Zealanders—and is it virtually zero for everyone in the same group this year; if so, how does that help to close the income gap for the majority of wage earners in New Zealand compared with their Australian cousins?
Hon GERRY BROWNLEE: The answer, I think, to the middle part of his question is no. The 1 October tax change will mean that 75 percent of New Zealand’s workforce will pay no more than 17.5c in the dollar. They will be better off.
Irrigation—Community Irrigation Schemes
JO GOODHEW (National—Rangitata) to the
Minister of Agriculture: What measures has the Government recently taken to progress community irrigation schemes?
Hon DAVID CARTER (Minister of Agriculture)
: Recently the Government announced changes to the Community Irrigation Fund. These changes will remove many of the common blockages to the development of community irrigation schemes. They are aimed squarely at fast tracking reliable but environmentally sound irrigation schemes, which are a clear priority for this Government.
Jo Goodhew: Why is progressing water storage and irrigation a priority for the Government?
Hon DAVID CARTER: Water is perhaps our greatest natural advantage and has huge economic potential, which is why accelerating water storage and irrigation is an important part of the Government’s economic growth agenda. In Canterbury alone, irrigation currently adds approximately $800 million each year to the regional economy. There is real potential for a much greater contribution from Canterbury and from throughout New Zealand. However, I stress that this is not about irrigation at any cost; any new schemes will have to meet very high environmental standards.
Jo Goodhew: What other steps is the Government taking to progress environmentally and economically sensible irrigation projects?
Hon DAVID CARTER: The Government has a major work programme under way to progress better water management. Aside from expanding the Community Irrigation Fund, we have established the Land and Water Forum, which is due to report to the Government shortly; we have reformed the Resource Management Act; we have appointed commissioners to deal with Canterbury’s water issues; and, finally, we have made it clear that once the regulatory roadblocks are addressed, and if all the commercial options are exhausted, we as a Government would consider financial assistance in order to get things moving.
Violence, Domestic—Minister’s Statement
Hon CLAYTON COSGROVE (Labour—Waimakariri) to the
Minister of Police: Does she stand by her recent statement “If you tell people don’t call the Police if you’re getting beaten up at home, because that’s a family issue, then you’re going to see your crime rates drop. That’s not something I’m prepared to do.”?
Hon JUDITH COLLINS (Minister of Police)
: Yes. That is why I expect everyone who experiences or witnesses family violence to report it to the police so that the victims can be helped and the offenders held to account.
Hon Clayton Cosgrove: What is she, therefore, prepared to do about the new policy of the Gisborne police to restrict which crimes they report to the media in order to—to quote the Gisborne police commander—“make people feel safer”?
Hon JUDITH COLLINS: The Gisborne police area commander, Inspector Sam Aberahama, is a hard-working police commander, not a spin doctor, and his press release certainly ruffled some feathers. My understanding is that the
Gisborne Herald’s complaint arose from police calling for an end to a historic tradition of a reporter wandering in daily, sitting at the senior sergeant’s desk, and going through the paperwork. That practice is not common in the rest of the country. I suggest that everyone calms down, has a cup of tea, and sorts it out.
Hon Clayton Cosgrove: Was Jeremy Muir, the editor of the
Gisborne Herald, correct when he said that the most important duty of the police is “actually making communities safer”, rather than engaging in a crude public relations exercise by selectively releasing information to make communities feel safer, as the commander of the Gisborne police district said?
Hon JUDITH COLLINS: I am very pleased to say that New Zealand police have a good working relationship generally with the media. As I have already explained, the situation in Gisborne was completely out of kilter with all other practices around the country. I do not think it is acceptable for a reporter to wander into a police office, sit at the senior sergeant’s desk, and go through the paperwork everyday.
Dr Cam Calder: What steps are being taken to help front-line agencies tackle New Zealand’s appalling record of child abuse?
Hon JUDITH COLLINS: The New Zealand Police and Child, Youth and Family are two of the front-line agencies that deal with the terrible results of child abuse every day. When a child’s life is marred by the horror of abuse or violence, that child must have somewhere to go and someone they can turn to for help. This morning I was very pleased to attend the signing of a memorandum of understanding between the New Zealand Police and Child, Youth, and Family, along with my colleague the Minister for Social Development and Employment, the Hon Paula Bennett. This memorandum will strengthen the relationship between the police and Child, Youth and Family staff, and will help ensure that children are kept safe, child abusers are brought to justice, and child abuse is reduced. We will do everything we can to help make that happen.
Hon Clayton Cosgrove: Is this new police policy in Gisborne an attempt to mask the reality that total crime in Gisborne increased by 8.6 percent last year under her watch, including an increase of 19.8 percent in violent crime; can we expect to see a similar policy implemented in Counties-Manukau, considering that there have been five homicides in the district already this year, including two last weekend?
Hon JUDITH COLLINS: There were about six questions in that; I will answer accordingly. I have already said twice today that the situation in Gisborne has been brought into line with that of the rest of the country. The police are not worried about publishing crime statistics; in fact, only last month they instituted a new policy of making sure that crime statistics for every month are on the police website, so that people in every district and every area can access them, as can the media and as can that member, if he ever bothers to have a look.
Hon Clayton Cosgrove: Given that answer, can she confirm that she also asked police national headquarters to change the way that it reports crime statistics so that they appear more positive; is that not just another attempt at spinning the reality to mask the fact that crime under her watch has been soaring?
Hon JUDITH COLLINS: No. I have said to the police that I think it is a great idea to get the statistics out every month so that everyone knows what is going on.
Foreshore and Seabed Act Review—Hapū and Iwi Governance and Management
HONE HARAWIRA (Māori Party—Te Tai Tokerau) to the
Minister of Conservation:
Kua hoatu e ia he tohutohu ki te Attorney-General kia whai mana ai, kia whai kāwanatanga ai hoki ngā hapū me ngā iwi ki ngā rāhui tapu i te moana; i roto i ngā ture takutai moana hou; ā, he aha aua tohutohu?
[Has she provided any advice to the Attorney-General regarding the opportunity for hapū and iwi governance and management of rāhui tapu (marine reserves) to be encompassed in the proposed foreshore and seabed replacement regime, and what was the nature of that advice?]
Hon Dr NICK SMITH (Minister for the Environment)
on behalf of the
Minister of Conservation: The advice provided to the Attorney-General has been focused on the involvement of iwi and hapū in the establishment of marine reserves, rather than their governance and management. Management committees have been established for some marine reserves, and it has always been the practice of the Department of Conservation to include both local iwi and hapū representatives on those management committees.
Hone Harawira: Is the Minister aware that Te Uri o Hikihiki and Te Whānau Whero of Ngāti Wai wish to nominate a marine reserve at Mimiwhangata, but that the Marine Reserves Act 1971 means that the Crown will retain ownership of their rohe and alienate them from governance and management; how will the replacement regime protect their customary interests?
Hon Dr NICK SMITH: Yes, the Minister is aware of concerns from iwi in eastern Northland about marine reserves and the impacts on their customary interests. Although
there were some informal discussions on marine reserve at Mimiwhangata in about 2004, there has been no formal application, and no statutory process for creating such a reserve is under way. There is a marine reserve reform bill currently before Parliament and the Minister would be happy to have a dialogue on the bill to ensure that a Māori perspective on marine reserves legislation is considered, and that it works well with the new proposed regime around the foreshore and seabed.
Hone Harawira: What action has the Minister taken to assure Ngāti Wai that the Department of Conservation will act in such a way as to enable them to participate in governance and management decisions over the Goat Island and the Poor Knights marine reserves?
Hon Dr NICK SMITH: Both the Poor Knights Islands Marine Reserve and the Okakari Point Marine Reserve are managed by the Department of Conservation with the advice of management committees that include representatives from tangata whenua. This provides the community with an ongoing ability to contribute to the management decisions that relate to those marine reserves, and the Government wants to ensure that iwi has an ongoing role in the management of marine reserves such as those.
Parity with Australia—Milestone Date
Hon DAVID PARKER (Labour) to the
Minister for Economic Development: When I asked him last Thursday will he give us a milestone date by which the wage gap with Australia will stop getting wider, when he replied “I will give that some consideration.”, how much longer will he need for his consideration?
Hon STEVEN JOYCE (Minister of Transport)
on behalf of the
Minister for Economic Development: No further time. When he made that remark last week, he was giving that member what is technically known as a brush-off, because although it may be of great academic interest to dream up arbitrary milestones, they will not make a blind bit of difference to the ability of New Zealand businesses to grow and take on new staff. There are any number of economic indicators out there, including the latest trade surplus figures that show the first signs of an export-led recovery, with the largest quarterly trade surplus since September 2001.
Hon David Parker: In light of the Minister for Economic Development’s answer earlier today on behalf of the Prime Minister, when he was asked by Mr Goff: “What are the targets or milestones to achieve income parity with Australia by 2025, which his Minister for Economic Development told the House last week that he had?”, to which the Minister for Economic Development said on behalf of the Prime Minister that we should ask the Minister for Economic Development, I now ask him, what are those targets?
Hon STEVEN JOYCE: I can only reiterate the answer to the primary question.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. The problem we have—and we are not allowed to table
Hansard—is that when asked earlier whether such things existed, the answer was “Yes.” It was not “Maybe, at some stage in the future.”; the answer was “Yes.”
Mr SPEAKER: The member is now debating the quality of answers given, although he may even go as far as to claim that he is debating the accuracy of answers given. But that is a matter for further questioning, and for the public to judge. It is not a matter that can be dealt with by way of a point of order.
Hon Trevor Mallard: I know this is really unusual, but this question asks: “Does he have targets or milestones to achieve income parity with Australia by 2025?” The answer is “Yes.” I seek leave to table that.
Mr SPEAKER: It is
that the member seeks to table?
Hon Trevor Mallard: It is
Mr SPEAKER:I will not put leave to table
Hansard. That is the end of the matter. The member cannot argue with me. The member, I am sure, has made his point perfectly adequately. There is no need to waste further time of the House by seeking leave to table documents that are readily available.
Hon David Parker: Why does the Government continue to dodge providing any meaningful milestone by which the Government can be judged by New Zealanders on its election promise to close the wage gap with Australia?
Hon STEVEN JOYCE: The Government does not dodge its milestones. It has made it clear that over a 15-year period we will fix up the damage caused by the previous Government, with our very careful economic growth agenda. I am happy to run through it for the member: personal tax reform, investment in new highways and new transport projects, cutting red tape, science investment, employment law reform, putting more money into tourism, lower company taxes, electricity transmission investment, sorting out irrigation in Canterbury, aquaculture, ultra-fast broadband, trade negotiations—
Mr SPEAKER: Someone at the back of the Chamber has a very loud voice. Please keep it under a little control.
Chris Tremain: What examples can the Minister draw upon when considering the potential to impose milestones on economic development?
Hon STEVEN JOYCE: Under the previous Government the much-touted “jobs machine”, which members may recall, promised that handing over 4 hectares of prime Auckland waterfront land, for less than 5 percent of its value, to a company called Sovereign Yachts would deliver 350 jobs within 2 years and generate $600 million in export earnings over 5 years. None of those milestones were met, and Sovereign Yachts was ordered into liquidation by the High Court last year.
Hon David Cunliffe: I raise a point of order, Mr Speaker. I raise this point of order because we have had an ongoing discussion on exactly the same matter. You have previously ruled that it is not acceptable in this House for a Minister to base the main substance of his reply upon Opposition policy and the policy actions of a previous Government.
Mr SPEAKER: The member will resume his seat. The member knows full well that the Minister is not in any way commenting on Opposition policy. He was asked something to do with milestones, and the Minister is reporting on what he claimed to be a situation that occurred previously. That has nothing to do with the Opposition’s current policy.
Hon David Cunliffe: I raise a point of order, Mr Speaker. You have ruled that it is acceptable for the Minister, in his answer to the primary question, to admit to having dodged a substantive answer earlier in response to a question on the Government’s targets. You are now ruling it acceptable for the Minister to quote a random example of a previous Government target. Why is it not acceptable—
Mr SPEAKER: I invite the member to resume his seat. The Minister has reporting responsibility for what happened under the previous Government. In respect of whether, in answer to a question, he admitted to something having previously been brushed off, that gives the Opposition the opportunity to ask further hard-hitting questions, and not waste time with points of order. Hard-hitting questions are what make a difference.
Hon David Parker: Why did the Minister for Economic Development last week, in response to this question: “Does he have targets or milestones to achieve income parity with Australia by 2025?”, say “Yes.”, but this week refuse to say what they are?
Hon STEVEN JOYCE: As I said in answer to the primary question, when the Minister made the remark last week he was giving that member what is technically known as a brush-off. The Government does have a milestone, and it is to achieve parity with Australia by 2025.
Hon David Parker: Does his Government’s refusal to provide New Zealanders with yardsticks by which they can measure the success or otherwise of National’s pledge to close the wage gap reflect either an admission by National that it does not intend to keep its promise or an arrogant assumption that Kiwis can be kept in the dark and fed the proverbial?
Hon STEVEN JOYCE: One has to find it a little amusing that the Opposition is hassling us about milestones, when Labour was the crowd that came up with a whole range of terms that had absolutely no milestones attached to them: closing the gaps, the growth and innovation framework, the knowledge wave, economic transformation, sustainability—
Hon Darren Hughes: I raise a point of order, Mr Speaker. We are now well into the answer from the Minister, and he is talking about the previous Government, not the one that he has responsibility for and the one that we are trying to ask questions about, in the public interest of New Zealand, so that we can talk about today, not yesterday.
Mr SPEAKER: On this occasion I think that the member should reflect on the nature of the question that was asked. It invited not the most precise answer.
Hon David Parker: Does the Minister understand that John Key’s replies to similar questions from Phil Goff last week showed Mr Key to be, to use Duncan Garner’s words, a “slippery politician”, and does Mr Brownlee accept any responsibility for Mr Key’s fall from grace?
Mr SPEAKER: The Minister has no responsibility whatsoever for the Prime Minister. It might work the other way round, as the Prime Minister has responsibility for his Ministers, but a Minister does not have responsibility for what the Prime Minister might say.
Hon Trevor Mallard: I raise a point of order, Mr Speaker. I have seen that question and I heard it being asked then, and I think it asked about the Prime Minister’s response to Mr Brownlee’s misleading statement. It was a question about whether Mr Brownlee felt responsible for the Prime Minister’s response to the inaccuracies that Mr Brownlee gave to the House and to the public.
Mr SPEAKER: That was a nice try at making the question come within the Standing Orders, but the Minister does not have responsibility for what the Prime Minister might think or say. The Minister does not have responsibility for that.
Hon David Cunliffe: I raise a point of order, Mr Speaker. Reflecting upon the exchange that has just occurred and seeking your guidance for future exchanges, what is the difference between the technical definition of a brush-off and contempt of the House?
Mr SPEAKER: That is not a point of order. I might have some sympathy with the member’s concern, but that is not a point of order. However, I remind everyone that this is Parliament, and everyone in this House should be careful in terms of what they say to this House.
Treaty of Waitangi Settlements—Progress
Hon TAU HENARE (National) to the
Minister for Treaty of Waitangi Negotiations: What recent progress has the Government made towards its goal of settling historical Treaty of Waitangi claims by 2014?
Hon CHRISTOPHER FINLAYSON (Minister for Treaty of Waitangi Negotiations)
: Last Friday the Crown signed terms of negotiation with Ngāi Te Rangi, one of whose negotiators is our parliamentary colleague the Hon Mita Ririnui. This milestone is important as it means that all three Tauranga Moana iwi have now entered Treaty settlement negotiations. Since the start of last year the Crown has reached over
30 significant settlement milestones, including 14 agreements in principle and six deeds of settlement.
Hon Tau Henare: What other initiatives does the Government have under way to support its goal of settling historical Treaty of Waitangi claims by 2014?
Hon CHRISTOPHER FINLAYSON: The Government recently announced the date for the 2010 Te Kōkiri Ngātahi Treaty settlement hui, where the Crown and iwi will continue to discuss ways of improving the path to settlement. These hui were initiated last year so the Government could meet iwi to discuss ways of improving negotiations. It was the first time in over 9 years that the Government had engaged with iwi on Treaty settlements, and it is illustrative of this Government’s commitment to achieving just and durable settlements.
Pay Equity—Gender Gap
CATHERINE DELAHUNTY (Green) to the
Minister of Women’s Affairs: Is she concerned that the quarterly employment survey released yesterday shows that the average wage gap between men and women has grown to 12.8 percent?
Hon PANSY WONG (Minister of Women’s Affairs)
: I have made the gender pay gap one of the three priorities for the Ministry of Women’s Affairs, and the ministry has a Budget increase of $2 million to tackle the issue.
Mr SPEAKER: Before I go on to invite further supplementary questions, the primary question—and it was a primary question—asked whether the Minister was concerned. I guess that in her answer she said that she had made that a priority for her department.
Catherine Delahunty: Does the Minister want the good news or the bad news? The good news is that very recent figures show—
Mr SPEAKER: Having just given some thought to whether I could assist the member to get an answer to her primary question, I cannot allow that kind of supplementary question. It bears no resemblance to the Standing Orders whatsoever, and I invite the member to rethink her supplementary question.
Catherine Delahunty: Does the Minister agree that the quarterly employment survey, which surveys 18,000 businesses to measure changes in average hourly and weekly earnings, is relevant to measuring the gender pay gap in New Zealand?
Hon PANSY WONG: It might be relevant to the measuring of the gender pay gap, because the gender pay gap can be measured according to the survey mentioned by the member, but it can also be measured by median weekly earnings and median hourly earnings. Therefore, adoption of a consistent measurement base is very important. Since 2004 the Ministry of Women’s Affairs has adopted the measurement of comparing the median hourly earnings of men and women provided by the annual New Zealand Income Survey. That measure gives us less distortion, because it excludes the value of benefits, and is less influenced by the number of hours than weekly earnings are.
Catherine Delahunty: Why does the ministry not take into account multiple surveys that measure the gap, in order to have the fullest and most up-to-date picture of the problem?
Hon PANSY WONG: I thank the member for wanting to know what is fair, and wanting not to have confused messages. Since 2004 the Ministry of Women’s Affairs has adopted as its measure the median hourly differences supplied by the New Zealand Income Survey. The latest figure available is for the period up to June 2009, when the gap decreased to 11.3 percent from 12 percent. It had been static since 2001.
Dr Jackie Blue: How many ways can the pay gap be measured, and which one has been consistently used by the Ministry of Women’s Affairs?
Hon PANSY WONG: Because there is so much confusion out there, I welcome the member giving me an opportunity to once again say that there are at least half a dozen ways of measuring the gap. It is important for us to look for consistency of comparison by using the measure used by the Ministry of Women’s Affairs. It has selected the difference between the median hourly earnings supplied by the annual New Zealand Income Survey, which shows the gap has reduced to 11.3 percent. That is the good news for New Zealand women.
Catherine Delahunty: How can she justify dismissing the latest figures and relying on a measure that has not been updated in over a year?
Hon PANSY WONG: By no means do I dismiss any figure, but it is important to measure the gap by a standardised, consistent trend, because of the many variables. The Ministry of Women’s Affairs has adopted that measurement since 2004. If I wanted to manufacture good news I could use the figures for full-time median hour earnings, which shows a wage gap of 7.8 percent, but the National Government is transparent and credible.
Catherine Delahunty: What new steps has her Government taken specifically to reduce the gender pay gap in the last 12 months?
Hon PANSY WONG: It has taken many steps, and I will try to be concise because I know that Mr Speaker wants concise answers. Some of the measures are promoting women into more choices in the trade sector; the ministry leading the work to establish the Women in Trades Network in Auckland and Wellington; and investigating the graduate income differential. We want to understand why, 1 year after graduation, a pay gap of 6 to 8 percent has developed. We are very, very fortunate to have many good accounting practices that can demonstrate that flexible work practices are good for retaining women and increase productivity. Mr Speaker, the good work keeps rolling out, but I respect your request to be concise.
Catherine Delahunty: Can the Minister explain—I am sure she can—why she is commissioning research into the problem if she has no intention of making changes based on the findings, which show that the gender pay gap continues to increase?
Hon PANSY WONG: I thought I had just quoted that the consistent pay gap measurement taken by the Ministry of Women’s Affairs has gone from 12.3 percent to 11.3 percent. I thought that was a reduction. I am an accountant; I should know.
Sue Moroney: Is she concerned that the gender pay gap got as low as 11.94 percent in March 2009 as a result of Labour’s planned approach, but since she stopped the pay equity investigation for social workers and school support staff, and since she closed down the pay and employment equity unit, the gap has widened to 12.81 percent?
Hon PANSY WONG: My worry is that the member has not been listening to all the previous answers. I advise her to discuss the issue with the previous Labour Minister of Women’s Affairs, the Hon Ruth Dyson, and also Lianne Dalziel and Steve Chadwick. They all endorsed the pay gap measure based on the hourly median earnings supplied by the New Zealand Income Survey. The gap has closed.
Sue Moroney: Has she taken instruction from the Prime Minister on how to fudge the figures when it comes to pay gaps?
Hon PANSY WONG: I take offence at the words “fudging the figure”. I do not believe that is worthy of a supplementary question in the Parliament, surely.
Mr SPEAKER: I take it the Minister is saying that—[Interruption] I have already ruled out two Opposition questions today, so I invite the member to rephrase her question. The member should not make outlandish allegations in asking a question. I invite her to reword her question.
Sue Moroney: Has she taken instruction from the Prime Minister on how to massage the figures when it comes to describing pay gaps?
Hon PANSY WONG: No. Unlike the Labour Party, whose leader cannot even get his members to follow instructions to apologise to their leader, this side of the House—
Mr SPEAKER: I think we have had enough of that.
Catherine Delahunty: Mr Speaker—[Interruption]
Mr SPEAKER: I ask members to show a little courtesy to Catherine Delahunty, who is sitting down the back of the House.
Catherine Delahunty: We know they want to hear it. If the gender pay gap keeps getting wider, will she concede that her Government’s approach is not working and work with the Green Party to develop legislation to address this big problem?
Hon PANSY WONG: It is very hard to cooperate with the Green Party when it believes in legislating for everything. I have every confidence in New Zealand women and employers, and people can see that good work practices will close those gaps.
Catherine Delahunty: I seek leave to table two tables from the quarterly employment survey released yesterday, showing—
Mr SPEAKER: The member should not waste the time of the House on tabling statistical information that is available to all members.
Tertiary Education—Management of Enrolments
GRANT ROBERTSON (Labour—Wellington Central) to the
Minister for Tertiary Education: Is he satisfied with how enrolments are being managed in the tertiary sector; if not, what actions is he taking?
Hon STEVEN JOYCE (Minister for Tertiary Education)
: I have mixed views on how institutions are managing their enrolments and believe that some could do better. I have spoken directly to vice-chancellors in a number of cases and they have undertaken to manage their enrolments better. The Government took a number of steps in Budget 2010 to relieve pressure on institutions. For example, it will fund a record number of places at universities in 2011—about 5,600 more than in 2008—it has made changes to student loan entitlements for new residents and Australians; and it has introduced a performance element for existing students, with the requirement that they pass the equivalent of 50 percent of their full-time courses over 2 years.
Grant Robertson: How does the Minister think that Victoria University turning away 1,500 students, Massey University 2,000 students, Waikato University 600 students, and other universities and polytechnics thousands more will help close the wage gap with Australia?
Hon STEVEN JOYCE: The numbers quoted are interesting numbers. The reality is that they are the numbers mostly quoted in the media. I notice that Otago University has closed its enrolments, and in actual fact has turned down 30 applications for the second semester of 2010. Nevertheless, it is never ideal to turn away too many students. That is why we are working to increase, and have increased, the number of places in 2011, and also have put a limit on student loan entitlements for new residents and Australians. The introduction of a performance element for existing students will ensure that they either use their opportunity for education wisely or make way for somebody new to come into the system to have his or her opportunity.
Grant Robertson: I raise a point of order, Mr Speaker. With respect, although the Minister talked about part of the question, the actual question asked how that reduction in the number of students would help close the wage gap with Australia.
Mr SPEAKER: The member will recollect that the Minister in answering the question disputed the statements contained in the member’s question, and the Minister is quite entitled to do that.
Carmel Sepuloni: Which of the following National Government actions is more likely to increase the numbers of Māori and Pasifika enrolling and succeeding at
university: refusing to lift caps on tertiary institution enrolments; time limits on student loans; or New Zealand Qualifications Authority changes to National Certificate of Educational Achievement requirements for university entrance, which will make it more difficult for thousands of secondary school students to gain eligibility to enter university?
Hon STEVEN JOYCE: Like me, the member is a new member in this Parliament, so she may not be aware that the reason for the student caps was the previous Government’s approach to student support and interest-free student loans. It introduced caps in 2008 to try to control the cost of tertiary education. Nevertheless, I am confident that the performance-linked funding initiatives that we are putting in place will encourage institutions to provide the pastoral care and support that will improve the outcomes for all New Zealanders, including young Māori and Pasifika.
Grant Robertson: What work has he done on the impact on closing the wage gap with Australia of universities and polytechnics shutting the door on some student enrolments, especially in light of the fact that while New Zealand tertiary institutions are trying to work out how to keep students out, Australian ones are working out how to get them in?
Hon STEVEN JOYCE: The member’s question is interesting. The latest statistics show that the New Zealand population aged 25-plus has a higher proportion of student graduates than Australia does. It goes to show that Australia has a little bit of catching up to do. I would also point out that, as a percentage of our GDP, we spend slightly more on tertiary education than the Australians do. The issue is the size of our GDP, which is why the Government has a very comprehensive economic growth agenda to grow our GDP so that we can afford to spend more on these sorts of services.
Rugby World Cup—2011 Festival Lottery Fund
JACQUI DEAN (National—Waitaki) to the
Minister of Internal Affairs: Why has the New Zealand 2011 Festival Lottery Fund been created?
Hon NATHAN GUY (Minister of Internal Affairs)
: During the Rugby World Cup next year nationwide festivals will be held to celebrate New Zealand’s culture, heritage, and national identity. The New Zealand 2011 Festival Lottery Fund is providing $9.5 million in funding to support these festival events. The Rugby World Cup is the biggest sporting event ever held in New Zealand, and we want to maximise the community’s involvement. This funding will help communities and regions get involved in the spirit of the event.
Jacqui Dean: What kind of events can be funded?
Hon NATHAN GUY: This fund will support all sorts of events with a community purpose associated with the Rugby World Cup. This could include things like concerts, fairs, exhibitions, street markets, and parades. Applications are now open, and they close on 17 September. I encourage communities to come up with ideas and make their applications through the website of the Department of Internal Affairs.
Employment—Workplace Access for Union Representatives
CAROL BEAUMONT (Labour) to the
Minister of Labour: How many complaints, if any, about union access to the workplace being abused by unions or union members has she received since becoming the Minister of Labour?
Hon STEVEN JOYCE (Minister of Transport) on behalf of the
Minister of Labour: The Minister has spoken to many employers around the country since becoming the Minister of Labour, some of whom have raised with her the issue of union access. She has also received correspondence on this issue. However, she does not have a spreadsheet cataloguing every complaint.
Carol Beaumont: Why is the Government proposing restricting the right of workers to have union representatives in the workplace when her own policy paper dated 15 May 2009 stated: “There does not appear to be widespread evidence of union representatives exercising their current rights to enter workplaces in an inappropriate way, resulting in disruption for business operations or adversely impacting on the employment relationship between employer and unions members.”?
Hon STEVEN JOYCE: A subsequent policy paper also says that providing discretion could enable employers to undertake better business planning—for example, avoiding any unforeseen stoppages and potentially rescheduling activities around employee availability. The reality is that this is not a widespread problem, but where abuse does occur it can cause significant disruption.
Carol Beaumont: What specific problems with the current arrangements is this proposed law seeking to address given that even Business New Zealand has said that this is not a high priority and that it does not receive many complaints from employers?
Hon STEVEN JOYCE: There have been some cases where unions have caused problems by using the right of access law—for example, pulling workers into long meetings unannounced, blocking customers trying to access stores, and making public scenes inside premises in order to embarrass employers.
Carol Beaumont: What advice has she provided to the Prime Minister since he told the New Zealand Council of Trade Unions that this issue was “not a driving priority” for him that caused him to change his mind?
Hon STEVEN JOYCE: I am not in a position to be able to discuss what advice the Minister has given the Prime Minister on that matter.
Carmel Sepuloni: Does the Minister agree that by restricting the right of workers to have access to union advice at the workplace during a 90-day trial period, the Government is making our most vulnerable workers more vulnerable than ever; and will the Minister therefore support my member’s bill to repeal the 90-day fire-at-will period?
Hon STEVEN JOYCE: I reject the premise at the opening of the member’s supplementary question, because this is about reasonableness, and reasonableness will be based on common sense. The reality is that if a workplace has a busy workload and needs all staff on deck, it can reschedule a union visit to another time. Saying no is not being unreasonable.
CRAIG FOSS (National—Tukituki)
: I move,
That the House take note of the report of the Finance and Expenditure Committee on the Reserve Bank of New Zealand Financial Stability Report, May 2010. First of all, I would like to thank members of the Finance and Expenditure Committee. Members of this House will note when briefly looking through this report that the committee was generally unanimous, although there were some differences in some areas. Overall, I think that that reflects the importance of the really high-level framework stuff that this report addresses. I acknowledge the members of the committee, the officials who helped pull that report together, and, of course, Dr Alan Bollard, Grant Spencer, and Toby Fiennes from the Reserve Bank, who presented it to us, as they do every 6 months now. I think this is the fourth one we have had since a change of regulation in Parliament 2 or so years ago provided for reports to come out every 6 months. It is important to note the difference between this report and the Monetary Policy Statement, although members will be inclined to wander into that territory. They are all linked at the end of the day.
The good news is that New Zealand’s financial system is very, very stable. As noted in the report from the Reserve Bank itself and the report back from the committee, the general theme is that things are better than they were. All risks are still quite prevalent. There have been improvements—some within the control of these borders and some beyond the control of these borders. Generally, things are looking better. It is also important to note that this report came out on 20 May. In fact, we are now in August, which is 3 months later. It is amazing how quickly things have moved around the world, particularly in southern Europe over recent months, in and around Greece and Spain, and how what happens there affects how the rest of the globe looks at the New Zealand situation and any metrics that may come to their attention that align us up with perceived higher risk. Those are the glasses through which they are looking at many nations round the world. It is good to note, though, that the world is probably in a slightly better place than it was even in May, when this report came out, but the message to New Zealand is that it is still very, very tenuous indeed.
In the report itself—it may be of interest to those members who are not on the Finance and Expenditure Committee to pick it up off the Table—there is a very good diagram that the Reserve Bank introduced in an earlier report, and it is called the financial stability cobweb. It addressed many of the questions people would ask about the diagrams and all things finance. This is one diagram that the Reserve Bank has brought into the report—the bank is slowly improving it, of course—that shows in pictorial form, diagrammatic form, how things have improved, and the bank has quite solid metrics under that. As members can see on page 4 of the report, things have got better on the blue line, and the red line is behind.
One can see that the report starts in May 2009 and it looks at the trend until May 2010—until this report. On every single measure other than capital, which I will come to in a moment, financial market conditions have improved markedly since the last report, which was in November 2009. Even in the constraints of a recession and the tight cash market out there, there is still a measure of confidence and the domestic market, in a financial stability lens—that is what we are talking about here—has markedly improved, particularly in the last 6 months. Funding and liquidity have improved markedly. The global environment itself between November 2009 and May 2010, as in that report, also improved. Capital and profitability are still pretty much
where they were, reflecting the squeeze on margins and the lower velocity of the economy, but a bit of confidence is indicated there, too. It is very noticeable that each and every one of those lines look better, although they are only a snapshot in time.
Looking forward, as can be seen in some of the graphs at the back of the report and in the commentary from Mr Bollard, again the message is that things are tenuous and we just have to keep our pencils very, very sharp as an indebted country—a country at the whim of the credit markets of the rest of the world. Like it or not, those so-called evil foreign bankers occasionally are the ones that have loaned this country $200 billion, so we need to make sure that they roll over those loans, at the very least, and have reasonable terms as our economy tries to address the principal at the very least, and pay it off.
This report picks up a lot of other issues and it looks at a whole lot of things, such as fiscal settings, monetary policy settings, liquidity changes and settings, which I will come back to, and the global environment overall, to name but a few. I tell members to remember that although it is often very tempting in politics to look for the silver bullet or to grab the headline, actually everything is linked in those various policy settings. We can argue and discuss as much as we like in this House and around this city, but at the end of the day we are a debtor nation. Be it private or public debt, as I said earlier we have to keep our pencils particularly sharp in a global environment where simple liquidity—that is, the cash itself—is very constrained. Credit—the ability to borrow the funds in the first place, then add the cash on top of that—is very constrained.
The Budget came out at around the same time as this report, and other members may want to touch on the importance of fiscal discipline insofar as the Budget is concerned. Members on this side of the House would argue that that was adhered to, given the constraints, the demands, and the commitments made by this Government to New Zealanders, and the tension between spending and saving. There is another very interesting part that might be new to members on page 9 of the Reserve Bank’s report, in figure B2 on credit default swap spreads. Simply, they measure the perceived margin that others are prepared to lend, and are lending, to New Zealand—anything denominated in New Zealand dollars.
Some might ask who really cares. If we are a creditor nation, then that is a fair point. But as a debtor nation, regardless of whether it is the Crown, people’s mortgages, or working capital for businesses, the rate that they pay is totally reflected right there in that graph. It is a bit hard to read, but there is an Aussie and a US one over the page that reflects the spikes in the crisis around the globe a couple of years ago. We can see the trend in those southern European nations. When we line up some of the metrics, New Zealand does not sit too well on some of them with the rest of the world, but on some of them we sit very, very well. It is our mission, and I am sure it is our obligation to ourselves and to future generations, to do all that we can to start to address some of the core problems that can create financial instability in New Zealand. Also, as the committee noted, there are many, many useful graphs at the back of the Reserve Bank’s report. They are backward looking, then they forecast out.
I have no intention of making a political speech here, at all. I think, as all members acknowledge, that we have some serious issues in New Zealand. Many of them have been with us for a long time. They have just got worse or have compounded over particular cycles, but if we address the things that we can control in this country, then when things happen that are out of our control, such as an issue in southern Europe, New Zealand itself will be better prepared to get ourselves through any crisis. A good example of that is the free-trade agreements. Most of the members in the House are in agreement with free-trade agreements. For example, the free-trade agreement with China was started under the previous Government, and it was completed by this
Government. Regardless of that, how that helped New Zealand through the recession and how it made our financial system more stable with more credit and cash moving around the system is a great example of one of those things that New Zealand could control. We invested in a free-trade agreement that actually helped our economy get through tough times, when the rest of the world was imploding.
On that note, I will leave it there. As I said, I am not getting political about this particular report. I will finish by acknowledging my colleagues on the Finance and Expenditure Committee. Overall, I think we worked together very, very well. Although this may seem very dry and boring to some people and members, it is of such importance to our country that our system stays as financially stable as it is right now. Thank you.
Hon DAVID CUNLIFFE (Labour—New Lynn)
: I join with the member who has just resumed his seat, Craig Foss, in welcoming this opportunity—quite a rare opportunity—to take the House’s time to note the Reserve Bank of New Zealand’s financial stability report, and indeed the report of the Finance and Expenditure Committee. There are several reasons for doing that.
The first is, of course, that the public normally sees this House in full debate, whether it be in question time, in the general debate, or in debates on members’ bills, as earlier tonight. They do not often have the opportunity to see the House in its less combative moments. It is in select committees that a lot of the work goes on in the background, where a lot of the time we join together to tease out evidence that is presented at the committees. This report from the Finance and Expenditure Committee tonight is really interesting because it shows 100 percent consensus. It is reported by the agreement of all the members around the table: the Labour members and the National members, and the Green member, the ACT member, and the Māori Party member. We all reached a consensus on what we thought of the material in this report on financial stability. As the previous speaker said, it is important, it affects our whole country, and it affects us for the longer term.
That brings me to the second point. I ask members whether it is not important and good that we have an independent central bank that draws upon the evidence and presents it in an apolitical way to a select committee, the public, and the banking system so that we can get the view of, if you like, the technicians in the trade and what the data is saying, with the politics taken out of it. That is helpful. It gives this House some things it can reflect on as we go through the headline conclusions in this report, because we know they are, in a sense, more objective than some of the stuff we hear across the Chamber.
What does the report say? Its first point is that although the global recovery has progressed over the past 6 months, it remains patchy and fragile in many economies. It mentions the problems in Greece, and it then goes on to talk about the problems that remain in the New Zealand economy. It notes that the first one is that the private sector in New Zealand remains heavily indebted, creating continuing vulnerability in the financial system. It is very important that the report singles out the private sector, because the overwhelming majority of New Zealand’s national debt is private debt, not public debt. It is not a matter of the Government spending willy-nilly beyond its means; it is one of New Zealanders having borrowed principally on international markets through the banking system to invest in their home mortgages.
Over the last few years it has been a national pastime, a sort of sport, in Auckland at least, where people now grab the property pages of the newspaper to discover how successful they have been at bidding up each others’ house prices, and feel richer as a result. Then they go out and spend a bit of their money, racking up some credit card debt. The net result is that New Zealand has become more indebted to overseas lenders.
Secondly, the capital that that behaviour brought into New Zealand has flowed to the housing sector, and not to productive businesses. That is why, principally, we have a very weak and shallow recovery going on, with very low wage growth and very little employment growth. It is in that context that I would like to agree with the Minister of Finance when he said it was “bumpy”, which was a bit of a euphemism. “Bumpy” means that we can hardly tell whether the economy is going up or down. I disagree with the Prime Minister, who called it an aggressive recovery. The only people feeling aggressive are the Kiwis at the supermarket checkouts whose housekeeping budget will not stretch to cover the trolley full of groceries.
The report states that rebalancing the domestic economy towards higher national savings and less reliance on external financing is important. In that regard, the report does not add, but I would add, that getting the savings rate up is absolutely crucial. It is with some pride that we look back on the time of the previous Government and the introduction of KiwiSaver, which was the biggest and most successful savings plan in New Zealand’s history. It is with regret that we note that the current Government has cut by half the contribution level and employer subsidy for that scheme, and that not only has that left New Zealanders worse off, because they do not have as rich a savings vehicle, but also it has depleted the rate of savings increase that was coming from KiwiSaver.
We note, again with regret, that in Budget 2009 the Government’s principal action was to defer pre-funding the New Zealand Superannuation Fund, and that is important because it was another principal tool for lifting our aggregate national savings rate. By deferring pre-funding we have reduced the inflow of funds into our largest collective savings vehicle. We did so at a time when the markets were down, and we have therefore missed out on some of the capital gain, surprisingly enough, as the markets have recovered but the Superannuation Fund was short of that additional capital that would have assisted it.
Coming through from the report is a lack of—but I will put it more charitably as a need for—a comprehensive economic plan to address the structural imbalance. If listeners out there do not believe me, perhaps we could quote the words of the Governor of the Reserve Bank, that independent authority who testified to the committee. He stated: “Despite the improvement in the current account deficit,”—people have imported less because they have been poorer in the recession—“the Governor stressed that the structural imbalances in the economy require continued attention. Specifically, the Governor said that a focus is needed on changing motivational levers away from consumption and back into production, to help to reduce New Zealand’s high private-sector debt,”. If that sounds familiar, that is because it is exactly what we have been talking about, but do not take it from me or the Labour Party; that was the Governor of the Reserve Bank saying that New Zealand needs a plan to rebalance the economy. I add the implication that if we already had a plan, he would not be saying that, and therefore we can conclude that the Government does not have a plan.
Labour does have a plan, and it has recently been released in our
Blueprint for Monetary Policy Reform, which of course bears upon the material in this financial stability review. We would, firstly, retain the independent full-service central bank, and we would retain the current inflation target. We would, however, amend the Reserve Bank of New Zealand Act and the policy targets agreement to broaden the objectives of the Act to include growth in employment and the economic well-being of New Zealanders and, in so doing, mirror more closely the structure of our nearest trading partner and most important neighbour, with the
Blueprint for the Australian Central Bank.
Secondly, we would explicitly recognise what this report refers to in terms of the Basel Committee on Banking Supervision and the G-20 movement in explicitly recognising the role of the new core assets ratio, which is strengthening the balance sheets of our banking system, and we would recognise the counter-cyclical role of what they call macroprudential policy—that kind of stuff—in the Reserve Bank of New Zealand Act itself. It is a surprise to us that the Government has not moved in that direction. It seems to be only the Beehive that has not recognised the movement that is going on all around the world as a result of the global financial crisis. It is going on in the G-20, in the Federal Reserve System in the US, even in the Bank of England, certainly in the Bank of Japan, and in the Reserve Bank of New Zealand, but it is not going on in the Beehive. It is also true that Labour would explore other complementary monetary tools, and I suspect that my colleague the Hon David Parker will elaborate on those when he takes a call.
It is important that we reflect, finally, on the record of the previous Labour Government on fiscal responsibility. We hear every day from the Minister of Finance in question time a mirage that somehow the previous Government was imprudent—
Hon Dr Nick Smith: Reckless!
Hon DAVID CUNLIFFE: Yes. I ask the member how that squares with the fact that under Labour gross debt was cut in half, net debt was cut to zero, and the incoming National Government inherited net debt of only 5 percent of GDP—only 5 percent. It is now over 20 percent, I recall. This Government has taken the economy in the wrong direction, just as National did the last time it was in Government. As I have already mentioned, the Government has put off pre-funding superannuation, which puts an additional cost on our children. That is not fiscally responsible; it is not fair to the next generation. The Government borrowed for tax cuts. It borrowed for tax cuts because it did not keep its promise to be fiscally neutral in Budget 2010, and it gave one-third of those tax cuts to the top 5 percent of earners.
Finally, Opposition members do not need the Government to lecture us about fiscal responsibility and financial stability, because Labour’s record stands up for itself.
JOHN BOSCAWEN (ACT)
: It is a pleasure to take a call to debate the report of the Finance and Expenditure Committee on the Reserve Bank’s financial stability statement of May this year. In drafting the comments that I intended to make this evening, I focused on three sections in the report: principally on the comments relating to unemployment, on taxation policies and the effect of GST, and, lastly, on the importance of agriculture in our economy. But the previous speaker, Mr Cunliffe, has just made a number of points, three of which I think need to be responded to. Before proceeding with my planned comments, I will briefly comment on some of the things that Mr Cunliffe has said.
Mr Cunliffe started by saying the Reserve Bank, in its testimony—because he said these were the words of the Reserve Bank, not the words of the Government—focused on the need to rebalance the economy, and, in particular, to direct funds away from consumption, which had been funded by high levels of private sector debt, and to put that money into, first, paying off debt and, second, savings. He said that if this Government does not have a plan, the Labour Party does. Well, the question that has to be asked is why we got into this situation in the first place. Why is the economy not balanced? Why do we need to rebalance it? The answer is very simply that there had been 9 years of mismanagement by the previous Labour Government. The current Government has to address these problems, because of the situation that it found itself in when it took over the Treasury benches in November 2008.
The next point that Mr Cunliffe made was that the Government, on coming into power, reduced the subsidy on contributions to KiwiSaver from 4c in the dollar to 2c in
the dollar. Why was that necessary? The reason is that the Government accounts were in a huge deficit. In essence if we look at KiwiSaver, we see that although it has a number of attractive features, which I personally support, effectively it subsidises people on higher incomes. So it is a subsidisation by people on lower incomes, who are not in a position to save. They are subsidising—using Government funds, or taxpayers’ money—the savings of people who are in a much better position to save than they are.
Mr Cunliffe also criticised the Government for backing away from pre-funding New Zealand superannuation. Once again, why is the Government not setting aside funds for the New Zealand Superannuation Fund? Very simply, as Mr Cunliffe is very, very well aware, the Government is in deficit. It is running a huge deficit, and that situation was bequeathed to it by the previous Labour Government. Mr Cunliffe suggested that it does not matter whether we have a $3 billion, $4 billion, or $5 billion deficit every year; he would like us to go out, borrow some more money, and invest it through the New Zealand Superannuation Fund. Mr Cunliffe knows more than anyone else that at the beginning of this year the money in the so-called Cullen fund was actually less than the dollars that had been put in and invested. Despite the pre-funding, we had less than a dollar for every dollar that had been invested.
I now come to the comments that I intended to make. I will start at the back of the report, where there are comments on unemployment. They refer to the fact that the Reserve Bank governor informed us that the labour market is lagging, in terms of the overall economic recovery of New Zealand. We do not have higher levels of employment. Unemployment is still hanging rather high, at over the 6 percent mark. We have just had a debate on a member’s bill, which was voted down this evening, on the proposal to cancel the 90-day employment trial period. If we want to address the issue of unemployment, we need to do everything that we can to incentivise employers to create jobs and offer jobs, and to make it as easy as possible for people to get those jobs. That is one of the great things about the 90-day trial. It has enabled employers of companies with fewer than 20 people to go out and hire employees, knowing full well if they make a mistake and the person they employ does not work out, then they do not have an ongoing liability for that. The 90-day trial is about to be extended to all employers in New Zealand. If there is anything that will make a move to address the higher levels of unemployment that the governor referred to in his testimony, that will be it.
I thought it was particularly interesting that Nanaia Mahuta, in speaking about that bill, talked about the 60,000 unemployed young people. I ask why we have such high levels of unemployed young people. The very simple answer to that is that the previous Government took out the youth rates. Previously, an employer could go out and hire a young person—a 17 or 18-year-old—and pay something less than the adult minimum wage. Someone who did not have previous full-time work experience was able to go out there, and employers had an incentive to take on a young person. The previous Government passed a law to abolish the youth wage rate. What happens now when an employer is faced with choosing between two potential employees? Let us say one is a family person who is 35, has a couple of young children as dependants, has 10-15 years of work experience—has a proven track record and has commitments—and has proven his or her reliability. Let us say the other is a 16 or 17-year-old who does not have the same experience and cannot show the same track record of reliability. When faced with having to pay those two people exactly the same wage, the minimum wage, I ask why the employer would not hire the mature person who has experience and a track record of reliability.
It was one of the great disgraces of this Parliament that when it had a chance to reinstitute youth wages earlier this year and support the member’s bill of my colleague
the Hon Sir Roger Douglas, this Parliament, both the Labour and National members, chose to vote it down. I think that that was a disgrace. One would expect that sort of thing from Labour members, but one certainly would not expect it from National. I think that the National members, when they talk about youth unemployment, should realise that the answer to that problem lay in their own hands. They had a chance to do something about that, but they missed that opportunity. That is tragic for those young people. As my colleague Sir Roger Douglas said, a young person might be prepared to work for $9 or $10 an hour, but the parliamentarians in this House do not believe that that young person should have the chance to do that. Instead, that young person is put on an unemployment benefit of about $160 a week.
I now refer to the section of the report on agriculture. The select committee’s report states that agriculture makes up some 16 percent of the total lending by New Zealand banks, and that as the cash-flow position of farms has improved, the demand for credit has declined. The report talks about the impact of the recent financial crisis on the agriculture industry. Once again, one of the great tragedies of this Parliament is that we proceeded with the emissions trading scheme on 1 July. We became the first country outside Europe to have an emissions trading scheme, and, in the words of the Hon Nick Smith, the Minister for Climate Change Issues, it is the “most comprehensive” emissions trading scheme in the world. Those were his words from 24 September last year, and he repeated them again in the third reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill on 24 November—the “most comprehensive” scheme in the world. Those were his words, which are in
Hansard, and he has the nerve to suggest that New Zealand is not leading on climate change.
What is the impact of the emissions trading scheme on farmers? Well, Beef and Lamb New Zealand has said the impact of the emissions trading scheme will add some $3,900 a year to costs for the average dairy farmer. Those costs do not come in in 2015; they came in on 1 July this year. Dairy farmers face up to $3,900 in additional costs from 1 July this year. Do the farmers in Australia pay those costs? No, they do not. Do the farmers in Japan pay those costs?
My time is coming to an end, but I finish by simply saying that if the Labour Party members are concerned about the fact that we have had to reduce the subsidy on KiwiSaver contributions, and if they are concerned about the fact that we have not been able to put funds into the New Zealand Superannuation Fund, the so-called Cullen fund, the reason for that is very much in their hands.
Mr DEPUTY SPEAKER: I am sorry to interrupt the member, but his time has expired.