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House of Representatives
3 June 2010
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Questions for Oral Answer — Questions to Ministers, Questions to Members


Questions to Ministers

State-owned Assets—Government Policy on Sales

1. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Finance: Will the Government tell New Zealanders before the election which assets, if any, they will sell if they are re-elected?

Hon BILL ENGLISH (Minister of Finance) : The Government has made a firm commitment to New Zealanders that there will be no asset sales in this term of office and that, if the policy changes, we will say so and campaign on the issue in the 2011 election.

Hon Annette King: In light of that answer, has the policy changed since yesterday, when the Prime Minister said a decision on whether to sell Kiwibank would be made in the second term if National were re-elected, rather than telling New Zealanders before they go to the polls what assets were on the block?

Hon BILL ENGLISH: No, the policy has not changed. We made a firm commitment that if there are any policy changes, we will say so before the election, and we will put it to the electorate in 2011.

Hon Annette King: Is Government policy regarding the sale of Kiwibank that it will not be sold, that there is no rational reason for selling it, and that there are no circumstances under which it will be sold, as stated by John Key, and does that represent a change of policy?

Hon BILL ENGLISH: No, it does not.

Chris Tremain: What is the Government’s priority for managing the $220 billion of assets it holds on behalf of taxpayers?

Hon BILL ENGLISH: Our priority is to fix the damage done by the previous Government’s very poor management of the $200 billion worth of assets. The taxpayer owns $59 billion worth of financial assets, $52 billion worth of companies, and $109 billion worth of housing, schools, hospitals, prisons, and roads. It is a top priority for this Government to manage that $200 billion worth of assets better. I have to say that we have been able to make a lot of progress, because such a poor job was done by the previous Government.

Hon Annette King: Is it Government policy to sell Kiwibank eventually, as he said on 1 August 2008, before the election, or is the policy to never sell Kiwibank ever, as stated by John Key on at least nine occasions, including May 2007, 5, 6, and 7 August 2008, 21 and 22 October 2008, and 4 and 5 November 2008?

Hon BILL ENGLISH: The Prime Minister has strong views on these things, and I tend to agree with them.

Hon Annette King: Did he agree with John Key when he refused to sign a pledge not to sell Kiwibank and then agree with him when he changed his mind and promised never ever to sell Kiwibank, and is he aware that, while John Key was sending mixed messages, Ministers like Nathan Guy were busy signing the pledge on behalf of his party?

Hon BILL ENGLISH: As I outlined in answer to an earlier question, the Government has made a commitment to New Zealand that there will be no asset sales in this term of office, and that if the policy changes, we will say so. As I have pointed out to the member, we have spent our time on a much more important task, which is fixing—[Interruption] I think that demonstrates the point that the last Government did nothing to manage $200 billion of assets properly in the interests of the taxpayer, and that is what we are doing, with considerable success.

Hon Annette King: Was his decision to raise the sale of Kiwibank a day after his Budget an attempt to foster debate about an asset sale or an attempt to foment trouble with his leader?

Hon BILL ENGLISH: In the context of a Budget that has gone down pretty well because it is good for the economy and good for families, I was answering a question asked by the audience.

Hon Annette King: I seek leave to table a pledge, signed by Nathan Guy, pledging that his party will not initiate or support the sale of Kiwibank.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

  • Document, by leave, laid on the Table of the House.

Hon Annette King: I seek leave to table a copy of a pledge signed by all party leaders except John Key, who has now said that he would never ever sell Kiwibank, anyway.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection

  • Document, by leave, laid on the Table of the House.

Hon Annette King: I seek leave to correct a comment I made when I tabled the pledge. I said it was signed by—

Mr SPEAKER: Leave is sought. I presume it is to make a personal explanation. Leave is sought to make a personal explanation. [Interruption] I have to put the leave to the House. Is there any objection to leave being given? There is no objection.

Hon Annette King: When I tabled the pledge, I said it was signed by all party leaders. It was not signed by the leader of the ACT Party. I said it was signed by all leaders of the parties. I apologise to the leader of the ACT Party; he has always stuck with what he believes in.

Budget 2010—Economic Advantages for New Zealand

2. PESETA SAM LOTU-IIGA (National—Maungakiekie) to the Minister of Finance: How will the Budget help give New Zealand economic advantages over other countries, which are being forced to increase income taxes and go deeply into debt?

Hon BILL ENGLISH (Minister of Finance) : New Zealand has an opportunity to stand out from other countries in the next few years by having lower income taxes and bringing public debt under control. The Budget tax package leaves the vast majority of New Zealanders better off. It tilts the economy towards savings, productive investment, and exports, and away from borrowing, housing speculation, and the excessive Government spending that were the hallmarks of Labour’s term in office. If we had followed its policies, we would not be able to stand out compared with other countries.

Peseta Sam Lotu-Iiga: After the Budget tax package, what will be the top marginal tax rate faced by New Zealanders on the average wage, and how does this compare with the marginal tax rates of average wage earners in other countries?

Hon BILL ENGLISH: From 1 October, excluding tax credits, someone on the average wage will pay a top marginal rate of 17.5 percent. In fact, 73 percent of all New Zealand income earners will face a top statutory tax rate of 17.5 percent or less. In the OECD the average tax rate on the average wage is 36 percent. In the United Kingdom it is 32 percent, and even in Australia it is 26 percent. So, by comparison with those countries, we have a much lower statutory tax rate on the average wage.

Hon David Cunliffe: What would have been the economic advantages to New Zealand had the previous Labour Government cut taxes to the extent that the then Opposition National Party advocated prior to the global economic crisis, and had not instead paid net debt down to zero?

Hon BILL ENGLISH: The problem with the previous Labour Government was that it let spending get out of control, and that made it difficult for that Government to cut taxes.

Hon David Cunliffe: Why does the Minister allege that the previous Labour Government let spending get out of control, when Government expenditure as a proportion of GDP is forecast to rise under his administration to 33 percent of GDP?

Hon BILL ENGLISH: The member should consult the Labour spin doctors, who are all trying to argue exactly the opposite of that. The member says our expenditure is going to rise as a proportion of GDP. Labour’s general line contradicts him and says it is going to drop because we are slashing and burning.

Peseta Sam Lotu-Iiga: How does the Government’s current gross debt level compare with that of the same countries that the Minister referred to earlier?

Hon BILL ENGLISH: When the Government took office we were facing forecasts of ever-growing debt. This situation was first outlined in Labour’s last Budget, where it showed a decade of deficits and rising debt. New Zealand’s gross debt, as measured by the OECD’s internationally comparable data, is about 30 percent of GDP. Government gross debt in the United States is 90 percent of GDP, and it is 80 percent in the United Kingdom. Australia, however, has gross Government debt of 20 percent—so it is better than New Zealand—because it did not squander the last decade.

Hon Sir Roger Douglas: Can the Minister explain to the House why the fact that New Zealand is going more deeply in debt—$23 billion, or 133 percent, over the last 2 years—and substantially increasing indirect taxation is somehow not a problem and is better than what other countries are doing by going more deeply in debt and increasing income tax?

Hon BILL ENGLISH: The Government has made some considered and balanced decisions about the extent to which it is willing to cut Government spending in a recession. We could have cut spending considerably. That would have dealt to some extent with the problems that the member is talking about, but we decided to continue with Government spending to underpin growth in the economy, and to protect people from the sharp edges of the recession. However, as we come out of the recession we need to have significant fiscal constraint, to prevent public debt from rising too rapidly. The Government is borrowing $240 million per week every week for the next 3 years to finance its deficits and refinance existing debt.

Peseta Sam Lotu-Iiga: What economic forecast did the Government inherit when it took office just 18 months ago?

Hon BILL ENGLISH: Far from one of a golden economy, we actually inherited deeply worrying forecasts, starting in the 2008 Budget under the previous Government, which featured sharply rising debt, a deepening recession, and billions of dollars of unfunded Government spending commitments. In Budget 2009 we got on top of those difficult circumstances, but now we need to make further progress, as we have done in the 2010 Budget.

Budget 2010—Gap Between Rich and Poor

3. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Why did he say that the gap between rich and poor is “about the same” as a result of Budget 2010?

Hon BILL ENGLISH (Minister of Finance) : Because on a range of measures it is about the same. The Budget made sure that low, middle, and higher income earners receive roughly the same proportion of increase in income. This was achieved by tax cuts that more than offset any rise in GST at all income levels, compensation for those who receive Government support, and a series of revenue-raising measures that impact predominantly on high-income earners.

Hon David Cunliffe: How can the gap between rich and poor remain the same when a family with four children in Māngere will face additional childcare costs of around $100 a week, plus a hike in power charges, groceries, transport, etc., of around 6 percent, while someone on $1 million a year gets $1,000 a week back in tax cuts?

Hon BILL ENGLISH: As I said, the Budget package switched tax from direct to indirect tax, and we made sure that right across the income scale the income tax cuts are larger than the impact of GST increases on those families. The people who pay more out of the Budget package are smokers, the overseas owners of New Zealand assets, and anyone who invests in property—that is who pays more.

Hon David Cunliffe: How can he say that the gap between rich and poor is about the same as a result of the Budget when the wealthiest one-twentiethof New Zealanders get almost one-third of the tax back?

Hon BILL ENGLISH: At least two-thirds of the cost of the income tax package went on lowering the bottom two rates of income tax. For those who are on lower incomes the best news in the Budget is 170,000 new jobs. It will provide new jobs for those people who have lost their jobs, and job security for New Zealanders who are concerned about it. Most New Zealanders share the Government’s point of view that the Budget is good for the economy.

David Bennett: How will the benefits of Budget 2010 tax changes alter through time?

Hon BILL ENGLISH: There has been some discussion about the future gains for taxpayers. An average-wage earner, for example, will immediately be about $15 a week better off after GST in October 2010. By 2014, using Treasury’s forecasts for wages and prices, the amount that that taxpayer has gained will have risen to about $1,000 a year, or $20 per week. That is, the longer we apply the forecast as a result of this tax package, the better off the average-wage earner will be. This will be the case for most households, with the gains from the tax package getting bigger as their incomes rise.

Hon David Cunliffe: Given that the Secretary to the Treasury, Mr Whitehead, had pre-cleared with the Prime Minister his comments on Q+A that 15 percent GST was just a first step, and since GST is a regressive tax that leaves hard-working Kiwis worse off, how will raising GST further narrow the gap between rich and poor?

Hon BILL ENGLISH: The changes in GST are part of a package of measures that will lift the growth rate of this economy and provide 170,000 new jobs. If the member knows one thing—

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister well knows that the Budget documents ascribe only 6 percent of that change to his Budget.

Mr SPEAKER: The member must not use a point of order in that manner. If he disagrees with an answer the Minister is giving, the member should question further with a further supplementary question. Has the Minister finished his answer?


Catherine Delahunty: Kia ora e te Whare. Talofa lava, malo le soifua. Does he agree that more-equal societies produce better health and education outcomes for people across all income brackets?

Hon BILL ENGLISH: I understand that that is a hypothesis put forward by some. It may be correct. Certainly, one of the keys to equality in any society is that people can get jobs. The poorest people in any society are those who do not have jobs. That is why the Government has a strong focus on creating new jobs in a stronger economy, and the Budget delivers about 170,000 new jobs over the next 4 years.

Hon David Cunliffe: I apologise for not doing so earlier, but I seek leave to table a report from the OECD that showed income distribution and poverty reducing under the term of the previous Labour Government.

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

Hon David Cunliffe: I seek leave to table a transcript of the Q+A interview by the Secretary to the Treasury, in which he advocates on behalf of the Government—

Mr SPEAKER: This is a recent television programme, as I understand it. Members have seen that. There is no need to take that course of action.

Hon David Cunliffe: I seek leave to table OECD research that shows the types of tax policy changes employed by the Government increase income inequality.

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

David Garrett: Talofa lava, malo le soifua. Is the Minister surprised that after Labour’s 9 years, when low-income suburbs were left infested with criminal activity, when large proportions of children left school illiterate and innumerate, and when the tax burden on all workers steadily rose, the underclass continued to grow and remains a problem to this day?

Hon BILL ENGLISH: The key to opportunity for many of the New Zealanders whom the member describes is that they can get a job. That is why as much policy as possible that the Government is implementing focuses on getting businesses to create new jobs, because there are no new jobs until a business decides to invest and to take the risk. That is why the Budget encourages 170,000 new jobs.

Mr SPEAKER: Before I call question No. 4 could I just ask the Hon Ruth Dyson, if she is going to conduct a mini-conference, not to do it in the Chamber during question time.

Job Ops Scheme—Increase in Numbers

4. TIM MACINDOE (National—Hamilton West) to the Minister for Social Development and Employment: Why has the Government doubled the number of Job Ops for young people?

Hon PAULA BENNETT (Minister for Social Development and Employment) : Because Job Ops has been a huge success. We have added an extra 6,000 places, which takes the total number of Job Ops to 12,000. This Government is committed to backing young people, including those with low to no skills, into opportunities to work, every time.

Tim Macindoe: What have been some of the successes for young people on Job Ops?

Hon PAULA BENNETT: I advise that 1,300 young people have finished their Job Ops and 86 percent of them have not gone back on to a benefit. Those are early results. Even those who did not complete their Job Ops have predominantly stayed off a benefit. We are still working with these young people, but the initial data indicate we are making a real difference for them.

Jacinda Ardern: Can she confirm that, as per her answers to written questions, a third of the young people who have completed Job Ops no longer have a job and have rejoined the 60,000 already unemployed young people; if so, what is she doing about them?

Hon PAULA BENNETT: As already indicated, 86 percent of those who have finished their Job Ops have not gone on to a benefit. I can break that down for the member, if she likes. Of those who left their Job Ops early, 77 percent have not gone on to a benefit, and I think that is really positive. Job Ops is really discovering opportunities for young people. I think another 6,000 places are very much needed.

Darien Fenton: Talofa lava. Is it fair that employers can receive a subsidy of up to $5,000 through Job Ops, presumably in recognition of their help in bringing down youth unemployment, but now, due to a change made by her Government, they can fire that subsidised worker within 90 days, with no fear of an appeal against unfair dismissal?

Hon PAULA BENNETT: The member may not understand Job Ops. What happens is employers get $2,000 upfront and they get $3,000 at the end of the 6 months. If, for whatever reason, that young person does not stay for the whole 6 months, the employer does not get the payment at the end. Job Ops is about opportunities. Employers are stepping up and taking on young people. We will back them every time to do that. And the 90-day trial period is working for them.

Economy—Innovation, Growth, and Export-led Recovery in 2010-11

5. Hon SHANE JONES (Labour) to the Minister for Economic Development: What steps is he taking in the 2010-11 financial year to foster innovation, firm growth, and an export-led recovery?

Hon GERRY BROWNLEE (Minister for Economic Development) : I am doing many things. In particular, last year I announced the establishment of the International Growth Fund. The fund is targeted at firms that New Zealand Trade and Enterprise has assessed as most likely to contribute to New Zealand’s long-term growth. In the 2010-11 financial year funding will rise to $30 million from the $9 million provided in 2009-10, during which time we were in transition from previous types of grants. Science and innovation are at the heart of the Government’s economic agenda, and I have worked with my colleague the Hon Dr Mapp on our budget package, which is aimed at lifting firms’ investment in research and development.

Hon Shane Jones: Why has the Government stopped talking about reducing the earnings gap between Australians and New Zealanders, and is this evidence of the abandonment of the step change strategy?

Hon GERRY BROWNLEE: No—far from it, in fact. The successes of the Government’s programme to increase our export base can be seen in the annual trade balance to the year ended April 2010, which was a surplus of some $161 million, or 0.5 percent of exports, compared with the average deficit of 10.8 percent of exports for the previous 10 financial years. I think the Government’s policies are working very well when it comes to raising our income through having more exports.

Hon Shane Jones: Given that esteemed commentators from the Business and Economic Research group have said to take out dairy, take out forestry, and take out fish, are there any export levers for growth?

Hon GERRY BROWNLEE: I totally reject that. I do not know what the member has been reading but he may be interested to know that, for example, oil is now one of our biggest export earners. It was third biggest in 2008 and fourth biggest in 2009, and is likely to be an even larger contributor in years to come.

Hon Shane Jones: Is the $226 million reduction in his budget from 2008-09 to 2009-10 evidence of innovation, firm growth, and an export-led recovery; if so, how?

Hon GERRY BROWNLEE: I think the member has got his figures quite wrong. We have gone from $53 million down to $30 million. I repeat for him that the April figure for our export or merchandise trade balance showed a surplus for the first time in 10 years. The member should be asking me why we did not take out more.

Te Ururoa Flavell: Kia ora tātou e te Whare. Talofa lava; malo le soifua. What role has the Ministry of Economic Development had in the deal with the foreign oil and gas company Petrobras, which awarded it the sole right to explore and drill in the Raukūmara basin; and what responsibility does the Minister have to ensure there was consultation with the hapū from within Te Whānau-a-Apanui and Ngāti Porou about how that proposal fosters their innovation and growth?

Hon GERRY BROWNLEE: Firstly, the oil is a Crown reserve mineral, so the Crown has every right to ensure that that resource is well explored; the benefits that come from it are accrued to all New Zealanders. I am reliably informed that consultation with the iwi started in September 2008, and that there was a period of some 40 days when there was an expectation that there might have been some response from the iwi. None was forthcoming during that time. At a meeting earlier this year there was an undertaking to let the iwi know when the block offer was being announced. There was a slip-up that I must take responsibility for, and I have apologised to Dr Māhuika and to Mr Gage for that slip-up. But I point out that much of that block—the vast majority of that block—is in the exclusive economic zone, not the foreshore and seabed.

Overseas Investment Rules Review—Membership of Technical Reference Group

6. DAVID CLENDON (Green) to the Minister of Finance: Is a lawyer working for Hong Kong - listed Natural Dairy NZ on the technical reference group advising the Government on the review of the overseas investment rules; if so, when was he alerted to this?

Hon BILL ENGLISH (Minister of Finance) : I understand that technical reference group member Andrew Petersen of Bell Gully is working on behalf of Natural Dairy in New Zealand. I am not aware of any other members of the technical reference group acting on behalf of the company. The technical reference group is made up of senior practitioners with expertise in applying the Act. When we considered improving the Act we decided to talk to people who know how the Act works. They know how it works because they handle applications. The member should keep in mind that they are providing technical and legal advice, not policy; that will be determined by Ministers and Cabinet.

Mr SPEAKER: Before I call the supplementary question, I tell the Minister that the question asked when the Minister had been alerted of that. It was a straightforward question, and I believe that the member deserves to have it answered, if the Minister has that information.

Hon BILL ENGLISH: I became aware of Mr Petersen’s connection with Natural Dairy Holdings only last week when it was made public.

David Clendon: When the Minister met with members of the technical reference group on 18 February, did any of them suggest raising the threshold required for business investments that must be approved under overseas investment law for citizens from China or Hong Kong?

Hon BILL ENGLISH: I do not recall the details of those discussions, but if the member is suggesting that individual lawyers were making propositions in the interests of particular applications, that is absurd. The applications are not processed by me or by the lawyers; they are processed by the Overseas Investment Office in accordance with the law, for which that member’s party voted, I am quite sure, when it was changed 4 or 5 years ago.

David Clendon: Will the Minister consider releasing the information relating to the 18 February meeting to which lawyers from five corporate law firms were invited to give their No. 1 problem with the current screening regime, so that the public can see how fair and open his review of overseas investment is; if not, why not?

Hon BILL ENGLISH: As far as I am aware there is no information related to that meeting. I had a discussion with a group of lawyers about how they thought the Act could be made to work better. That is about it. There is no possible conspiracy here. They were giving some technical advice on, as I recall it, issues like the definition of land, which is an uncertainty in the Act. Any applications are processed by the Overseas Investment Office in accordance with law passed by this Parliament in recent years.

David Clendon: Do officials from Treasury and the Overseas Investment Office liaise with the members of the technical reference group; if so, how are conflicts of interest handled?

Hon BILL ENGLISH: As I understand it, they do liaise with those members. The way that any potential conflicts of interest are handled is that all the applications are handled by the Overseas Investment Office, which is separate from Treasury, separate from the Minister, and separate from Cabinet, and administers independently a law that was passed by this Parliament in recent years.

David Clendon: Could the Minister explain how Treasury’s advice to the members of the technical reference group not to produce any formal report, thereby leaving no paper trail, reduces the risks of any conflicts of interest?

Hon BILL ENGLISH: No, I could not.

David Clendon: Will the Minister release all advice from the technical reference group members at the same time as the Government announces its plans for the next step of the overseas investment review, so that the public can decide for themselves whether there were any conflicts of interest; if not, why not?

Hon BILL ENGLISH: This is an open Government and all of the processes of the Government, including that one, are subject to the Official Information Act. The member may be disappointed to find that the group of lawyers have provided some pretty narrowly focused technical advice, mainly to Treasury. I had one meeting with them, 4 or 5 months ago now. In case the member is not aware, all applications are processed by the Overseas Investment Office. Any policy changes that are made will be debated by this Parliament in the same open and transparent manner as every other policy change that goes through Parliament is.

Agriculture, Minister—Suspicious Package Sent to Office

7. Hon DAMIEN O’CONNOR (Labour) to the Minister of Agriculture: Did he or his office contact New Zealand Police about Farmers Weekly journalist Alan Emerson relating to the incident in his office on 17 May; if so, what information was passed to police?

Hon DAVID CARTER (Minister of Agriculture) : No, definitely not.

Hon Damien O’Connor: Did he or his office contact the media and provide Alan Emerson’s name; if so, does he think that compromised the ability of the police to investigate the cluster fly bomb incident?

Hon DAVID CARTER: No, definitely not.

Hon Damien O’Connor: How then does he explain Alan Emerson’s assertion that TV had been provided by his ministerial office with Mr Emerson’s name, and is he attempting to clarify the actions undertaken by his office?

Hon DAVID CARTER: This matter is an open police investigation. I do not think that it is in the public interest for me to comment on that question or on any allegations from Mr Emerson.

Hon Darren Hughes: I raise a point of order, Mr Speaker. The answer that the Minister gave would be correct if the matter were before the courts, as then it would be improper for any member to speak about it. Mr O’Connor asked the Minister a question about something that is merely a matter of inquiry.

Mr SPEAKER: The Minister has an absolute right to assert that it is not in the public interest to answer a particular question; the Minister has asserted that, and that is where the matter lies. Only the Minister can judge that.

Hon Damien O’Connor: Given that the bomb turned out to be a box of dead flies, does the Minister consider that the response by the police was warranted when local rural people in the Wairarapa cannot get support from police for love nor money to address the many serious crime issues that are facing the region?

Hon DAVID CARTER: As I answered before, as this matter is now under an active police investigation, it is not in the public interest for me to comment further.


8. PAUL QUINN (National) to the Minister of Corrections: Can she provide an update on any major initiatives to avert the prison capacity crisis?

Hon JUDITH COLLINS (Minister of Corrections) : Talofa lava. Yes, today at Rimutaka Prison I was delighted to open the first prison unit in New Zealand built using pre-loved shipping containers. Due to a lack of planning and action from the previous Government, we were forecast to run out of baseline prison beds this year. The use of containers to provide prison beds, as well as the expansion of double-bunking, has successfully averted the crisis. We have also taken action to manage future growth in the prison muster through the redevelopment of Auckland Central Remand Prison in Mount Eden, and the proposed public-private partnership at Wiri in South Auckland.

Paul Quinn: What are the main advantages of using container cells to house prisoners?

Hon JUDITH COLLINS: The 60-bed unit was built in half the time and cost 30 percent less than a traditionally built unit. The unit was commissioned in August 2009, and only 9 months later we had the unit ready for its first occupants. Although the cells are basic and austere, they are of much better quality than many of the cells in many of our older prisons. They also provide an effective plug in, plug out option. If prison capacity is needed elsewhere, the containers can simply be unplugged from their current location and plugged in where they are needed.

Question No. 7 to Minister

Hon DAMIEN O’CONNOR (Labour) : I seek leave to table two documents. The first one is an article from Alan Emerson, claiming that—

Mr SPEAKER: When the member says it is an article from Alan Emerson, does he mean an article in a publication?

Hon DAMIEN O’CONNOR: Yes, it is.

Mr SPEAKER: Which publication?

Hon DAMIEN O’CONNOR: The publication is the New Zealand Farmers Weekly magazine.

Mr SPEAKER: It is readily available.

Hon DAMIEN O’CONNOR: I seek leave to table the second document.

Mr SPEAKER: What is the other document?

Hon DAMIEN O’CONNOR: It is Wellington Police District crime statistics, showing that crime rates in the Wairarapa are going up and resolution rates are going down.

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

Budget 2010—Grant to Pacific Economic Development Agency

9. SU’A WILLIAM SIO (Labour—Māngere) to the Minister of Pacific Island Affairs: Was there an open and transparent bidding process to ensure accountability for taxpayer funds before the decision was made to grant $4.8 million to the Pacific Economic Development Agency Ltd in Budget 2010; if not, why not?

Hon GEORGINA TE HEUHEU (Minister of Pacific Island Affairs) : Talofa lava. The member is making an assumption that a contestable process was required. In this instance the Government decided to fund the Pacific Economic Development Agency for certain economic deliverables, and new money was appropriated in Budget 2010 for this purpose.

Su’a William Sio: Were any of the well-established organisations that offer similar services to the Pacific communities in Auckland—such as the Pacific Business Trust, the New Zealand Pacific Business Council, the Manukau Institute of Technology, the Auckland University of Technology, Best Pacific Institute of Education, and the Pasifika Education Centre—able to bid for the $4.8 million before the Government awarded it to the Pacific Economic Development Agency Ltd; if so, which one?

Hon GEORGINA TE HEUHEU: Those are all excellent organisations and, yes, they are all in Auckland. But, as I said earlier, this was a Budget initiative. New money was appropriated specifically for the provision of services from the Pacific Economic Development Agency.

Su’a William Sio: What did the Pacific Economic Development Agency say it could deliver in return for $4.8 million of taxpayer money that other well-established organisations could not?

Hon GEORGINA TE HEUHEU: The Government is still to enter into negotiations for a purchase agreement with the Pacific Economic Development Agency, and all of those issues will be sorted out in good time.

Su’a William Sio: Who represented the Pacific Economic Development Agency throughout its negotiations with the Government, which resulted in it being awarded $4.8 million of taxpayer funding in Budget 2010?

Hon GEORGINA TE HEUHEU: Ministers met with a number of people who are connected with that agency, and we were convinced that it could offer certain services that would help the Government to achieve its priorities for Pacific people in Auckland.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was, I think, a specific and careful question about who represented it, and I think that saying “a number of people” is not an answer to the question of who represented someone. Saying “a number of people” is not, I think, an answer to what was a careful and specific question without any spin around it, at all.

Mr SPEAKER: I think that the member makes a fair point. I think the question was a fair question that was totally focused on the primary question, and if the Minister has that information, it would be helpful to the House. [Interruption] The Minister is indicating that she does not have that information with her.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I know that I am placing myself at some risk here, but it just beggars belief that the Minister—

Mr SPEAKER: No, the member will resume his seat right now. He cannot treat the House like that; that is not on. The Minister has indicated that she does not have that particular information and, therefore, she cannot answer the question with any more detail than that. People can make their own judgments about that, but it is a perfectly fair answer to the question.

Hon David Cunliffe: I raise a point of order, Mr Speaker. In support of my colleague, I say this is an important matter. I seek clarification as to whether the Minister is saying she does not know—

Mr SPEAKER: The member will resume his seat right now. I am on my feet. The member is trying to litigate the answer. That is not on. It is perfectly within the members’ opportunity to ask, on the next sitting day, a specific question about whom the negotiations took place with, and then the Minister will answer it.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The point of order was just that if the Minister had a document with her, for example, that she might have access to or might have quoted from, then it would not be within the Standing Orders for her to say she did not have that information, so—

Mr SPEAKER: The member will resume his seat. He will not litigate this. The Minister has indicated to the Speaker that she does not have that information with her. I must take the Minister’s word on that, and so must the member. He cannot litigate the matter in that way.

Environmental Protection Authority—Establishment of Stand-alone Agency

10. CHRIS AUCHINVOLE (National—West Coast - Tasman) to the Minister for the Environment: What decision has the Government announced today with effect to the establishment of a new stand-alone Environmental Protection Authority?

Hon Dr NICK SMITH (Minister for the Environment) : I was pleased to announce this morning, at the Environmental Defence Society conference in Auckland, Cabinet’s decision on Monday for a stand-alone Environmental Protection Authority. I welcome the fact that the Environmental Defence Society issued a release warmly welcoming the decision. This will bring under one roof a wide range of environment regulatory functions and will provide strong national direction to the environment roles of district and regional councils.

Chris Auchinvole: How does the Environmental Protection Authority fit into the Government’s broader plans for environmental management?

Hon Dr NICK SMITH: The Government’s overall environment framework is to have the Ministry for the Environment as a well-focused policy ministry, to have the Environmental Protection Authority responsible for efficient regulation, and to have the Parliamentary Commissioner for the Environment as the independent auditor. This was a policy that National promised in the 2008 election. It is about ensuring this Government meets its goal of growing the economy while effectively protecting New Zealand’s environment.

Brendon Burns: Talofa lava. When the Minister told the New Zealand Planning Institute on 8 May last year that he wanted “the expanded EPA fully operational by 1 July 2010”, did he envisage an increase in the number of staff working on national environment standards—an increase not guaranteed in the Cabinet paper he has released today?

Hon Dr NICK SMITH: The first phase of the Resource Management Act review on 1 October last year was for the national consenting function of the Environmental Protection Authority to start up, and there is provision in the Budget for about $13 million for that function. The announcements I have made today involve transfer of about 50 staff, both from my colleague Gerry Brownlee’s ministry, the Ministry of Economic Development, and the Ministry for the Environment, to beef up the overall capacity of that Environmental Protection Authority. I make no apologies to the member for the fact that this is not a Government that wants big bureaucracy; it wants efficient Government agencies, and that is what we will achieve with the Environmental Protection Authority.

Chris Auchinvole: How will this new authority assist New Zealand to better manage environmental issues in its exclusive economic zone?

Hon Dr NICK SMITH: The authority will provide for additional functions to ensure that the huge area of ocean covered by the exclusive economic zone has world best practice environmental protection. I think we have all been reminded of the importance of that with the environmental tragedy that has occurred in the Gulf of Mexico. The Government is determined to ensure that New Zealand’s marine environment is properly protected as we expand petroleum exploration and development in the exclusive economic zone.

Rahui Katene: How would a new stand-alone Environmental Protection Authority, or indeed any Government agency, protect the interests of the hapū within Te Whānau-a-Apanui and Ngāti Porou in the event of drilling and exploration in the Raukūmara basin, such that any environmental catastrophe would be prevented?

Hon Dr NICK SMITH: I acknowledge the input of the Māori Party in today’s announcement, particularly the strong advocacy by the Hon Dr Pita Sharples on behalf of Māori for the robust Environmental Protection Authority model that the Government opted for on Monday. This model provides for appropriate Māori input into the Environmental Protection Authority’s role. As well as that, the Minister for Economic Development and I have commissioned an independent report to ensure that our exclusive economic zone regulatory proposals represent best practice, so that we can assure those important people that their environment will be protected.

Internal Affairs, Department—Proposed Merger with National Library and Archives New Zealand

11. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Internal Affairs: Will the positions of National Librarian and Chief Archivist be employees of the Chief Executive of the Department of Internal Affairs and be accountable to him under the proposed merger of National Library and Archives New Zealand into the Department of Internal Affairs?

Hon NATHAN GUY (Minister of Internal Affairs) : Once integration of the three departments is complete, the individuals holding the statutory positions will be employees of the Chief Executive of the Department of Internal Affairs, instead of the State Services Commissioner as is currently the case. The independence and integrity of the Chief Archivist will be preserved. The status of the statutory role of the National Librarian will also be preserved.

Grant Robertson: In light of that answer, how does the Minister think that the Chief Archivist will be able to maintain his or her important constitutional role to compel chief executives to deposit and maintain Government records if he or she is subordinate to another chief executive?

Hon NATHAN GUY: The statutory roles and functions of the Chief Archivist will be preserved and protected. I remind the member that when he looks around the world, he will see that in Australia the archives function sits within the Prime Minister and Cabinet portfolio, in the United Kingdom it sits within the Ministry of Justice, and in Ireland the Chief Archivist sits within the Department of Tourism, Culture and Sport. Those officials continue to have statutory independence.

Grant Robertson: Does the Minister think it is appropriate that the historic and constitutionally significant Alexander Turnbull Library will be led by a third-tier manager in the Department of Internal Affairs under the proposed arrangements; if so, why?

Hon NATHAN GUY: I reassure that member that there will be a full select committee process through the change, and the operational details of the merger are currently being worked through by the three very capable chief executives, with some support from the State Services Commission.

Grant Robertson: Can the Minister confirm that significant damage was done to the original copy of the Treaty of Waitangi the last time Archives New Zealand was part of the Department of Internal Affairs; if so, why would he want to repeat that disastrous mistake?

Hon NATHAN GUY: I cannot confirm that for the member. I can confirm that since the 1990s there have been two Acts that will continue to be enforced—the Public Records Act 2005 and the National Library of New Zealand (Te Puna Mātauranga o Aotearoa) Act 2003, which the National Party supported through this process.

Broadband Roll-out—Rural Initiative Response

12. TODD McCLAY (National—Rotorua) to the Minister for Communications and Information Technology: What response has the Government received to the Rural Broadband Initiative?

Hon STEVEN JOYCE (Minister for Communications and Information Technology) : I am pleased to report that the Government has received 39 responses to its call for expressions of interest in the Rural Broadband Initiative. Interest has come from a range of infrastructure companies in New Zealand and abroad, and includes nine substantial expressions of interest covering rural areas across the entire country. The responses contain some innovative ideas for the deployment of fast broadband to rural communities and schools, and Ministry of Economic Development officials will now consider them.

Todd McClay: What benefits will rural communities receive as a result of this policy?

Hon STEVEN JOYCE: The Rural Broadband Initiative will see 93 percent of rural schools connected to the Internet by fibre within 6 years, allowing them to interact with specialist teachers by videoconferencing, view high-definition documentaries, and access international collections of educational resources. In addition, most rural communities will receive fast broadband speeds of at least 5 megabits per second, delivering an end to dial-up Internet and allowing online accounting, farm management, banking tools, third-generation mobile services, and access to popular video sites like YouTube and Parliament TV, on both of which people can see their parliamentary representatives in action.

Clare Curran: Will the Minister guarantee that his Government will meet the targets of the Rural Broadband Initiative, given it is investing just $48 million of taxpayers’ money in its rural scheme compared with $1.5 billion in its urban scheme?

Hon STEVEN JOYCE: The new telecommunications development levy, together with the direct Government investment, will be around the $300 million mark. I point out once again to the member that we cannot directly compare the urban and rural policies, because the urban amount is an investment that the Government ultimately expects to have returned to it, whereas the rural network amount is a grant. The urban and rural networks start from different points. Many rural households and businesses are struggling on dial-up, whereas the urban network is an investment in ultra-fast broadband.

Hon Trevor Mallard: Further to the Minister’s reference to YouTube, I note that only four people have viewed his Federated Farmers speech on YouTube compared with 18,000 who have viewed the analysis in this House of his academic record—is that why he wants to upgrade rural broadband?

Hon STEVEN JOYCE: I confirm that I am very flattered to have my academic record not only celebrated in this House but also viewed by so many people around the country and around the world in celebration of my zoology degree, which included the study of animal behaviour and the mating behaviour of the mallard duck.

Questions to Members

Electricity Commission—Consideration of 5-year Review Report

1. JOHN BOSCAWEN (ACT) to the Chairperson of the Commerce Committee: What progress has been made on the committee’s consideration of the Report from the Controller and Auditor-General on Electricity Commission: Review of the first five years?

Hon LIANNE DALZIEL (Chairperson of the Commerce Committee): The Commerce Committee met on 6 August 2009 to consider this report and it agreed unanimously at that meeting to conclude its consideration of the report without report to the House. Standing Order 387(2) requires committees only to consider reports from Officers of Parliament; they do not have to report their findings to the House.

John Boscawen: Can the chair confirm that the committee has received a letter from me regarding the recent increases in the price of electricity; and what options does the committee have?

Mr SPEAKER: I do not believe that this question relates to a matter before the committee, and therefore I do not see how the chair of the committee can answer. If the chair indicates that I am wrong, I am very happy to sit down, but I believe that the chair of the committee can answer questions related only to matters before the committee. Whether someone has written a letter to the committee is not a matter before the committee. I stand to be corrected if the chair of the committee thinks that I am wrong.

Hon LIANNE DALZIEL: I am not sure that you are wrong. However, I wonder whether it would be in order for me to respond to the question, but not by referring to whether the letter has been received. Although it is not out of order for the member to say he has written a letter, it may be out of order for me to say that it has been received. Perhaps it would be of assistance for me simply to say what the options would be if such a letter had been received. I do not think that would be—

Mr SPEAKER: That may be helpful to the House. [Interruption] I think we should stick with the proper procedures of the House. Members cannot ask questions about matters that are not before the committee. I regret that the supplementary question cannot be answered.

Hon Darren Hughes: I raise a point of order, Mr Speaker. I think it might be useful to sort this matter out for future questions. I think the chair is saying that a letter has been received and it will be on the agenda for the next meeting of the Commerce Committee. [Interruption] It is before the committee at the present time.

Mr SPEAKER: This is a matter of some interest. I am looking at Speaker’s ruling 149/2: “A question to a chairperson of a select committee can only be for information on a matter for which the committee has charge—that is, on a matter referred from the House or that the committee has resolved to inquire into.” On this occasion the matter has certainly not been referred from the House, and I do not believe that the committee has resolved to inquire into it. That is why such a question cannot be asked of the chair of a committee.