Questions for Oral Answer — Questions to Ministers

Yes. I also stand by my comments yesterday that a programme that focuses on the highest paid is not the sort of programme people would expect to see from a Labour-led Government.

💬 Hon Bill English: Can the Minister confirm that it is now his position that he is opposed to larger tax cuts because of their potential impact on inflation and Government spending, and at the same time he is opposed to smaller tax cuts because, for instance, if they are only $6 a week they are measly; so if he is opposed to both larger and smaller ones, then what kind of tax cuts is he talking about?

It is a pity the member has never heard of Goldilocks. But, apart from that, if the member cared to read the entire speech, which I think was one of my more brilliant speeches, delivered to the Waipukurau Rotary Club in 2005, he would see that I said that Australian taxpayers earning up to $58,000 would receive a measly $6 a week—and the important point was the next sentence—meanwhile, those earning $125,000 or more would receive an extra $87 a week.

💬 Hon Mark Gosche: Has the Minister seen any reports on the widely reported gap between taxes on average New Zealanders and taxes on average Australians?

Yes. According to the latest OECD report, Taxing Wages Report 2006, which is the last period for which we have the data, an Australian one-earner married couple with two children on the average wage had a tax burden six times higher than the equivalent New Zealand family.

💬 Hon Trevor Mallard: Wake up, Bill!

💬 Madam SPEAKER: Comments like that lead to disorder.

💬 Hon Bill English: Why does the Minister regard a tax reduction of $6 per week as measly when this has an annual value of $300, yet he regards cheaper doctor visits, which have an annual value of something like $50 a year for an average New Zealander, as extremely valuable; so why does he regard cash delivered through a tax cut as insignificant when it is $10 a week, but he regards cash delivered through cheaper doctor visits as very valuable when it is about $1 a week?

The member is clearly getting more and more convoluted in his arguments. The point I was making to the Waipukurau Rotary Club, which some day may invite Mr English to talk to it, was—

💬 Hon Dr Nick Smith: Why not answer the question?

💬 Madam SPEAKER: Comments like that also lead to disorder.

The contrast was between the $6 a week that somebody on the average wage and well above the average wage got, and the $87 a week that somebody earning A$125,000 a year got. The point about doctors’ fees, of course, is that people who need to go to the doctor, who are often people on lower incomes, have had a massive reduction, and I thank the member for reminding the House that National plans to increase doctors’ fees and lift the cap.

💬 Hon Bill English: Is it now the Minister’s position that a tax cut of $6 to $10 is significant, and why has he not offered one of those when he could afford them?

A New Zealand tax cut across the board at $10 a week—which, of course, National would never offer—costs something over a billion dollars a year. Even in National Party terminology, I would have thought a billion dollars a year was reasonably significant.

💬 Hon Jim Anderton: Has the Minister had any reports of anyone in the political arena who advocates significant tax cuts, while at the same time wanting the Government to expend more money on every single conceivable Government administrative area in the country?

💬 Hon Dr Nick Smith: Less bureaucrats.

If we had more teachers, then that member might have said “fewer bureaucrats” instead of “less bureaucrats”, but never mind. Yes, the National Party daily calls for more spending in almost every area of Government activity, and calls for lower taxation, but of course we now know how those members make it up. Mr English has now been clear. Every weekend for about the last three he has quite clearly said that a National Government would borrow more money. That borrowing would be disguised for something, but it would actually be for tax cuts.

💬 Hon Bill English: Can the Minister confirm his statements made over the last 2 years where he has ruled out adjusting tax thresholds for inflation, he has ruled out changing the top tax rate, the middle tax rate, and the bottom tax rate, he has ruled out implementing a tax-free zone, he has ruled out cutting taxes when growth is strong and cutting taxes when growth is falling, and in fact the only thing he has not ruled out is to promise tax cuts in election year?

No, I cannot confirm any single one of those statements. I remind the member, firstly, that we are cutting corporate tax on 1 April next year, which the member voted against. I remind the member that we have cut tax on working families in New Zealand, which the member voted against. I remind the member that we have cut taxes on savings, which the member voted against. All I know is that Mr English has said that it does not matter whether we have high inflation, low inflation, a Government surplus, or a Government deficit; he would cut taxes and he would borrow to do it.

💬 Hon Bill English: How does he explain to people on $39,000, paying 33c in the dollar on every extra dollar they earn, that he is so keen to avoid cutting income taxes he has now decided that he is the biggest tax cutter there ever was and he has cut everything except the personal income tax rate, which they must continue to pay?

The fact is I have cut taxes more than the previous National Government did, but they have been targeted on families, targeted on savings, and targeted on economic growth. They have been targeted on what does good things for the country.

💬 Jeanette Fitzsimons: When will the Minister commit to a proper investigation of replacing some of the tax on the bottom band of wages and salaries with equivalent taxes on pollution, waste, scarce resources, and unearned income, as the Greens have been advocating for many years, given that New Zealand makes less use of these eco-taxes than most of the OECD?

A number of options have been under consideration, and are under consideration. The member also needs to realise that any tax changes at all have to pass through Parliament. They must also not be regressive, and many forms of taxation—the form that she mentions—are capable of being regressive because they tend to hit low to modest-income families higher than families on higher incomes.

Trades—Young People

2. SUE MORONEY (Labour) to the Minister of Education: What steps is he taking to encourage more young people into trades-related careers?

The most recent is the launch of the Youth Apprenticeships pilot programme in 10 schools across New Zealand that offers secondary students industry-based trades training, tertiary education, and work experience while they are at school. The pilot will be evaluated and we hope to extend it across many more schools in the future.

💬 Sue Moroney: How does this pilot build on other initiatives for trade training?

It should be seen in the context of a wide-ranging programme to build apprenticeships and industry training. The programme includes restoring funding to Career Services; restoring attention to the technology curriculum in schools; making sure we have a bridge from school to work through programmes such as Gateway, in which 9,000 secondary school students are experiencing the workplace before they leave the classroom; the Modern Apprenticeships scheme, with 3,000 apprenticeships already qualified, and 9,000 in training; and the introduction of the on-the-job training programme in the industry training area of 176,000 trainees next year. I point out that the contribution made by the National Opposition to this programme was to abolish apprenticeships in 1992.

💬 Katherine Rich: Can he confirm that out of 8,595 secondary school students in the Dunedin area, only 5 students will take part in his pilot next year, meaning he has announced not so much a pilot but a “pilot-ette”, and that this programme, just months after John Key’s trades training policy announcement, is just a cynical attempt to get the issue of increased trades training in schools off the political agenda?

Can I say I am pleased the member thinks a pilot will sweep away the policy of the National Party around the area of apprenticeships, but I would go back to say that while this is a pilot, students can enjoy being part of the many hundreds getting advice around the youth career area. They can be part of a technology programme, they could be part of the 9,000 students currently in training for the Modern Apprenticeships scheme, and they could enjoy being part of the 176,000 who are enjoying being in industry training. So they have huge options compared with the abolition of apprenticeships in the 1990s, which was not much of an option at all for those students.

💬 Hon Bill English: I seek leave to table the Hansard showing that the Labour Party voted for the Industry Training Act, which replaced the Apprenticeship Act.

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

I seek leave to table the voting record of National members who voted against the Modern Apprenticeships bill, and during the debate labelled it as pathetic.

Document not tabled.

💬 Katherine Rich: I seek leave to table an article from the Otago Daily Times that states only five kids are going to take part in his grand pilot next year.

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

Cancer—Radiotherapy, Australia

3. Hon TONY RYALL (National—Bay of Plenty) to the Minister of Health: How many category C cancer patients have been sent to Australia for radiotherapy treatment this year, specified by cancer treatment centre?

Radiotherapy in Australia is sometimes offered to category C patients, often when the district health board experiences a surge in demand. In the financial year just finished two centres have offered treatment in Australia and four have not. A total of 211 patients in Auckland and in MidCentral have accepted this offer. Although that represents only 2 percent of all patients who receive radiotherapy in New Zealand, it does materially improve the timeliness of radiotherapy treatment for all cancer patients.

💬 Hon Tony Ryall: Is the Minister aware that Palmerston North cancer patients are waiting up to 3 months to begin radiation treatment, which is over three times the Ministry of Health guidelines, and why have these delays got so bad; last year he blamed the strikes, what is his excuse for failure this year?

The situation in mid-Canterbury started off quite badly, got a lot better, and has started to deteriorate just in recent weeks. The situation around the country is that nearly all patients in category C get their treatment in a timely manner, and all patients who are in categories A or B—the ones who really need it—always get it on time.

💬 Maryan Street: What has been the main limiting factor for radiotherapy in New Zealand, and is the proportion of New Zealanders who are being treated in a timely way getting better or worse?

In recent years the key problem has been the shortage of radiation therapists—the people who work the machines. The National Government in its time decided to let the market deliver radiation therapists and—surprise, surprise—the market failed to deliver. This Government has now actively increased training so that there are now 36 percent more radiotherapists in the workforce and the number of graduates each year has now doubled. Because the workforce problem has been substantially addressed, the proportion of New Zealanders who receive timely therapy has steadily risen, as this graph of figures over recent years shows.

💬 Barbara Stewart: If, as reported, a facility is set up in Auckland to make the radioactive material used for PET scanners, will he request that the district health boards review the case for the purchase of PET scanners for use in the public health system; if not, why not?

That is a good question. The member is well aware, but the House may not be, that PET scanners are not actually involved in treatment; they are a diagnostic tool and a treatment refinement tool. The situation with PET scanners is that at present New Zealand is drawing up criteria—I am talking about doing that this year—for PET scan use. If we then apply those criteria across our population, we will be able to estimate the likely number of people who would benefit from PET scan use. If that use was sufficient to warrant having a PET scanner, then I am sure the district health boards would review the case for purchasing one.

💬 Hon Tony Ryall: Given that cancer patients in Auckland who face an 8-week delay for radiotherapy are offered treatment in Australia, why are women with cancer in the lower North Island who face 3-month delays not being offered treatment elsewhere in New Zealand or in Australia, or is the Government satisfied that what people get from the health system depends more on where they live than what they need—nothing short of health care by postcode?

I think the member managed to mishear my answer to his primary question. MidCentral—that is, Palmerston North—sends patients to Australia.

💬 Hon Tony Ryall: Not this year!

The member says: “Not this year!”. I have given him the figures.

💬 Hon Tony Ryall: That was last year.

The member suggests that somehow or other I have given him the wrong figures. His question asked about the number of people who had been sent to Australia in the last year; I gave him that information. The information I have given him is correct. He has now decided he is going to make it up for himself. It is not appropriate to do that.

💬 Hon Tony Ryall: Has the Minister seen the reports of the MidCentral District Health Board spokesperson who, earlier this month, said that sending patients to Australia was not being considered by the district health board, and does he recall the Prime Minister’s speech to the Labour Party when she said: “Why are cancer patients waiting so long for radiotherapy that their cancer is dangerously progressing? I have a friend who waited for 3 months and still does not know for sure whether that will prove fatal.”; and what does he say to the women of Palmerston North—and of Canterbury, on the latest available information—who are waiting more than 3 months to begin this lifesaving treatment?

District health boards offer patients treatment in Australia if they feel they cannot give it to their patients in a timely way. Some patients say: “That’s a good idea. I would rather have my treatment sooner, in Australia.” Some patients say: “No, that’s OK. I’m OK with the situation that I’m in. I’ll take my treatment in New Zealand later.” That is the situation—it is an offer. It is an offer that has been around for a while. It is an offer that the National Party called for 5 years ago, saying: “Can you please let these people have treatment in Australia?”. And we do. The long and short of it is that the proportion of New Zealanders who get treatment in a timely way has been going up. If members want to know what it was like 10 years ago, I will quote from a little memo to the Minister of Health at the time, Jenny Shipley. North Health indicated that in Auckland alone there were 259 people who were waiting an average of 16½ weeks—that is an average, not one or two people waiting more than 13 weeks. There were 259 of them waiting an average of over 3—damn near 4—months.

💬 Hon Tony Ryall: Does the Minister stand by his recent statement that the health budget should not be used to pay rent to private landlords, and how does that square with the new breast cancer screening facility in Palmerston North being in a privately owned building that is rented by the district health board and having been opened in March last year by the Minister himself?

Large parts of our health system are privately run, and large parts of it is privately provided, including the provision of real estate. My statement that the member referred to—he pretends to misquote it—is about a situation in which for ideological reasons there is a requirement that a hospital be built by the private sector and rented out to a district health board, such that even after 10 or 12 years, when the building is paid off, the landlord is banking the money and the patients are not the getting the care they would otherwise get because the money has gone to the landlord.

💬 Hon Tony Ryall: Which of these is Government policy: the Minister’s statement that the health budget should not be spent on paying rent to private landlords, the reality of a breast cancer screening facility in Palmerton North that is privately owned but rented by the district health board, or the fact of the publicly funded district health board mental health and public health facilities being provided from rented buildings by a district health board in his own electorate in Dunedin?

There are hundreds of such examples. I stand against—[Interruption]

💬 Madam SPEAKER: It is becoming impossible to hear.

I stand against political pressure on any health provider to require it to go to the private market and get a deal that damages health care because ideology trumps common sense.

💬 Hon Dr Michael Cullen: Napier is a good example.

Indeed, Napier is a good example; so is Central Hawke’s Bay. There are plenty of examples of National, when in power, using its ideological pressure to require landlords to be enriched at the expense of the health of New Zealanders.

💬 Hon Tony Ryall: I seek leave to table the statement “crucial health funds could be diverted from treating patients into paying rent to private landlords.”

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

💬 Hon Tony Ryall: I seek leave to table a report from the MidCentral District Health Board spokesperson, who said: “Treatment in Australia—”.

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

Immigration—Labour Market

4. PETER BROWN (Deputy Leader—NZ First) to the Minister of Immigration: Does he stand by his statement: “We must always ensure capable Kiwis get jobs first. Immigration should never substitute foreign for domestic labour because it is cheaper.”; if so, why?

Yes; because it is an important principle and an objective that is set out in immigration work permit policy.

💬 Peter Brown: Is the Minister aware that the Government’s skilled labour policies are being exploited by companies in the communications industry, such as Transfield Services and possibly DownerCommspec, through the practice of bringing in relatively cheap technicians from countries like the Philippines, which is forcing skilled New Zealand telecommunications technicians to receive downward pressure on their wages, or, alternatively, to move offshore; in light of all that, would he still assert that our immigration policy should not lead to Kiwis losing their jobs to cheap foreign labour, as is apparently happening in this industry?

In the first place, I am aware there are extensive skill shortages in the information and communications technology industry, and by far the majority of representations that I receive on that subject are in the direction of desperate companies seeking to hire more workers from whatever source. Further to that, I draw the House’s attention to the fact that there are various mechanisms that prevent the undercutting of New Zealand wages by immigrant labour, such as the labour market test, the need for industry and union agreement to place jobs on the long-term and immediate skills-shortage lists, and ensuring that applicants are qualified to undertake any relevant work in New Zealand.

💬 Russell Fairbrother: What reports has the Minister of Immigration seen on the contribution of migrants to the New Zealand labour market?

I have seen a Department of Labour survey, which provided good feedback from employers of skilled migrants and shows that 81 percent of employers were impressed with the performance of their skilled migrant staff, and that 90 percent of skilled migrants were either satisfied or very satisfied with their jobs and lives in New Zealand.

💬 Peter Brown: Is the Minister aware that the general manager of AutoTerminal New Zealand Ltd, one of New Zealand’s largest used-car importers, has allegedly told an employee that if he had any problems with signing a contract—offering lower pay and worse conditions—the employee would be replaced by someone from the Philippines, as the company had “people in the Philippines who are training to do branch managers’ jobs and sales jobs over here, to replace anyone who won’t fall into line.”; and would the Minister agree that the ability to blatantly exploit our skilled labour shortages and replace hard-working New Zealanders with cheap foreign labour show that the Minister’s immigration policy is failing to meet expectations?

I am truly shocked that the member has found an allegedly unethical used-car dealer, but if he would like to put down a primary question on the matter, or write to me about it, I would be happy to look into it.

💬 Peter Brown: Would the Minister agree that the ability for employers to bring in cheap, foreign labour under the guise of filling our skilled labour shortages, when they come at the expense of New Zealanders already filling those jobs—like the examples I have already listed in my supplementary questions—has now created the perverse consequences of employers forcing down wages, and, even worse, forcing those same New Zealanders offshore to get better-paid employment; and can he describe this as being anything other than a complete disaster?

Yes, I certainly can. In the last quarter, 42 percent of New Zealand firms described difficulty finding unskilled staff and fully one-third of all New Zealand businesses recorded a shortage of skills as their primary constraint to growth.

💬 Peter Brown: Has the Minister personally received any reports of abuses such as those I have just outlined; if so, can he tell us what he is doing to address the situation, noting his comments that I quoted in my primary question?

As I outlined to the House, the member has not done me the courtesy of providing me in advance with the information he refers to. But there are two industries where those sorts of reports have come to me and where we have taken appropriate action. One is the situation of foreign crews on charter fishing vessels, where we have substantially tightened the rules, and the other is the seasonal labour industry in horticulture and viticulture, where the Government’s new Recognised Seasonal Employer programme is making a huge and positive difference.

State-owned Enterprises—Asset Ownership

5. GERRY BROWNLEE (National—Ilam) to the Minister for State Owned Enterprises: Does he consider buildings or wholly owned subsidiaries of State-owned enterprises to be taxpayer-owned assets; if not, why not?

I start by thanking the member for the opportunity to contrast the various policies of the National Party on asset sales with the policy of Labour. The substantive answer is “Yes” for wholly owned subsidiaries, and as far as buildings are concerned it depends on whether the Crown is the beneficial owner. Lots of buildings in New Zealand are not owned by the taxpayer.

💬 Gerry Brownlee: Is it correct that as one of the two shareholding Ministers he recently approved a deal allowing the Airways Corporation of New Zealand to sell its purpose-built Christchurch complex, then lease it back off the private sector; if so, why did he do that?

Yes; because it is not a core asset.

💬 Dave Hereora: What reports has he seen on alternative views of ownership of State-owned enterprises?

I have seen quite a number, including two from the National Party in this New Zealand Exchange publication. The National Party is in such disarray that its members cannot get together to tell one story in the publication; they tell two stories in that publication, rather than one. I tell the members opposite that we understand the difference between core assets of State-owned enterprises and things that are not core. For example, a wind farm is a core asset of Meridian Energy but a building is not.

💬 Madam SPEAKER: Supplementary question, Doug Woolerton. [Interruption] I have called Doug Woolerton. Would members please be quiet; otherwise, members will be leaving the Chamber.

R Doug Woolerton: Can the Minister confirm that dividends from former State-owned enterprises that were sold in the 1980s and 1990s—not including the ones that the Government has had to buy back because the effect of their sale was disastrous—largely flow offshore, ramping up our current account deficit and making other countries rich at our expense?

I think it is fair to say that that is generally the case, but in the case of some specific assets that have been sold directly to National’s mates, that might not necessarily apply. The point I want to make to members opposite is that Government members understand the difference between trading and not trading. National Party members seem to say that Landcorp cannot sell a sheep, or Meridian Energy cannot sell a unit of electricity. Clearly, that is nonsense. But what we do know is that this Government will never do what the National Government did—and, frankly, some other Governments did—in the past, and that was to sell off assets that should have been retained in the beneficial interests of all New Zealanders.

💬 Gerry Brownlee: Can the Minister explain, given that he says a wind farm is a core asset, what a geothermal field generating electricity is, if it is not a core asset; if it is a core asset, why did his party decide to sell the some of the geothermal assets of Mighty River Power to Tūwharetoa—

💬 Hon Member: Who?

💬 Gerry Brownlee: I will start again, Madam Speaker. If a wind farm is a core asset—[Interruption]

💬 Madam SPEAKER: We will hear this question in silence, to get it over with. Come on! I want this question heard in silence, so that there is not constant interruption of the member who is trying to put his question.

💬 Gerry Brownlee: If a wind farm is a core asset, what is a geothermal field producing electricity; if it is a core asset, why did his Government sell some of Mighty River Power’s geothermal capacity to Ngāti Tūwharetoa Geothermal Assets Ltd; and can he explain why it is OK if his party sells State-owned assets, but if someone else talks about it, it is not?

A number of the electricity companies owned by the State have been involved in joint-venture arrangements with iwi. That will continue; it is one of the ways that the assets of the iwi can be used positively, not only for the iwi but for the security of supply of electricity in New Zealand. That is a good thing.

💬 Gerry Brownlee: Can the Minister explain whether the sale of the AgResearch subsidiary AgVax Developments Ltd to a foreign-owned company called Intervet was an example of privatisation of taxpayer assets, and was it in his view a “good thing”?

No, it was not. That company was a spin-off company, one that was not—[Interruption] Well, there are a number of ignorant people opposite who do not understand that one of the things that our State-owned enterprises and Crown research institutes sometimes do is develop intellectual property into a company and sell it, whereas the practice of the National Government was to sell intellectual property at an early stage for very little return. This Government believes that there are occasions when it is worth developing intellectual property to the point where we get real value from it, rather than selling it off cheap to one’s mates in the way that Bill English, Tony Ryall, and Nick Smith did in the past.

💬 Hon Bill English: I raise a point of order, Madam Speaker. The member knows he cannot make that kind of imputation in Parliament. I ask him to withdraw it.

💬 Madam SPEAKER: The member has asked for a withdrawal of comments that were made in answer to the question. I personally found it very difficult to hear, so I cannot assist members. I am afraid members will be leaving the Chamber systematically; I will be simply asking members to leave, because of the barracking. Will the member please withdraw.

I withdraw.

💬 Hon Dr Michael Cullen: Can the Minister confirm that Paraparaumu Airport was sold to mates of National at below its real value?

That is a matter of record. How much the former Minister of Transport got for his campaign funds for doing so is unclear.

💬 Hon Maurice Williamson: I take grave exception to that. I want to make a personal explanation. I was the Minister of Transport when Paraparaumu Airport was sold, and I received not a cent from anybody for any campaign fund. I want to make that very clear.

I raise a point of order, Madam Speaker. I want to make it clear that I made no reflection on that member; Roger Sowry was, of course, the member involved.

💬 Gerry Brownlee: Is it acceptable for a State-owned enterprise with a vital role in New Zealand’s air safety to sell its purpose-built building to a profit-seeking private sector investor without a lease guarantee, when, according to statements from the Minister’s fellow Ministers, these very same factors present insurmountable barriers to any private sector involvement in new roads or other infrastructural assets?

This Government has never ruled out the involvement of the private sector in the building of roads. The private sector has been involved in the building of roads in New Zealand ever since the Ministry of Works was broken up over 20 years ago.

💬 Gerry Brownlee: Can the Minister confirm this afternoon that the Labour Government is perfectly happy with the sale of non-core assets, perfectly happy with the sale of spin-off assets, perfectly happy with the sale of non-trading assets, and perfectly happy with the sale of numerous buildings; in that context, can he explain what the extraordinary sale of the South Island national grid under his Government was all about?

Yes, yes, no, maybe, and we did not sell it.

Obesity—Community Initiatives

6. DARIEN FENTON (Labour) to the Minister of Health: Has he received any reports of community initiatives that have helped in the fight against obesity and contributed to better health outcomes?

Yes, I have. Last week the Mangere Healthy Kai initiative won the supreme Health Innovation Award. Shopkeepers in Māngere have got together to promote and improve sales of healthy food, and to raise awareness for adopting healthy lifestyles. It works. The good people of Māngere have taken to sushi, filled roll sales have doubled, banana sales have trebled, and so on. We should congratulate all those involved.

💬 Darien Fenton: Has the Minister seen any reports of initiatives that will not contribute to better health outcomes?

I am afraid I have, too. The National Party’s secret plan to let the market set the price for seeing a doctor would drive many people away from getting health advice. John Key and his friends think it is OK for something like health to be a market commodity. This is a little at odds with ordinary Kiwis, who are now going to see their general practitioners more often because it is half the price it used to be. It is also at odds with community initiatives like the Mangere Healthy Kai one, which relies on partnership and goodwill rather more than on venal motives.

💬 Sue Kedgley: Does the Minister agree that, valuable though community initiatives like the one he mentioned are, they will not be sufficient as long as we have an environment in which unhealthy food is far more readily available, is often cheaper, and is far more heavily promoted than healthy food, and that we will not change that environment without putting controls over the marketing of unhealthy foods to children?

Certainly, the marketing of food for children is part of the thinking within the original Healthy Eating - Healthy Action strategy, and I notice that it is also part of the thinking of the report into obesity that has just come from the Health Committee, which the member who asked the question chairs. So, yes, this issue runs across the whole of society, and it will require multiple areas of endeavour to make progress on it. On the other hand, where a small, successful initiative has done so well, I think we should applaud it and give it some congratulations.

Benefit Fraud—Serious Fraud Office

7. JUDITH COLLINS (National—Clevedon) to the Minister for Social Development and Employment: How does he respond to the concerns of the Serious Fraud Office in relation to the Wayne Patterson benefit fraud investigation that “The role adopted by the Ministry as the investigator, the prosecutor, and the political adviser on this significant fraud in which it was also the victim does raise perception issues that would have been avoided had the Police or the Serious Fraud Office been responsible for the investigation and the prosecution.”?

Although this is clearly an operational matter between the ministry and the Serious Fraud Office, I am advised that the ministry informed the police of this case as soon as the scale and the nature of the offending was identified. That was the correct thing to do. The protocol at the time was for the police to engage the Serious Fraud Office. The ministry worked closely with the New Zealand Police, the Department of Internal Affairs, the Crown Law Office, the Crown-warranted criminal prosecutors, and forensic accountants, and it liaised with the Inland Revenue Department. I point out that Mr Wayne Patterson was sentenced to 8 years in prison. All of the money he stole will be recovered. An additional $467,000 on top of that will be returned to the Crown, so I fail to see how this was an inappropriate way to conduct an investigation that was supported by the police and by forensic accountants.

💬 Judith Collins: Does the Minister agree with the Serious Fraud Office that aspects of the investigation did not meet professional standards; if not, why not?

No, I do not, for the reasons I outlined in my substantive answer.

💬 Judith Collins: Does the Minister think the Ministry of Social Development was acting professionally when it took a full week, from 26 September to 3 October, for the ministry’s senior fraud investigator to take Kiwibank’s notification of suspicious activity any further because she “couldn’t open the spreadsheet”?

I believe that this investigation, into what was a one-off, extraordinary case, resulted in the full recovery of all money stolen plus nearly $500,000 on top of that. As I said in answer to the member’s first question, I fail to see how the department could have done any better than that.

💬 Judith Collins: Is the Minister aware that when the Ministry of Social Development’s senior fraud investigator received a call from the Department of Internal Affairs on 2 October offering assistance with Operation Sparky, the ministry investigator admitted that she did not know what he was talking about because even though she had received an email about a potential fraud with a spreadsheet containing 14 identities 6 days earlier, she had not been able to open that spreadsheet; and does the Minister agree that this amateurish response suggests that the investigation would have been better handled by the Serious Fraud Office or the police?

No, I do not. I point out to the member that the end result—which, as I have repeatedly pointed out to her, is quite an outstanding one—may well not have been achieved by the Serious Fraud Office. The Serious Fraud Office focuses on prosecution and conviction. We have a prosecution, we have a conviction, we have our money back, and we have nearly $500,000 on top of it. That is not a bad result.

💬 Judith Collins: When the Minister said yesterday that the conclusion of this investigation shows the way this was handled was obviously very effective, did he know then that his senior investigator had no idea what was going on for well over a week and could not open a simple spreadsheet; and how can the public have confidence that there is not another Wayne Patterson story sitting in a spreadsheet somewhere?

I doubt that there is a person out there with 123 unique identities at the present time taking money from any particular system, given the judge’s saying that this was one of the most unique cases he had ever heard. But what I do not doubt is that this investigation has got all the money back plus $500,000, and that the person was prosecuted and is currently sitting in prison for 8 years. It is not a bad result.

💬 Hon Trevor Mallard: Does the Ministry of Social Development have computer skills courses to improve its staff’s skills in this area, and might those courses be shared by members opposite who, as The Hollow Men showed in the case of Bill English, Gerry Brownlee, Nick Smith, Don Brash, and John Key, had their emails on a broadcast system?

💬 Madam SPEAKER: The first part of the question is in order, not the second.

I can confirm that the ministry is constantly lifting the skills of—

💬 Gerry Brownlee: I raise a point of order, Madam Speaker. How can the first part of that question be in order, Madam Speaker? The member asked whether the skills he spoke of would be shared by the National Party.

💬 Madam SPEAKER: No, that is not what was said. The member needs to listen, like I have to.

💬 Gerry Brownlee: Well, I can hardly hear. That is the problem.

💬 Madam SPEAKER: Well, maybe the member would like to talk to his colleagues and to the colleagues on this side. There is a lot of chattering going on as well as interjections. Members need to lower it. The first part of the question was purely within the ministerial responsibility, but I ruled that the second part was totally out of order. Would the Minister please respond.

I can confirm that the ministry is constantly lifting the skills of its staff around all sorts of areas, including computers. If people are enrolled with the ministry, as some people may well be at some time in their lives, then they will have the opportunity to go on computer courses as well.

Electoral Finance Bill—Freedom of Expression

8. CHRISTOPHER FINLAYSON (National) to the Minister of Justice: Does he agree with the Hon Peter Dunne regarding the Electoral Finance Bill that “It is little wonder that groups including the Human Rights Commission and the Law Society have condemned the bill as a massive attack on free speech.”; if not, why not?

I certainly agree with Mr Dunne’s comment that the proposition behind the bill is difficult to argue against. He also makes some constructive comments on ways of addressing concerns raised by submitters. I welcome this, and I stand by the comments I have repeatedly made—that the select committee process will add value by further refining the bill.

💬 Christopher Finlayson: How can the Minister stand here and defend a bill that another Minister of the Crown has likened to something the KGB would have struggled to match; and why does he not give up defending this bill and throw it out, as the Law Society and the Human Rights Commission have suggested?

Because, again, if the member were a little more careful with his reading he would note that the Minister he is referring to suggested that changes needed to be made to the bill. As I have said repeatedly, the select committee that is considering this bill—and of which that member is apparently a member, although he shows no evidence of it in this House—I am sure will suggest useful changes.

R Doug Woolerton: Can the Minister confirm that in the 2005 election year, campaign billboards began appearing early, around February or March, but that the cost of those was not attributed to that party’s campaign costs; and that these facts alone highlight why change is necessary?

Indeed, I can confirm that the National Party had such billboards, along with, of course, a $350,000 Exclusive Brethren - funded campaign, followed by a million-dollar Exclusive Brethren - funded campaign—none of which managed to find their way into proper accounting processes around electoral finance.

💬 Metiria Turei: Does the Minister agree that freedom of speech can be protected while ensuring that elections are not bought by those with the most money, if we are able to narrow the definition of third-party electoral activity so that third-party election activities genuinely aimed at influencing an election’s outcome are the only ones affected, and we are able also to have a real crackdown on secret trusts and anonymous donations to protect the public’s interest in knowing how political parties are funded?

I do indeed agree that if a narrowing down of the definition of “third party” is achieved, then it will indeed further help the protection of freedom of speech.

💬 Hon Peter Dunne: Noting that answer and also the speech by the Leader of the Opposition to the National Press Club in August, in which Mr Key accepted the need for some change to electoral financing law, including a cap on third-party expenditure and more transparency of donations, why has the Minister not engaged directly with the Leader of the Opposition and his party to bring about a solution that everyone seems to be broadly in agreement with?

Because the bill concerned is in front of a multiparty select committee. That select committee—

💬 Hon Dr Nick Smith: That’s not an excuse. That’s a weak excuse.

Oh, Dr Smith should calm down. That bill is before a select committee whose membership was enhanced and significantly enlarged to ensure that full political party participation could indeed take place, and that the discussion could take place around the submissions from many submitters. I think that that is the precisely correct place for that consideration of the bill to take place—including, I might add, useful amendments to it.

💬 Christopher Finlayson: When the Minister said in the House yesterday: “I am persuaded by relevant case law, by contrary legal advice,”, with regard to the compatibility of the Electoral Finance Bill with the right to freedom of speech, what “relevant case law” was he referring to, and what “contrary legal advice” was he referring to?

Again, the member should recall that Harper v Canada was the relevant case law. Contrary legal advice came from Crown Law, of course, which included reference to that case law, and which also made reference to the United Nations Human Rights Committee and its view on these matters, and the European Court of Human Rights, which also supported that.

💬 Christopher Finlayson: Can the Minister explain why he thinks the New Zealand Law Society got it wrong when it said the legal advice provided by the Crown Law Office was deficient and did not engage with the points raised in its submission?

It is not for me to judge the debate between the Law Society and the Crown Law Office. I am persuaded by the appropriateness and value of the Crown Law Office advice, given the references and the considerations I have referred to already.

💬 Christopher Finlayson: Can he explain why he thinks the Human Rights Commission got it wrong when it said: “By limiting freedom of expression and creating a complex regulatory framework in the way it does, the Electoral Finance Bill unduly limits the rights of all New Zealanders to participate in the electoral process. The Commission therefore considers that the Bill is inherently flawed and should be withdrawn.”?

One of the great things about our select committee process is that it enables all sorts of views to be expressed. I do not think that the Human Rights Commission’s analysis is correct. I have explained that at length to the member, including the fact that the Human Rights Commission failed to make reference in its submission to the most relevant and up-to-date case law. But it made some useful points, and I am sure the select committee will give careful consideration to the primary issues it has raised, along with many of the other submitters, and make useful refinements to the legislation.

💬 Hone Harawira: Tēnā koe, Madam Speaker. Kia ora tātou te Whare. Does he agree with Garth Wyllie, executive of the Employers and Manufacturers Association (Northern) Inc., who told the Justice and Electoral Committee that the Electoral Finance Bill will impinge on democratic rights by suppressing freedom of speech, and what difference does he see between freedom of speech and an ability to pay to promote a particular political view?

No, I do not agree with that submission, and I am confident that when the select committee has completed its work it will offer some suggested changes that will further improve the legislation to ensure that the freedom of speech of ordinary New Zealanders, and their right to participate in the electoral process, is protected, whilst ensuring that there is not an overwhelming and undue influence of those few who have large sums of money to spend on the election process.

💬 Hone Harawira: What guarantees can he make that the revelation of third-party advocacy will not be used to persecute individuals, such as happened in the case of Amokura Panoho, a Department of Labour employee who was forced to resign because false allegations were made in public against her by two Government Ministers?

I think that that question is getting to the very edges of relevance in this particular question.

💬 Madam SPEAKER: Yes, I would agree. But would the Minister try to address the question within the context of the primary question.

I can say to the member that the parameters of this legislation are clear, and they are about defining provision that enables ordinary New Zealanders’ rights to participate in their electoral process without their voices being drowned out by those—as we have seen in recent experience—who can and will spend vast sums of money to try to overwhelm the voices of the many.

💬 Rodney Hide: Does he agree that the Electoral Finance Bill is too broad in its sweep, when South Pacific Pictures’ movie We’re Here to Help, about Dave Henderson’s fight with the Inland Revenue Department, is captured by clause 5 as “words and graphics” that will persuade voters not to vote for a particular party, especially in light of Michael Cullen’s repeated attacks under privilege on Dave Henderson, and does he not think that that is absurd, given that the Government, through the Film Commission, has poured $1.9 million of taxpayers’ money into the movie, which none the less under his bill would be declared election advertising?

Perhaps the relevant part of the member’s question in particular is around clause 5(1)(a), and I would suggest in particular clause 5(1)(a)(iii), which has been the focus of a considerable number of submissions. It is, I believe, an area in which the select committee will offer its view, and I would not be surprised to see a suggested refinement to that clause. I would be happy to consider that, as I have indicated all along.

State-owned Enterprises—Diversification

9. LESLEY SOPER (Labour) to the Minister for State Owned Enterprises: What reports has he received on the benefits of diversification in the State-owned enterprises portfolio?

This Labour Government supports State-owned enterprises expanding their scope of business into new markets. Kiwibank is an obvious example of one that is successful and is a core asset. Express Couriers, a subsidiary of New Zealand Post, is another example. This joint venture with DHL has made a real and positive contribution to New Zealand Post’s financial position—

💬 Hon Member: You sold it.

No, we actually own half the joint venture. It is very successful internationally because DHL has international assets, which has meant that our profits are higher. The taxpayer gets a bigger return. We will, however, take the profits from selling non-core assets, such as the $800 million profit from the sale of an Australian wind farm; from memory, it was a return on the original investment of about 130 percent. Where we can use that cash for better purposes—in this case, building roads in Auckland—we will do so.

💬 Lesley Soper: Has he seen any reports that propose an alternative to diversifying State-owned enterprises?

Yes, I have—several. Bill English wants to sell all of them all, or at least part of all of them, John Key wants to sell a few, and Gerry Brownlee is too confused between a share and an asset to make any sense at all.

💬 Metiria Turei: Can the Minister describe the benefits to the climate of the State-owned asset Landcorp clearing forest for dairy farms, with the resulting double whammy of carbon dioxide and methane emissions?

Landcorp managing that process for the landowner—which it is not—is no different from any other enterprise doing that.

💬 Gerry Brownlee: Can the Minister explain why his Government sold Southern Hydro, why it sold off some of Mighty River Power’s geothermal assets, why it sold AgVax Developments, why it sold numerous State farms, and why it sold numerous State buildings, and, most important, can he explain the extraordinary sale of the southern transmission grid?

I shall take a couple of those as examples. Landcorp sells farms. That is part of its job. It is the old Department of Lands and Survey. For more than 100 years it has bought land, developed farms, and sold them to cockies. That is what it does. It is a good thing to have a Government agency doing that. Southern Hydro is another very good example. We bought into a development—[Interruption]

💬 Madam SPEAKER: We are in danger of having the Minister repeat his answer in silence, so would members please keep the level of intervention down.

Southern Hydro is another good example. We bought into an Australian wind farm development. Buying into it meant that we got a bulk deal on windmills for that development and for New Zealand. So we got our windmills a lot more cheaply than we would have. But, not withstanding that, for our $600 million investment we got a $1.4 billion return.

💬 Gerry Brownlee: Ah, asset sales are good.

It was an asset sale, but a bloody wind farm in Australia is not a core asset of a New Zealand State-owned enterprise. If Gerry Brownlee is too thick to understand that, there is no hope for him.

💬 Gerry Brownlee: I raise a point of order, Madam Speaker. The Minister answered—inadequate as it was—only half the question. Could he answer the rest?

💬 Hon Dr Michael Cullen: Opposition members insist on asking lots and lots of questions, but there is no requirement to answer more than one of them.

💬 Madam SPEAKER: That is totally correct. That is consistent with the Standing Orders.

💬 Gerry Brownlee: Can the Minister explain how the deal works whereby the South Island transmission grid was sold?

No, because it was not sold.

Police Recruitment—Standards

10. CHESTER BORROWS (National—Whanganui) to the Minister of Police: Does she stand by her statement that the Cerno report on police standards and assessment practice “provided assurances that the Police are training recruits to an acceptable standard, and that police are capable of doing their jobs when all their training has been completed.”; if so, does she have the same level of confidence that the standard of recruits being accepted into Police College has not declined?

Yes, and I can do no better than quote from Dr George’s report: “On balance, the assessment processes used by Police seem capable of ensuring that those achieving permanent appointment as Constables are able to perform the job. Primarily this is because of the multiple hurdle approach adopted by Police, whereby any weaknesses in one aspect of the assessment process are tempered by other, subsequent, parts of the process. Indeed, the demanding and broad range of tests that aspiring Constables must pass are significantly greater than those required for entry to most New Zealand organisations.”—and, I would add, including this Parliament.

💬 Chester Borrows: Can she confirm the finding of the report that when it came to the performance of new recruits on the general mental ability entrance test “Overall, the changes in pass marks in Examination support the claim that there is a decline in performance”, and is that not an acknowledgment that more people are going to the Police College who would not have made it in the past and who require extra tuition before they can graduate?

The report does point out that the police do spend, in the report’s view, too much time on helping recruits during their training. But I think it is important to point out that the report stated that those who graduate meet the standard required and are fit for purpose. What do New Zealanders want? They want police officers on the street who can do the job. That member, among others, claimed they could not. This report shows they can.

💬 Jill Pettis: Does the report conclude that constables who go out on the beat are fit for purpose and probably thinner today than some former serving officers—that they are able to perform the job—or does it support the unfortunate headline in the Dominion Post that described New Zealand police as the “thick blue line”?

Dr Dave George, who was the author of the report, said that Professor Hattie’s conclusion was that the police were actually at least at the population average of intelligence or greater. The speed at which some politicians and some media attacked and denigrated the police was unfair and gratuitous and no doubt had an effect on those officers who are out on the street trying to do their job 24 hours a day. I think it would help if some people would withhold their judgment on the police on some occasions and engage their brains before their mouths.

💬 Chester Borrows: Can she confirm that when it came to the reasons why recruits were doing worse on entrance tests, the report stated: “It is not clear that any decline is attributable to the change in assessment, but is more likely related to decisions about the standards”; and can she confirm that one of those decisions was to exclude the bottom 23 percent, when the police had previously excluded the bottom 40 percent, after the agreement signed between Labour and New Zealand First?

No, I cannot confirm the final part of that member’s question. I can confirm that Professor Hattie said the police should not use stanines in testing. He said they should not use them, and the police are as intelligent today as previously—probably more intelligent than when that member went through. The constant attack on New Zealand police by saying they are not fit for purpose is proved by this report to be untrue. I ask the member to get over it. He has lost it, because this report shows the claims that member was making were wrong.

💬 Chester Borrows: Can she confirm the finding of the report that the decision last year to make two of the physical standards for recruits easier, the new run times based on age and gender and the lowering of the height of the scaling wall from 6 feet to only 4 feet, “did not follow a sound and rigorous process” and “lacked a sound rationale or research evidence on which to base the changes”, and that this drop in standards came after the Labour - New Zealand First agreement; and was not the real reason for that to meet the target of 1,000 new police, which the Prime Minister had stated before the election was simply not credible?

No, no more than the National Party’s decision to allow shorter people in the police meant that they are not good police officers. This report showed that the people who graduated met all the standards that were required at graduation. The member is trying to say that people who came in and who may not have met all the standards when they started were therefore not capable of being police when they graduated. This report showed that they met the standards and that they were capable of graduating and capable of doing the job. I ask the member to stop attacking New Zealand police officers. They are out there doing the work that he used to do but is not capable of doing now.

Taxation—Tax Evaders

11. RODNEY HIDE (Leader—ACT) to the Minister of Finance: Does he stand by his statement that Mr David Henderson, or “Hendo” is “one of the biggest and nastiest tax evaders in this country … who ran the sex industry in Christchurch and avoided tax thereon” and has he any evidence to support his claims?

Mr Henderson has exercised his right to make a formal response to this House and I have no further comment to make on the matter.

💬 Rodney Hide: How then can Dave Henderson ever get fair treatment from the Inland Revenue Department when the Deputy Prime Minister has already declared him guilty of criminal tax evasion and he has never even been charged or had any evidence produced against him, and why is the Deputy Prime Minister not big enough to apologise and say that he got it wrong?

Under the Tax Administration Act, of course, the Inland Revenue Department must not take any instructions from Ministers on such matters, at all.

💬 Rodney Hide: Does the Minister not find it richly ironic that the taxpayer, through the Film Commission, has put $1.9 million into a movie, We’re Here to Help, showing that the Inland Revenue Department unfairly victimised Mr Dave Henderson—a victimisation that continues to this day because of the wild allegations that were made by the Deputy Prime Minister under privilege and that to this day have not been retracted?

I repeat that under the Tax Administration Act, the Inland Revenue Department must act independently and cannot be directed. The fact that the Film Commission has helped fund a film shows what a democracy this is. But I would like to quote to the member from the blurb for the film: “This film does not purport to be an accurate account of the events involving Mr Henderson and the IRD.”

Accident Compensation—Injury Prevention, Rehabilitation, and Compensation Amendment Bill

12. PANSY WONG (National) to the Minister for ACC: Does she stand by her statement made during debate on the Injury Prevention, Rehabilitation, and Compensation Amendment Bill: “Business people—whatever their company structure—like to have some certainty. …if we have no smoothing policy at all, then we will get back to the good old bad days when people had no idea from one year to another what their levy was likely to be. That is a totally unsatisfactory situation.”; if not, why not?

Yes. The smoothing policy of the Accident Compensation Corporation (ACC) gives some certainty to employers, while also ensuring adequate funding to pay for the treatment and rehabilitation costs of injured workers.

💬 Pansy Wong: What does the Minister have to say to Mr Douglas Bull, who is self-employed and facing a 34 percent increase in his ACC levy for 2008, and who was told that it was because of the merging of the self-employed work account and the employer account?

If the increase was in the levy, then that is quite different from an increase in the rate. Obviously, an increase in the levy could also be contributed to by a considerable increase in income. That would be logical, because it is rated against income. The way the self-employed work account is now worked out—the way the rate is determined—has separated the income and non-income parts of the account, which is fair, given that we are now moving them to be on the same basis as employers.

💬 Pansy Wong: What does the Minister have to say to Mr Gray, who is self-employed and has had increases in his ACC levy of at least 10 percent a year since 2003, and who is now facing a 35 percent increase in the levy for 2008 for similar cover?

It would depend on the question I was asked to address as to what I would say to him. If I was asked whether a privatised competitive scheme under National would make it better, then the answer would be no. As has been shown in a country as close as Australia, when insurance companies undercut their prices, they loss-lead so that they give lower bills. They end up going bankrupt. That is what happened to the National Party’s ACC privatisation adviser, HIH, which left the taxpayers of Australia with millions and millions of dollars for them to fund.

H V Ross Robertson: Can the Minister tell the House by how much the work account is currently overfunded, and what ACC will to do to rectify that?

The ACC work account has substantial reserves, which have arisen from strong investment from ACC, strong economic conditions, particularly high employment, and lower than forecasted injury rates. As noted in the levy consultation papers that are currently out for discussion, it is proposed that ACC returns $250 million to employers in the 2008-09 year.

💬 Pansy Wong: What does the Minister have to say to Mr Armstrong, a truck owner and driver who is facing an increase of 47.5 percent in his ACC levy for 2008, and who has been told by ACC that this increase is only the beginning in the phasing in of the new work account, which covers both the self-employed and employers?

I can tell Mr Armstrong—as I would say to any employer and employee—that under this Government the cost of his injury, treatment, and rehabilitation will be met by income gained from the scheme. Under that member’s proposals of a “pay as you go”, privatised scheme, that would not be the case. People’s cost of injury would not have the funds collected, so who would pay it?