Questions for Oral Answer

1. to the Minister of Finance: Does the investment protocol the Prime Minister will be signing with Australia include any provisions that would stop Australians from buying shares in New Zealand State-owned assets such as Meridian Energy, Mighty River Power, Genesis Energy, and Solid Energy, should a future Government privatise them?

The Prime Minister has spelt out five clear tests that would have to be met for the Government to proceed with a mixed-ownership model for those four State-owned enterprises. One of those tests is that New Zealand investors would have to be at the front of the queue, and that we would be confident of widespread and substantial ownership by New Zealanders, in addition to the 51 percent stake that would certainly be owned by the Government. The details of the investment protocol will be announced tomorrow, but I can assure the member that the protocol is consistent with that test.

💬 Dr Russel Norman: How can New Zealanders be at the front of the queue to buy shares in these partially privatised assets when by its very nature the investment protocol requires equal treatment of Australian and New Zealand investors?

💬 Hon BILL ENGLISH: As I said before, the details of the protocol will be announced tomorrow, and the member will have an opportunity to scrutinise the protocol in detail. That may help lay some of his fears to rest.

💬 Dr Russel Norman: Can he confirm matters that are already in the public domain, which are that under the investment protocol any investment less than $477 million from an Australian investor in a New Zealand company faces no scrutiny from our Overseas Investment Office?

💬 Hon BILL ENGLISH: Again, the details will be announced tomorrow, but clearly the Government has been negotiating that matter, and I can assure the member that the tests we have set out for the mixed-ownership model are consistent with the protocol.

💬 Aaron Gilmore: How much do New Zealanders have invested in Australia?

💬 Hon BILL ENGLISH: When we are considering these issues of what Australians can invest here, we do well to remember that New Zealand benefits from a more than proportionate investment in Australia. In fact, recent figures show that New Zealanders have about $36 billion invested in Australia—that is, we have investments in Australia equivalent to about two-thirds of the size of our own stock market. The investment protocol will continue with a process that has been going on for 25 years, which is to move towards a single economic market. Up until recently that process was endorsed by all major political parties.

💬 Hon Phil Goff: Has Treasury warned him that the privatisation or partial privatisation of the State-owned power companies within a decade will result in cornerstone stakes being held by foreign multinational companies in those power companies?

💬 Hon BILL ENGLISH: No, because that is not true.

💬 Hon Phil Goff: I seek the leave of the House to table a Treasury document that says precisely what I asked in the question, which the Minister of Finance denied.

💬 Mr SPEAKER: Could the member—

💬 Hon Phil Goff: The document is a Treasury document relating to Crown ownership of commercial entities, I think given to Cabinet around December last year.

💬 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.

💬 Dr Russel Norman: Does the Minister of Finance agree that it is one of the fundamental principles of these investment treaties that investors from different countries get equal treatment? How will he be able to discriminate against Australian investors after signing up to a treaty that actually guarantees them equal treatment?

💬 Hon BILL ENGLISH: When the member has the opportunity to scrutinise the protocol in detail, he will be able to draw his own conclusions. But as a general point, it is not at all unusual for someone who is selling assets to be able to discriminate among classes of buyers.

💬 Dr Russel Norman: Does he agree that New Zealand’s current account deficit is in large part made up of the investment income deficit, due to profits sent overseas by New Zealand companies that are owned by overseas owners, and that if we partially privatised those State-owned assets and they go into Australian or other ownership, that will simply add to the amount of money going offshore and make our current account deficit worse?

💬 Hon BILL ENGLISH: We need to remember that the flows work both ways. As I said before, New Zealanders have $36 billion invested in Australia, and we believe that the Australian Government’s open policy of accepting New Zealand investment is beneficial to many New Zealand savers, who are able to get the benefits of investing in a large economy that at the moment has been performing pretty well. This matter is one of mutual policy positions where we are open to investment from Australia and they are open to investment from us. Some Australian investment has been here for a long time. I think AMP and ANZ have been here for almost 150 years.

💬 Dr Russel Norman: Does he agree that the transfer of profits involving the Australian banks has been a very significant drain on the New Zealand economy—possibly in the order of $2.5 billion a year—and that if we have further foreign ownership of the New Zealand economy, it will make that problem worse?

💬 Hon BILL ENGLISH: The member is generally correct. The answer to that question is the answer that New Zealanders are now coming up with, which is to save more so that there is a bigger pool of capital in New Zealand for us to do things like buy back the banks or buy into any other asset New Zealanders feel they can control. Fortunately, at the moment, because of Australia’s open investment policy, New Zealanders are able to buy shares in those banks. So if New Zealanders think those banks are excessively profitable, they can benefit by buying shares in them.

💬 Dr Russel Norman: For the purpose of clarity, will the Minister guarantee that the investment protocol between New Zealand and Australia will guarantee New Zealand investors preferential treatment in any partial privatisation of New Zealand’s State-owned assets?

💬 Hon BILL ENGLISH: As I have said to the member a number of times, when he has the opportunity to scrutinise the protocol he can then make up his own mind about it. I can say to the member that the protocol is consistent with the test the Government has set, which is that we would like to see substantial and widespread New Zealand ownership under the mixed-ownership model.

State-owned Assets, Sales—Shares

2. to the Prime Minister: Why does he want to sell shares in State-owned enterprises?

on behalf of the Prime Minister: The member is getting ahead of himself, as no decision to sell shares has been made. The Minister of Finance and the Minister for State Owned Enterprises have asked Treasury for advice on whether extending the mixed-ownership model can meet the five tests the Prime Minister has outlined before—namely, retaining majority control, prioritising New Zealand shareholders, providing good investments, using capital to purchase other public assets, and protecting consumers. As the Prime Minister said in his speech last month, the Government is interested in making smarter use of its assets, which will both reduce our reliance on debt and provide savings opportunities that are an alternative to the housing market.

💬 Hon Phil Goff: Why has the Prime Minister justified selling Kiwi assets in order to reduce Government debt when he has admitted that New Zealand has one of the lowest Government debt rates in the world—because Labour repaid it—and that “We don’t owe very much.”?

Yes, the Prime Minister is very happy with the equation of debt being included in the five considerations that Treasury will take into account before a final decision is made in this policy area.

💬 Hon Phil Goff: Did the Government’s December Investment Statement show that total shareholder returns from all of the State-owned enterprises exceeded 15 percent, on average, over the last 5 years while the average 10-year bond rate was around 6 percent, showing that investments comfortably exceeded the cost of capital; if so, why does it make any sense to sell off those assets to repay debt?

I believe that the December statement did indeed reflect the first figure the member referred to. One of the interesting things about the total shareholder return model is that it does not require one specific type of valuation to be carried out, meaning that a mixed matrix of valuations would apply across those State-owned enterprises. Interestingly, one of the things that is not taken into account when we are talking about the cost of borrowing is that the missing component, as the former Minister for State Owned Enterprises well knows, is the component of risk.

💬 Hon Phil Goff: Did Treasury tell the Government that selling the State-owned enterprises would not significantly improve their financial performance?

I cannot recall exactly the reference the member makes, but I would also remind the member that the final policy in this area has not been confirmed yet, until the five tests are met.

💬 Hon Phil Goff: I seek leave to table an excerpt from a Treasury paper, Crown ownership of commercial entities, which stated that there is little evidence to suggest that privatisation would significantly improve the financial performance of many of the State-owned enterprise companies.

💬 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 Phil Goff: Did Treasury tell the Government that foreign corporates would end up with a cornerstone shareholding in the State-owned power companies within a decade if they were sold?

Well, it may have, except I would say this: it is impossible to have a cornerstone shareholder offshore if the Government retains 51 percent of the companies.

💬 Hon Phil Goff: How much of the $700 million paid by the three State-owned power companies to the Government in the last year was used to meet any social services or purposes beyond reinvestment in those companies, thus helping the New Zealand taxpayer, who is a shareholder in those companies?

I would not have an exact figure as to what proportion of that income was used for those specific appropriations or votes that the member refers to. If the fundamental question the member is asking is why forgo the dividend in that situation, then it is a fair question for the member himself to answer. He pondered on radio the week before last why the Government would forgo $700 million in dividends and, in the very next sentence, said that it was collecting too much in dividends.

💬 Hon Phil Goff: With regard to the Minister’s last answer, has he considered that privatisation prevents the Government from returning some of those dividends to the electricity consumer by way of a reduction in price or rebate?

That question may well have applied to the 72 percent increase in power prices over the 9 years that that member’s Government was in charge. I also note that that is now the third position I have heard today about dividends. The first was to ask why we would give them away, the second was that they were too much, and the third is that we should not collect any, to offset power prices.

Export Sector—Performance

3. to the Minister of Finance: What reports has he received on the recent performance of New Zealand’s export sector?

Statistics New Zealand data show that, month on month, the value of New Zealand’s exports has increased by about 15 percent in the past year. This is largely due to record-high commodity prices, which have risen by about 16 percent over the last year. The challenge now is to increase the volume of our exports, to take advantage of these high prices. That is why the Government is focused on policies that shift resources from the less-productive non-tradable sector into the high-productivity tradable sector.

💬 Craig Foss: How have New Zealand’s domestic and internationally competitive sectors performed respectively over the past decade?

💬 Hon BILL ENGLISH: There are different ways of measuring that, but between 2003 and 2009, the non-tradable sector, which includes housing and retailing—the domestic part of the economy—grew by about 20 percent, mainly fuelled by borrowing. In the same period the export sector shrank by 6.3 percent because of poor Government policy settings, rising interest rates, and a fairly high dollar. That means that our internationally competitive industries went into recession from about 2005.

💬 Craig Foss: How has the respective performance of the tradable and non-tradable sectors been reflected in jobs?

💬 Hon BILL ENGLISH: From 2003 to 2009 non-tradable jobs grew by 270,000, so we had strong job growth in the domestic part of the economy, but that was fuelled by unsustainable borrowing and unsustainable Government spending. By contrast, the export sector lost 55,000 jobs over the same period. So this Government has the task of crafting an economy that produces new jobs and job growth from the export sector, because the domestic part of the economy is not growing very fast.

💬 Craig Foss: What signs of progress has he seen in new jobs in the tradable sector since 2009?

💬 Hon BILL ENGLISH: Fortunately, job growth is starting to look more balanced and positive. In contrast to the period up to 2009 export sector jobs are now growing—in fact, they have increased by 25,000 in the last year and a quarter, or by about 6 percent. Of those new jobs, 17,000 are in the manufacturing sector, which has been doing reasonably well because Australia is in good shape and it is our biggest market for manufactured products. Job growth in the non-tradable economy is pretty flat, and it will probably remain so because the housing market is flat, the Government is not growing nearly as fast as it was, and people are being careful with their retail spending.

Social Development and Employment Programmes—Minister’s Satisfaction

4. to the Minister for Social Development and Employment: Is she satisfied that her programmes are working for New Zealanders?

Yes. For example, approximately 70 percent of Community Max programme graduates who finished the programme have not gone back on to any benefit.

💬 Hon Annette King: Why should New Zealanders believe the figure the Minister has just given us on the success of her make-work programme, because she has actually given three different answers to the number of people staying off benefits having been through the programme, each time reducing her so-called successes?

💬 Hon SIMON POWER: As far as I am aware, I gave only one answer.

💬 Katrina Shanks: Has he seen any recent reports on the Community Max programme?

💬 Hon SIMON POWER: Yes. I have seen a report in which a reporter visited a Northland Community Max project called Paikauri Reserve. The reporter turned up 8 months after the project had ended, and failed to mention that of the 24 participants in the project, as at today 13 remain off the benefit altogether.

💬 Hon Annette King: Will she provide better information on the success or otherwise of her make-work schemes, which are costing taxpayers over $100 million, before Bill English commits any more funding, which is likely to be wasted on empty pumpkin patches, tracks to nowhere, and abandoned sewing classes?

💬 Hon SIMON POWER: I raise a point of order, Mr Speaker. I am sorry but I missed the first part of that question. I apologise to the member.

💬 Mr SPEAKER: I ask the honourable member if she would not mind please repeating her question, and I ask members to show a little courtesy so the question can be heard.

💬 Hon Annette King: Will she provide better information on the success or otherwise of her make-work schemes, which are costing taxpayers over $100 million, before Bill English commits any more funding, which is likely to be wasted on empty pumpkin patches, tracks to nowhere, and abandoned sewing classes?

💬 Hon SIMON POWER: Better information will always come to hand and will be made available as all information is, under various avenues. I have to say that the list of initiatives that the member opposite lists did not include two gangs in Timaru who received money through a pilot employment scheme, and used the money to upgrade their headquarters, when she was Minister of Employment in 1989.

💬 Hon Annette King: When will she listen to the growing chorus of advice—

💬 Mr SPEAKER: I apologise to the honourable member, but I am sure that the Minister will not be able to hear, again. I ask members on the National benches, please, to show some courtesy.

💬 Hon Annette King: When will she listen to the growing chorus of advice, including from Treasury, telling her that the schemes are poor value for taxpayers’ money, are having no effect on youth unemployment, and are merely recycling people through expensive schemes that are abandoned after 6 months; is not quality just as important as quantity?

💬 Hon SIMON POWER: In fact, those schemes are designed to give people life skills—to get them out of bed in the morning, and to give them a commitment to a purpose during the day. It is a $13,000 investment over a 6-month period, which is a lot cheaper than funding someone to go on and off an unemployment benefit for the following 10 years. That is why this Government will continue to back the Community Max scheme.

💬 Hon Annette King: Why is she refusing to answer questions on her make-work scheme, hanging up on reporters, and then heading to Washington again to learn about the quality of that city’s programmes, when it is quality and value for money here at home that she needs to concentrate on?

💬 Hon SIMON POWER: The member is right in the sense that the Minister for Social Development and Employment is currently at an international seminar that deals with intervention programmes, which, I am sure, will help inform the Government’s decision making in this area.

💬 Jacinda Ardern: Does she agree with Work and Income’s description of Community Max that “It provides an opportunity for young people to build skills …”; if so, what skills did the job of sending text messages to defendants before court appearances, at a cost to the taxpayer of $18,000, provide young people in Hamilton?

💬 Hon SIMON POWER: Yes, I do agree with that advice. And I also happen to agree with the advice that the member expressed on 2 August 2009 that “Any initiative that creates opportunities for young people is to be welcomed,”.

💬 Katrina Shanks: What reports has he seen from members of Parliament on Community Max?

💬 Hon SIMON POWER: Labour members of Parliament clearly see Community Max as having value, as I have just outlined. They have consistently argued for it to be expanded or continued. Nanaia Mahuta said: “the Community Max scheme that I visited in Thames demonstrated positive gain for the community and individuals involved,”. Chris Hipkins on 10 March 2010 said: “It would be good to find a way to keep similar programmes going. There’s a real gap there that needs to be filled.” And Maryan Street, who, I have to say, brings a slightly more intellectual approach to these things, said that it is “a step in the right direction”.

💬 Jacinda Ardern: Why has she spent more than $300,000 on a garden that has left participants unemployed and produced just one pumpkin?

💬 Hon SIMON POWER: Mr Speaker—[Interruption]

💬 Hon Gerry Brownlee: Jacinda’s waiting for midnight.

💬 Mr SPEAKER: Order! I say to Labour members on this occasion that one of their colleagues has asked a question, and I am sure that she wishes to hear the answer.

💬 Hon SIMON POWER: In fact, the programme the member refers to has not left everybody unemployed; it has taken a number of those participants off the benefit. I also add that unlike hip-hop tours going around the world for $26,000, on this occasion three visits occurred to the Northland social development services project. Those visits were monitored, and a very close eye was kept on the project.

Marine and Coastal Area (Takutai Moana) Bill—Public Access

5. to the Attorney-General: Is he planning to amend the Marine and Coastal Area (Takutai Moana) Bill to provide an explicit guarantee of free public access, and provide that all negotiated agreements be passed by Parliament?

The member should be aware that individual Ministers do not have the power to amend bills before the House. That is the prerogative of the legislature, not the executive. However, I can confirm—I am sorry if I sound like Sir Geoffrey—that it is my intention to recommend that Parliament amend clause 27 of the bill to make it explicit that charging for public access in the common marine and coastal area is not permitted, and that negotiated agreements for customary marine title will require legislation, thereby ensuring full parliamentary and public scrutiny of any such agreements.

💬 Hon John Boscawen: Why is he proposing to recommend changes to the Marine and Coastal Area (Takutai Moana) Bill when his colleagues on the Māori Affairs Committee, chaired by the honourable Tau Henare, rejected those suggestions, and will he support a free vote on the bill to allow Mr Henare and the rest of the National backbench to vote against the bill?

💬 Hon CHRISTOPHER FINLAYSON: I cannot comment on the proceedings of the Māori Affairs Committee, because I have no responsibility for it. The select committee is part of the legislature, and I am part of the executive. However, I can say that I have listened very carefully to the submissions. I have been out on the road, listening to people at hui and public meetings, and I believe that these approaches I have adopted will address the legitimate concerns of many good people in New Zealand.

💬 Mr SPEAKER: Just before I call the honourable member, I tell Labour members on this occasion that a member of another party has asked a question, and that member has the right to hear the answer. It has been very difficult to hear answers.

💬 Hon John Boscawen: Has he received agreement from the Māori Party to vote for his amendments, and to provide for an explicit guarantee of free public access and parliamentary scrutiny of negotiated agreements; if not, does he have the numbers to pass these amendments?

💬 Hon CHRISTOPHER FINLAYSON: Those are matters of parliamentary procedure, and when the issue comes before Parliament in the next few days the member will have his answer.

💬 Hon David Parker: What caused the change between 24 September 2010, when the Attorney-General promised there would be a full select committee process for the bill, and last week, when his Government members caused the bill to be reported back without the amendments that today he says he supports?

💬 Hon CHRISTOPHER FINLAYSON: Again, because I am not responsible for the Māori Affairs Committee, I cannot talk about the parliamentary procedures undertaken by that select committee. I can say to the honourable member, however, that the Government has listened very carefully to the submissions, it recognises the legitimate concerns that have been raised by many good New Zealanders, and it is endeavouring to address them. I say to the member that I have also read very carefully Labour’s submission on the subject, which was written by Dr Michael Cullen, and which I thought was very good. That was the first submission; of course, Labour’s position has changed three or four times since then.

Economy—Recovery

6. to the Minister of Finance: Has the economy improved in line with his prediction on Q+A in February 2010 that the economy would “get better” over the next 12 months?

Yes, but my prediction that the member would get better has not.

💬 Hon David Cunliffe: I raise a point of order, Mr Speaker. Do you feel that he may have addressed the question, or might he have another go?

💬 Mr SPEAKER: I must say that the member has a legitimate grievance, in my view. The question was answered—and it was a perfectly fair question. It asked: “Has the economy improved in line with his prediction on Q+A in February 2010 that the economy would “get better” over the next 12 months?”. There was nothing political in the question, and the last part of the answer was gratuitous. The member has a legitimate grievance about that, and I ask Ministers, when answering straight questions like that, to avoid that kind of gratuitous comment.

💬 Hon David Cunliffe: Has GDP growth in each of the last three quarters following his February 2010 prediction got stronger or weaker?

💬 Hon BILL ENGLISH: As the member will know, GDP growth has fluctuated through the year. I think that the first quarter might have been about 0.6, and the September quarter was slightly less than zero. The economy did not grow in 2010 as quickly as most people anticipated, and I think the reasons for that are pretty well understood. New Zealanders are saving rather than spending, and the engine of growth that came from fast growth in credit and house prices simply has not kicked into action in the last 12 months.

💬 Chris Tremain: What indications are there that New Zealanders are building a platform for stronger growth ahead?

💬 Hon BILL ENGLISH: The distinct feature of the recession was that it was, to a large extent, a financial recession—that is, dominated by excessive debt. So New Zealanders have set about the business of clearing or reducing that debt, and increasing their savings. Although in the short term it means that there has been a bumpy road to recovery, in the longer term it is laying down a stronger foundation for future growth. New Zealanders will have got their debt to reasonable levels and will then be ready to spend and invest in a more measured way.

💬 Hon David Cunliffe: Do recent official statistics that show that total retail sales for the December quarter went backwards by nearly half a percent make it more or less likely that New Zealand has now entered a double-dip recession?

💬 Hon BILL ENGLISH: As the member will know, it was discussed at the select committee last week. There may or may not be a technical recession—the change is about 0.1 or 0.2 percent above or below zero. But I think the retail figures simply confirm the story we know, which is that New Zealanders are not spending. They are trying to get their debt back to reasonable levels, and they are not feeling as wealthy because their house prices have stopped going up.

💬 Hon David Cunliffe: If the Minister considers that negative growth is a good thing because it shows New Zealanders are saving more, why does he not go all out and drive the economy into, say, minus 10 percent growth so they can save even more?

💬 Hon BILL ENGLISH: What is happening is the result of hundreds of thousands of New Zealanders making their own choices. We believe that is quite a good way to run the economy. They have correctly figured out that if they are careful with their spending and if they support a Government that is pursuing plans for a stronger economy in the future, then they can expect to get the pay-off in higher incomes.

Youth Guarantee—Increase in Places

7. to the Minister of Education: What recent developments have there been in implementing the Youth Guarantee for students aged 16 and 17?

We are making huge progress, and I am pleased to announce that we are increasing the original number of Youth Guarantee places from 2,000 to 2,694. This exceeds the number that was in last year’s Budget. That means that under the wider Youth Guarantee umbrella up to 4,000 16 and 17-year-olds are staying in the system to gain an education and skills training, rather than dropping out. This Government is committed to addressing the chronic gap between those succeeding in, and those being failed by, our education system. We are working to ensure that all students have the best possible chance to develop, rather than just developing catchy slogans like the previous Government did.

💬 Paul Quinn: How many trades academies have opened this year as part of the wider Youth Guarantee?

💬 Hon ANNE TOLLEY: I was very pleased to have that member with me yesterday to open the WelTech trades academy, which is one of eight trades academies opening this year. These partnerships between schools, tertiary providers, and employers give free tertiary training—

💬 Mr SPEAKER: I apologise to the Minister. I say to the Labour Party front-benchers that if I cannot hear the Minister, what chance does the questioner at the back of the House have? The questioner has a right to hear the answer. The Labour front bench is being a little unreasonable today in terms of the noise volume.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think the point might be in respect of the members around the questioner. The questioner, of course, is reading. He already has the question written down.

💬 Mr SPEAKER: That was unhelpful, I must say.

💬 Hon ANNE TOLLEY: They just cannot stand hearing good news. These partnerships between schools, tertiary providers, and employers will give free tertiary training to 16 and 17-year-olds, ensuring that they work towards completing the National Certificate of Educational Achievement and have a head start on trade skills. This comes on top of 19 service academies that are helping nearly 400 kids to stay in school.

💬 Paul Quinn: What feedback have you had about the trades academies?

💬 Hon Darren Hughes: I raise a point of order, Mr Speaker. Have you received reports on this matter?

💬 Mr SPEAKER: I ask the member to repeat his question and make it within order. He should not address his question to the Speaker; he should address it to the Minister.

💬 Paul Quinn: My apologies, Mr Speaker. What feedback has the Minister had about trades academies?

💬 Hon ANNE TOLLEY: I have opened three of the academies so far and spoken to a number of teachers, students, and parents. Their overwhelming feedback was a feeling of excitement and hope. Finally, these kids are being given the chance to succeed and get a qualification that will actually help them in life, rather than their just dropping out of the system and waiting until they are 18 to go on the dole.

💬 Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou katoa. In what ways do the recent developments around the Youth Guarantee scheme benefit Māori; if they do not, what specific policy initiatives will be taken to ensure that the appalling underachievement and unemployment statistics for rangatahi Māori are addressed?

💬 Hon ANNE TOLLEY: From the initial roll-out of the Youth Guarantee scheme we have targeted areas, in particular, that had high Māori unemployment. We have been very successful to date in attracting and retaining students. In addition, the trades academies are also targeting Māori students. There was a great example in my own electorate on Friday last week, when we opened the trades academy that is being led by Trident High School. We have six other local Eastern Bay of Plenty high schools participating, plus Waiariki Institute of Technology, Te Whare Wānanga o Awanuiārangi, and local businesses. So we are starting to see the Māori education communities come together to form these relationships, and I have no doubt that that will continue to grow.

Marine and Coastal Area (Takutai Moana) Bill—Constitutional Impacts

8. to the Attorney-General: Does he agree with Colin James’ assessment of his handling of the Marine and Coastal Area (Takutai Moana) Bill that “yet again the Government—pale shades of the dark days of Sir Robert Muldoon—has discarded constitutional niceties, this time for expedition. Not a good look for Mr Finlayson who, as Attorney-General, is the Cabinet’s guardian of constitutional propriety …”?

No, I do not. Mr James was talking about the work of the Māori Affairs Committee. As a member of the executive I have no responsibility for the select committee—that committee reports to Parliament and determines its own processes—nor do I have any responsibility for its excellent chairperson, Mr Henare. On the point of constitutional propriety, I tell the member that I take my duties very seriously. For example, I have produced reports under section 7 of the New Zealand Bill of Rights Act—a constitutional requirement that the previous Government ignored in order to ram through its universally reviled electoral finance legislation.

💬 Hon David Parker: Does the Attorney-General agree with the Nelson Mail editorial of 12 February 2011 that rushing the marine and coastal bill back to Parliament “invites nothing so much as despair. It provides even more ammunition to those who have argued that the new law will fail abjectly in healing the festering sore which has opened up since the seabed and foreshore issue was sparked into life the best part of a decade ago. It reinforces the sense that the bill has become a source of inconvenience for both National and the Maori Party.”?

💬 Hon CHRISTOPHER FINLAYSON: No, I do not. I actually read that editorial when I was in Nelson on Saturday night and reflected on it. I think the author of the editorial has not read the legislation, because what the legislation endeavours to do is restore two things that were taken away by the previous Labour Government: access to justice and respect for property rights. It took one very brave person, Mrs Tariana Turia, to stand up to Helen Clark and the aim is to put it right.

💬 Hon David Parker: When the Attorney-General said last week that the select committee chair was efficient in bringing the bill back to the House 2 weeks early, which decision does he consider most efficient: the decision to prevent members of the committee from seeking legal advice relating to the effect of the bill, the decision to prevent members from making amendments to the bill, or the decision to prevent members from being able to properly consider officials, advice, or the over 4,500 submissions received?

💬 Hon CHRISTOPHER FINLAYSON: When the member turned up, which I understand was in occasional circumstances, the chair conducted himself with propriety. He was a tough and demanding chair. One needed someone like that to get through the huge number of submissions and to get the bill back to the House by 25 February.

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Could you advise me. I thought it was a longstanding tradition that members could not refer to the absence of members either from this Chamber or from a select committee, which is a part of this process. If I am correct, I invite you to explain to the House why you did not pull the Minister up.

💬 Hon Gerry Brownlee: If that was of concern to you, Mr Speaker—and I am sure that if it had been inappropriate, it would have been—you would have pulled up Labour members previously for mentioning the absence of a Minister.

💬 Mr SPEAKER: I think that we can get too pedantic about these matters. The reference was very much in passing. One has to accept that the nature of this question is highly political. The question is not particularly seeking a lot of information; it is making political points. The Minister is perfectly at liberty to make political points in response and there is no way I am going to stop him from doing that.

💬 Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I accept your ruling. Is it therefore the case that the Minister can, in making political points, allege a member’s absence when that is absolutely not true?

💬 Mr SPEAKER: In answering a highly political statement like that, the Minister can be political. I am not going to get too pedantic by preventing that. If members do not want Ministers to give political answers to questions, I note that there are some questions on today’s order paper that are good examples of questions where I have stopped Ministers from getting political. But if questions are asked that are highly political, then answers can be expected to be political.

💬 Hon Shane Jones: Why has he refused to comment, explain, or identify the size of the political slush fund to fund takutai moana litigation as announced by Dr Pita Sharples?

💬 Hon CHRISTOPHER FINLAYSON: Because there is no political slush fund. Under the 2004 Act, as Mr Jones should know, there was a fund set up to deal with certain types of application to the High Court. That fund after 6 years has about $215,000 left.

💬 Hon Shane Jones: Fudging, fudging, dodging, hiding, concealing.

💬 Hon CHRISTOPHER FINLAYSON: We are not concealing anything, I say to Mr Jones; we are trying to deal with the issue of what to do with that fund under the new legislation.

💬 Hon Shane Jones: Political hush money for the Māori Party.

💬 Hon CHRISTOPHER FINLAYSON: It is certainly not political hush money for the Māori Party. I wish the member would get himself under control.

Emissions Trading Scheme—Impact on Renewable Energy and Forestry Investment

9. to the Minister for Climate Change Issues: Has implementation of the moderated emissions trading scheme last year had any impact on renewable energy and forestry investment?

Yes, there have been marked changes in both sectors in response to our moderated emissions trading scheme. The year 2010 saw a record high amount of renewable electricity projects consented, with 800 megawatts approved—45 percent geothermal, 40 percent wind, and 15 percent hydroelectric. This contrasts with the pre - emissions trading scheme period under the previous Government when over two-thirds of new generation was fossil fuelled. There has also been a positive turn-round in forestry investment. Whereas we saw 37,000 hectares of deforestation in the 3 years preceding the emissions trading scheme, we have seen a shift to afforestation of an estimated 6,000 hectares since the scheme has been in place.

💬 Chris Auchinvole: How have changes the Government made to the emissions trading scheme impacted on increases in fuel and power prices, and has the Minister seen reports of any policy changes that would increase costs for consumers and businesses?

💬 Hon Dr NICK SMITH: The Government has been very mindful of costs for consumers and that is why our changes to the emissions trading scheme, supported by the Māori Party, halve the impact on the cost of living and particularly on energy prices. I have seen policy that states that the emissions trading scheme should be scaled up to the full obligation immediately. This would put up power prices by another 5 percent and fuel prices by a further 3.5c per litre. Members opposite need to be careful about cost of living issues, when their stated policy is to immediately increase power prices by 5 percent and fuel prices by 3.5 percent.

💬 Brendon Burns: How can he claim that National’s moderated emissions trading scheme is responsible for the 800 megawatts of new renewable generation consented in the last year, when it takes several years to plan a consent for new generational capacity; are these new generation plants not really just the result of Labour’s emissions trading scheme?

💬 Hon Dr NICK SMITH: National had a very clear policy at the last election that did not deal with just the emissions trading scheme but also the consenting process. There are examples of cases where it took up to 9 years to get consent for a renewable power station. Last year the changes that Chris Auchinvole and the Local Government and Environment Committee advanced resulted in a decision-making process of just 9 months. That is the biggest single contributor to the 800 megawatts of new capacity that was approved last year.

💬 Chris Auchinvole: Has the Minister seen any incorrect claims about New Zealand’s climate change targets and record on forestry?

💬 Hon Dr NICK SMITH: Yes, I have. The first was a press release on 4 February that claimed that New Zealand’s forest loss was the second worst in the world. But the author failed to read the actual report, which referred to New Caledonia, not New Zealand. The second was a press release on 10 February—again bagging New Zealand—that claimed that our minus 50 percent by 2050 target actually amounted to an increase. But it involved a miscalculation of 31 million tonnes, it overlooked the United Nations’ rules, and it was, embarrassingly, withdrawn from the Green Party’s website. I urge the Green Party to stop bad-mouthing their own country with false and inaccurate claims about our climate change policies.

Energy Companies, State-owned—Financial Returns

10. to the Minister of Finance: Does he stand by his statement to the Finance and Expenditure Committee that the State-owned energy companies’ returns have been excessive?

Yes. The member needs only look at trends in power prices during the 9 years that Labour was in office to see that retail electricity prices jumped by 72 percent and that State-owned energy companies benefited from this enormous lift in power prices under the previous Government, which pocketed large dividends from them.

💬 Hon Clayton Cosgrove: How does he reconcile his comments to the Finance and Expenditure Committee on Wednesday, 9 February with the letter sent by Simon Power, Minister for State Owned Enterprises, in December 2008 where the Government demanded higher returns from all State-owned enterprises?

💬 Hon Member: Don’t confuse price with performance.

💬 Hon BILL ENGLISH: That is exactly the point—not to confuse price with performance. The Government in its role as a regulator, under the leadership of the Minister of Energy and Resources, decided that the electricity market was not sufficiently competitive. Over the last couple of years he has engineered a range of complex changes to make the electricity market more competitive.

💬 Hon Clayton Cosgrove: Has the Minister seen reports from energy specialist Molly Melhuish that Contact Energy and TrustPower have both raised their retail charges consistently faster than the three State-owned power providers, and does he have any evidence to suggest that the State-owned energy companies will not also increase prices at a faster rate once he has partially privatised them?

💬 Hon BILL ENGLISH: The fact is that complaints from the Labour Party about power prices lack credibility because at a time when Labour had total control of the State-owned energy companies, retail power prices went up by 72 percent. This Government is trying to undo that momentum through better regulation and clearer definition of the roles of ownership and performance.

💬 Hon Clayton Cosgrove: Given the returns being made by State-owned power companies, why is he in favour of partially selling the State-owned energy companies, a policy that will transfer profits to the private sector—profits that could instead be used to fund essential public services for New Zealanders like schools, hospitals, and infrastructure?

💬 Hon BILL ENGLISH: Use of the mixed-ownership model is just following the example set by the previous Labour Government, which through its mixed ownership of Air New Zealand was able to free up capital for other uses, which is what we want to do; make investment in good New Zealand companies available to New Zealanders, which is what we want to do; and get better performance out of the companies, which is what we want to do. We are just following the lead of Air New Zealand.

Census 2011—Preparations

11. to the Minister of Statistics: What information has he received on preparations for this year’s census?

I can feel the electricity building; the tension is incredible! I am pleased to report that Statistics New Zealand is ready for the census.

💬 Hon Simon Power: Good answer.

💬 Hon MAURICE WILLIAMSON: There is actually more, I say to Mr Power. Statistics New Zealand is ready for the census on Tuesday, 8 March. Over 7,000 census collectors will be delivering to nearly 2 million households, and that delivery begins on Saturday, 19 February. The first television commercials went to air last week in a campaign to raise awareness. This is also the first year Statistics New Zealand has used YouTube, where the campaign ads can be viewed online when anybody wants to do so. It is an exciting time in Statistics New Zealand.

💬 Nikki Kaye: How can the public complete their forms in this year’s census?

💬 Hon David Carter: With a pen.

💬 Hon MAURICE WILLIAMSON: My colleague David Carter has just intervened and said: “With a pen.”, but I have better news for people. This year people will get not only their forms but also an access code for the Internet site. I urge as many New Zealanders as can possibly do it to fill out their forms via the Internet. If everybody in an individual house uses the Internet, the census collector will not even need to collect from that house. It will be quick, it will be fun, and it has made statistics come alive.

National Certificate of Educational Achievement—Confidence

12. to the Minister of Education: Does she believe NCEA is a world-class qualification system for young New Zealanders; if so, why?

I take this opportunity to congratulate the member—this is my first opportunity—on his portfolio. I think he is Labour’s third spokesperson on education since I have been the Minister of Education, but it is a fantastic portfolio so I welcome him. In answer to the question, yes, I do. Despite quite a controversial start to life, it is proven to work for the vast majority of New Zealand secondary schools and their students.

💬 Hon Darren Hughes: Why does she not think the National Certificate of Educational Achievement (NCEA) should be compulsory for secondary school students?

💬 Hon ANNE TOLLEY: I am not quite sure that the member fully understands the concept of Tomorrow’s Schools, which gives schools the flexibility to reflect the needs of their communities. Auckland Grammar School has consulted its community, and the board is doing what it thinks is best for its current and future pupils.

💬 Hon Darren Hughes: Why did she acquiesce to Auckland Grammar School, saying its move to relegate NCEA was way ahead, but threaten with dismissal parents on boards of trustees who had evidence-based opposition to her national standards policy?

💬 Hon ANNE TOLLEY: The member fails to understand that it is not an option for children to learn to read and write and do maths at primary school. If they have not got that ability, they have no ability whatsoever to participate in any form of secondary qualifications. As I said, it is important under Tomorrow’s Schools that schools have the ability to reflect the needs of their community. Auckland Grammar School is offering NCEA, as well as some other forms of qualifications that its community thinks are appropriate. What is more, those students are achieving. So where is the harm?

💬 Hon Darren Hughes: Why then does she not make national standards optional, as she is prepared to allow NCEA to be optional?

💬 Hon ANNE TOLLEY: I thought I just answered that question. It is clear the member does not understand that it is not an option for young children at primary school to learn to read and write and do maths. When did that ability become an option, other than under a Labour Government? The National Government is determined to ensure that children have that ability so that we do not have one child in five leaving school unable to read and write and do maths at anywhere near the level they need to succeed.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. That answer was quite a long answer, but not to the question that was asked. The question was about options for boards to use assessment systems, not about whether kids are taught reading and writing at school.

💬 Mr SPEAKER: I believe that the Minister did answer the question as I heard it. I think she did answer that question.

💬 Hon Annette King: What was the answer?

💬 Mr SPEAKER: The Minister simply argued that learning to read and write is not optional for students, and that was the Minister’s answer to why it was not an optional thing.

💬 Hon ANNE TOLLEY: The question was not about an assessment system. That is not what national standards are.

💬 Mr SPEAKER: We are not going to have an argument by way of a point of order.

💬 Te Ururoa Flavell: How is the NCEA system working for young Māori, and what place do iwi have in shaping the qualifications for young Māori?

💬 Hon ANNE TOLLEY: It is not working nearly well enough when nearly 50 percent—half—of all Māori students leave school without gaining NCEA level 2. We are working hard—with, I have to say, tremendous support from my Associate Minister the Hon Dr Pita Sharples—to make sure that we address that issue specifically rather than just hope that the students improve, as was the case under the previous Labour Government. We have introduced national standards and ngā whanaketanga rūmaki Māori in order to pick up struggling students and make sure they learn to read and write and do maths before it is too late. We are introducing the Youth Guarantee, as I have talked about before, to target areas with high numbers of young Māori students who are dropping out of school without a qualification. In the House last week I read out a long list of the initiatives we are putting in place to address Māori underachievement. I also say to the House that the Ministry of Education has 43 agreements with iwi, and we are working together constructively to make the changes that are needed, and have been needed for so long, for Māori students.