Questions for Oral Answer

1. to the Minister of Finance: What implication does the United States’ credit rating downgrade have for the New Zealand economy?

The downgrade and subsequent financial market volatility confirm that we live in risky and uncertain times. Finance markets are sending a clear message to New Zealand and to any Government that they have no appetite for Governments that cannot get on top of their fiscal or debt problems, or for policies that require more debt and borrowing. The Government has focused on getting its own books in order, returning to Budget surplus by 2014-15, at which point debt will peak and we will be able to reduce debt as a proportion of GDP.

💬 Jonathan Young: How is New Zealand placed to deal with the global uncertainty compared with other countries?

💬 Hon BILL ENGLISH: Global uncertainty will affect our economy one way or another, but we are relatively better placed than other developed countries. We will be one of the few countries that kept net Government debt below 30 percent of GDP, and one of the few that will be looking at Budget surpluses within a few years, but just as important is that we have worked to stabilise our financial system and get our economy in shape to be more competitive to support our export efforts. Also, New Zealand households have got the message and started saving.

💬 Jonathan Young: How do the current threats from global market uncertainty compare with those from the global financial crisis in 2008?

💬 Hon BILL ENGLISH: I would hope that the threats from the current uncertainty will not reach the scale of the threats of the financial crisis in 2008. Whatever happens, we are better placed to withstand these challenges than 3 years ago. One of the reasons is that the Government’s books are now in better shape. Our largest trading partners, Australia and China, are two of the world’s better-performing economies, and the Reserve Bank and the Government learnt a lot from the last crisis about how to handle any similar crisis in the future.

💬 Jonathan Young: What policies would put New Zealand’s relatively strong economic and fiscal position at risk?

💬 Hon BILL ENGLISH: Any policy that requires the Government to borrow more than is currently projected on volatile world financial markets, and any policies that make it harder rather than easier for our exporters to earn a living from the rest of the world. For instance, a wide range of complicated tax system changes or reducing returns to KiwiSavers would send New Zealand backwards.

💬 Hon John Boscawen: Does he agree that if the changes he made in this year’s Budget had been made in each of his two earlier Budgets, New Zealand would be much better placed to weather the global financial uncertainty created by this downgrade; if not, why not?

💬 Hon BILL ENGLISH: In its first two Budgets the Government did make significant changes because the fiscal mess left behind by the previous Government was not widely understood, but because the Government took careful and considered decisions we were able to prevent a situation where Government spending was going through the roof. It looked like our debt would continue rising with no end, and sensible decisions over those three Budgets have corrected that situation, so we are much less vulnerable now. One could argue that we should have done more, sooner, but at the bottom of the New Zealand recession we believed that would be harmful to the New Zealand economy.

State-owned Assets, Sales—Timing

2. to the Prime Minister: Will he suspend or change his timetable for the proposed selldown of State-owned assets in light of the current economic circumstances; if not, why not?

There is no timetable for extending the mixed-ownership model. The Government has always said it will take this policy to the electorate in November, and we are not making plans before that time.

💬 Hon Phil Goff: I seek the leave of the House to table the Finance and Expenditure Committee’s response to estimates review questions, which points out the timetable for the sale of State-owned assets.

💬 Mr SPEAKER: Is this a document that the Parliament has?

💬 Hon Phil Goff: I would have thought so, but the Prime Minister—

💬 Mr SPEAKER: We don’t table those documents.

💬 Hon Phil Goff: As he has already booked the sale of shares in State-owned enterprises in this year’s Budget, is he still prepared to sell those shares even if it means lower prices in a depressed market?

💬 Rt Hon JOHN KEY: Firstly, it is very important that we correct the error from the Leader of the Opposition, because he is prone to having quite a few of them, on the basis of his transcript from this morning—

💬 Hon Phil Goff: I raise a point of order, Mr Speaker. I think you understand what the point of order is. That is not an appropriate way to begin an answer to a question.

💬 Mr SPEAKER: I think the point is well made. There is no need for that kind of comment. There is no problem with disputing information contained in a question, but making a derogatory comment about a questioner is not on.

💬 Rt Hon JOHN KEY: There is not a timetable. There is a zero capital budget in Budgets 2012-16. In fact, any of the dividend streams and the income that would be reflected from a sale of shares through the mixed-ownership model are not in Budgets 2012-16. As I said yesterday, of course the Government, if we are the Government post November 26, would take into account the financial conditions at the time, but the reality is that if there is any timing difference it is likely to be months, and certainly not one that would affect the overall thing.

💬 Hon Member: So there is a timetable, or there’s not?

💬 Rt Hon JOHN KEY: “If” there was one, I said.

💬 Hon Phil Goff: Is the Budget 2011 estimate accurate that even after the sale of State-owned enterprise shares Government debt will double in the next 5 years; if so, what guarantee is there that a future National Government would not use that as a pretext to sell down even further shares than he has already announced?

💬 Rt Hon JOHN KEY: No, that is not correct, and that was the very basis on which I made the statement earlier that the member often gets his figures wrong. In fact, gross debt in New Zealand this year is $78 billion. In 5 years it will be $86 billion. A doubling of $78 billion would be $156 billion. It is very similar to the way in which the member said this morning that the Government’s bond programme would be $16.7 billion—

💬 Mr SPEAKER: I do not think that is quite necessary in order to answer the question.

💬 Hon Phil Goff: I wonder whether I could seek leave to table the Budget document that shows that gross—

💬 Mr SPEAKER: I just stopped the Prime Minister on the one hand, and the Leader of the Opposition is now misusing a point of order. He knows that we do not seek leave to table Budget documents.

💬 Hon Phil Goff: How does having the one-off sale of shares in State-owned enterprises and annual tax cuts of nearly $2.5 billion for the top 10 percent of earners while the Government is borrowing over $16 billion this year protect New Zealand in an uncertain global economy?

💬 Rt Hon JOHN KEY: The Government is not borrowing $16.7 billion this year. The Government is borrowing $5.1 billion, and the tax cuts the member refers to were fiscally neutral. If the member wants to go back to the policy he adopted when he thought he was a bus driver, which, frankly, he was better at than at being the Leader of the Opposition, then he is welcome to reverse the policy.

💬 Hon Phil Goff: Why is the Prime Minister not following the advice of the Chief Executive Officer of the Bank of New Zealand, Andrew Thorburn, who said on the weekend that what this country needs in the face of global uncertainty is a change of tax regime, such as a capital gains tax, to disincentivise investment in housing and to encourage investment in the productive sector?

💬 Rt Hon JOHN KEY: I think that Mr Thorburn is wrong. If one looks at the changes the Government made in Budget 2010, one sees that we took $1 billion out of the property market, in terms of changes to depreciation and the like. In my view, if one puts a capital gains tax on a company that would otherwise be employing people on its activities, one will actually dampen investment.

💬 Hon Phil Goff: If the chief executive of BNZ, Andrew Thorburn, is wrong, was the chief economist of Westpac, Dominick Stephens, also wrong when he said “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets.”, and that a capital gains tax is necessary to reduce those sorts of distortions? Are they all wrong?

💬 Rt Hon JOHN KEY: In my opinion, yes.

💬 Hon Phil Goff: Are the former Secretary to the Treasury, John Whitehead, and the Reserve Bank also wrong when they say a capital gains tax would remove significant distortions in the tax system and would support and strengthen the productive sector, which is exactly what this country needs in the face of a global recession?

💬 Rt Hon JOHN KEY: What John Whitehead was referring to was an extension of the capital gains tax that is already currently in place to include the family home. What I think we are hearing from the Leader of the Opposition—and I think New Zealanders should listen carefully—is that by stealth, if given the chance, Labour would bring in a capital—

💬 Mr SPEAKER: Ministers should not speculate on—[Interruption] I am on my feet.

💬 Hon Phil Goff: I seek leave to table this quote from the former Secretary to the Treasury, John Whitehead—

💬 Mr SPEAKER: Before we have the quote, what is the source of the document?

💬 Hon Phil Goff: The source of the document is www.knowledgebasket.co.nz, and it is from November of last year.

💬 Mr SPEAKER: The member may indicate now what the document said.

💬 Hon Phil Goff: The document says that Treasury had explored the introduction of a capital gains tax as a means of removing significant distortions from the tax system.

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

💬 Hon John Boscawen: Does he not believe that the real issue facing the country is reducing Government expenditure, rather than trying to find and invent new ways to raise it, such as a capital gains tax?

💬 Rt Hon JOHN KEY: I think the member has a point, and that was why we ran a zero Budget going into Budget 2011, despite the fact that the country was facing the crisis that presented itself as a result of the Christchurch earthquakes. I think this Government has been very fiscally responsible, and it has got to a point where it will be back in surplus within a few years. We will not be running the debt levels that a Labour Government would run if it was elected post 26 November. New Zealand simply cannot afford the policies that Labour is promoting.

Future Focus—Implementation

3. to the Minister for Social Development and Employment: What progress has been made on the implementation of Future Focus?

When we announced Future Focus, there were 345,000 beneficiaries; now there are 328,000. So, despite a recession, we now have 17,000 fewer people on benefits. Prior to Future Focus, 75 percent of beneficiaries had no work-test obligations. Now, because of these changes, that figure is 63 percent. Future Focus is responsible for much of this success because we have had a greater focus on work, on more childcare support, and on clear obligations. Seeing those on the unemployment benefit having to reapply has made a significant difference in this area, as well.

💬 Tim Macindoe: How many people have asked for extra help since the Future Focus changes came in?

💬 Hon PAULA BENNETT: As I have said in this House many times, help is there for those who need it. There is certainly help through special-needs grants and advances on benefits. But 54 percent of beneficiaries have not required a single hardship grant during this 9-month period, and 15 percent of beneficiaries have asked for just one hardship grant. That suggests the majority of people on a benefit are managing their finances reasonably well—and there is help for those who need it. Another interesting fact is that 97 percent of those over 65 have not asked for a single special hardship grant.

💬 Hon Annette King: Were the 7,400 people who she said came off the unemployment benefit under Future Focus all under the age of 25 years, single, and receiving no other taxpayer support; if not, how did she calculate the $6 million savings?

💬 Hon PAULA BENNETT: No, they were all people who were on the unemployment benefit, so they were not necessarily aged under 25; they were within the age for the unemployment benefit. The Ministry of Social Development calculated that of those who were on it, they were most likely to come off over a period of time and it did the calculation that way. That is how it came up with that figure.

💬 Hon Annette King: Why, if Future Focus has been such a success at getting people off the domestic purposes benefit, have the numbers of people receiving this benefit reached a 10-year high, with the cost to taxpayers having increased by nearly $200 million since she became the Minister?

💬 Hon PAULA BENNETT: Because there has been a thing called the global recession. It has actually had an effect on jobs, which the member may not have noticed. Things have been a little bit tough in the last 3 years. So, yes, we have seen, as the household labour force survey says quite regularly, a reduction in part-time employment opportunities for those on the domestic purposes benefit. That makes the changes since September last year all the more remarkable. The fact that in these times, as we come out of recession, we have managed to find work for more people who were on the domestic purposes benefit than before is remarkable and a sign of these changes.

Milk Pricing Inquiry—Government Support

4. to the Prime Minister: Does he stand by his statement with regard to milk prices that “they are” getting a fair price and that “the work we’ve done so far would indicate they are”, and if not, what has changed his mind?

Yes, I stand by my full statement. I think it is an interesting observation that when I read out my full statement, sometimes members opposite try to give one impression by, at the least, truncating the quotes I make. The full statement was that “The work we’ve done so far would indicate that they are but sometimes daylight is the best disinfectant.” As I said yesterday, it looks like a competitive market, but it is important that consumers feel a degree of confidence. That is why National has decided to support a select committee inquiry.

💬 Hon Annette King: Why did he not believe consumers who told him and his Government as far back as February last year that the price of milk was too high, having gone up by over 9 percent, by his own Minister of Agriculture’s calculations?

💬 Rt Hon JOHN KEY: Firstly, because the food price index shows that the price of fresh milk has gone up 1.7 percent over the last 6 months, no doubt helped by Fonterra’s supermarket price freeze; and, secondly, for the very same reason that I assume Labour did not rush in when it went up 23 percent in the last 2 years under its watch.

💬 Hon Annette King: Supplementary question—[Interruption] Just wait your hurry.

💬 Mr SPEAKER: We will not have that kind of interjection.

💬 Hon Annette King: Well, we will not have that sort of interjection, Mr Speaker.

💬 Mr SPEAKER: I think we have had enough. The Hon Annette King will ask her question without further comment.

💬 Hon Annette King: Thank you, Mr Speaker. Does he recall saying in 2008 in Opposition that the then Government should do something to reduce the cost of milk, because families were rationing it to their children; if so, why has it taken an Opposition push for a select committee inquiry before he will acknowledge that something needs to be done about the price of milk now he is in Government?

💬 Rt Hon JOHN KEY: Yes, because milk prices rose 23 percent under Labour in its last 2 years. The Government has been doing things. The Commerce Commission was looking to see whether it could undertake an inquiry. As all members know, it is independent and is governed by the Commerce Act, so the Government wanted to wait and see whether it would respond. The Government has also had interdepartmental inquires taking place, and it has been doing quite a bit of work.

💬 Hon Annette King: Does he stand by his answer to an oral question on 11 February 2010 that milk would become much more affordable when the tax cuts came in in October; if so, how many more families now can afford milk than then?

💬 Rt Hon JOHN KEY: Yes. By definition, it does, because milk has gone up 1.7 percent over the last 6 months, helped by Fonterra’s price freeze, and New Zealanders across the board got a net positive tax cut that was distributionally even over the course of the last Budget.

💬 Te Ururoa Flavell: Nā te kaha hāngai o Fonterra ki te utu o te miraka, ka whai atu te Pirimia i tā Te Pāti Māori i whakarewa i ngā marama e whā ki muri, kia whakawhānuitia te arotakenga o te utu o te miraka ki te tūtohu Trading Among Farmers a Fonterra?

[Given the strong focus that Fonterra has on the price of milk, will the Prime Minister follow the suggestion made by the Māori Party some 4 months ago to extend the inquiry into the price of milk to Trading Among Farmers proposed by Fonterra?]

💬 Rt Hon JOHN KEY: It is a matter for the select committee—governed, obviously, by the Commerce Committee to determine the terms of reference.

Health Sector Graduates—Voluntary Bonding Scheme

5. to the Minister of Health: What progress has the Government made on the Voluntary Bonding Scheme?

The Voluntary Bonding Scheme is designed to encourage graduate doctors, nurses, and midwives to stay in New Zealand, by writing off their student loan if they work in a hard-to-staff area. For the third year in a row the scheme has been hugely popular with young doctors, nurses, and midwives. This year 429 more graduates have enrolled, bringing the number of health professionals on the scheme to more that 1,800. These graduates are keeping their skills at home and helping patients in hard-to-staff specialities and areas.

💬 Jacqui Dean: How many doctors, nurses, and midwives are enrolled in the Voluntary Bonding Scheme?

💬 Hon TONY RYALL: I am advised by the Ministry of Health that there are 1,424 nurses, 220 doctors, and 179 midwives currently enrolled in the scheme. They are signed up to work in remote communities, including the East Coast, and in specialities including general practice, rural hospital medicine, intensive care nursing, and aged-care nursing—areas that have struggled to get the staff that they need. Just last week, Marilyn Head of the New Zealand Nurses Organisation said the scheme “helps to develop critical leadership and a homegrown workforce.”

Crown Debt as Percentage of GDP—Current and Past Levels

6. to the Minister of Finance: What was net core Crown debt as a percentage of GDP and in dollar terms in November 1999 and November 2008, and what is it currently?

The percentages were 24 percent, 6 percent, and 21 percent as at May this year.

💬 Hon David Cunliffe: How many Budget fiscal surpluses has he achieved, and how does that compare with the record of the previous Labour-led Government?

💬 Hon BILL ENGLISH: Well, the answer to that is no fiscal surpluses, and the reason is that when we became the Government we were presented with forecasts that showed that on the basis of the damaging policies of the previous Labour Government, there would be deficits for 10 years and ever-rising debt that would have reached the same levels as some of the distressed countries that are being buffeted by financial markets now. We have done a good job of getting that under control.

💬 Hon David Cunliffe: I raise a point of order, Mr Speaker. Regretfully, the Minister has not addressed the question, which was to seek a comparison between whether his Government has achieved fiscal surpluses and the record of the previous Labour Government—not whatever projections he might think he has about the future. There was no comparison with the unending run of surpluses achieved under the previous Government.

💬 Mr SPEAKER: I think the member has now achieved the point he wanted to make.

💬 Hon David Cunliffe: I seek leave to table the time series of fiscal and economic indicators from the year 1999—

💬 Mr SPEAKER: The source of the document?

💬 Hon David Cunliffe: From the Budget documents. They show the fiscal surpluses—

💬 Mr SPEAKER: Oh no, we do not table Budget documents. Does the member have a supplementary question?

💬 Hon David Cunliffe: Given that the Minister’s Government has increased debt by a record amount since entering office, and by its own admission has borrowed $17 billion in the last year alone, was it fiscally responsible to pass $23 billion worth of tax cuts—the lion’s share of which went to the already well-off?

💬 Hon BILL ENGLISH: Yes. The Government, at the same time as dealing with the recession, has focused on long-term structural reform in the economy. In 2010 we implemented a unique tax switch where we cut taxes on incomes and savings across the board and increased tax on consumption and the effective tax rate on property. That was a fiscally neutral package, and it will be very good for this economy in the long run because it promotes higher incomes and higher growth.

💬 Hon David Cunliffe: In light of that answer, would it not now be more fiscally responsible to partially unwind those large and partially unfunded tax cuts to the wealthy by reintroducing the former 39 percent tax rate at a higher threshold of, say, $150,000 a year?

💬 Hon BILL ENGLISH: Well, the member is about 3 years late. Actually, in Budget 2009 we did unwind significant tax cuts for the upper end of the income range. In fact, we cancelled them. But if the member thinks that more spending, funded by higher taxes and more borrowing, is what the world is going to pay for in New Zealand, then he is wrong.

💬 Hon David Cunliffe: Will he now support a capital gains tax to remove tax distortions that favour property speculation and make the debt problem worse, and offer all Kiwis a fair tax cut in these tough times?

💬 Hon BILL ENGLISH: No. I see that that proposal is part of a package of tax and spend that will leave New Zealand having to borrow an extra $18 billion in international markets at exactly the time when those international markets are deeply concerned about any Government that is trying to borrow more money.

Roading, Auckland—Western Ring Route and Hobsonville Deviation Progress

7. to the Minister of Transport: What progress has been made on the Hobsonville Deviation and the Western Ring Route Road of National Significance?

Good news. On Saturday I joined the Prime Minister in opening the new Hobsonville deviation in Auckland, 6 months ahead of schedule. I am very pleased that the benefits of this project will be felt in time for the Rugby World Cup. The Hobsonville motorway is just one of three major Auckland motorway projects opening ahead of schedule. In July of last year the Manukau Harbour Crossing opened 7 months ahead of schedule and the Victoria Park tunnel will open to two lanes of traffic in November, 3 months earlier than anticipated. These projects are crucial in helping New Zealand to grow more strongly out of the global financial crisis.

💬 Hon Tau Henare: What benefits will the Hobsonville project deliver to Auckland residents?

💬 Hon STEVEN JOYCE: The new deviation at Hobsonville completes the Upper Harbour Highway section of the western ring route, which of course is a 48-kilometre alternative to State Highway 1, running from Manukau to Albany. The $220 million Hobsonville project will significantly reduce congestion in north-west Auckland and improve journey times from the west to the North Shore. This will boost economic growth and productivity in Auckland through more efficient movement of freight and people to the western parts of the city, and support planned residential expansion and commercial expansion in this area. The new motorway will also improve safety greatly by taking a lot of through traffic off local roads.

💬 Phil Twyford: Does he accept that the cost-benefit of motorway ramps for the new Westgate Town Centre would be vastly better than the cost-benefit for his “Holiday Highway”?

💬 Hon STEVEN JOYCE: The member opposite and his compatriots do need to give up this constant disparaging of the Pūhoi to Wellsford road, but I would point out that there is ongoing discussion between the developers—who of course want access on that motorway—the New Zealand Transport Agency, and the council, and I understand that good progress is being made.

Current Account Deficit—Projections

8. to the Minister of Finance: What is the projected current account deficit as a percentage of GDP and in dollar terms for the forecast years in Budget 2011?

For the 3 years from 2012 the forecasts are 4.1 percent, 5.2 percent, and 6.8 percent. This is after the current account deficit averaged more than 8 percent of GDP each year between 2004 and 2008. In 2010 it fell to 3 percent of GDP.

💬 Hon David Parker: I raise a point of order, Mr Speaker. That was a question on notice, and it asked for the current account deficits in dollar terms as well. That part of the question has not been answered.

💬 Mr SPEAKER: That is a fair point.

💬 Hon BILL ENGLISH: They are 8.4, 11.5, and 15.6.

💬 Hon David Parker: I raise a point of order, Mr Speaker. Is that billions or hundreds?

💬 Mr SPEAKER: The Minister should clarify.

💬 Hon BILL ENGLISH: He knows it is billions. Of course he knows that.

💬 Mr SPEAKER: I have asked the Minister to make it clear.

💬 Hon BILL ENGLISH: Billions.

💬 Hon David Parker: Is the Minister of Finance aware that under current policy settings that current account deficit he projects means that New Zealand’s indebtedness to the rest of the world is projected to grow by $52 billion by 2015?

💬 Hon BILL ENGLISH: Yes, I am aware of the projections. Again, because of the very large current account deficits run by the previous Government in what were ideal economic conditions, this Government has had to try to hold back the massively negative momentum, and we have partially succeeded so far, with a lot more to do.

💬 Hon David Parker: Does that Budget not forecast show to him that his policies are not working, because after 6 years, if National is re-elected, New Zealand every year gets poorer by billions and billions of dollars?

💬 Hon BILL ENGLISH: No, because if the Government had not taken the considered and consistent decisions it has, we would be in a much worse situation. We are not likely to take much notice of that member, because his Government promised to halve the current account—

💬 Mr SPEAKER: The member asked a question. He did not ask whether anyone should take any notice of him. He is entitled to ask a question. The Minister should not make any disparaging comments about the questioner.

💬 Hon BILL ENGLISH: I raise a point of order, Mr Speaker. The standard that you usually apply is that if a question is asked in a political way, it invites a political response. The member referred to Government policy failure, so a political response is to refer to the failure of the previous Government, which made this job so hard.

💬 Mr SPEAKER: I hear the point the member makes. [Interruption] I am considering a point of order. I accept the point being made, which is that members should be a little more careful in asking questions, too.

💬 Hon David Parker: Given his disagreement with me, why does he also disagree with the legion of economists, the IMF, the OECD, and Treasury, which state that to overcome the structural problems the New Zealand economy has, we need a structural solution like a capital gains tax?

💬 Hon BILL ENGLISH: As I pointed out, the tax the member refers to is part of a tax package that means bigger Government spending financed by higher taxes and more debt. That will be bad for the New Zealand economy. I accept some of the criticism that the previous Government led a consumption boom, fuelled by excessive debt. We have grappled with that over the last couple of years. We have not yet succeeded in turning it round, but we are determined to do so.

💬 Hon David Parker: Given that a very high proportion of New Zealand’s international debt has been borrowed to fund mortgages for property speculation, would it not be sensible to close the capital gains loophole that distorts investment towards property, to the detriment of the export sector, so that we can start getting that current account deficit under control?

💬 Hon BILL ENGLISH: Two points: if the member really believed that, he would have done it when he was in Government. He had 9 years and he did not do it. Secondly, the measures the Government has taken to increase the effective tax on property are collecting somewhere between $800 million and a billion dollars this year. That is about 6 or 7 years ahead of when any kind of capital gains tax would collect that sort of revenue from the property sector. So the measures the Government has taken are much more effective than what the member proposes.

Question No. 7 to Minister

I seek leave to table this photograph, which shows the Hon Annette King—

💬 Mr SPEAKER: What is the source of this document?

It is a photograph of Annette King turning the first sod on the Hobsonville motorway in 2008. It raises the concern that the pipeline of Labour-initiated transport projects is running out.

💬 Mr SPEAKER: The member has made his point. Leave is sought to table that document. Is there any objection? There is objection.

Neighbourhood Policing Teams—Reports

9. to the Minister of Police: Can she provide an update on the Police’s Neighbourhood Policing Team initiative that is focused on reducing crime, crashes, and disorder in priority neighbourhoods?

Yes. I am pleased to report that following the successful deployment of neighbourhood policing teams in Counties-Manukau, a further 18 teams are being trained for a nationwide roll-out of the initiative. Neighbourhood policing teams work in priority communities for 3 to 5 years alongside other Government agencies and partners to solve the problems of that neighbourhood. By the end of the year 30 teams will be working across priority communities in New Zealand to reduce crime, road accidents, and disorder by proactively focusing on prevention and demand reduction.

💬 Peseta Sam Lotu-Iiga: Why have police adopted this new approach and what has been the community’s reaction to the teams in Counties-Manukau?

💬 Hon JUDITH COLLINS: The neighbourhood policing initiative is one of a range of common-sense initiatives that form the Policing Excellence programme. This programme aims to put resources where they are most needed, respond better to victims, and increase the focus on preventing crime and road accidents. Six neighbourhood policing teams were first deployed in Counties-Manukau in August last year. There are now 12 teams working across the district. The local reaction has been very positive. The communities have welcomed the opportunity to work with police to take ownership of the issues on their own patch.

Earthquakes, Royal Commission—Legal Representation for Victims’ Families

10. to the Attorney-General: Does he stand by his statement in response to Oral Question No. 8 last Wednesday regarding legal representation for earthquake victims’ families that “the better analogy here is not with Pike River; it is with the Victorian royal commission, in which counsel assisting the commission liaised with families in order to assist those families through that particular process”?

Yes.

💬 Hon Clayton Cosgrove: How is the Victorian royal commission a better analogy, when a state-backed organisation called Bushfire Legal Help was set up to, among other things, “promote direct participation of people affected by the bushfires in the 2009 Victorian Bushfires Royal Commission”?

💬 Hon CHRISTOPHER FINLAYSON: Bushfire Legal Help was a consortium of lawyers. It was formed a couple of days after the disaster in Victoria, and its aim was to provide a wide range of free legal services to bushfire victims in their communities. Those involved in this organisation were Victoria Legal Aid, the Public Interest Law Clearing House, the Victorian Bar—

💬 Hon Clayton Cosgrove: State-funded.

💬 Hon CHRISTOPHER FINLAYSON: —the Victorian Bar is not state-funded, at all—the Victoria Law Foundation, the Law Institute of Victoria, and the Federation of Community Legal Centres. It was a largely unfunded partnership that was primarily resourced by its members. I think what the member is referring to is the assistance provided to the community law centres by the federal Attorney-General’s office. It was a limited sum. It was provided shortly after, or in the very initial stages of, the Bushfire Legal Help’s work.

💬 Hon Clayton Cosgrove: Before refusing to provide independent legal assistance to victims’ families, was he aware that the Prime Minister had personally assured quake families, in the days after the February earthquake, that the Government would do everything it could to assist those families; and upon the families’ first request would he acknowledge that the Government refused any support?

💬 Hon CHRISTOPHER FINLAYSON: I am certainly aware of what the Prime Minister said, and I think it is unfair to say that there is a refusal. The royal commission has itself met with these families, as I told the member last week. There is a families’ liaison person, and counsel assisting is providing very useful help to these families in their plight.

💬 Hon Clayton Cosgrove: When his Cabinet colleague the Hon Gerry Brownlee provided information to Cabinet—of which this Minister is a member—regarding the necessity of paying, among others, Jenny Shipley more than double the standard rate to sit on the Canterbury Earthquake Recovery Authority review panel, does he regard that information that he received as entirely accurate, and does he consider that this reflects badly on the Government, which at the same time is refusing to provide independent legal representation, requested by victims’ families, to those victims’ families?

💬 Hon CHRISTOPHER FINLAYSON: Yes, I am aware of that information. I have no reason to doubt the accuracy of that statement, but I do emphasise to the honourable member that very substantial assistance is being provided to the families. This Government is determined to help these people, and through the royal commission very good assistance is being provided. I would hope he would not unduly politicise this very important issue.

Transport Funding, Auckland—Role of Public and Council in Decision Making

11. to the Minister of Transport: Does he stand by his statement that “the public will have a say on transport matters” and will he allow the Auckland Council to make its own transport funding decisions?

In answer to the first part, yes, and in answer to the second part, yes, to the extent that they involve council funding streams paid for by ratepayers. There is, of course, an enduring notion that central government is responsible for taxation and taxpayer assets, and that local government is responsible for rates income and ratepayer assets. Therefore, it is understandable that central government might have a view, especially when the proposition is to add new taxes that could be a significant drag on economic growth.

💬 Gareth Hughes: Given that the Government has insufficient funding for projects like the central business district rail loop under the Government’s own public transport infrastructure activity class under its Government policy statement, does he support the Auckland Council investigating alternative funding arrangements for transport projects?

💬 Hon STEVEN JOYCE: I disagree with the first part of the premise of that member’s question. The reality is that the Government has taken a decision that if there are rail infrastructure projects to be funded—and we are, of course, currently funding very, very significant rail infrastructure projects; the greatest investment since about the mid-1970s—then we will make the decision to do those directly from the consolidated account. We, of course, do support the Auckland Council looking for funding streams, but, again, I think we have to look at that in the context of my primary answer, which was about the distinction between central government taxation and local government rates-generating powers.

💬 Gareth Hughes: Given that the Minister has already ruled out a regional fuel tax, does he agree with Government papers released under the Official Information Act that state it would make sense for the Auckland Council to consider new and innovative approaches to funding and financing infrastructure, including congestion charges?

💬 Hon STEVEN JOYCE: I think the member will find that that was actually released on a website, rather than under the Official Information Act. There are a number of ways that local government could, for example, consider ways of raising revenue if it did so. There are of course rates, targeted rates, income from its various assets, balance sheet development contributions, borrowing, public-private partnerships, and parking charges. All of those things are within the purview of a local council.

💬 Gareth Hughes: Is it smart to be spending $19.3 billion on State highways when we know that traffic on our roads is falling, petrol over the long term is going up, and rail patronage in Auckland has grown by more than 20 percent in the last year?

💬 Hon STEVEN JOYCE: I think that the member probably inadvertently provided some of the perils of working in percentages, because even though the rail patronage is growing, it is off a very, very low base, as the member knows. About 1.5 percent of travel in Auckland is by rail, so, yes, a 20 percent increase would take it, by my calculations, to maybe 1.8 percent, versus about 80 or 90 percent currently on the roads. So I think he has to be very careful with percentages, and I suggest he might take that approach.

💬 Hon Shane Jones: How does the Minister think that remedying transport woes in Auckland will be advanced by him antagonising and seeking to publicly daily humiliate the Mayor of Auckland, Len Brown?

💬 Hon STEVEN JOYCE: I think it is a bit rich coming from the member, but I am certainly not in the process of seeking to humiliate the Mayor of Auckland. Can I point out again that it is important we approach all of these projects with a certain amount of logic and detachment, because the project that both members are talking about currently has a benefit-cost ratio of about 0.3. That is the problem with the issue, which they should take to addressing before they address the funding options. In terms of the Pūhoi to Wellsford road, seeing that a member asked, it currently has a benefit-cost ratio of about 1 to 1.3.

💬 Gareth Hughes: Why does he continue to act as if he knows what is best for Auckland, given that yet another New Zealand Herald DigiPoll out last month found that the central business district rail link had more support than his “Holiday Highway”, from both Aucklanders and non-Aucklanders?

💬 Hon STEVEN JOYCE: I would not, of course, presume to act on behalf of all Aucklanders, because I think that is quite difficult to do, but being an Aucklander myself, I am a little bit aware of some of the issues and challenges faced there. But, again, I think it is important that the member focus on actually establishing which projects will achieve real economic gains in Auckland. The best and the most independent analysis currently of the central business district rail loop suggests that it would take only about 1,500 to 2,000 cars off the road a day. I think that would be a very small return for about $2.3 billion investment. That is probably the sort of work that the member needs to address if he seeks to promote this project.

💬 Gareth Hughes: Why does the Minister continue to show this Parliament only one side of the story, and deny the findings of the actually independent review commissioned by Auckland Council, which was reviewed by PricewaterhouseCoopers, Parsons Brinckerhoff, John Bolland Consulting, M.E Market Economics, Beca Group, GHD, Ascari, AECOM, and the University of California Transportation Center, at Berkeley, and how many international reviewers reviewed the Government’s central business district rail link report?

💬 Hon STEVEN JOYCE: Well, some of those consultants are, of course, known public transport advocates, and others are not.

💬 Hon Member: Beca!

💬 Hon STEVEN JOYCE: By the way, Beca’s stuff was actually a policy case as to how it could possibly improve the business case for that project. I think the member, unless he is suggesting something else, would recognise that both the Ministry of Transport and Treasury are reasonably dispassionate observers of this stuff. If members are saying that the Public Service is biased, then they should probably get up and say so.

💬 Gareth Hughes: I raise a point of order Mr Speaker. I acknowledge that it was a very long question, but the rub of the question was whether anyone reviewed the Government’s report.

💬 Mr SPEAKER: Well, if he had just asked that question, he might have been able to get the answer to that, but, as the member acknowledges, there was a lot more stuff in the question.

💬 Gareth Hughes: Why does the Minister continue to be the roadblock to Auckland’s smart-transport aspirations, and when will he heed the advice of the New Zealand Herald editorial to “Mind your own business on rail loop, Mr Joyce”?

💬 Hon STEVEN JOYCE: Well, I respectfully observe that the Minister of Transport probably does have an interest in Auckland transport—that is a weird concept but possibly it is true. Can I also say that it is very, very important that when one uses the term “smart transport”, I say to Mr Hughes, one must come up with a better answer than a 30c in the dollar return on a project. That is not smart transport; that is pouring money down a hole.

Early Childhood Education—Playcentre Funding

12. to the Prime Minister: What changed between Wednesday last week when his Minister of Education refused to rule out funding cuts to Playcentre and the next day when he did rule out cuts?

I do not agree with the member’s assertion. Last week the Minister of Education reiterated that this Government values parent-led services like Playcentre. The Government has put $1.4 billion into early childhood education, which is the most any Government has ever spent on early childhood education. It has expanded the 20 free hours policy to include Playcentre. It has made sure that the regulations that guide early childhood services are amended, and playcentres are getting over $14 million in funding this year.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very direct question—and had been properly authenticated with you, Mr Speaker, through your office—as to whether the Minister had to refuse to rule out cuts. My question to you is whether the Prime Minister should answer the question about what had changed between when that happened in the House on Wednesday, and Thursday when he did rule out cuts.

💬 Mr SPEAKER: I think the member made the pertinent point at the last moment—that is, the question asked what changed between Wednesday last week, etc. The Prime Minister said that nothing changed. That is his answer to that question. He then went on to explain why he has that view, but that was an answer. The question asked what changed and the Prime Minister said that nothing changed.

💬 Sue Moroney: I raise a point of order, Mr Speaker. During the question that was asked in the House on Wednesday last week, I sought your interpretation of the Minister’s answer, and your interpretation was that she was, in fact, refusing to rule out funding cuts to Playcentre.

💬 Mr SPEAKER: The relevant issue, though, is that the question asked what changed. That is what the question actually asked. The rest of the question identifies what that change is in relation to, and the Prime Minister in his wisdom has argued that nothing changed. I cannot dispute the Prime Minister’s answer in that regard.

💬 Sue Moroney: Why did it take him so long to rule out proposed funding cuts for Playcentre, given that the Labour leader, Phil Goff, called on the Government to rule them out as early as 19 July?

💬 Rt Hon JOHN KEY: This will come as a shock to the member, but I do not take my riding instructions from Phil Goff. Secondly, the member asked an interesting question: “What changed between Wednesday and Thursday?”. I take just a moment to read out what the Minister said on Wednesday: “while the taskforce recommended a change in the funding system, we have no intention of doing anything that will disadvantage the parent-led sector.” That was said on Wednesday last week.

💬 Sue Moroney: Will he now rule out funding cuts proposed by the task force to the 20 free hours policy for early childhood education, which will cost thousands of families an extra $50 per child per week if implemented? Will he rule that out?

💬 Rt Hon JOHN KEY: The Government’s position is that it will be maintaining the 20 free hours policy.

💬 Sue Moroney: I raise a point of order, Mr Speaker. The question that I asked was specific: whether he will rule out funding cuts proposed by the task force to the 20 free hours policy for early childhood education. I did not hear an answer as to whether he was ruling out the funding cuts proposed by the task force to the 20 free hours policy for early childhood education.

💬 Mr SPEAKER: The Prime Minister’s answer was that the Government would be maintaining the 20 hours. The member does have a further supplementary question to pursue that particular issue.

💬 Sue Moroney: Does he stand by the answer that he gave to the last question, that he is committing to keeping the same subsidies for 20 free hours’ early childhood education and the same fee controls in place for 20 free hours’ early childhood education?

💬 Rt Hon JOHN KEY: No to the last bit.