Questions for Oral Answer

1. to the Minister of Finance: What reports has he received on progress in lifting New Zealand’s household savings and reducing household debt?

The latest available data comes from the year to March 2011, and shows that net household savings in that year were 0.2 percent of disposable income. Although this is modest, it is the first annual positive savings rate since 2000, and only the second since 1993. Treasury forecasts an increase in the household savings rate from 0.2 percent of household disposable income to 3.9 percent by 2016. This higher savings rate and the reduction in household debt are expected to be helped by continued restraint on consumer spending, which of course is not such good news for the retail sector.

💬 Paul Goldsmith: What impact has the recent increase in household savings had on household debt?

💬 Hon BILL ENGLISH: Household debt did grow quickly through the mid-2000s. However, since then the growth has slowed and started to turn down, helped along by New Zealanders being careful with their money. As a result, household debt as a percentage of disposable income has fallen from 155 percent of disposable income in 2009 to 140 percent today. So that is quite a significant reduction. The level of household debt, however, is still high, and I would expect that New Zealand households will continue to pay down their debt.

💬 Paul Goldsmith: Given the improvement in household savings and the fall in household debt, what factors are behind forecasts for the current account deficit over the next few years?

💬 Hon BILL ENGLISH: The current account deficit is forecast to go out to 6.7 percent of GDP by March 2016. This is still significantly less than its peak at 8.7 percent of GDP in 2006. The forecast widening of the deficit will reflect a couple of factors. One is the Christchurch rebuild, which is being part-financed from overseas insurance inflows. Statistics New Zealand estimates $15.7 billion of reinsurance for Christchurch. A second driver of it will be increasing business investment—that is, where people are financing investment in their own businesses, which will generate future income.

💬 Andrew Williams: Has the Government any plans to ensure more household saving is invested in New Zealand - owned financial institutions, rather than in foreign-owned banks; if not, why not?

💬 Hon BILL ENGLISH: There is a bit of a trade-off in this respect, where large investors such as the New Zealand Superannuation Fund and ACC have investment policies that include diversification of their holdings. Both of those funds are so large that they have probably invested almost as much as they can in the New Zealand stock market, though they do invest a considerable amount of their funds offshore, as a rational investor probably would.

Christchurch, Recovery—Funding and Potential for Sale of Council Assets

2. to the Minister for Canterbury Earthquake Recovery: Did the advice he has received on Christchurch City Council assets contemplate a sell off or sell down of shares in companies supervised by Christchurch City Holdings Ltd or of other council assets; if so, which ones?

on behalf of the Minister for Canterbury Earthquake Recovery: I think it is important to be clear that the advice the Minister has received on the Christchurch City Council’s assets from Treasury and the Canterbury Earthquake Recovery Authority is not advice of any specificity; it is simply advice on the financial position of the Christchurch City Council and its ability to contribute to the recovery. There is no list of assets compiled for the purpose of considering sales, and the Minister has had no discussions with either Government officials or the council around the particular sales of any assets.

💬 Eugenie Sage: Given that the running costs for the Wellington electricity network have increased by 296 percent since 1990, attributed to the privatisation of electricity distributors, is the Minister concerned that selling off or selling down Orion would risk increasing electricity prices for people in Christchurch, who are already facing high energy costs in damaged homes?

💬 Mr SPEAKER: I am a little uncertain. Is Orion an asset owned by the Christchurch City Council?

💬 Eugenie Sage: Yes.

💬 Mr SPEAKER: Well, the Minister has no responsibility whatsoever for assets owned by the Christchurch City Council. But in the interest of fairness I will allow the member to rephrase her question to try to bring it within the Minister’s responsibility.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think we have already had tabled in this House—and if not, I am prepared to offer it for tabling—two things: a Cabinet paper and also a list of assets of the Christchurch City Council—

💬 Mr SPEAKER: Order!

💬 Hon Trevor Mallard: Can I finish, sir?

💬 Mr SPEAKER: No. I have allowed the member some time to make clear what the issue of order is, and I do not hear what the issue of order is. Disputing by way of a point of order—even if cleverly done—a Minister’s answer is not acceptable.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. I was not in any way disputing the Minister’s answer; I was disputing your ruling. Your ruling indicated that there was no responsibility. The point I was making was that the Minister asked for and received a list of the Christchurch City Council’s assets—

💬 Mr SPEAKER: Order! That is not an issue of order. I cannot for the life of me see how that has anything to do with the proceedings of this House. It may have something to do with whether the member judges the Minister’s answer to have been a good answer, but that is not a matter to do with the proceedings of the House. The questioner has the opportunity to dig into the Minister’s answer if the questioner finds the answer surprising, but what the member cannot do is ask the Minister about matters for which the Minister is not responsible. The Minister for Canterbury Earthquake Recovery has no responsibility for former sales of assets owned by any city council.

💬 Hon Trevor Mallard: I raise a point of order, Mr Speaker. The matter that the member was bringing up was not the former sale; it was a possibility of a sale of an asset, the list of which was asked for by the current Minister—

💬 Mr SPEAKER: Order! The member continues to seek to question the Minister’s answer. The Minister gave the House a certain answer. The member seems to disagree with that answer. He has the chance to ask supplementary questions; that is the way to deal with answers that surprise the member, not points of order. My ruling stays. But I am not dismissing the question and saying the member loses the question; I am just asking her to rephrase the question in a way that clearly brings it within the responsibility of the Minister. I stress in doing that that the Minister for Canterbury Earthquake Recovery has no responsibility whatsoever for the assets of the Christchurch City Council. The Minister has responsibility for advice he receives—or he is answerable for advice he receives—but he is not responsible for those assets.

💬 Hon David Parker: I raise a point of order, Mr Speaker. Just dealing with that point as to whether the Minister does have responsibility. The legislation this House passed gave the Minister the authority to, by regulation, pass regulations that can take over the Christchurch City Council—very wide-ranging powers—which I would suggest mean that this is a question that even in its present form is within order, because the Minister could do that and take control of Orion and sell it, if he thought it was a wise thing to do.

💬 Mr SPEAKER: I think that is a pretty long bow. I have invited Eugenie Sage to rephrase her supplementary question.

💬 Eugenie Sage: In the event of advice from Treasury about selling down shares in Orion, would the Minister have a concern that that would potentially risk increasing electricity prices for Christchurch residents, given the experience in Wellington, where the privatisation of the electricity distribution network has increased prices by 296 percent?

The matter is entirely hypothetical. The Minister has received no such advice.

💬 Eugenie Sage: Does the Minister believe it is fairer for Christchurch people to pay what is effectively an earthquake levy through their rates, or to spread this across all New Zealanders through a temporary earthquake levy?

My view is that the approach the Government has taken is the appropriate way to fund the response.

💬 Eugenie Sage: Given that a majority of respondents in a nationwide poll supported a temporary earthquake levy to look after Christchurch, why will the Minister not support this levy instead of encouraging further increases in rates, council borrowing, or selling down productive assets?

💬 Hon Anne Tolley: I raise a point of order, Mr Speaker. If you look at the primary question, this is the second supplementary question now that has wavered quite widely of the primary question, which is about advice that the Minister has received about the sell-off or sell-down of shares on behalf of the Christchurch City Council. There is nothing in there about a rate, an earthquake levy—nothing.

💬 Mr SPEAKER: I do not think I need to hear further on this. In my view, the question was in order. The question related those other matters that the honourable Minister has mentioned to the issue of sales of assets, and the primary question asks about fundraising through the sales—advice on the sales of assets. I think the question does relate to the primary question sufficiently to be in order. Does the Minister still recollect the question, or shall I ask the member to repeat it?

I would point out to that member that all taxpayers of New Zealand are contributing to the recovery of Christchurch through the $5.5 billion of taxpayers’ funds that the Government has collected from all the citizens of New Zealand and is contributing to the rebuild in Christchurch. The important issue is that we also expect the Christchurch City Council to play its part in the rebuilding of Christchurch, and we expect it to consider all the funding options available to it to do so.

💬 Eugenie Sage: Will the Minister give an assurance that the Government will not use the Minister’s powers under section 48 of the Canterbury Earthquake Recovery Act to direct the Christchurch City Council or Christchurch City Holdings Ltd to sell down or sell off their assets?

The Government has sought no advice in that regard, it has had no discussions with the council in that regard, and it is unhelpful for that member to continue to speculate and raise fear in that respect.

💬 Kevin Hague: I raise a point of order, Mr Speaker. The question sought an assurance from the Minister that that power would not be used. The Minister’s answer relates to the advice that has been received about that matter, but does not address the issue of whether or not the power will be used.

💬 Mr SPEAKER: I hear the member’s point, but, in fairness, where assurances are sought over hypothetical matters, Ministers cannot see into the future. It is not reasonable to expect the Minister to be able to give an absolute assurance of yes or no, when circumstances—we do not know; there might be another earthquake, for example. No one knows what the future holds, and that is why traditionally in this House, while it is fair to ask a Minister in case a Minister is prepared to answer such a question, it is not reasonable to expect an absolutely precise answer on a hypothetical question like that.

💬 Eugenie Sage: Given that the Christchurch long-term plan provides for the council to fund its share of the earthquake rebuild through rates and borrowing without selling assets, will the Minister give an assurance that the decision will be Christchurch City Council’s as to how it funds its share of the rebuild cost?

We have made it very clear that we expect the Christchurch City Council to play its part in the rebuilding of Christchurch, and that we expect the Christchurch City Council to consider all of the relevant options in doing so. How the council makes its decision is not a matter of my responsibility.

💬 Eugenie Sage: If the Government is expecting Christchurch City Council to consider all relevant options, will the Minister give an assurance that the Government will not put any pressure on Christchurch City Council or Christchurch City Holdings Ltd to sell Christchurch’s assets?

The member keeps asking the same question, with respect, and, with respect, my answer remains the same. It is a matter for the Christchurch City Council. We expect it to consider all of its options, and we expect it to play its part in the rebuilding of Christchurch.

💬 Gareth Hughes: I raise a point of order, Mr Speaker. With all respect, the Minister is talking about the council, which is outside the Minister’s responsibility. It is a clear question around the Minister’s responsibility: will the Minister put any pressure on the council to sell down the assets of the holdings?

💬 Mr SPEAKER: I think, in fairness, that I understand why the member has raised his point of order, but the Minister has said in relation to that question that the Government expects the Christchurch City Council to consider all its options, but then the decision is theirs, not the Government’s. OK, the member came back with a further question about it, but the Minister has not changed her answer in that matter. I think it is a reasonable answer to the question. You cannot always expect to get exactly the answer the member might be wanting, but then further questions can be asked. There is a further question available.

💬 Eugenie Sage: I seek leave to table an article from the Public Service Association journal Working Life from March 2012 that finds that Wellington’s electricity network’s running costs increased by 296 percent in 20 years due to privatisation.

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

💬 Hon Lianne Dalziel: Can he confirm that he specifically asked for the list of the council’s strategic assets in the context of discussions with the council about cost-sharing; if so, what other implication than the potential for inputting the funds from selling those assets could one take from that request?

No.

💬 Hon Lianne Dalziel: I seek leave to table the response from the Canterbury Earthquake Recovery Authority to the Minister’s office, setting out “The Minister requested that we advise what the CCC identified as their strategic assets.”, and listing all those strategic assets.

💬 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.

New Zealand - Australia Migration—Effect on Regional Areas

3. to the Minister of Finance: Does he stand by his answer to yesterday’s primary question “as I understand it, there are no regional statistics that specifically isolate the number of people leaving any particular region to move overseas” and has the Treasury reported to him the existence of official statistics on permanent and long-term migration compiled by local council area and region?

What I meant yesterday was that you cannot isolate the relative impact of internal and external migration relevant to the question that the member asked. However, the member is right that there is a separate series of external migration statistics by region. However, the big issue here is the actions the Government is taking to try to create more opportunities for young New Zealanders, who would rather have good job opportunities in New Zealand.

💬 Hon David Parker: Since he made that statement yesterday, has he read the official permanent and long-term migration statistics prepared by Statistics New Zealand, and do those statistics show by region and local council area that the regions of New Zealand are being hollowed out by the departure of young New Zealanders to Australia?

💬 Hon BILL ENGLISH: No, I have not, but the member’s question illustrates more of the defeatism that I originally criticised. We live next door to one of the fastest-growing developed countries in the world. That means we have to compete for the talent of our young people, and, as I said, we should get on and compete instead of standing around counting everything.

💬 Hon David Parker: If the Australian resources boom is the main reason why people are going, why did Taranaki lose 1,232 people last year—which is, even after migration into the region, a net loss of 885 people—when it has some of the best natural resource development in the country? Why are they going from a resource-rich region to Australia? Is it because so few of them are getting a trickle-down of any benefit to working families?

💬 Hon BILL ENGLISH: No, and actually there might be a couple of logical reasons. One is that when it comes to resources it is the huge new investment in Australia that is generating the jobs, and I look forward to the support of the Labour Party as we ensure there is huge new investment in the Taranaki Bight to create the same sorts of jobs. The other reason people will be moving from Taranaki is that that is exactly the kind of expertise that is needed, particularly in the gas industry, in Australia. We want to help Taranaki businesses benefit from that large opportunity.

💬 Hon David Parker: Is there any region of New Zealand where the trend of departures has stopped or is getting better, or do the figures show that the permanent departure of young New Zealanders is hollowing out every single regional area of New Zealand?

💬 Hon BILL ENGLISH: All I can do is repeat what I said earlier. There are young people leaving. It does not matter whether you count them regionally or nationally, you get the same result. The issue is this: it is time New Zealand stopped being defeatist about it, and got on with competing and taking advantage of living next door to the fastest-growing economy in the developed world. That is exactly what the Government is doing.

💬 Hon David Parker: Has he seen comments from the New Zealand Institute of Economic Research that “Rural New Zealand is likely to disproportionately suffer the consequences of the country’s ageing population and outward migration through a loss of skilled and innovative labour,” and does he think young New Zealanders would be leaving in droves for Australia if New Zealand offered job opportunities and wages here?

💬 Hon BILL ENGLISH: Of course we need to offer them jobs and opportunities, and what that needs is strong support for the businesses that make the decisions to invest and to create that new job. That is why the Government is advancing pro-growth policies, and that is why it is hard to understand why the Opposition is against those pro-growth policies, because that is stopping businesses creating jobs and opportunities.

💬 Hon David Parker: Are the regions that have lost the most young people in the last year the regions that tend to have the longest-serving National MPs, and is that why they are leaving?

💬 Hon BILL ENGLISH: No. Actually, I represent a region that has had challenges of population probably for about 30 years, but what is happening in Southland is the opposite of the kind of defeatism that the member is talking about. We have worked very hard to develop our local resources and provide more jobs and opportunities. Because of that we have a vibrant and successful local economy—more productive than any other part of the country.

Industry Training—Changes

4. to the Minister for Tertiary Education, Skills and Employment: What changes is the Government making to improve results from industry training?

Yesterday I announced the Government is seeking to further improve the performance of industry training by boosting the number of apprentices and increasing the support for apprenticeship training. These proposals follow a comprehensive policy review conducted by the Ministry of Education. The changes are the next step in improving the performance of the Government’s investment in industry training, and include clarifying the role of industry training organisations, increasing the performance expectations of industry training organisations, enabling learners to transition easily between workplace-based and non - workplace-based training, and ensuring a sustainable funding regime is in place for results-focused industry training. The Government expects the changes to drive a higher level of qualification completion in industry training, so that workers are equipped with transferable skills that improve this country’s productivity and boost economic growth.

💬 Scott Simpson: Given the revised system’s focus on improving the performance of the Government’s existing investment in industry training, who will benefit from these proposals?

💬 Hon STEVEN JOYCE: When the Government came into office, it was clear that training enrolments were high but actual credit achievement was very disappointingly low, with huge numbers of phantom trainees. We set about making changes, as we have in other parts of the tertiary system, to focus on results and improve value for money for taxpayers. Those changes have successfully raised credit achievement in the industry training sector by 19 percent since 2008. A more high-performing industry training sector will significantly benefit trainees, first of all, in achieving valuable skills and higher wages in the labour market, but also businesses, with a more productive workforce, and the New Zealand economy, in producing goods in demand around the world.

Christchurch, Recovery—Funding and Potential for Sale of Council Assets

5. to the Minister for Canterbury Earthquake Recovery: Which of the assets identified by CERA in response to his request has he ruled out asking Christchurch City Council to sell?

on behalf of the Minister for Canterbury Earthquake Recovery: As I have already made clear in answers to question No. 2 today, the Minister has received advice from Treasury and the Canterbury Earthquake Recovery Authority that considers the financial position of the Christchurch City Council in the context of its ability to meet its rebuild obligations. These reports do not consider the sale of individual council assets and do not recommend the sale of any assets. Instead, the advice suggests that the Christchurch City Council should consider all of its options to fund its share of the rebuild.

💬 Hon Lianne Dalziel: When was the Christchurch City Council first advised of the specific details of the council’s anchor projects that it would have to fund itself, and what the mayor has called “the gap between what the council can afford and what’s outlined in the [Government’s] plan.”?

I cannot give the member the specific date, but what I can tell the member is that we have been working with the Christchurch City Council comprehensively through the development of the blueprint in the plan, and, furthermore, that the council is very well aware that the assets identified as anchor projects in the plan have been blocked for location, with a clear understanding of all parties that each one of those assets, be they centrally led assets or civic assets, will now have to go through a specific design process. It is through that design process that final costings will become known.

💬 Hon Lianne Dalziel: What was the reaction of the council members when he met privately with the Christchurch City Council on the Thursday before the public announcement to tell them the news, and when they told him that it was going to cost them another $1 billion?

I cannot advise, as I was not physically present at the meeting. What I can tell the member, though, is that the Christchurch City Council has acknowledged to us that it is entirely reasonable that the Government would want it to demonstrate that it has considered all of its options when it comes to funding of the projects that it is responsible for, and that the Government is correct in expecting that the council would demonstrate that, before it were to seek any additional funding from the Government.

💬 Hon Lianne Dalziel: Can the Minister confirm that when he met with the council on the Friday he was able to give it a reassurance that the difference was not the $1 billion that it had been advised the night before, but he had managed to get it down to $100 million, and what is the gap that the Christchurch City Council is expected to fund?

Can I reiterate once more that the final costings for these assets is a long way from determined, and will not be determined until we go through a process of final design specifications and costings for each asset. The member should be aware that when we launched the blueprint, it was made very clear that it was a matter of identifying the locations for key assets—not the design of them, not the final configuration of them, and not the costings for them. The discussions we have had with the council have focused on the fact that the Government will certainly take the lead in the replacement of central government facilities, and that we expect the city council to be the lead agency in the delivery of the civic assets that are part of that plan.

💬 Hon Lianne Dalziel: Why did the Government announce the specific projects that will be civic assets when it had not even discussed them or the costings with the Christchurch City Council before it made the final decisions?

I reject that entirely. The Christchurch Central Development Unit, which compiled the blueprint, was made up of a collaboration of Canterbury Earthquake Recovery Authority officials and Christchurch City Council officials. The point was made repeatedly at the launch that the Christchurch City Council had been intimately involved in the formation of the plan, and it is well aware of the proposals, to the extent of listing its contributions to them in its annual plan. So to suggest that it had no idea that it would be called upon to fund them is simply wrong.

💬 Hon Lianne Dalziel: I raise a point of order, Mr Speaker. I know it is difficult because the Minister is not the Minister who would normally be answering the question, but it has been made clear in the public arena that the officials who were seconded to the Christchurch Central Development Unit were sworn to secrecy. They had to sign a gagging order—

💬 Mr SPEAKER: Order! This is not a matter of order in this House. The member asked questions and has received answers, and I can see that some of the answers have surprised the member asking the questions, but that is what asking questions and getting answers is about. The point of order is not a valid point of order.

💬 Hon Lianne Dalziel: I raise a point of order, Mr Speaker.

💬 Mr SPEAKER: Well, I will hear further from the member.

💬 Hon Lianne Dalziel: I am not trifling with the Chair; I am just trying to get an understanding. I used the phrase “Christchurch City Council”, but I am referring to the council, not to staff members who are seconded, and I just wonder whether the question has been answered in the context that it was given.

💬 Mr SPEAKER: Well, on my listening to the answer given, I believed the question had been answered. I could see the member was surprised by the answer given, but an answer to the question was given. The member does have further supplementary questions, though, to pursue the matter should it be of paramount importance to sort that detail out, but it cannot be done by way of point of order.

Family Court—Changes

6. to the Minister of Justice: What changes is she making to improve the Family Court?

Today I have announced plans to reform the Family Court that will focus on supporting parents and families to resolve their family disputes independently, and will help modernise the Family Court to make it more efficient, effective, and responsive. We know that, if at all possible, it is best to keep some family matters out of court, especially when children are involved. Our changes put the needs of children and vulnerable people first.

💬 Katrina Shanks: How will the Family Court changes improve the focus on children and vulnerable parties?

💬 Hon JUDITH COLLINS: We know that court proceedings can have a harmful impact on children. We want to minimise that harm. A new Family Disputes Resolution service will include free access to the highly regarded Parenting through Separation course, which helps families cope with the emotional upheaval of a domestic dispute. We are creating a fast track for urgent cases, and better supporting victims of domestic violence with improved treatment programmes, an increased maximum penalty for breaching a protection order, and recognition of economic abuse as a form of psychological abuse.

💬 Katrina Shanks: Why are changes to the Family Court needed?

💬 Hon JUDITH COLLINS: Earlier this year judges, lawyers, and counsellors raised serious concerns about how the court currently operates, including long delays and a lack of focus on children and vulnerable parties. Our new Family Disputes Resolution service will see about 4,000 fewer applications, involving 2,000 children, going to court each year for Care of Children Act cases. We are clearly putting the needs of children and vulnerable people first. People needing immediate access to court, legal representation, legal aid, or court-funded counselling will get it; this is not changing. What is changing is that for some private, family matters we can help families resolve their disputes without having to go to court.

💬 Charles Chauvel: Does she agree with her officials’ estimate that her new fee of $897 for families to access the Family Disputes Resolution service, which will replace the existing counselling—which is provided free of charge and without any formalities like affidavits required—will deter 1,200 families with children every year from having their problems resolved by the New Zealand Family Court?

💬 Hon JUDITH COLLINS: Of course I do not agree with that advice, and I can tell the House why. Of course, this is the whole fee—$780 plus GST—for a hearing, or, in fact, a dispute resolution mediation service. What that actually means is that for anyone who is on a low income such that they would normally get legal aid, their share will be paid for them. The other half of that share, I can tell the House, equates to about 1 hour of a lawyer’s fee, and is actually a very minimal cost towards what is resolving matters that, if they were allowed to go on, could ultimately cost people many hundreds of thousands of dollars.

💬 Charles Chauvel: I seek the leave of the House to table an information document provided to the public by the Minister today, which shows that $780 plus GST equals $897, and also—

💬 Mr SPEAKER: Order! Could I just check that this is not a press release.

💬 Charles Chauvel: No, it is a Q and A put out by the Minister.

💬 Mr SPEAKER: But it is put out by the Minister?

💬 Charles Chauvel: Yes.

💬 Mr SPEAKER: Has it been put out for all members?

💬 Charles Chauvel: No, I do not believe that it has been sent to members.

💬 Mr SPEAKER: Well, I will leave it up to the House. The member can describe it.

💬 Charles Chauvel: Thank you. The second point that the Q and A document makes is that 1,200 fewer applications to the Family Court are expected per annum.

💬 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 Trevor Mallard: Is it her intention to extend the new affidavit-making process into the rest of the legal system, therefore making it easier to establish the truth as to whether John Judge is correct when he describes the Minister as pathetic, knowing the truth, and trying to blacken Mr Judge’s name, or she is correct when she wrongly suggested that he had wiped his computer and removed evidence about her leaked documents?

💬 Hon JUDITH COLLINS: I can tell that member that I am not anticipating taking that action, but I can tell him that there will be far better anger management assistance for abusers in the Family Court from now on.

Whānau Ora—Recipients of Funding

7. to the Minister for Whānau Ora: Does she stand by her statement that “I don’t object to any vulnerable family receiving Whānau Ora support, because that’s what the money is for”?

on behalf of the Minister for Whānau Ora: Yes.

💬 Le’aufa’amulia Asenati Lole-Taylor: Given that answer, how does the Minister justify the Mongrel Mob receiving $20,000 through Whānau Ora?

I am not sure what the member is referring to. I know there is a trust that is before the courts facing charges of misappropriation. I am not sure whether it is the same group that the member is referring to.

💬 Le’aufa’amulia Asenati Lole-Taylor: Has her department undertaken any inquiries into how the Mongrel Mob came to be in receipt of $20,000 of taxpayers’ money; if so, what was the result of these inquiries?

I understand the relevant department has made inquiries. In fact, those inquiries may have been of some assistance to the police.

State Housing, Auckland—Condition

8. to the Minister of Housing: Does he stand by all his comments on housing; if not, why not?

Yes, as long they are taken in context.

💬 Hon Annette King: Do the statements that he made over 4 years ago about mouldy, old, damp State houses apply to any State houses now, almost 4 years after he became the Minister of Housing, promised to rid the land of slum State housing, and said that upgrading State houses was a high priority?

💬 Hon PHIL HEATLEY: Yes. As I said yesterday, in fact—more recently than 4 years ago—of our State houses that we inherited about one-third were of the wrong size, in the wrong place, or in a serious state of disrepair. We are insulating every State house that we can by the end of next year. We are very proud of that. In fact, we consider that, as a State landlord, this should have been done decades ago, and the previous Government should be a bit embarrassed about it.

💬 Hon Annette King: Can he recall his visit to the flats at 44 Symonds Street, Auckland, early this year, and did he notice the mouldy, old, damp walls, the broken windows, the peeling paint, and the one laundry for 45 flats; if so, what action has been taken to address these slum-like problems after his visit?

💬 Hon PHIL HEATLEY: I have visited a number of State houses, both in Opposition and in Government. I confirm again in this House that the State housing stock was left in a serious state of disrepair. There are a large number of State houses even today that are in a serious state of disrepair. I look forward to the Labour Party and the Green Party supporting this Government upgrading them—

💬 Mr SPEAKER: Order! Order! Does the member need a new prescription for his glasses?

💬 Hon PHIL HEATLEY: Are you offering, Mr Speaker?

💬 Mr SPEAKER: Well, I was on my feet and the Minister just kept going. I was very impressed by the passion in the answer; the only problem was I do not think it said anything about the question asked. There is a lot of licence with that kind of question but there should be some reference to the question. It asked whether the Minister had visited a certain block of flats, I think, or apartments in Symonds Street, in Auckland. There is nothing wrong with the Minister giving a little more information than necessary, but there was no mention made of those flats whatsoever. If the Minister could assist the House in that regard, I would appreciate it.

💬 Hon PHIL HEATLEY: I may or may not have visited them. I have visited a lot of State houses in my time. I can let you know, though—and the House—that there are a large number of State houses that we want to demolish and subdivide, and we would appreciate the support of the Labour Party, instead of its members stopping every development we are trying to do in this country. On the one hand they want them fixed—

💬 Mr SPEAKER: Order! Order! That is sufficient.

💬 Hon Annette King: Has he been told that the only maintenance that has been done at 44 Symonds Street in 4 years occurred a few days before he visited, when the entrance foyer got a new piece of lino, which is now called the ministerial lino; if so, does he intend to visit again, so that they can get another piece of lino?

💬 Hon PHIL HEATLEY: I always suspected I was a very effective member. I notice that member never gets a red carpet laid out for her. What I can say is simply this. There are a large number of State houses in this country that need repair. Every time we try to subdivide a section and move someone else to a new State house, that party’s members object. The State housing stock needs upgrading. I want their support.

💬 Hon Annette King: I seek leave to table a photograph taken by Jacinda Ardern on our recent visit at 44 Symonds Street, showing the ministerial lino.

💬 Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is objection. I call Jacinda Ardern. [Interruption] Order! The House has had some fun. I must be able to hear the supplementary question.

💬 Jacinda Ardern: Is he planning to demolish or sell the flats at 44 Symonds Street, as he implied in his earlier answer?

💬 Hon PHIL HEATLEY: I am unaware of any moves to do that. It would be a matter for the Housing New Zealand Corporation. What I can say is that there is a large number of State houses across New Zealand that we wish to either upgrade, subdivide, or demolish and rebuild, and every time we do it the Labour Party members oppose us. Yet they want them upgraded. What do we do? Well, we get on with the job.

Foreign Affairs and Trade, Ministry—Uncontested Contracts Awarded to External Consultants

9. to the Minister of Foreign Affairs: What is the total number and cost of uncontested contracts given by the Ministry of Foreign Affairs and Trade to external consultants in the last two financial years?

on behalf of the Minister of Foreign Affairs: In 2010-11 the Ministry of Foreign Affairs and Trade engaged 82 consultants or contractors through non-contested processes at a cost of $5.06 million. In the more recent fiscal year the numbers dropped to 49 consultants at a cost of $2.98 million.

💬 Dr Kennedy Graham: Why did the ministry this year give a contract worth more than $300,000 for change management with no tender process, and the only reason given as justification is that the consultant, Harrington Allen and Associates, had previously worked for the ministry?

The Minister has a very strong view based on Public Service policy that this is an operational matter for the chief executive.

💬 Dr Kennedy Graham: In asking the Minister to extend his ministerial writ and comment on issues that naturally fall within his purview, perhaps he could answer why there was no tender process for this particular contract, given that the consultant’s original contract the previous year, also costing about $300,000, was awarded with no tender process, this time due to urgency?

I can only repeat the underlying point. This is obviously a decision of the management. I am sure they had good reasons to consider the alternative, and made this decision in the best interests of the process.

💬 Andrew Williams: Will the Minister agree to end the use of uncontested contracts given by the Ministry of Foreign Affairs and Trade to external consultants, on the grounds that they are inconsistent with open, transparent, and merit-based contracting in the public sector; if not, why not?

The answer to that is no, because it would be extremely inefficient to do so, and it is a longstanding matter for the Public Service across many agencies to have uncontested contracts, particularly for contracts of $50,000 or less, although that is not a complete bar to considering proposals above that figure.

💬 Dr Kennedy Graham: I raise a point of order, Mr Speaker. I put it to you that the issue of the integrity of tenders being put out is not an operational matter; it is a ministerial matter. The ministry applies the policy; the Minister is there to judge and set the policy.

💬 Mr SPEAKER: The member is quite correct, as I understand the situation, and that is why the last question that asked about policy was answered quite firmly by the Minister. Previous supplementary questions that have asked about detailed particular contracts, the Minister has deferred to the ministry because they are management matters, just as the member himself has described.

💬 Dr Kennedy Graham: Asking a broader matter of policy of the Minister, what is the threshold for tenders for legal advice at the ministry, given that Bell Gully received $121,000 in 2011 for work relating to aid contracts, and no other tenders were called, the price being deemed to be below the threshold?

I do not have that information available to me as to what the policy structures are for that matter.

💬 Dr Kennedy Graham: Has the Minister’s recent cutback meant that the Ministry of Foreign Affairs and Trade no longer has officials able to provide advice on diplomatic matters, given it is paying external contractors hundreds of thousands of dollars for advice on diplomacy?

I think that is a somewhat broader question, and I think I can assure the member that the type of independent consultant whom I am aware of—most of whom I have known personally over many years—are people of great international standing, of unrivalled expertise, and of very high integrity. I do not think the member needs to be concerned.

💬 Hon Phil Goff: Why was the Minister not aware that deliberately leaving policy positions unfilled and then cutting foreign policy positions by more than 30 would prove to be false economy, leading, since he became Minister, to a doubling of public expenditure on external consultants to $8.4 million a year?

I think there are two qualifications I would put to the member’s question. The first is a relatively minor matter, and the second is more profound. The minor matter is, of course, that he is not comparing apples with apples, because the previous Government’s use of consultants excluded Ministry of Foreign Affairs and Trade consultants used in our aid programmes, which are a very considerable part of the package. The more important point, of course, is that this is like listening to one hand clapping. The basic point of this whole process, at least in part, was to get Public Service efficiencies, and we expect savings of $24 million, or some three times the amount of money we are arguing here. [Interruption]

💬 Mr SPEAKER: Order! I must hear Dr Kennedy Graham.

💬 Dr Kennedy Graham: I seek leave to table three documents. The first pertains to the four guiding principles for recruitment by the Ministry of Social Development, including selection on merit, and open, honest, and transparent processes, so that those with unrivalled talent can compete with others.

💬 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 Kennedy Graham: I seek leave to table section 77H of the State Sector Act, which—

💬 Mr SPEAKER: Order! We do not table bits of legislation.

💬 Dr Kennedy Graham: I seek leave to table the recruitment process of the Ministry of Foreign Affairs and Trade, which advertises for “Experienced foreign policy staff wanting to return to the Ministry”.

💬 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.

Broadband, Ultra-fast and Rural—Progress

10. to the Minister for Communications and Information Technology: Has she received any reports on the progress of the Government’s Ultra-Fast Broadband and Rural Broadband Initiatives?

Yes. Today I am releasing a report on the results of the first year of the build programme for both the Ultra-fast Broadband Initiative and the Rural Broadband Initiative. Under the Ultra-fast Broadband Initiative, the fibre network now reaches over 76,000 premises, exceeding the year 1 target by nearly 10 percent. Under the Rural Broadband Initiative, 69,000 homes and businesses in rural areas now have access to improved broadband, meeting all first-year expectations. The four rural hospitals scheduled for connection have been connected. A total of 661 schools now have fibre to the gate, representing 85 percent of an ambitious year 1 target, with the remainder to be connected by September. As well as the nearly 500 rural schools, 10 of our most remote schools have also been connected. These initiatives are part of the National-led Government’s commitment to deliver world-class connectivity to drive innovation, create jobs, and grow our economy.

💬 Mark Mitchell: Has the Minister seen any reports on the provision of international bandwidth and its effect on ultra-fast broadband?

💬 Hon AMY ADAMS: Yes, I have. This is an area that we monitor closely. Although our position is that we would welcome and encourage a second cable provider, we are satisfied that the existing capacity is sufficient to meet New Zealand’s needs. The key point is that the case for our ultra-fast broadband and rural broadband projects was never reliant on a second cable. There is ample capacity in the medium term in the Southern Cross cable, with upgrades planned to increase capacity tenfold by 2016, and numerous commentators have now confirmed this position. New Zealand also indirectly benefits from the competitive international market in Australia, as Southern Cross Cables charges New Zealand the same rates as it does in Australia. I am confident that as market dynamics change, there is every likelihood that the investment case for a second cable will improve.

💬 Clare Curran: What is the best estimate she has received, to the nearest $100 million, of the economic loss to the country from the collapse of the Pacific Fibre cable deal?

💬 Hon AMY ADAMS: My interest in this issue is ensuring that the Ultra-fast Broadband Initiative and the Rural Broadband Initiative will not be hampered by the provision of international bandwidth. I am satisfied that they will not, so I have not requested any further analysis in that regard.

Foreign Charter Fishing Vessels—Labour Law Breaches

11. to the Minister of Labour: Does she stand by her statement regarding foreign chartered fishing vessels “If breaches of labour law occur—such as underpayment of wages or illegal deductions or breaches of the Code of Practice, the Department of Labour will be able to investigate them and take action”?

Yes. I said that as part of our announcement that we will be moving to require reflagging of foreign fishing vessels. This bold step was much needed because the current system, which Labour put in place in 2006, was simply not working. That system has created many difficulties around pay, conditions, and enforcement on foreign boats, and we are trying to deal with these current issues as we transition to the new regime.

💬 Darien Fenton: Why, after more than a year, have the crews of Oyang 75 and Shin Ji still not received the wages they are owed under the Minimum Wage Act, when she said the Department of Labour would help?

💬 Hon KATE WILKINSON: There are various vessels going through various stages of the auditing process, which is an increased auditing process under the improvements that we have made. We did inherit a system that was in disarray, we did move boldly, and we are doing what we can to make sure that minimum wages are actually maintained and that conditions are actually enhanced.

💬 Darien Fenton: How much funding are the crew members owed, and is the amount greater or lesser than the cost of the three investigations her department has so far ordered into this issue without achieving any result?

💬 Hon KATE WILKINSON: I do not have the amount in order to answer that question, but if you put it in writing I am happy to give it a go.

💬 Barbara Stewart: Has she read the US Department of State’s Trafficking in Persons Report for 2012; if so, what is her response to claims that foreign charter fishing vessels are employing slave labour in New Zealand waters?

💬 Hon KATE WILKINSON: We are always very concerned about any suggestions of slave labour in the seas, whether they are our seas or not. That is why we took the very bold step of having a ministerial inquiry into foreign fishing vessels, and that is why the decisions following on from that went further than the recommendations of the inquiry itself.

💬 Darien Fenton: Is it true that the widows of the six crew who drowned when the Oyang 70 sank in the Southern Ocean in 2010 have also not received the wages owed to their lost relatives; if so, what is her department doing about it?

💬 Hon KATE WILKINSON: As I answered in response to a previous question, albeit generically, the department is going through various audits of all fishing vessels. We have got the services of KPMG as an independent auditor, because some of the tracking of the money through the sources is actually forensic accounting, takes some specialist work, and is not an easy job. That is why we tried to fix a code that was put in place under Labour and was not working.

💬 Darien Fenton: Can she assure the House that the new rule she is introducing around the flagging of foreign fishing vessels will stop this 21st century slave labour conduct; if so, why is she allowing these practices to continue for 4 whole years before implementing the new rules?

💬 Hon KATE WILKINSON: I can assure the House that the new code that is being proposed is vastly superior to the old code, which was in place under the Labour Government, and which it did nothing for.

Waste Management—Waste Minimisation Fund and Plastics Recycling Scheme for Farms

12. to the Minister for the Environment: What recent announcements has she made in relation to the Waste Minimisation Fund?

Last month I announced that more than $1 million has been awarded to 10 projects that will reduce the amount of landfill rubbish, under the latest funding round for the Waste Minimisation Fund. The 10 projects receiving funding this round include initiatives that encourage public recycling, the sorting of treated and untreated timber to make biofuel, and a project to help businesses compost more of their waste and raise the importance of composting. Every year New Zealanders send 2.5 million tonnes of waste to the landfill. That is over a tonne of rubbish per household. These projects will make a significant difference to our environment by encouraging individuals and businesses to reduce, reuse, and recycle.

💬 Nicky Wagner: How have previous projects funded through the Waste Minimisation Fund helped to reduce waste in landfills?

💬 Hon AMY ADAMS: I have recently received a report describing that more than 650 tonnes of plastic farm waste has been recycled nationwide during the past year, thanks to a Government-accredited product stewardship scheme called Plasback. Plasback supplies more than a thousand recycling bins to New Zealand farms, and collects agricultural plastics such as bale wrap, agrichemical containers, crop bags, and silage wraps and covers, which are recycled into new plastic products. This voluntary scheme is about getting alongside farmers and providing an environmentally friendly alternative. Thanks to the Waste Minimisation Fund and the agricultural sector’s commitment, this means there are now 650 fewer tonnes of plastic waste that are no longer being burned or buried.