Oral Questions

1. to the Prime Minister: Does she stand by all her Government’s policies and actions?

Yes.

💬 Hon Simon Bridges: Was Iain Lees-Galloway reflecting Government policy when he said, “If a small change to the minimum wage is going to be detrimental to them they don’t sound resilient. … a lot of businesses come and go, … That’s the nature of doing business.”?

💬 Rt Hon JACINDA ARDERN: I think he was reflecting the fact that we have an expectation that people be able to enter into the workplace and receive a decent wage. We increased the minimum wage to $16.50 an hour in April, we have flagged our intention for it to be $20 by April 2021, and the member clearly is articulating that he’s not as ambitious for New Zealanders who are in low-paid work.

💬 Hon Simon Bridges: What does she say to those workers of the businesses who would lose their jobs under the minimum wage policy?

💬 Rt Hon JACINDA ARDERN: I would rather speak to the actual examples the member has of a business closing because of an increase to $16.50 an hour.

💬 Hon Simon Bridges: Well, does she accept her officials’ advice that the increases will result in job losses?

💬 Rt Hon JACINDA ARDERN: Even that last Government probably got that same advice. In fact, when Labour was last in office and increased the minimum wage nine times, we had the opposite problem and had some of the lowest unemployment in the OECD—a record that on this side of the House we’re quite proud of.

💬 Hon Simon Bridges: In light of Iain Lees-Galloway’s statement that changes to the minimum wage need to be signalled, what other increases to the minimum wage will there be this term?

💬 Rt Hon JACINDA ARDERN: As we’ve said, we’ve already signalled in the coalition agreement with New Zealand First that it’s our expectation the minimum wage will be increased to $20 by April 2021.

💬 Rt Hon Winston Peters: Since the coalition Government announced its aspiration and target of $20 an hour, has unemployment gone up or down?

💬 Rt Hon JACINDA ARDERN: I’ve very pleased to say it has gone down and is projected to continue to go down.

💬 Hon Simon Bridges: Has the Prime Minister any advice on what the effect of that $20 minimum wage would be on jobs?

💬 Rt Hon JACINDA ARDERN: As I’ve said, we routinely receive advice on the projected impact, but in the past we’ve received that same advice and, in fact, what we have seen is unemployment going in the other direction.

💬 Hon Simon Bridges: Does she believe her Government’s industrial relations reform contributed to today’s Staples Rodway Business Confidence Survey’s finding that only 15 percent of 500 business leaders thought job security would increase, with 45 percent thinking it would decrease?

💬 Rt Hon JACINDA ARDERN: I am, of course, interested, yes, both in the feedback that we get from those business surveys and also the reality, and I know the reality is that, in fact, a firm’s own outlook is something incredibly important to us as a measure. It’s still a net positive, and that includes for the long-run average. We, of course, also have projected growth of around 3 percent and declining unemployment. The reality is looking very, very positive, and come Thursday will look even better.

💬 Hon Simon Bridges: Why does the Prime Minister believe more than half of the respondents to the survey believe this week’s Budget will have a negative impact on the economy and that the Government’s performance around the economy to date has been poor?

💬 Rt Hon JACINDA ARDERN: Again, I would ask for the member’s evidence points, given, of course, again, I’m speaking to the evidence—the reality of what exists out there—and that is projected growth of 3 percent, unemployment declining down to levels around 4 percent, and the fact that when you look at some of the stimulus that’ll be coming on track, like, for instance, the increase via the Families Package, both taxpayers and business have plenty of reasons to feel very, very positive.

💬 Hon Simon Bridges: Is the Prime Minister saying that business confidence doesn’t matter, and isn’t that an incredibly high-handed, arrogant approach to take?

💬 Rt Hon JACINDA ARDERN: No. I have, in fact, myself said that I’m very keen to make sure that a survey of perception matches reality.

💬 Hon Simon Bridges: Can she, then, just tell me why it is that the survey makes clear that businesses around this country think that the Budget will lead to a declining economy, and that the Government so far is doing a poor job on the economy?

💬 Rt Hon JACINDA ARDERN: Mr Speaker, you’ll forgive me for not wanting to allow anyone to get ahead of themselves before the Budget actually comes out. Two more sleeps.

💬 Hon Simon Bridges: Is the Prime Minister aware that in the two years before the election 10,000 jobs were created every month, and will she commit to a similar target over the next two years?

💬 Rt Hon JACINDA ARDERN: And again I would point out that, actually, minimum wage increases therefore—case in point—do not necessarily lead to job losses. We’re not going to apologise for wanting to make this a productive, high-wage economy. That’s exactly the kind of leadership that New Zealand needs.

💬 Hon Simon Bridges: Does that mean the Prime Minister will commit to a similar target to 10,000 new jobs a month over the next couple of years?

💬 Rt Hon JACINDA ARDERN: Of course, what’s important is what happens to your overall employment rate, and that’s why we’ve set ourselves a goal of 4 percent unemployment, because, of course, what matters is whether people are coming and going and staying in the job market, not just new job creation.

💬 Rt Hon Winston Peters: Does the Prime Minister accept, though, that there may be a cause for downwards wage adjustment for poor professional performance, such as is coming from the Opposition at this present time?

💬 Rt Hon JACINDA ARDERN: Mr Speaker—

💬 SPEAKER: Oh, no, no. It’s a very good question, but it’s not within the Prime Minister’s responsibility.

💬 Hon Simon Bridges: Well, it’s not actually a good question. Given how important wage growth and productivity are to the Prime Minister, is she aware that between 2008 and 2017 the average wage increased by $13,000, twice the rate of inflation, and will she commit to a target of wages growing at twice the rate of inflation for her Government?

💬 Rt Hon JACINDA ARDERN: What I would like is some consistency from the Opposition. On the one hand, increasing wages are going to lead to businesses closing and job loss, and on the other, we’re apparently not being ambitious enough. What I can tell you is that we are focused on making sure this is an economy with high wages, with decent wages, and with a growing economy, and you’ll see that the proof will be in the pudding.

💬 Hon Simon Bridges: Given that need for decent wages, as she says, will she hold her Government to account and commit to a target of wages growing at twice the rate of inflation for her Government, like they did when we were in Government?

💬 Rt Hon JACINDA ARDERN: Of course we’re setting a high bar for ourselves, including making sure that we have the minimum wage continually moving, and not sacrificing the fact that we believe that those individuals deserve a decent wage, decent conditions, and low unemployment.

Economy—Crown Debt, Tax Increases, and Business Confidence

2. to the Minister of Finance: What effect will additional borrowing and the proposed increase in petrol tax and levies have on the New Zealand economy?

💬 SPEAKER: Order! Before I call the member, can I just ask the senior members who are having an exchange across in front of me to cease. Thank you.

The Government is committed, using the favoured measure of the previous Government, to reducing net core Crown debt as a percentage of GDP to 20 percent within five years of taking office. The Half Year Economic and Fiscal Update shows nominal GDP growing faster than core Crown net debt in the years 2017 to 2022 and, importantly, shows that core Crown finance costs fall both as a percentage of GDP and in nominal terms over the period. In response to the second part of the member’s question, I draw her attention to the evidence we have from when the previous Government increased petrol levies by 40 percent over their nine years in office—the sky didn’t fall and she needs to cheer up about the New Zealand economy.

💬 Hon Amy Adams: Does he accept that increases to petrol tax, the new regional fuel tax, the five-year brightline test tax, and the new “Amazon tax” add up to Kiwis paying around $2.27 billion more tax over the next four years?

💬 Hon GRANT ROBERTSON: I can’t confirm the member’s figures, but what I can say, in answer to the question about the so-called “Amazon tax”, is we’re very grateful for the work of Judith Collins in developing that.

💬 Hon Amy Adams: Well, can he confirm that the Government’s plan to borrow around $10 billion more over the coming years will result in more than $1.1 billion in additional debt-servicing costs over the next four years, or $650 for every household?

💬 Hon GRANT ROBERTSON: I can’t confirm all of those numbers from the member, but what I can confirm is that core Crown finance costs, according to the Half Year Economic and Fiscal Update, will fall from 1.3 percent of GDP in 2017 to 0.96 percent of GDP in 2022. I can also confirm that in nominal terms core Crown finance costs are proposed to fall from $3.5 billion to $3.3 billion.

💬 Hon James Shaw: Can the Minister confirm that the money that the Hon Amy Adams is talking about will lead to a reduction in child poverty and better protection of the environment?

💬 Hon GRANT ROBERTSON: I can confirm that, because the evidence is that tens of thousands of New Zealand children will be lifted out of poverty by the Families Package. On this side of the House we are prepared to borrow and invest and make sure that we’re building roads and houses, rather than waiting for the benefits to trickle on down.

💬 SPEAKER: Order! Before I call the member, I am going to remind her that when the Minister is answering, she is of course allowed to interject, but she is not allowed to bring me in—I think she did it at least four times.

💬 Hon Amy Adams: My apologies. Why is the Government imposing additional taxes on Kiwi families, and additional debt-servicing costs, all during good economic times, which is driving an increase to the Australia - New Zealand wage gap for the first time in a decade?

💬 Hon GRANT ROBERTSON: I reject the premise of that question. What we’re doing is doing exactly what the previous Government did when it comes to the fuel excise duties. In terms of what we’re doing in the other tax changes—they’re actually about getting some fairness into the tax system. I really do encourage the member to talk to her neighbouring member Judith Collins about why those moves are important.

💬 Hon Amy Adams: Well, has he seen today’s Staples Rodway business survey results, which found that more than half of the respondents believe that their Government’s performance around the economy to date has been poor; if so, why is he continuing to dismiss survey after survey showing low business confidence in his Government?

💬 Hon GRANT ROBERTSON: As the Prime Minister has already said, the thing that correlates to GDP growth is businesses’ confidence in their own activity. That is still strong. We have a Budget on Thursday that will show that we’re going to build both a productive and sustainable economy and manage the Government’s finances well.

💬 Hon Amy Adams: Well, does he agree with the 88 percent of businesses surveyed, who say that it’s important for the Government to avoid taking on further debt; if not, how does he justify taking on $10 billion more debt when the Government’s tax revenue is already forecast to grow by nearly $20 billion over the next four years?

💬 Hon GRANT ROBERTSON: It’s interesting, isn’t it, because the previous Government managed to borrow an additional $49 billion during their term in Government—$49 billion. I’d also add that our revenue is forecast to grow by around 29 percent, but that compares to a 37 percent increase in that revenue by the previous Government. This side of the House is prepared to invest in New Zealand’s future. We’re borrowing at exactly the right time, Mrs Adams, because, actually, we need to build some houses and fix up the mistakes of the previous Government.

Budget 2018—Fiscal Responsibility

3. to the Minister of Finance: Will the Government demonstrate fiscal responsibility in Budget 2018; if so, how?

Yes, we will show fiscal responsibility through a strong commitment to our Budget responsibility rules. I am pleased to be able to say that Budget 2018 will show that we are meeting all of these challenging targets. This means, among other things, that we will deliver sustainable operating surpluses and we will reduce net core Crown debt to 20 percent of GDP within five years of taking office. When we announce the Budget on Thursday, New Zealanders will see that we have got the balance right between fiscal responsibility and implementing our plan to rebuild critical public services.

💬 Dr Deborah Russell: Why has fiscal responsibility been an important part of Budget 2018 considerations?

💬 Hon GRANT ROBERTSON: Because every Government has the responsibility to future generations to ensure we budget responsibly and have the means to make significant and sustained investments. We need to futureproof the economy to ensure that New Zealand is resilient to any shocks, natural or global, that we may face. Our economy must be fit for purpose for this generation and for our children and grandchildren.

💬 Dr Deborah Russell: How does this fiscal responsibility fit within the Government’s wider policy agenda?

💬 Hon GRANT ROBERTSON: Our Budget responsibility rules underpin the Government’s work programme. The Government knows that we need Budget surpluses and a growing economy to be able to fund our public services to the high standards that Kiwis expect and deserve. Budget 2018 will show that we have got the balance right, between being responsible fiscal managers and also rebuilding critical public services like hospitals, classrooms, housing, and police.

💬 Hon Simon Bridges: You just said all that.

💬 Hon GRANT ROBERTSON: You didn’t hear it, though, did you, Mr Bridges? Budget 2018 also shows that this Government has a plan for a more productive, sustainable, and inclusive economy, where the Government is a partner, rather than waiting for wealth to trickle on down.

KiwiBuild—House Prices

4. to the Minister of Housing and Urban Development: When he told the media last week in relation to KiwiBuild that “The important thing is to have some clear guidelines out there, make them transparent and stick to them”, what did he mean?

What I meant was that it’s important to have some clear guidelines out there, make them transparent, and stick to them.

💬 Hon Judith Collins: Why did he raise the price of a KiwiBuild house from his initial promise of $600,000 to $650,000 and only told New Zealanders about it last week?

💬 Hon PHIL TWYFORD: We raised the price points for the maximum prices in Auckland and Queenstown to $500,000 for a one-bedroom place, $600,000 for a two-bedroom place, and $650,000 for three bedrooms or more. For houses outside Auckland and Queenstown, the maximum price is $500,000 for all houses. We made the decision based on advice from both industry and the Public Service about what would be the most logical way to do it, and then we announced it.

💬 Hon Judith Collins: What calculation is he using to show that a $650,000 KiwiBuild house is affordable for first-home buyers?

💬 Hon PHIL TWYFORD: We’ve based that calculation on extensive advice from the Ministry of Business, Innovation and Employment about what first-home buyers would be able to borrow. But I would note that Ms Schultz, the developer of apartments in Papakura, that that member wanted us to include in KiwiBuild, said that construction costs had pushed the price of her apartments up $75,000. So, on the one hand, that member criticises us for increasing the maximum price of a three-bedroom KiwiBuild home in Auckland, and, on the other hand, she criticises us for not increasing them further so that her friend can take part in KiwiBuild. That’s bizarre.

💬 Hon Judith Collins: I raise a point of order, Mr Speaker. I take offence at that last comment from the member. That person is not a friend; I’ve met her once. The Minister has attacked my integrity.

💬 SPEAKER: The member has taken offence. I think it might even be simpler, without having to rule on that, to say that the comment was superfluous and should be withdrawn.

💬 Hon PHIL TWYFORD: I withdraw.

💬 Hon Judith Collins: Thank you, Mr Speaker. How long has he known that his KiwiBuild houses are going to cost first-home buyers $50,000 more than he told them eight months ago?

💬 Hon PHIL TWYFORD: The decision to increase the price points was made several weeks ago.

💬 Hon Judith Collins: Why did it take him so long to realise that the $600,000 KiwiBuild promise was out of date?

💬 Hon PHIL TWYFORD: It didn’t take long at all, but we’ve had a lot of expert advice from people, including—

💬 Hon Judith Collins: I raise a point of order, Mr Speaker. I think the Minister didn’t hear me. I said “Why did it take him so long”.

💬 SPEAKER: Well—

💬 Hon PHIL TWYFORD: I reject the member’s assertion.

💬 SPEAKER: I don’t think we’ve got a point of order any more.

Mycoplasma Bovis—Advice

5. to the Minister for Biosecurity: Does he stand by all his statements and actions in relation to Mycoplasma bovis?

Yes, and, in particular, I stand by my statement of the shameful inaction of that member to develop an animal tracing system that works, because National Animal Identification and Tracing (NAIT) has let us down immensely through the whole Mycoplasma bovis response.

💬 Hon Nathan Guy: Does he agree with his senior officials in the select committee last week who said “We were prepared for this—yes we were.”, knowing that biosecurity funding in the 2017 Budget was the highest ever, at $248 million?

💬 Hon DAMIEN O’CONNOR: I don’t agree with them. I don’t think they were prepared. A lot of changes had to be made by this Government, and we exposed a total inability of the National Animal Identification and Tracing system because that Government and that member refused to implement it properly.

💬 Hon Nathan Guy: What specific recommendations were contained in the most recent technical advisory group report he has received?

💬 Hon DAMIEN O’CONNOR: I can’t repeat all of them—I don’t have the report in front of me—other than to say that at that point, eradication was still possible. They are convening today. I hope that they come back with a similar recommendation. However, the goal posts have shifted. We have a lot more infected farms, a lot more unfortunate farmers are under huge pressure, and the inability of our National Animal Identification and Tracing system has made this job far more difficult.

💬 Hon Nathan Guy: What specific scientific advice has he received that has caused him to repeatedly defer making a decision on eradication or long-term management—specific scientific advice?

💬 Hon DAMIEN O’CONNOR: Part of the scientific advice is the fact that more farms are infected. I don’t know whether the member’s noticed that, but we’ve certainly disclosed as much information as we get to industry leaders. This afternoon, I’m meeting with industry leaders. We’re happy to share all the information we have. If that member has an idea, perhaps he should have put it in place when he was in Government.

💬 Hon Nathan Guy: When will he make a decision on what option will be funded, when the Budget is two days away, hundreds of thousands of dairy cattle have already begun farm movements, and farmers are screaming out for certainty right now?

💬 Hon DAMIEN O’CONNOR: I can absolutely appreciate the pressure on farmers. Farmers who are shifting their stock—if they’re not under a notice of direction, they are still able to shift their stock. What I would recommend is that they adhere strictly to the legal NAIT requirements. I suggest that they take sound biosecurity measures when they’re shifting their stock and they know where they’re shifting to. This is all basic information if you run a proper farming system and a good biosecurity system. Unfortunately, the previous Government never told farmers the right instructions.

💬 Hon Shane Jones: What reports has the Minister received about NAIT recently?

💬 Hon DAMIEN O’CONNOR: One of the most concerning reports I’ve heard is that properties of significance in the Mycoplasma bovis outbreak were set to undergo NAIT compliance activities in 2015, and compliance officers were discouraged from carrying that out. Maybe the previous Minister can explain that.

💬 Hon Shane Jones: In light of that report, what can the Minister confirm as to the reasons as to why there was such a level of inattention and inactivity—political interference?

💬 Hon DAMIEN O’CONNOR: There has been a comprehensive review of NAIT carried out. It was completed at the end of 2016. The organisation, under the Government’s watch, sat on that report for one year. It only released that after I threatened legal action. And can I say that the 38 recommendations in that will all improve the system; 23 of those recommendations will be followed through by this Government and changes made to improve it as quickly as we can. I don’t know why the previous Government didn’t do the same.

💬 Hon Nathan Guy: Why will it take the Minister two months to get advice from his 2,600 officials regarding the NAIT recommendations—if there is so much urgency, why doesn’t he put the House into urgency and change the law and the regulations and get on with it?

💬 Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That is not a parliamentary question and most certainly cannot be addressed to you in the way that fool did.

💬 SPEAKER: Yeah, I’ve—the question was out of order. It’s not the first question today that’s been out of order, and the questions that are out of order have not only come from one side of the House. I’ve been trying to let things flow a little bit. This is an important issue and at the core of the member’s albeit not well-phrased question was something which the Minister could understand and respond to.

💬 Hon DAMIEN O’CONNOR: Sorry, could I have the question again, please, because I just missed it in the hullabaloo.

💬 SPEAKER: Well, the member can have it again, and maybe the member could have a go at making it in order as he did it.

💬 Hon Nathan Guy: If there is so much urgency around the NAIT recommendations, why is it going to take two months after the Minister received the report to get advice from his officials when, if this was a serious matter like the Minister is proposing, he could put the House into urgency and get on with it?

💬 Hon DAMIEN O’CONNOR: I can assure you that every single official in the Ministry for Primary Industries (MPI) and now Biosecurity New Zealand is focusing on containment and possible eradication of Mycoplasma bovis. That report, which I leveraged out of NAIT Ltd, will be actioned as quickly as possible. The question is, why did that member not take action when he was given advice in 2015?

💬 Darroch Ball: I raise a point of order, Mr Speaker. Responding to the Hon Gerry Brownlee’s request last week in this House, I seek leave to introduce the Farm Debt Mediation Bill—a member’s bill in my name—and for it to be set down as members’ order of the day No. 1.

💬 SPEAKER: I’m going to ask the member to do that at the end of question time, rather than break up question time now.

💬 Hon Gerry Brownlee: Why? He’s done it now. What are we waiting for?

💬 SPEAKER: Because my view is that when matters come up in the week afterwards they should come up at the appropriate time, which is the beginning or end of question time, not after a particular question.

💬 Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Well, I don’t want to question your decision making. It wouldn’t be something that I would do. However—[Interruption]

💬 SPEAKER: Order! I accept the reason for the laughter, but it’s got to be contained.

💬 Hon Gerry Brownlee: You just made the point that that was a very serious question and you’ve allowed a certain flow across the House that I think was, in my opinion, generous towards the Government. The reality is there are thousands of farming families out there who are likely to face significant hardship because of this issue. The bill that is being proposed by Darroch Ball could well see those farmers see little bit more light on the day then they perhaps are at the moment. It therefore is appropriate—

💬 SPEAKER: OK. The member will resume his seat. He’s convinced me of the urgency of the situation and that half an hour might make a difference in it. I am going to let the member seek leave and put the question to the House. But I will remind Mr Brownlee that when he takes his points of order he will not reflect on my chairmanship. My view is being flexible with an Opposition member who was clearly breaching the rules, as was pointed out by the most senior member in the House correctly—giving him a bit of leeway, is not favouring the Government. Darroch Ball, have another go.

Question time interrupted.