Oral Questions

1. to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Treasury yesterday released its Monthly Economic Indicators—a very popular topic, it seems—for July 2018, noting that there are risks to their growth projections for the next fiscal year. In terms of the risks, Treasury noted that the housing market was cooling slightly faster than expected, international trade tensions had risen, and business confidence had fallen since the Budget. Their 3.3 percent growth forecast for the coming fiscal year may, therefore, need to be lowered. But Treasury also reported a number of positives in the economy. These included a boost in building consents, an increase in export values, stronger wage growth for Kiwi workers, and solid employment growth under the coalition Government.

💬 Dr Deborah Russell: How do Treasury’s comments on the housing market, wages, and employment fit with the coalition Government’s economic plan?

💬 Hon GRANT ROBERTSON: What the Treasury report shows is that more houses are being built under the coalition Government, meaning greater prospects for Kiwis to own their own homes. It also shows that more Kiwis are in work under the coalition Government and that they are receiving higher wages. The ANZ chairman, John Key, said recently that growth under the previous Government had been driven by migration and the housing market, something that had to change. This change is happening under this Government’s policies as we transition the drivers of growth towards the productive economy, regional development, and innovation to lift employment and wages and ensure that growth actually delivers for all New Zealanders.

💬 SPEAKER: And I am going to warn the Minister of Finance that the answer to the next supplementary is going to be shorter.

💬 Dr Deborah Russell: What other recent reports has he seen on employment in the New Zealand economy?

💬 Hon GRANT ROBERTSON: Picking just one: on Friday, ANZ released its job ads report, which showed job ads rose 3.1 percent in July, with an annual increase of 4.7 percent, up from an annual increase of 3 percent in June.

💬 Dr Deborah Russell: What reports has he seen on CEO views of the New Zealand economy?

💬 Hon GRANT ROBERTSON: Reports released by KPMG and Pricewaterhouse Coopers (PwC) have shown that New Zealand CEOs are concerned about global conditions and changes in the economy. However, as KPMG CEO Godfrey Boyce said, “We are in a period of realistic rebalancing, not a faltering of confidence.” The PwC survey noted that almost 90 percent of New Zealand’s CEOs expected their companies to grow this year. As the report says, “It’s important to look beyond the day-to-day headlines and at the bigger picture.”

Prime Minister—Business Confidence, GDP, Industrial Action, Unemployment, and Universities' Academic Freedom

2. to the Prime Minister: My question’s to the Prime Minister, and we warmly welcome her back. Does she stand by all her Government’s policies and actions?

I’m nothing if not consistent—yes.

💬 Hon Simon Bridges: Some things don’t change.

💬 SPEAKER: Order! I think that’s sort of now 2-1 in the out-of-order comments. We’ll just get back to the questions.

💬 Hon Simon Bridges: When she dismissed business confidence yesterday as “perceptions” and said “I’m interested in the reality of what our economy is doing and how it is performing.”, had she then seen yesterday’s report from Treasury that stated, “weaker confidence, in conjunction with other data, highlight the risk that growth over the coming fiscal year may be weaker-than-forecast in the Budget”?

💬 Rt Hon JACINDA ARDERN: I would not characterise that as dismissal at all. I hear what business is saying in the same way I hear what nurses have said, what teachers have said, what anyone who works in the well-being space has said around the need to rebuild confidence in New Zealand’s social well-being outcomes as much as our economic outcomes. What I will say is that I also have to acknowledge the international environment, which is having an effect here in New Zealand, which is why we need to diversify our economy and make sure that we are not vulnerable, which is exactly the place that last Government left us in. [Interruption]

💬 SPEAKER: Before I call the member, I am going to ask David Bennett to go the rest of this question and the series of supplementaries and answers without interjecting.

💬 Hon Simon Bridges: On the international environment, why is it, then, that New Zealand’s the only country to have gone from near the top of the OECD in business confidence to right near the bottom?

💬 Rt Hon JACINDA ARDERN: We’re actually a fraction away from the long-term average, and I have to say, when you look at the OECD comparisons around our growth forecast, actually, we stand up pretty well.

💬 Hon Simon Bridges: Does she accept the weaker growth talked of now by Treasury is the reality, as is a decline in GDP per capita in just the last quarter?

💬 Rt Hon JACINDA ARDERN: If we’re going to quote what Treasury have said, let’s share the entire picture. They’ve said that the housing market was cooling faster than expected. And, actually, the housing market was overheated under that last Government, and we need to stand up and fully confront that and the harm that it was doing New Zealand’s people. Secondly, we need to acknowledge the international environment, which Treasury has, as well. At the same time, they’ve said that labour income—wages—are growing strongly, that employment growth is solid, and that we have issued things like more building consents. If you’re going to talk about the economy, let’s talk about all of the indicators, not just some of them.

💬 Hon Simon Bridges: On her discussion, once again, of the international environment and Treasury’s view on it, does she not accept that they’ve said, “The international environment remains broadly stable.”—nothing’s changed?

💬 Rt Hon JACINDA ARDERN: If the member is reading the voice of business—like, for instance, I would imagine he would look at the KPMG survey, which has highlighted that that is, in fact, having an impact. So if the member thinks the KPMG survey is babble, does he think that what John Key has said was babble as well? Because he’s raised it, too.

💬 David Seymour: Does the Prime Minister stand by education Minister Chris Hipkins’ statement that the Tertiary Education Commission will have new powers under the Act to monitor the tertiary sector and hold providers to account for their use of public funding?

💬 Rt Hon JACINDA ARDERN: If he’s asserting that the Minister of Education is saying that we should strive for high-quality tertiary education, then that is no bad thing.

💬 David Seymour: Would it be a bad thing if a university failed to use its public funding in alignment with section 161 of the Education Act 1989 to uphold academic freedom, such as by refusing to allow speakers to speak on university campuses because of their political views?

💬 Rt Hon JACINDA ARDERN: Ultimately, institutions have their own freedom on a day-to-day basis, but if he’s asking me for a personal opinion, the example I think that he is pointing to I would characterise as an overreaction on the part of the institution.

💬 Hon Chris Hipkins: Does the Prime Minister think it is tenable for the Government to threaten to cut funding for universities when they make decisions that the Government disagrees with?

💬 Rt Hon JACINDA ARDERN: Absolutely not. We continue to hold a personal view, and, as I say, there are a number of examples where politicians and ex-politicians have caused a stir on university campuses. I think the reaction we’ve seen has been an overreaction. Will we retaliate? Of course not.

💬 Hon Dr David Clark: Ha, ha!

💬 Hon Simon Bridges: Does she accept—

💬 SPEAKER: Order! Who made that noise?

💬 Hon Dr David Clark: Mr Speaker, if you’re referring to the laugh, that was me.

💬 SPEAKER: Right, OK. Thank you.

💬 Hon Simon Bridges: Does she accept the weaker growth foreshadowed by Treasury and the decline in GDP per capita in just the last quarter to be a reality?

💬 Rt Hon JACINDA ARDERN: Of course Treasury has put out its forecasts, and I acknowledge that, yes, the housing market has cooled. International tensions have had an effect. But on the flip side, if I’m going to accept that, I’m also going to accept the wage growth, which is benefiting New Zealanders; high employment, which is also benefiting New Zealanders; and the fact that we have seen, for instance, a decrease in the number of young people in unemployment. I accept that we have challenges in front of us. That’s why we’re investing in boosting productivity, it’s why we’re investing in diversifying our trade, and it’s why we’re investing in R & D. I’m not shying away from those challenges.

💬 Rt Hon Winston Peters: Regarding the international influence upon New Zealand’s economy, is the Prime Minister encouraged by, all of a sudden, the number of highly placed European Union officials and representations with respect to a free-trade deal with the European Union?

💬 Rt Hon JACINDA ARDERN: Absolutely. We have a visit today which only helps us further our relationships and New Zealand’s interests. I also applaud the work that the Minister for Trade and Export Growth is doing on our Trade for All, alongside negotiating the Pacific Agreement on Closer Economic Relations, the Regional Comprehensive Economic Partnership, and the EU free-trade agreement. We are moving at pace, because growing exports grows jobs.

💬 Hon Simon Bridges: Does she accept a 60 percent decline in job growth since her Government came into office is a reality for the thousands of New Zealanders who didn’t get a job as a result?

💬 Rt Hon JACINDA ARDERN: We have 94,000 more people employed at the end of June 2018 than there were in June 2017. Our unemployment rate has decreased. So the member is picking a figure and interpreting it in the way that he chooses, but I am proud of the fact that we are putting people into jobs.

💬 Hon Simon Bridges: Does she accept a 4,000-person increase in unemployment in just three months to be a reality for those families?

💬 Rt Hon JACINDA ARDERN: It’s down from 4.8 percent, I would first point out. The second point that I would make is that we have seen a rise in participation—more people moving into the job market. I would interpret that to be that they see hope that there are jobs and work available for them. The ANZ Job Ads indicates that that is indeed the case.

💬 Hon Simon Bridges: Does she accept more industrial strikes in the last nine months than in the last nine years to be a reality for those businesses and workers?

💬 Rt Hon JACINDA ARDERN: I just want to highlight today we’ve also concluded the nurses’ pay agreement, which is something that I would like to celebrate—and you’re welcome. We concluded that after inheriting it halfway through. We concluded it because we doubled the offer, we addressed the safety concerns, and, just as we have with teachers, we’ve already scrapped national standards. We’ve brought in more funding for teacher-aides and for those with learning needs, and we have increased their operational funding. There is more to do, but we’ve done more in nine months than that Government did in nine years.

💬 Hon Simon Bridges: Does she accept the collapse of multiple construction companies to be a reality for those businesses, their workers, and their customers?

💬 Rt Hon JACINDA ARDERN: Look, absolutely we’ve acknowledged that’s happened—that’s why we sat down with the vertical construction industry yesterday. I acknowledge that it’s a very different case for residential and those working in infrastructure, because they are seeing a huge boost in investment out of this Government in those sectors. When it comes to vertical construction, 18 percent of the work for that industry comes from Government. Even though we represent only 18 percent, we are fronting up and saying that if we can play a leadership role to ensure that we do not have a further collapse in this sector, we will play it. That’s what this Government has done. We hadn’t gone far enough with the reforms of the last Government, and we are, again, happy to pick up the pieces.

💬 Hon Simon Bridges: Does she think there will be real impacts for New Zealanders from us having the lowest business confidence since the global financial crisis, while in Australia it’s at a 30-year high?

💬 Rt Hon JACINDA ARDERN: Australia’s at a 30-year high, and yet we’re outperforming them on things like the employment rate.

💬 Hon Simon Bridges: No, we’re not—not on anything.

💬 Rt Hon JACINDA ARDERN: On things like the employment rate, we absolutely are. We have the third-highest rate of employment in the OECD. We have steady economic growth and—according to the OECD—at 3 percent, the same as Australia going into 2019. Where we don’t sit on the same page as Australia is our low wages, and we’re doing something about that, too.

💬 Hon Simon Bridges: Is the Prime Minister seriously denying that in Australia right now they are growing faster than us for the first time in several years, that their business confidence is at a 30-year high while ours is at a 10-year low, and that there are more New Zealanders leaving for Australia than there have been for some quite considerable time?

💬 Rt Hon JACINDA ARDERN: What I am arguing is that if we’re going to look at the health of our economy, then we should look at a range of indicators. Employee confidence is up. Job ads are up. Consents are up. Unemployment—we have incredibly low unemployment in this country. We have 94,000 more people in work and—and—we have, on average, over $70 going into the back pockets of working New Zealanders and those in need, which, of course, is stimulating our economy. I’m proud of the changes we’re making. We need to modernise our economy and we are working hard on doing just that, as well.

💬 Hon Simon Bridges: Does she accept any responsibility in terms of her Government’s policies such as industrial relations reform; shutting down the oil and gas sectors in terms of new exploration; higher taxes; and banning foreign investment, and the hurt they’re causing business confidence, and therefore the direct impact they’re having for families all around New Zealand?

💬 Rt Hon JACINDA ARDERN: Look, as I’ve said, I absolutely acknowledge that businesses have shared with us via the confidence surveys that there are issues they wish us to work on—I’ve heard that. When you ask business what it is, they say to us it is the skills gap, so we’ve invested in training and educating our workforce, and business can access that just as much as anyone else. They’ve told us that it’s our productivity challenge. They’ve told us that it’s that we’re not investing in R & D. They’ve told us that we’ve under-invested in the regions, which is why we have the Provincial Growth Fund. They’ve told us it’s because we need to modernise our economy and because of the challenges of climate change, which is why we have the Green Investment Fund. I acknowledge that as with any Labour-led Government in the past, this coalition Government needs to challenge the perception that exists. I’m not shying away from that challenge, and that’s why I’m fronting it head-on.

💬 Hon Simon Bridges: Isn’t the Prime Minister in complete denial about our economy’s reality and any number that any of us could pick in her Government policies’ impact, and doesn’t she need to start listening to businesses, small and large, around New Zealand and make some serious changes?

💬 Rt Hon JACINDA ARDERN: As I’ve said, I’ve acknowledged every single economic indicator that tells us we have a lot to be proud of, and I also acknowledge 94,000 more New Zealanders in work—something to be proud of. If that member wants to go around dissing our economy and the potential that exists in this country, that, I have to say, is a damned shame.

Economy—Business Confidence, Cost of Living, Employment, and GDP

3. to the Minister of Finance: Does he stand by all of the Government’s policies, statements, and actions in relation to the New Zealand economy?

Yes, when understood in their context—in particular, my statements about the importance of all New Zealanders getting a fair share of economic growth, including our nurses, midwives, and healthcare assistants, who today agreed to a settlement that delivers the biggest pay increases nurses have seen in a decade and will put 500 more nurses in our hospitals.

💬 Hon Amy Adams: Does he agree with the Prime Minister when she characterised plummeting business confidence as just a matter of “perception”, and said that real indicators are what matters?

💬 Hon GRANT ROBERTSON: Of course I agree with the Prime Minister, and, as I’ve said many times in this House, when you look back at Governments that have had the Labour Party at the centre of them, those same business confidence surveys have shown pessimism, yet the economy has kept growing—3.2 percent, on average, the last time Labour was in Government. I also agree with the Prime Minister that we will keep working with, and listening to, business and making sure that we have an economy that’s delivering higher wages and better jobs.

💬 Hon Amy Adams: Does he consider the rate of new job creation, which has halved under this Government, or the number of unemployed, which has increased by 4,000 people over the last quarter, to be real economic indicators?

💬 Hon GRANT ROBERTSON: As a former Minister of Finance said, it’s very challenging to look at quarterly figures on their own. Let’s just pick out that unemployment number: 4.8 percent when we came into Government; 4.5 percent now—heading in the right direction because we’ve got a Government that’s actually serious about training and skills and how we’re going to create sustainable jobs.

💬 Hon Amy Adams: Does he consider that our rate of GDP growth, which even Treasury now indicate is weakening, and GDP per capita, which is at its lowest level since 2012, to be real economic indicators?

💬 Hon GRANT ROBERTSON: The real economic indicators of the consensus forecast for the economy released in July are that we will achieve growth of around 3 percent over the forecast period. There will be some challenges in our transition away from an economy built on population growth and speculation in housing to a more productive and sustainable economy. That’s the challenge the member’s party left us. We’re getting on with addressing it.

💬 Hon Amy Adams: Does he consider higher costs of living at a time when wages are rising more slowly than the Consumers Price Index to be a real economic indicator?

💬 Hon GRANT ROBERTSON: I absolutely reject the member’s point about wage growth. She’s picking out one particular stat, but, if we actually look at the quarterly economic survey, we’ll find that wage growth is, in fact, very solid and well above inflation. But, actually, one of the first things this Government did was make sure that we redirected untargeted, unfocused tax cuts to low and middle income families, so they’ve got more money to meet their cost of living.

💬 Hon Amy Adams: Why is he asleep at the wheel while so many of the real economic—

💬 SPEAKER: Order! Order! The member will start that question again.

💬 Hon Amy Adams: Why is he refusing to acknowledge or take any responsibility for the fact that so many of the real economic indicators that this Government says it cares about are clearly showing signs that our economy is turning in the wrong direction and that growth is stagnating?

💬 Hon GRANT ROBERTSON: I would note that the slowdown in GDP growth actually began at the beginning of 2017, so the member needs to understand that these are long-run trends. What this Government has that the last Government didn’t is a plan to do something about that: to be a more productive economy with more investment in research and development, to actually start to transition to the effects of climate change, and to deliver to New Zealanders real wage growth.

School Buildings—Christchurch Schools Rebuild Programme

4. to the Minister of Education: What recent progress, if any, has been made on the Christchurch Schools Rebuild programme?

Last week, I visited Hornby High School in Christchurch for the official opening of the first stage of a $26 million redevelopment of the school that will result in 45 new classrooms. This includes a new administration area, library, staff area, and student canteen. In addition, there’ll be a new gymnasium and a new technology block.

💬 Dr Duncan Webb: What other schools in Christchurch are starting their rebuilds?

💬 Hon CHRIS HIPKINS: I was also pleased to visit Oaklands primary school, who are receiving three new school buildings and will have six buildings refurbished. Work on the redevelopment is expected to start in the next few weeks. This year’s Budget provided an additional $62 million of funding to get the Christchurch schools rebuilding programme sped up so that Christchurch schools get the modern facilities that they need.

KiwiBuild—Procurement and Risk

5. to the Minister of Housing and Urban Development: Does he stand by all his reported statements regarding KiwiBuild?

Yes, including my recent tweets.

💬 Hon Judith Collins: Wonderful. When he was reported yesterday by stuff.co.nz stating that “KiwiBuild is not at risk of cost overruns because [the larger contractors are] not particularly involved in residential construction”, did he know that a Housing New Zealand apartment block was being built by Ebert Construction, that went into receivership last week?

💬 Hon PHIL TWYFORD: Yes.

💬 Hon Judith Collins: Then why did he say that?

💬 Hon PHIL TWYFORD: Because while there is some overlap between the vertical infrastructure sector and the residential market, by and large, they are two separate markets with different players and with different approaches to contracting.

💬 Hon Judith Collins: Is he now saying that large construction companies will not be building KiwiBuild and that small owner-operator companies will be contracted to build for KiwiBuild, even when that involves large apartment blocks that he has foreseen in Northcote, and also the Unitec sites?

💬 Hon PHIL TWYFORD: No, I’m not saying that, but I would wonder, really, is the member using the collapse of Ebert Construction as yet another excuse for her Government not building affordable or State housing?

💬 Hon Judith Collins: If construction companies currently follow a “least-cost procurement model”, does his announcement yesterday to relook at procurement practices mean that KiwiBuild house prices will now also rise in cost?

💬 Hon PHIL TWYFORD: Well, while the Government has taken some responsibility of leadership, because of the fact that public sector procurement accounts for 18 percent of the business in the vertical infrastructure market, I think that’s the right and responsible thing to do—to work with industry players to find new ways of procurement that can create a more efficient and competitive market. But that’s not necessary—that’s not necessary—in relation to the KiwiBuild programme, because we already have put in place a highly collaborative and engaging process for working with developers to do the deals that will deliver the affordable homes that New Zealanders desperately want.

💬 Hon Judith Collins: I raise a point of order, Mr Speaker. I wonder if you believe that that question has been addressed sufficiently.

💬 SPEAKER: I think it has been addressed. Answered—probably not, but it was addressed.

Transport Infrastructure—Fuel Taxes and Land Transport Construction

6. to the Minister of Transport: Do the funding allocations in the Government Policy Statement on Land Transport justify increases in fuel taxes over the next three years; if so, how?

Yes, because I think, as New Zealanders understand, investing in a modern, efficient, multimodal land transport system across the country to unlock growth and prosperity costs money.

💬 Jami-Lee Ross: Why is he continuing with his plan to tax New Zealanders by an extra billion dollars over the next three years when his final Government policy statement shows a billion dollars less being spent in that time frame than his proposed draft statement earlier in the year?

💬 Hon PHIL TWYFORD: Because the increase in the fuel excise duty and the road-user charge is there to deliver on the Government’s priorities in the Government policy statement across a 10-year period. This includes livable cities and thriving regions, including following through on the currently committed State highway projects, with significant increases to road maintenance, including State highway maintenance, local roads, regional roads, walking and cycling in our cities, and rail.

💬 Jami-Lee Ross: Is he therefore saying he’s collecting extra taxes in the next three years but not spending that money in the next three years?

💬 Hon PHIL TWYFORD: Let me reassure the member that all of the money will be spent and it will be well spent on a mix of transport priorities that reflect the 21st century transport needs of this country.

💬 Jami-Lee Ross: I raise a point of order, Mr Speaker.

💬 SPEAKER: I think I know what the point of order is, and the Minister will have another try.

💬 Hon PHIL TWYFORD: The money will be spent within the three-year period—

💬 SPEAKER: Thank you. That’s all we need.

💬 Jami-Lee Ross: Does he agree with Civil Contractors New Zealand CEO, Peter Silcock, that transport infrastructure construction expenditure would be reducing over the next two to three years?

💬 Hon PHIL TWYFORD: I’ve met with Civil Contractors five times in the last few months specifically to discuss the issue of ensuring that there is a clear continuity, a transparent pipeline of new work, that reflects the Government’s priorities. We’ve had a very positive dialogue on that and I’ll say that Civil Contractors appreciate the new direction in the transport policy. They want to do construction jobs, and they are very happy with the mix of projects that we have announced in the Government policy statement. Our Government’s doing everything we can to put together a pipeline of work that will give that industry confidence and continuity.

💬 Jami-Lee Ross: Isn’t the reason why transport construction is slowing over the next three years because this Government has put billions of dollars’ worth of planned roading projects on the back-burner while he takes time out to plan his new Auckland tramways?

💬 Hon PHIL TWYFORD: This Government has very different transport priorities to the last one. We are not going to waste billions of dollars on a few hand-picked urban motorway projects at the expense of every other part of the transport system. We are going to invest in livable cities and modern rapid transit. We are going to invest in a freight system that gets the best out of coastal shipping and rail and roads. We’re committed to a 21st century transport system that is efficient, effective, and sustainable.

Building and Construction Industry—Government Support and Micro-credentials

7. to the Minister for Building and Construction: What are the outcomes of yesterday’s meeting between Ministers and representatives of the construction sector?

The outcome of the meeting was very positive. My colleagues the Hon Phil Twyford, the Hon Shane Jones, and I sat down and met with leaders from the construction sector to discuss the issues that are longstanding issues. While Government contracts only represent 18 percent of the vertical construction work, the Government has made the decision to take leadership on this issue. I’ve asked the Ministry of Business, Innovation and Employment (MBIE) for advice on options for ensuring a whole-of-life contracting approach to construction, especially for Government projects. We agreed that Government and industry need to work together to address these issues. I took an oral item to Cabinet, and a Cabinet paper will soon be taken for our colleagues to agree that Government agencies must demonstrate that MBIE’s Government procurement document is actively taken as part of the decision-making process. Industry representatives acknowledge that there are improvements vertical construction can make in providing guidance on construction contracts and the risks that they take, as well as collaborating and sharing good practice.

💬 Paul Eagle: What other steps is the Government taking to support the building and construction sector?

💬 Hon JENNY SALESA: Maintaining a healthy construction sector is very important to all of us in New Zealand. I’ve instigated an ambitious cross-Government programme of work to address the construction sector issues I inherited when I took this portfolio on. I’ve established a ministerial group on the construction workforce, working across nine portfolios. That group has developed a construction skills action plan, and we’ve consulted with industry. In the very near future, I will be announcing the initiatives we will be pursuing to address the skills gap and to support a strong, competitive, and efficient sector.

💬 Paul Eagle: What new initiative has the Government announced that will contribute to addressing issues of concern in the construction sector?

💬 Hon JENNY SALESA: On 1 August, my colleague the Hon Chris Hipkins, the Minister of Education, and I launched a new system called the micro-credentials system, which is an important step towards addressing some of our skills shortages, as well as assisting workers to maintain and to update their skills. Micro-credentials are a stand-alone education product. I’m delighted that the Building and Construction Industry Training Organisation has taken micro-credentialing and piloted it, and now they’re expanding its implementation. Micro-credentials are an employment- and industry-driven initiative, which means workers can upskill in specialist areas while they’re working. This approach will also—

💬 SPEAKER: Order! Order! Order! This was really interesting the first and second times the House was told about this; I think we’ve had enough of it now. Thank you.

Regional Economic Development—Employment Relations

8. to the Minister for Regional Economic Development: Does he stand by his statement to Q+A on Sunday, regarding the effect of employment relations reforms on regional economic development, “I’m entitled to hear the concerns of provincial employers; I’m entitled to hear the concerns of regional leaders”; if so, what are the concerns he’s hearing?

In my role as the Minister for Regional Economic Development, as it’s expanded, a certain magnetic dimension has evinced itself. I am overwhelmed by the number of concerns that my role attracts. One concern is the place of migrant labour in the regional economies. Another concern is the mismatch of skills development as a part of growing the employee workforce. And a third concern, which has been given to me loud and clear, is ensuring that the voices of provincial employers are heard, and that provincial employers are not shoehorned mistakenly into an Auckland cost structure.

💬 Hon Paul Goldsmith: Does he stand by his statement in the same interview on the same subject, “Let’s call a spade a spade. Obviously this is one of the causes as to why people … in the business community [are] saying they’re not totally confident about their … investment decisions, their own hiring decisions”; if so, what changes will he propose to the employment relations reforms to his Cabinet colleagues?

💬 Hon SHANE JONES: On the matter of the spade, for all the questions I’ve had from that member over my time as the provincial champion—stop digging. In relation to specific remedies, I have just come from speaking to a range of CEOs from the provincial ports, and I have undertaken to them to continue to send me their concerns as to how we can balance the various provisions in future legislation, which no doubt will comprise discussions between our leader and the Prime Minister.

💬 Rt Hon Winston Peters: Is one of the concerns he’s hearing the fact that the four-lane superhighway between Warkworth and Whangarei had not one cent allocated to it?

💬 Hon SHANE JONES: I can confirm that on my recent visits to the North, people are concerned that promises were made prior to the last election—prior to the last election—but no funding was allocated. Of course, that doesn’t surprise me, because from Epsom you can’t see that far.

💬 Hon Paul Goldsmith: Will the employment relations reforms lead to less investment and less hiring of new staff in the regions?

💬 Hon SHANE JONES: The final form and nature of the provisions from said legislation is still a matter in play, but no one—if I can use as an example from the forestry sector—is downplaying their investment ambitions. In fact, as a consequence of our Overseas Investment Office changes, I’m swamped with demand.

💬 Hon Paul Goldsmith: Does he agree with the Prime Minister’s statement this morning on Radio New Zealand: “The industrial relations changes that are already before Parliament, again, I don’t think should be any cause for concern.”?

💬 Hon SHANE JONES: Obviously, a key part of those reforms is the achievement of the $20 per hour minimum wage, and I think it’s a particularly nasty and sad Opposition who don’t agree that Kiwis in the region should be paid a fair wage.

💬 Hon Paul Goldsmith: Well, is he hearing concerns from regional exporters about how they will pay a 25 percent increase in the minimum wage over three years while still maintaining their international competitiveness, or are they “particularly cold-hearted sort of malodorous” businessmen and women for raising such a topic?

💬 Hon SHANE JONES: Of the exporters that I talked to—in particular, the forestry sector—they are very keen to improve the amount of money the workforce is paid, but they have raised the prospect that we are not creating large enough battalions of workers for my billion-tree strategy, and they are constantly calling for additional migrant labour. But I don’t think the member should worry, because there’ll be a happy balance between nephs off the couch, more money in the pocket, and less of a reliance on migrant labour.

Schools—Class Sizes

9. to the Minister of Education: Will he commit to reducing teacher ratios in primary schools in this term of Government to reduce class sizes?

Reducing teacher ratios would most likely have the effect of increasing class sizes, so I’m happy to rule that out. If the member meant to ask about reducing child or student ratios, the Government will consider any such changes as part of future Budget rounds, alongside other pressing priorities, including more support for children with special needs, more support to recruit and train teachers for the vacancies we already have, and funding to deal with the decade of educational neglect we inherited from the last Government.

💬 Hon Nikki Kaye: Does he agree with Labour’s education spokesperson Mr Chris Hipkins, who said, in July 2017, “It remains a goal to reduce class sizes”, and can he confirm whether reducing child-teacher ratios and workload are off the table in the current pay negotiations with primary teachers?

💬 Hon CHRIS HIPKINS: The member’s question contained a number of things in it that are certainly on the table. Reducing teacher workload is absolutely one of the things that I imagine will be discussed as a result of the current bargaining round. I’m not ruling out changes to class sizes over the term of this Government, but, as I indicated in my answer to the primary question, they will be considered alongside all of the other priorities that the Government has in the education area.

💬 Hon Nikki Kaye: Why will he not absolutely commit to reducing class sizes, and what action will he take against Labour list MP Ginny Andersen, who distributed this pamphlet, which said Labour believes class sizes are too high and will absolutely invest in class sizes?

💬 Hon CHRIS HIPKINS: I’m not sure which election campaign that flyer came from, but what I can be clear about is that the Government is absolutely committed to employing more teachers. We put funding aside for 1,500 more teachers in this year’s Budget, and that will have an effect on class sizes, that would have been going up had we not put that funding aside in order to fund that.

💬 Jan Tinetti: Is the Minister prepared, even ahead of knowing the scale of change or where the funding would come from, to announce that he would be reducing class sizes in this term of Government?

💬 Hon CHRIS HIPKINS: It would be irresponsible to make such a commitment without knowing exactly what we would be buying for the money or how much it would cost or how it is going to be paid for.

💬 Hon Nikki Kaye: I seek leave to table a pamphlet by Ginny Andersen which was distributed—

💬 SPEAKER: I think the members—we know. Yep. Is there any objection to that being tabled? There appears to be none. It shall be tabled.

Document, by leave, laid on the Table of the House.

💬 Hon Nikki Kaye: Given his comments about finding out what the highest priority is for teachers, has he asked them whether they would prefer the Government spend $2.8 billion on his fees-free and tertiary support package, or a very similar amount that would give every teacher in New Zealand a 15 percent pay rise?

💬 Hon CHRIS HIPKINS: I have indeed been discussing priorities with the teacher representatives. Amongst the things that they identified as not a priority was the huge amount of money that was spent on the Investing in Educational Success initiative implemented by the previous Government and any number of the things the previous Government decided to prioritise over the very things the member is now advocating for.

💬 Hon Nikki Kaye: When will he take responsibility for his decisions, which include more than 18 broken promises on class sizes and on donations and his decision to spend billions of dollars on students instead of teachers, and how does he think criticising 50,000 teachers by calling them unreasonable will help resolve the teacher strikes?

💬 Hon CHRIS HIPKINS: First of all, I absolutely reject the premise in the last part of the member’s question. The Government is absolutely committed to negotiating in good faith with the teachers, both primary and secondary, and we will continue to do that. There are a range of priorities in the education portfolio that the Government will be endeavouring to meet over the term of Government. I absolutely reject any suggestion that we’ve broken any promises with regard to class sizes, and I’m absolutely committed to delivering on the commitments made in the Speech from the Throne, the coalition agreement we have with New Zealand First, the confidence and supply agreement with the Green Party, and the other commitments that the Government has signed up to through the Budget.

Defence Force—Living Wage

10. to the Minister of Defence: What recent reports has he received on the New Zealand Defence Force’s approach to paying the living wage?

The New Zealand Defence Force is a major employer of New Zealanders, both civilian and military, in our regions and in our cities, and recently I received reports stating that the Government’s excellent decision to move the core Public Service on to the living wage of at least $20.55 per hour does not directly apply to the New Zealand Defence Force, as a non - Public Service department. However, I am pleased to announce to the House that the New Zealand Defence Force will be implementing the living wage for all of its employees by 2019.

💬 Jenny Marcroft: What does this mean for New Zealand Defence Force civilian personnel?

💬 Hon RON MARK: Currently, 8 percent of New Zealand Defence Force civilians are paid below the living wage, as a result of the last nine years of Government. After this year’s remuneration package, which will come into effect in September and be backdated to July, this figure will drop down to 6 percent.

💬 Hon Gerry Brownlee: Stop being reckless with the truth. Totally reckless with the truth.

💬 SPEAKER: Order!

💬 Hon RON MARK: Following the 2019 package, all civilians will be on at least $20.55 per hour.

💬 Jenny Marcroft: What does this mean for New Zealand Defence Force military personnel?

💬 Hon RON MARK: All regular force members who have completed basic training are already paid above the living wage. Recruits undergoing training will remain at a level below the living wage, but will receive and continue to receive free accommodation. I’m also happy to report today that the New Zealand Defence Force intend bringing all reservists up to at least the living wage.

Electoral (Integrity) Amendment Bill—Effect

11. to the Minister of Justice: Does he agree with the statement by the Attorney-General that his Electoral (Integrity) Amendment Bill will have a chilling effect on the expression of dissenting views by MPs?

I agree with the full effect of the Attorney-General’s advice, which is that although the bill has the potential to have a chilling effect, nevertheless, any encroachment on rights in the New Zealand Bill of Rights Act is justified under that legislation because it upholds the fundamental constitutional objective of preserving proportional party representation in Parliament.

💬 Hon Dr Nick Smith: Does he agree with his ministerial colleague Eugenie Sage that voting for his bill is like swallowing a dead rat; if so, what particular aspects of his bill have the characteristics of a dead rat?

💬 SPEAKER: I am going to let the question go. I think, strictly, I shouldn’t, because it’s not related, other than mentioning the same bill. But I’m sure, in the spirit of things, the Minister would like to answer it.

💬 Hon ANDREW LITTLE: I am not familiar with the experience or feeling, literally or metaphorically, of swallowing a dead rat, and I therefore can comment no further.

💬 Hon Dr Nick Smith: Does he agree with his officials in their departmental disclosure statement on his bill that it compromises New Zealand’s commitment to the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights; if so, how can New Zealand promote these abroad when we are breaching them at home?

💬 SPEAKER: No, I’m now not going to—I think the member got a warning in my response to the previous—

💬 Hon Dr Nick Smith: Point of order, Mr Speaker.

💬 SPEAKER: No, I am going to finish ruling.

💬 Hon Dr Nick Smith: But you should consider a submission from myself, please, Mr Speaker—point of order.

💬 SPEAKER: I will consider a submission.

💬 Hon Dr Nick Smith: I raise a point of order, Mr Speaker. The original quote that was in my primary question came from the New Zealand Bill of Rights Act assessment by the Attorney-General. That same report makes reference to both the Universal Declaration of Human Rights and also the International Covenant on Civil and Political Rights.

💬 SPEAKER: Thank you. Having heard the member state that, if he had drafted his primary question in such a way as to include reference to that document rather than reference to the Attorney-General’s view in part of that document—if he’d referred to the document at all, he would have a decent argument. I’m going to let the member try—I’m not going to rule it out, but I am going to ask the member to ask a question which comes within the relevance rules.

💬 Hon Dr Nick Smith: Certainly. Does he agree with his officials, who share the concerns of the Attorney-General about the bill having a chilling effect on MPs’ free speech, and their further concern that it compromises New Zealand’s commitment to the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights, and how is it going to be possible for New Zealand to promote those important conventions overseas when officials are saying that we’re breaching them at home?

💬 Hon ANDREW LITTLE: In response to the first of those three questions, I refer the member to my first answer today, which is that although the Attorney-General acknowledges the potential for a chilling effect, he goes on to say that the bill meets the justified limitations part of the New Zealand Bill of Rights Act because it upholds what he describes as the significant constitutional objective of preserving party parliamentary proportional representation.

💬 Rt Hon Winston Peters: Would the Minister be surprised to learn that it was Nick Smith who led the charge in the National Party caucus for a unanimous expulsion vote against National MP Maurice Williamson?

💬 SPEAKER: Order! No, I’m not going to allow the question. The Minister has no responsibility for that. [Interruption] Order! I’m just sort of counting each way. It’s even at the moment, and it’s going to stop.

💬 Hon Dr Nick Smith: Why would this Minister want to promote a piece of legislation that has a chilling effect on free speech, and isn’t this just symptomatic of a wider and rising concern in New Zealand that free speech in this country is being compromised?

💬 Hon ANDREW LITTLE: I stand firmly behind the principle of ensuring that the voters of this country have their collective vote respected by this House, and not undermined by the whim and will of individual MPs who take an elitist view that somehow when they get here they can do what they like, and that the significant constitutional objective of preserving proportional parliamentary representation is absolutely vital.

💬 Rt Hon Winston Peters: Is he aware that opposition to this bill from the National Party is because it is seeking to start a new party from within its ranks—as admitted by the Hon Mark Mitchell from Rodney last Wednesday twice, inside the House and outside?

💬 SPEAKER: No responsibility.

Police—Deputy Commissioner of Police, Inquiry into the Appointment Process

Question No. 12, Chris Bishop. [Interruption] That appears to be—does the member want to ask the question?

💬 Chris Bishop: Yes.

Question No. 12, Chris Bishop.

💬 Chris Bishop: You hadn’t called it—sorry, Mr Speaker.

I did call the member. If he was listening, he might have heard.

12. to the Minister of Internal Affairs: Is she confident that the Government inquiry into the process around the appointment of the Deputy Police Commissioner will retain public confidence with her as its responsible Minister?

Yes.

💬 Chris Bishop: When Cabinet appointed her to oversee the Government inquiry into the appointment process for a Deputy Commissioner of Police, was she aware that the deputy leader of New Zealand First, Fletcher Tabuteau, regards Wally Haumaha as a member of his whānau, and mentioned him in his maiden speech, and that Mr Haumaha is the chair of Mr Tabuteau’s marae at Waiteti?

💬 Hon TRACEY MARTIN: Cabinet did not appoint me as the Minister to appoint the chair. I was appointed and sworn in as the Minister of Internal Affairs, who has responsibility for the process—is the responsible Minister for the process—of inquiries under the Inquiries Act.

💬 Chris Bishop: When Cabinet authorised her to appoint the member of the Government inquiry into the appointment process for a Deputy Commissioner of Police, was she aware that the Rt Hon Winston Peters spoke on Mr Haumaha’s and Mr Tabuteau’s marae at Waiteti last year to celebrate Mr Haumaha’s appointment as assistant commissioner of police, alongside police commissioner Mike Bush?

💬 Hon TRACEY MARTIN: Again, Cabinet did not appoint me. I am the Minister of Internal Affairs, and so have responsibilities to bring Cabinet papers forward after Crown Law, the Department of Internal Affairs, and the Cabinet Office have done appropriate process. So I don’t see how I can answer the member’s question.

💬 Rt Hon Winston Peters: I seek leave to make a personal explanation in response to that allegation from that member.

💬 SPEAKER: The member seeks to make a personal explanation under the relevant Standing Order. Is there any objection? There is none.

💬 Rt Hon Winston Peters: It is true that I was invited to the marae to celebrate the appointment as an assistant commissioner of police of Wallace Haumaha by the then Government of the day—and the National Party, who were then the Government—and the Minister of Police as well, and there asked by the police to make a speech. I do not think that in any way compromises me.

💬 Chris Bishop: I raise a point of order, Mr Speaker. In relation to the member’s answers, the Cabinet paper that the Minister herself has released on the Department of Internal Affairs’ website specifically notes that the Minister is empowered by Cabinet to appoint a member of the inquiry, so I’m not sure—

💬 SPEAKER: Well, the member might be disputing the answer. There are methods of doing that, but—

💬 Chris Bishop: When Cabinet authorised her to appoint a member of the Government inquiry into the Appointment Process for a Deputy Commissioner of Police, was she aware that Tommy Gear, a friend of the Rt Hon Winston Peters and uncle to Fletcher Tabuteau, is a senior leader on Waiteti Marae, alongside Mr Wally Haumaha?

💬 SPEAKER: Well, I think—[Interruption] Order! Once again, we have Ministers and the Leader of the Opposition encouraging each other to make out-of-order comments, and it will stop.

💬 Hon TRACEY MARTIN: I’m having some difficulty with the questions from the perspective that, one, I am the Minister of Internal Affairs and so, therefore, have a statutory responsibility under the Inquiries Act to actually follow due process and take Cabinet papers and so on to the Cabinet. The Cabinet makes the overarching appointment and decision about any chair, and also the process of this inquiry is into the appointment processes of the State Services Commission. I’m having difficulty seeing the connection between the questions and my responsibility as a Minister of Internal Affairs.

💬 Chris Bishop: For the sake of public confidence in the inquiry into this very important matter, wouldn’t it be better for any New Zealand First MP and Minister to recuse themselves from any further involvement?

💬 Hon TRACEY MARTIN: I am not—as the Minister of Internal Affairs, I represent the coalition Government and the Cabinet’s decisions. I do not see any conflict that I have in that role with the responsibility I have as the Minister of Internal Affairs to take Cabinet papers forward that have been prepared by the Department of the Prime Minister and Cabinet, the Department of Internal Affairs, and Crown Law.