Oral Questions

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

Fakalofa lahi atu. Last week, the International Monetary Fund released its October World Economic Outlook, showing an upward revision in New Zealand’s growth forecasts. The IMF is forecasting growth of around 3 percent over 2018 and 2019, recognising the sound fundamentals of the New Zealand economy. This upgraded view follows the IMF’s review of Budget 2018, which included growth-friendly policies like the R & D incentive and the Provincial Growth Fund, and record transport infrastructure investment.

💬 Dr Duncan Webb: What does the IMF report say about the global economy?

💬 Hon Dr DAVID CLARK: The report shows a downward revision in the global economic growth forecasts over the next two years. The IMF’s forecast of 3.7 percent in both 2018 and 2019 is down 0.2 percent compared to its April forecasts, largely due to rising international trade tensions and disappointing global activity. The average forecast New Zealand growth rate over 2018 and 2019 is, therefore, stronger than forecasts for Australia, the United States, the euro area, Japan—

💬 SPEAKER: Order! That’s enough, thank you.

💬 Dr Duncan Webb: What reports has the Minister seen that demonstrate New Zealand’s resilience to international risks?

💬 Hon Dr DAVID CLARK: The IMF also released its October 2018 Fiscal Monitor, which used New Zealand as an example of good fiscal management. The IMF expects the New Zealand Government’s financial position to remain better than peers, including Australia, Canada, the UK, the US, and the euro area, while our public debt will remain lower than these other advanced economies’. We remain committed to managing the Government’s books responsibly so that we continue to be in a position to respond to any external shocks that might come our way.

Question No. 2—Prime Minister

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

Faakalofa lahi atu, Mr Speaker. Yes.

💬 Hon Simon Bridges: How many cents per litre is the regional fuel tax, and when did it come into effect?

💬 Rt Hon JACINDA ARDERN: The regional fuel tax came in earlier this year, in July, and is 10c a litre, as applied by—as local government chooses to implement it in Auckland.

💬 Hon Simon Bridges: Does she still stand by her statement last week that since October 2017 “petrol prices have risen roughly 39c, of which 6.8c at that point could be attributed to taxes and levies;”?

💬 Rt Hon JACINDA ARDERN: Again, if the House will indulge me, I’ll again give the quote that I gave—

💬 Hon Dr Nick Smith: Slippery.

💬 Rt Hon JACINDA ARDERN: —at the post-Cabinet—

💬 SPEAKER: Order! Who made that interjection? The member will stand, withdraw, and apologise.

💬 Hon Dr Nick Smith: I stand, withdraw, and apologise.

💬 SPEAKER: No, the member will do it—

💬 Hon Dr Nick Smith: I withdraw and apologise.

💬 SPEAKER: Thank you. Last warning.

💬 Rt Hon JACINDA ARDERN: I will give the same quote that I gave in the post-Cabinet press conference from which the member is quoting me—to which I said, “between 27 October 2017 and 28 September 2018—this is where we have data—”. I was quoting directly from the latest data provided by the Ministry of Business, Innovation and Employment (MBIE), which is exactly the same data that that side of the House used every single day they were in Government.

💬 Hon Simon Bridges: So, in light of that, did she, or anyone in her office, actually go and check their work, given that they had put on those extra taxes of a regional fuel tax and an excise tax, that it had gone through Cabinet, and she had done it?

💬 Rt Hon JACINDA ARDERN: I spoke openly about both of those in that post-Cabinet press conference as well. MBIE has fully acknowledged that they need to improve their modelling to take into account the regional fuel tax, and they also need to acknowledge up front that they discount 14c in that modelling for coupons and fuel cards. But I want to draw it back to the point here: either the member on that side of the House thinks consumers are dealing with an issue with overpriced fuel generally, or he doesn’t. In February 2015, he wrote a letter to all of the fuel companies asking them to bring their prices down. Clearly he thought it was a problem then, but he doesn’t now.

💬 Hon Simon Bridges: If MBIE need to improve their modelling, why at her post-Cab press conference was she at such pains to hang her hat on it?

💬 Rt Hon JACINDA ARDERN: I use the modelling that we have available to us, in the same way that he did when he was in office. It would have been the same data he used when he decided in 2015 to write to the fuel companies and say there was a problem—something his Government never resolved. They ignored him. They did nothing, and consumers are continuing to feel it.

💬 Hon Simon Bridges: Why did she not include the regional fuel tax when she said petrol taxes have only increased by 6.8c a litre, given that it came into effect on 1 July this year?

💬 Rt Hon JACINDA ARDERN: I was using the numbers to give the proportion across that period of time for which excise was accountable, relative to the increases that we have seen. And, if I was being fair, I would also acknowledge that some of the most significant margin increases we have seen have been since 2008. This has been a problem for a long time. We’re the ones doing something about it because that last Government failed.

💬 Hon Simon Bridges: How can New Zealanders have confidence in her and her Government’s ability to deal with their cost of living rises when she relies on numbers that do not even measure the increase in petrol taxes her Government has imposed in July and October of this year?

💬 Rt Hon JACINDA ARDERN: It is known to everyone what we have done with both excise and regional fuel tax. It’s been clear because we campaigned on it. We made it absolutely clear that if we wanted to invest in infrastructure, it was necessary to have the regional fuel tax. To imply otherwise is ludicrous, and those families that we are talking about also know that we campaigned on a $5 billion Families Package, increasing the minimum wage, abolishing the letting fees, making sure that we had a winter energy payment to put extra money in the pockets of those who need it most, and paid parental leave. All the while, our excise increases were less than yours the entire time you were in office.

💬 SPEAKER: I’m just going to remind the Prime—

💬 Rt Hon JACINDA ARDERN: Oh, excuse me—not yours.

💬 Hon Gerry Brownlee: Yeah. You’re getting off light.

💬 SPEAKER: Order!

💬 Hon Simon Bridges: With inflation numbers showing petrol prices have increased by 19 percent in the last year more than any other item, why is she still going ahead with more than 24c of petrol tax increases in the space of just three years?

💬 Rt Hon JACINDA ARDERN: Again, as I addressed extensively in the last question, we’re working to both increase the incomes of low and middle income New Zealanders whilst acknowledging that we have a significant infrastructure deficit. Every single cent that comes from that excise and regional fuel tax goes into building the infrastructure that that last Government never built—despite the fact that, I have to say, back when the last Government was bringing in 9c worth of excise increases, Gerry Brownlee then said, “Excise increases in recent years have helped maintain the real value of the land transport fund.” He said that as he brought in the exact same excise, in the form of 9c, that we have.

💬 Rt Hon Winston Peters: Is the Prime Minister prepared to explain all this to Mr Bridges in a personal note if I can find the crayon?

💬 SPEAKER: I think the member does know what’s wrong with it.

💬 Rt Hon Winston Peters: No, I don’t.

💬 SPEAKER: The member has been here for a very long time—

💬 Brett Hudson: Too long.

💬 SPEAKER: I’m on my feet—who interjected? That member will stand, withdraw, and apologise.

💬 Brett Hudson: I withdraw and apologise.

💬 SPEAKER: And he’s on his final warning for this question time as well. The member, Winston Peters, has been here for a very long time. He knows that one cannot use irony as part of questions.

💬 Hon Simon Bridges: How long will it take for the Commerce Commission to undertake a market study into fuel prices?

💬 Rt Hon JACINDA ARDERN: Less time than it took for his Government to do something about it. He wrote in 2015, and we’re still waiting for this to be fixed.

💬 Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You appear to have just taken three questions off us. What for?

💬 SPEAKER: Yes, for your interjections.

💬 Hon Gerry Brownlee: Because we’ve just listened to very extensive explanations of questions from the Prime Minister—

💬 SPEAKER: The member will resume—[Interruption] The member will resume his seat now. The member will resume his seat. I took questions off because the member interjected while the question was being asked. We had, I think, while I was previously on my feet, at least three members who interjected, only one of whom was honest enough to admit it, and I was soft on the others. If the member is suggesting that we roll back the rules or that he has an exemption from them, then I’m not prepared to do it. Going back to the Deputy Prime Minister, I think it was relatively clear from the look on the Deputy Prime Minister’s face that he did accept the fact that he had acted inappropriately again.

💬 Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Firstly, I don’t argue with you about who it is that makes the decision about what an interjection is or is not. So I accept that you have said that my suggesting that the Deputy Prime Minister was being harshly treated—sorry, misunderstood—was in fact an interjection, but, none the less, the Deputy Prime Minister breached the Standing Orders in a very deliberate way and paid no price; but for sympathising with him, we lose three questions. Now, that’s no way to run this House in a reasonable fashion.

💬 SPEAKER: Does the member have a further supplementary?

💬 Hon Simon Bridges: Does the Prime Minister know how long it will take the Commerce Commission to undertake a market study into fuel prices?

💬 Rt Hon JACINDA ARDERN: Obviously, we’re changing the legislation over the next two weeks. There’s then a statutory process the Minister will go through that takes, from memory, around a month, so I would’ve thought in the first half of next year. Again, I would again put emphasis on the fact that in 2017 the last Government tried to do this work unsuccessfully. Our expectation is that we, of course, now with the ability to undertake this market study, will be able to do it properly and finish the job the last Government didn’t.

💬 Hon Simon Bridges: Once the Commerce Commission has reported back, how long will it take to act on any recommendations?

💬 Rt Hon JACINDA ARDERN: Obviously, I’m going to wait for their process to be completed, but, obviously, this is something we’re quite focused on.

💬 Hon Simon Bridges: Is it correct that if the Prime Minister wanted she could immediately legislate to remove the regional fuel tax and halt increases to the national excise tax—changes that would immediately ease the cost of living for Kiwis?

💬 Rt Hon JACINDA ARDERN: As I have said, I cannot guarantee that that would be directly passed on to consumers. What I can guarantee though is every cent that comes out of excise goes directly into projects in the likes of Auckland, where we’re losing productivity, where those families are already paying the price of being stuck in congestion and being unable to move around their city. It provides genuine alternative transport options for them.

💬 Hon Simon Bridges: Is it true that petrol taxes are roughly four times the size of importer margins?

💬 Rt Hon JACINDA ARDERN: Of what, sorry?

💬 Hon Simon Bridges: Is it true that petrol taxes are roughly four times the size of importer margins?

💬 Rt Hon JACINDA ARDERN: I haven’t got that figure in front of me, but what I can say is that, for instance, over the last decade—since 2008—petrol margins increased by 21c. The margin trend was up overall about 124 percent. So we have seen a significant change, one that we on this side of the House think warrants investigation. Clearly that side of the House has changed their tune since they were last in Government.

💬 Hon Simon Bridges: Why won’t she take immediate action to ease the cost of living by removing her Government’s new petrol taxes, given it’s clear that the Commerce Commission and their decisions will take a good year, and that those importer margins are some four times the size of the petrol taxes in total?

💬 SPEAKER: Order!

💬 Hon Gerry Brownlee: Other way around.

💬 SPEAKER: Yeah. Does the member want to ask the question again. I’m sorry, I—

💬 Rt Hon JACINDA ARDERN: I knew what he was trying to say though.

💬 SPEAKER: The Prime Minister gets it?

💬 Rt Hon JACINDA ARDERN: I get the gist. I’ll reverse the last part of your question. When it comes to the cost of living, of course that is a focus for this Government. Everything we have done far outstrips anything that a consumer then would be paying at the pump via a regional fuel tax. The Working for Families package, on average, delivering $75 a week; minimum wage increases; winter energy payments—far outstrip anything that consumers are experiencing. And on top of that, we’re getting to the nub of the issue, which goes well beyond anything anyone’s experiencing in excise. Finally, I’d love to hear from the member what projects he will cancel because he no longer believes in excise, which has been in place since the 1920s.

Question No. 3—Defence

3. to the Minister of Defence: What recent reports has he received regarding support given by the New Zealand Defence Force?

I know the House appreciates being updated on what our defence force is up to, and I can assure you that while Parliament has been in recess, our women and men in uniform have been very busy. On 3 October, the New Zealand Defence Force (NZDF) responded to the devastating earthquake and tsunami in western Sulawesi in Indonesia. During the operation they flew seven missions, transported 646 people, including 158 evacuees, and delivered over 56,000 kilograms of aid and relief supplies. The New Zealand Defence Force, and the C-130 Hercules in particular, is a very important tool the Government use to assist in times of natural disasters, both overseas and here at home as well.

💬 Darroch Ball: Is the Minister aware of any recent examples where the NZDF has delivered value to our nation and region?

💬 Hon RON MARK: Yes. The New Zealand Defence Force recently helped out the Department of Conservation, surveying the number of southern right whales. Additionally, they’ve been gearing up for a very busy Antarctic season. As members might have seen on television last night, deployments got under way. We will soon see 220 personnel working on the programme, making it once again New Zealand’s largest military deployment in support of science. In this operation, we will see the C-130s in action, with about 10 planned flights to McMurdo Station, with another six planned flights with the Royal New Zealand Air Force Boeing 757s.

💬 Darroch Ball: What else does the NZDF have planned in the coming months?

💬 Hon RON MARK: Alongside our work in Antarctica over the summer, we will be sending an offshore patrol vessel down into the Southern Ocean to monitor fishing vessels. In this deployment, HMNZS Wellington will work alongside a P3K Orion and ensure vessels operating in the area are doing so within the boundaries of their catch limits and are not using illegal methods like drift-netting. And, of course, they’ll be looking for and reporting on any illegal, unregulated, unreported fishing activities that they may find.

Question No. 4—Finance

4. to the Minister of Finance: Is it a goal of this Government’s economic policy to make it easier for New Zealand families to get ahead?

Yes, this Government believes we all win when we grow our economy for the benefit of all New Zealanders.

💬 Hon Amy Adams: Does the Minister believe, as he said yesterday and repeated today, that he is, in fact, growing the economy for the benefit of all New Zealanders, when the Government’s new petrol taxes have led to some of our poorest families having to choose between filling their car or putting food on the table?

💬 Hon Dr DAVID CLARK: New Zealand’s fuel excise is actually one of the lowest in the OECD, while the pre-tax cost of fuel is the highest. I’d also point out that the price of Brent crude has almost doubled since the middle of last year, and petrol companies have increased their profit margins by 10 percent in the last year alone. So I do not agree that petrol excise is the main cost of rising fuel prices. And if the member believes, now that she’s no longer in Government, that petrol excise should be done away with, she needs to explain to New Zealanders which transport project she would cut.

💬 Hon Amy Adams: When the Minister said yesterday that the Government makes no apology for implementing policies that they’ve been told are likely to push up energy costs, was he just saying that this Government doesn’t concern itself with how its policies are affecting the cost of living?

💬 Hon Dr DAVID CLARK: Of course I am not saying that. I reject what the member’s saying. Through policies like the Families Package, and by raising the minimum wage, we are lifting tens of thousands of children out of poverty. We have an economic plan to transform New Zealand towards a more productive, sustainable, and inclusive economy that pays higher wages, and where all New Zealanders will get to share the benefits of that growth.

💬 Hon Amy Adams: So does the Minister actually receive advice from Treasury that quantifies the likely effect that Government policies, such as higher petrol taxes or residential property regulations, will have on the cost of living for New Zealanders?

💬 Hon Dr DAVID CLARK: I don’t see all of the advice that the Minister of Finance receives, but we do receive a lot of advice on cost—of course we do. All Governments receive advice. Some of it we accept, and some of it we think is flawed. That’s natural. That’s what Governments do. Governments make judgment calls, and our judgment has been to support those on low and modest incomes in our Families Package—$5.5 billion more, that will see 384,000 New Zealanders $75 a week, on average, better off when that’s fully rolled out. We care about New Zealanders and making sure that growth is inclusive, sustainable, and shared across the economy.

💬 Hon Amy Adams: So then what was that Treasury advice on the cost of living impacts on the Government’s oil and gas decisions?

💬 Hon Dr DAVID CLARK: In terms of oil and gas, this Government has an ambitious plan to ensure a just transition, and we are prepared to show strong leadership to get things done. I saw some of the advice on this subject and I simply did not agree with it.

💬 Hon Amy Adams: I raise a point of order, Mr Speaker. I asked a very direct question about what Treasury advice was on the cost of living impacts, not what the Government’s plans for a transition are. He didn’t refer to Treasury’s advice and the cost of living impact at all in his answer.

💬 SPEAKER: I think he did at the end. He said he saw it and he didn’t agree with it. Was that what the member said?

💬 Hon Dr DAVID CLARK: To clarify, I certainly have seen Ministry of Business, Innovation and Employment advice I disagreed with on the topic, and I’m pretty sure I’ve seen Treasury advice. I’d need to check that, but I disagreed with it.

💬 Hon Amy Adams: Well, then, what was the Treasury advice on the cost of living impact on the Government’s residential property changes?

💬 Hon Dr DAVID CLARK: The member is asking very specific questions about very specific sets of advice. We know, as a whole, that rents are rising fastest in areas where the housing shortage is greatest. This Government has inherited a dire situation, where there’s a housing shortage around the country, and it is going to take time to build more housing, and it’s going to take time to insulate housing. It’s going to take time to get the housing stock up to where it should be, so that New Zealanders aren’t getting preventable diseases. That is the legacy of that Government—they should hang their heads in shame.

💬 Hon Amy Adams: I raise a point of order, Mr Speaker. It is the same point of order, again. The question was about Treasury advice on the cost of living impact on the Government’s changes, not a general rant around the Minister’s view of property.

💬 SPEAKER: The member asked a very specific question, and if the member expects to get a specific answer, then that should be part of the primary question.

💬 Hon Amy Adams: I raise a point of order, Mr Speaker. I’m not expecting a specific answer to know the exact detail, but I am expecting the answer to at least address the question that was asked on the Treasury advice. Now, he can say he hasn’t seen it, he doesn’t recall it—he doesn’t have to give a specific answer, but he does have to address the question asked.

💬 SPEAKER: I think the member did.

Question No. 5—Housing and Urban Development

5. to the Minister of Housing and Urban Development: Does he stand by his statement that “homelessness is likely to get worse before it gets better”?

Yes.

💬 Hon Judith Collins: Does he accept comments this morning by the Salvation Army that KiwiBuild is too unaffordable to address the growing level of homelessness?

💬 Hon PHIL TWYFORD: The Salvation Army has once again highlighted the extent of the housing crisis that this Government inherited. And no matter how successful our Government is at driving down build costs, reducing red tape, and making KiwiBuild houses affordable, for many New Zealanders who would love the opportunity to have a crack at affordable homeownership, a mortgage of $300,000, or $400,000, or $500,000 will simply be out of reach. That is why we are working on a shared equity programme that will give New Zealanders the opportunity to—people who otherwise would not be able to afford to—through a shared equity programme, have a smaller initial mortgage that over time they will have the opportunity to pay off and buy out the equity share of. If we’re successful in doing that, a much larger group of New Zealanders will have the opportunity to have a crack at affordable homeownership.

💬 Hon Judith Collins: Why is he allowing high-income couples who earn $180,000 per year to buy KiwiBuild homes when this may mean that low and middle income earners will miss out?

💬 Hon PHIL TWYFORD: Well, our policy with KiwiBuild is that until supply of new KiwiBuild homes matches demand, we’re going to ballot those houses, because balloting is by far the fairest and easiest way to do it. Under the policy settings of the former Government, who refused to build affordable homes, low-income families were forced to compete in the market against better-off families. They had no chance of affordable homeownership. Under our policies they will have a chance.

💬 SPEAKER: Does the member want to take a point of order?

💬 Hon Judith Collins: Yes, I would, thank you, Mr Speaker.

💬 SPEAKER: Well, I get it.

💬 Hon Judith Collins: Thank you.

💬 SPEAKER: Does the member want to repeat the question?

💬 Hon Judith Collins: Yes, sorry, Mr Speaker. Yes, I do.

💬 SPEAKER: It’s probably the easiest thing. Repeat the question.

💬 Hon Judith Collins: Thank you, Mr Speaker. Why is he allowing high-income couples who earn $180,000 per year to buy KiwiBuild homes when this may mean that low to middle income earners will miss out?

💬 Hon PHIL TWYFORD: Well, for a start I reject the premise of the member’s question—that allowing a broader range of New Zealanders to take part in KiwiBuild will disadvantage lower-income families. More important than that, the member needs to understand that after nine years of allowing the housing crisis to spin out of control, young New Zealanders, professionals in good jobs earning good money, even earning $150,000 to $160,000, cannot afford to buy their own homes under the housing crisis that you left us.

💬 Hon Judith Collins: Does he agree with the Salvation Army that the basic problem we have is that “the rental market is on the collapse”?

💬 Hon PHIL TWYFORD: No, I agree with the Salvation Army when they say that years of failed policies have killed the dream of homeownership and put huge social stress on low and middle income New Zealanders and we need radical change, and that’s what this Government is delivering.

💬 Rt Hon Winston Peters: Having regard to the level of sincerity in the questions today about the housing affordability, why has the Government changed its policy?

💬 Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I’d invite you to reflect carefully on that question. The Minister has no responsibility for any intentions behind the questioner’s motives.

💬 Rt Hon Winston Peters: Speaking to the point of order, my question is for an explanation as to why the Government has changed the housing policy it inherited. It’s very simple, Gerry.

💬 SPEAKER: OK, I think what I’m going to do is I’m going to ask the Deputy Prime Minister to ask the question again without the preface.

💬 Rt Hon Winston Peters: That was the best part, but I’ll summate by asking the Minister of Housing and Urban Development as to why it was that the new Government changed the housing policy that they inherited.

💬 Hon PHIL TWYFORD: We changed our policies because New Zealanders believed in and voted for a Government that would first accept that there is in fact a housing crisis, and that would accept the fact that policies need to intervene in the market to deliver decent housing for ordinary New Zealanders. For nine years, they put up with a Government that refused to intervene, that refused to build affordable housing, that refused to make houses warm and dry, and that refused to change the tenancy laws to deliver more security of tenure.

💬 Hon Judith Collins: Does he then agree with the Salvation Army, that has said today, “It might evolve that KiwiBuild does little more than replace the market as a source of new housing for higher-middle income households.”

💬 Hon PHIL TWYFORD: No, I don’t agree with that quote, but I am highly amused to see the new friend of the poor sympathetically quoting Alan Johnson from the Salvation Army. I never thought I’d live to see the day.

Question No. 6—Housing and Urban Development

6. to the Minister of Housing and Urban Development: What progress has he made towards the Government’s KiwiBuild homes targets up to 2020/21?

A few weeks ago, the Government announced the very first South Island KiwiBuild development in Wānaka, where there will be 211 KiwiBuild homes built over the next two years. Queenstown Lakes District is one of the fastest-growing districts in New Zealand and it has an acute housing crisis. The first 10 KiwiBuild homes to be balloted at Northlake include four two-bedroom and six three-bedroom modern stand-alone homes. Prices for these homes range from $565,000 to $650,000.

💬 Paul Eagle: What reports has he seen on this announcement?

💬 Hon PHIL TWYFORD: Well, I’ve seen reports of “KiwiBuild fever” in the Otago Daily Times. Cardrona skifield workers Emilee Laurie-Fendall and James Leech have lived in Wānaka for 18 months and have begun the KiwiBuild pre-qualification process. They said they’d been “seriously looking for a house for six months but everything in our price range just gets snapped up so fast.”

💬 Paul Eagle: What interest has there been for KiwiBuild homes in the Queenstown Lakes District?

💬 Hon PHIL TWYFORD: Over 3,000 people have registered an interest in KiwiBuild in Queenstown Lakes District out of over 44,500 people nationwide. KiwiBuild is restoring the dream of homeownership to thousands of families priced out of the housing market not only in Queenstown Lakes but across the country.

💬 Paul Eagle: How do these KiwiBuild homes compare to homes on the market?

💬 Hon PHIL TWYFORD: Well, for just over half the median price in Wānaka, these homes are fully landscaped with offstreet parking and a Fisher & Paykel home appliance package. They’re built in durable and low-maintenance materials in colours which reflect the natural beauty of the Wānaka area. The homes are backed by a 10-year Master Build guarantee.

💬 Hon Judith Collins: Is the Department of Building and Housing correct when it has stated that there are only 70 KiwiBuild houses presently under construction after a year of him being the Minister?

💬 Hon PHIL TWYFORD: There is no Department of Building and Housing.

Question No. 7—Justice

7. to the Minister of Justice: Does he stand by all his statements and actions?

Yes.

💬 Hon Mark Mitchell: Does he stand by his statements in relation to the criminal justice summit: “I’m totally satisfied with the cost of the summit.” and “It takes a lot to put … together”?

💬 Hon ANDREW LITTLE: I’m not quite sure what the member is quoting from, but the last time I spoke in this House about the criminal justice summit I said that their costs were excessive. I’ve spoken to the Secretary for Justice about it, and I expect better cost control in future.

💬 Hon Mark Mitchell: Does he know how much it cost to set up three registration desks at the summit?

💬 Hon ANDREW LITTLE: No.

💬 Hon Mark Mitchell: Is he surprised to learn that the cost of setting up those desks was $20,278?

💬 Hon ANDREW LITTLE: I’m not sure I have any information that supports that accuracy of that statement, but what I am pleased about is that since the criminal justice summit, and, in fact, since this Government has been in office, the prison population has reduced significantly, saving this Government tens of millions of dollars.

💬 Hon Mark Mitchell: Does he think it excessive that $20,278 of taxpayers’ money was used to set up three registration desks at his criminal justice summit?

💬 Hon ANDREW LITTLE: Assuming that that member is correct, yes.

💬 Hon Mark Mitchell: How does he think that the taxpayers—the four taxpayers—feel about having their annual income tax, the income tax of four minimum wage earners, spent on setting up a registration desk?

💬 Hon ANDREW LITTLE: The overwhelming feedback I’ve had from New Zealanders as I’ve gone around the country is to say, “At long last we have a Government that is addressing the very serious problems that underpin the rapidly growing prison population that happened under the previous Government.” They are very pleased to see a Government that doesn’t want to continue to spend over $1 billion a year on locking up ever more people and not dealing with the underlying problems. I’m pleased to see that a public debate about different ways of approaching criminal justice and prison reform is happening, and I look forward to good, positive results.

💬 SPEAKER: And I am going to ask the Minister just to address the very specific question. The member might want to ask it again.

💬 Hon Mark Mitchell: What would the Minister say to the four minimum wage earners that have had their annual income tax pay for three registration desks at the criminal justice summit?

💬 Hon ANDREW LITTLE: I would say what I said to the House a few weeks ago, which is that the costs of the summit were excessive. I’ve spoken to the Secretary for Justice about it, and said that I expect much better cost control on any comparable exercise in the future, but, equally, I’ve also said that the overwhelming feedback from New Zealanders as I’ve gone around the country—including in regional New Zealand; Ōāmaru most recently, Wanganui last week—was people saying, “At long last we have a Government that’s taking seriously the issue of getting to grips with the ballooning cost of imprisoning more people with no better results.” And we are facing that challenge.

💬 Hon Mark Mitchell: How did he not catch the extraordinary waste of taxpayers’ money before the criminal justice summit?

💬 Hon ANDREW LITTLE: My instructions to the Secretary for Justice were very clear during the course of the ministry putting together the criminal justice summit, which was that I expect good cost control. Since the criminal justice summit, I’ve continued that conversation with the Secretary for Justice, and I expect better cost control from that ministry in the future.

Question No. 8—Social Development

8. to the Minister for Social Development: What approaches, if any, has this Government taken to get people into sustainable and meaningful employment?

Fakalofa lahi atu, Mr Speaker. For this Government, it’s about more than just getting people into any job; it’s about supporting them to find the right work for them that is sustainable and meaningful. Building industry partnerships and developing relationships with business and local communities is crucial to this. Last week, I visited Turners and Growers in the Hawke’s Bay, who are working closely with the Ministry of Social Development (MSD) to develop new initiatives that meet the growing needs of their business while adding value to workers’ lives.

💬 Priyanca Radhakrishnan: What impact is this initiative having on the local community?

💬 Hon CARMEL SEPULONI: The Hawke’s Bay is a leading producer of pipfruit, which is a growth industry. The work under way by Turners and Growers in Hawke’s Bay ensures that training and development is in place to meet the growing needs of industry and local workers are equipped to participate and thrive in this industry. Turners and Growers have partnered with the Ministry of Social Development through a number of programmes, including a sole parent initiative and Mana in Mahi. The labour manager at Turners and Growers told me his number one priority used to be the apples, but, since changing focus and catering to the needs of the workers, the apples are fine and business is booming.

💬 Priyanca Radhakrishnan: How does this approach support sustainable employment?

💬 Hon CARMEL SEPULONI: In the last year, MSD have placed 204 people with Turners and Growers in Hawke’s Bay, and they consistently achieve over 80 percent sustainable employment contracted outcomes for people previously on benefit. A big part of this can be attributed to their focus on pastoral care for workers, flexible hours for working parents, and the provision of healthcare. One sole mother of three who’d been out of work for six years says getting a job with Turners and Growers has been life changing. She said, “It feels good knowing that your kids are fine and you’ve got a good job behind you as well.”

Question No. 9—Energy and Resources

9. to the Minister of Energy and Resources: How many cents per litre has the “petrol margin trend New Zealand” in the MBIE data set titled “weekly fuel price monitoring” changed between the most recent data point and 27 October 2017; and, how many cents per litre have total Government or local government taxes increased over the same period in and outside of Auckland?

1.32, 9.53, 11.5, 9.53, and 0. For the benefit of the member, from October 2017 to 28 September 2018 the actual increase in the importer margin was 9.28c. This is part of a longer trend. In 2008, New Zealand had one of the lowest pre-tax fuel costs in the OECD. By 2018, the pre-tax cost for fuel in New Zealand was the highest in the OECD.

💬 Hon Paul Goldsmith: So is it correct that the 1.3c increase in the fuel company margin over a year, when smoothed out as a trend, is more than accounted for by the cost of the regional fuel tax, which is included in that margin?

💬 Hon DAVID PARKER: The member misunderstands what the most relevant figure is. In respect of importer margins, the actual increase from October 2017 to 28 September 2018 was 9.28c per litre, and, as I said, this is part of a longer trend which has seen New Zealand, from having amongst the lowest pre-tax fuel costs in the OECD, having, by 2018, the highest pre-tax fuel costs in the OECD.

💬 Hon Paul Goldsmith: Would it surprise the member that the figure for retail margins that he just quoted bounces around? The Prime Minister used 27 October 2017 to 28 September 2018 to show a 9.8c increase in importer margin. If someone used the dates 8 December 2017 to 5 October 2018, the figure is 1c rather than 9.8c. And, given the bouncing around, the fairest representation of importer margins is the trend.

💬 Hon DAVID PARKER: As everyone who goes to the petrol station knows, the price of fuel varies significantly from month to month. It has many components: oil, taxes, and importer margins. The biggest change has been in the price of oil, which has increased by more than 50 percent in the last year.

💬 Hon Paul Goldsmith: So is it correct that after taking the Auckland fuel tax into account, margins have decreased over the past year by the petrol margin trend measure?

💬 Hon DAVID PARKER: The largest increase has been of the margin that is going to the exporter of oil, because the price of oil has increased by more than 50 percent over the last year.

💬 Hon Paul Goldsmith: I raise a point of order, Mr Speaker. He didn’t answer the question, which—

💬 SPEAKER: Well, I think the member can ask the question again.

💬 Hon Paul Goldsmith: So is it correct that after taking the Auckland fuel tax into account, margins will have decreased over the past year by the petrol margin trend measure?

💬 Hon DAVID PARKER: No. As I said when I last answered that question, the largest increase in margin has been as a consequence of the change in oil prices. That margin has been received by oil sellers, who have managed to increase their price over the last year by more than 50 percent.

💬 Hon Paul Goldsmith: So does he agree with the Prime Minister’s conclusion: “New Zealand consumers, in my book, are being fleeced.”?

💬 Hon DAVID PARKER: In respect of the increase in importer margins, that appears to be the case. As I have said, the latest annual trends are part of a longer trend which has seen New Zealand move from 2008, when we were in the position that we had the lowest pre-tax fuel costs in the OECD. By 2018, the pre-tax fuel costs for New Zealand were the highest in the OECD.

💬 Hon Paul Goldsmith: Who is doing the fleecing if, by the time period that the Prime Minister referred to, fuel company margins have increased by 1.3 percent over the year, including the cost of an Auckland fuel tax—or is it his Government that’s doing the fleecing by increasing taxes on a monumental scale?

💬 Hon DAVID PARKER: To quote the member’s own question to me just a couple of supplementaries before, it said that some of these prices move around month to month. That is true. That is why the long-term trend is the one that most attention should be paid to, which, I repeat, has seen New Zealand move from having amongst the lowest pre-tax fuel costs in 2008 in the OECD to having the highest pre-tax fuel cost in the OECD in 2018.

Question No. 10—Health

Thank you Mr Squeak—Speaker. My question is to—[Interruption]

Well, my granddaughter calls me “Mr Talker”.

10. to the Minister of Health: Did he receive any advice about the $200 million in reprioritised medicine in Budget 2018 being redirected to nurse salary increases rather than the purchase of new medicines; if so, what was the nature of that advice?

Fakalofa lahi atu. Up until this year, Pharmac managed the district health boards’ (DHBs’) community drug-buying budget, while the DHBs held their own budget for buying hospital medicines. Earlier this year, Pharmac took over responsibility from DHBs for buying all of their medicines, which Treasury forecasts say will save close to $200 million over four years through Pharmac’s purchasing power. That change was made earlier this year, creating one-off savings for DHBs in the 2017-18 financial year. Given the inadequacy of the health budget put forward in 2017 by the previous Government, I made it clear to DHBs that any savings in the 2017-18 year could be used to offset the cost of wage settlements. Following the member’s questions yesterday, officials have searched and have been unable to find any record of advice about using the forecast future savings for nurses’ salaries.

💬 Hon Michael Woodhouse: Why did he not take the opportunity to invest the $200 million of reprioritised funds into new medicines?

💬 Hon Dr DAVID CLARK: There are always competing demands in the health sector. The budget for Pharmac has not been cut as a result of these savings. What is actually happening is more medicines are being bought for more New Zealanders with the same amount of money. Additional money in the health budget is something I am always seeking as health Minister, and there are a range of competing priorities.

💬 Hon Michael Woodhouse: How many new medicines were actually funded in Budget 2018?

💬 Hon Dr DAVID CLARK: As the member knows, the decisions around which new medicines are purchased and when are the responsibility of Pharmac.

💬 Hon Michael Woodhouse: I raise a point of order, Mr Speaker. The question wasn’t addressed. I didn’t ask who was responsible for purchasing; I asked how many new medicines were funded.

💬 SPEAKER: And I think both members understand the way the system works.

💬 Hon Michael Woodhouse: Speaking to that point, Mr Speaker?

💬 SPEAKER: No, the member’s not speaking to the point. The member will resume his seat. He can take another supplementary if he wants to.

💬 Hon Michael Woodhouse: Does he think it’s acceptable that New Zealand women are selling their houses or setting up Givealittle pages to pay for cancer medicines that are routinely funded in comparable countries?

💬 Hon Dr DAVID CLARK: The medicines raised in the House yesterday are currently under examination for funding by Pharmac. It is true that there are some countries that have some medicines that New Zealand does not have, but I don’t think the member has changed his position and now wants to undermine the Pharmac model. If he has, he would need to explain to New Zealanders how we should make do with fewer drugs, because we wouldn’t be able to afford the drugs that we have. And, on top of that, I would also note that that party opposite, when they were in Government, had the opportunity to fund the health budget better and instead they cut money out of the budget. New Zealanders have a lot of catching up to do. It will take several Budgets to make sure the health system is funded as well as we would like to see it funded.

Question No. 11—Building and Construction

11. to the Minister for Building and Construction: What action, if any, is the Government taking to address skills and labour shortages in the construction sector?

Fakalofa lahi atu kia mutolu oti, Mr Speaker. Earlier this month, along with my ministerial colleagues, I announced the Government’s Construction Skills Action Plan to address skills labour shortages in the construction industry. We’re working as a ministerial team, together with the sector, to improve the construction industry’s ability to deliver skills and training and careers in order to build more houses. Together with industry, we will ensure the construction sector is better able to deliver the right people at the right time with the right skills to build the houses New Zealanders need. The Construction Skills Action Plan will deliver at least 4,000 new people pursuing construction-related careers over the next three years.

💬 Marja Lubeck: What are the key priority areas of this Construction Skills Action Plan?

💬 Hon JENNY SALESA: The Construction Skills Action Plan has six initial priority areas, and they are: first, leveraging Government procurement, led by the Minister for Economic Development; second, growing construction careers and credentials, led by the Minister of Education; third, expanding skills for industry, led by the Minister for Social Development; fourth, further changes to immigration settings, led by the Minister of Immigration; fifth, establishing additional jobs and skills hubs; and sixth, Mana in Mahi - Strength in Work, both led by the Minister of Employment.

💬 Marja Lubeck: Why is the construction sector so important to the economic well-being of New Zealand and its people?

💬 Hon JENNY SALESA: The construction sector is one of our largest employers, with nearly 10 percent of our workers engaged in construction-related occupations. The construction sector is rapidly evolving. Embracing the opportunities provided by innovation and technology through prefabrication and new ideas for achieving sustainability over time is one of the things that we’re doing. Our construction action plan anticipates the changes ahead, supporting new skills that will be required to achieve the Government’s ambitious housing and economic objectives.

Question No. 12—Energy and Resources

12. to the Minister of Energy and Resources: Does she stand by all her Government’s policies, statements, and actions in relation to the energy and resources portfolio?

On behalf of the Minister of Energy and Resources, yes.

💬 Jonathan Young: Is the Minister concerned by OMV’s comments to the Environment Committee yesterday, which said the country has just seven years’ firm supply, with natural gas production forecast to start falling away from 2021 onwards, and that we are heading towards a gas supply gap in New Zealand?

💬 Hon DAVID PARKER: Long-term prices for electricity are set by the cost of new generation capacity. Wind power is already cheaper than gas, which is why Genesis has today announced a new 100 megawatt wind farm in Taranaki, which I’m surprised the member is not celebrating.

💬 Jonathan Young: So is the Minister still concerned, following her reported comments to interest.co.nz, that she can’t be sure there will be enough affordable clean energy, despite today’s announcement, available to fill the gap when New Zealand’s natural gas reserves run out?

💬 Hon DAVID PARKER: The first point I would make is an obvious point in energy markets as well as political parties, which is that you can’t start a transition without starting a transition. The second point is New Zealand can’t reduce its emissions by using more fossil fuels; we can only do so by using more renewables. The announcement today by Genesis shows that we’re heading in the right direction.

💬 Jonathan Young: Is the Minister concerned by OMV’s comments that the country still needs a new immediate discovery to maintain security of supply over the next decade, but the new offshore exploration ban is discouraging potential investment partners that OMV and others need?

💬 Hon DAVID PARKER: I’m confident that New Zealand has the security of supply settings right. I’ve heard scaremongering from prior National Governments about how impossible it was to increase renewables. We’ve proven that wrong.

💬 Hon Dr Nick Smith: We did.

💬 Hon DAVID PARKER: Actually, you opposed it at the time, Dr Smith, through your then energy spokesperson. I would also take some comfort, if I was the member and was so interested in the use of gas rather than renewables, that Todd Energy has recently committed to a substantial investment in a new gas peaking plant, which, of course, we will need in the transition to more renewables.

💬 Jonathan Young: What plan does the Minister have to ensure New Zealanders have access to affordable electricity when current hydro storage is at its lowest point at this time of the year since 2010, with September wholesale prices up 58 percent on the same month as last year, and with longer-term natural gas backup constrained and less likely to be available?

💬 Hon DAVID PARKER: I have great confidence because I understand that the core principle that lies at the heart of the New Zealand electricity market is that long-term prices—[Interruption]

💬 SPEAKER: Order! Order! Could I ask the Deputy Prime Minister and Chris Bishop to let the Minister answer the question so that I can hear him, rather than having their own debate. Could the Minister start again, thank you.

💬 Hon DAVID PARKER: Thank you, Mr Speaker. I have great confidence that long-term prices are under control because I understand that the most basic principle that lies at the heart of New Zealand’s electricity system is that long-term prices for electricity are set by the cost of new generation capacity, and we know that on this very day, wind power is already cheaper than gas, which is why Genesis have today announced that they’re investing in a new 100 megawatt wind farm in Taranaki, not in more gas. That’s because wind is already cheaper than new gas.

💬 Rt Hon Winston Peters: Talking about the rise in power costs, is it not a fact that Contact Energy was sold on 1 October 1998, when I wasn’t in Cabinet?

💬 SPEAKER: Order! Order! It may be a statement of fact, but this Minister has no responsibility for it.