Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeQuestions for Oral Answer — Questions to Ministers[Sitting date: 12 March 2014. Volume:697;Page:16545. Text is incorporated into the Bound Volume.]Questions to MinistersEconomy—Interest Rates Housing Affordability and Power Prices1.Dr RUSSEL NORMAN (Co-Leader—Green)to the Minister of Finance: How will the expected increases in the Official Cash Rate over the coming year affect New Zealand families and businesses?Hon BILL ENGLISH (Minister of Finance):That will depend somewhat on the circumstances of those families and businesses. For instance for those who have some of the over $100 billion on deposit in New Zealand banks it will mean slightly higher incomes. For others with mortgages it will mean slightly higher costs. We would need to remember though that this is against a background where interest rates have been at near 50-year lows for the past 3 years and they are likely to be on a gradual return to more normal levels. For all households and businesses any rise in interest rates signals growing momentum in the economy and therefore the prospect of more jobs and higher incomes.Dr Russel Norman: Has he seen the research conducted by Reserve Bank officials that found that when the official cash rate increases by 1 percent the unemployment rate increases by around 1.2 percent above what it would otherwise be which means 30000 fewer jobs in the economy?Hon BILL ENGLISH: No I have not seen that particular piece of research although I am sure that the Governor of the Reserve Bank has seen it. He has a job of targeting inflation and in the next few days he will tell us about just how he intends to do that in the context of a growing economy. He will also be publishing forecasts about unemployment and employment growth. If they are consistent with other market forecasts and Treasury forecasts they will show that even if interest rates rise somewhat there will continue to be strong growth in employment—as indicated by information from SEEK today showing record job ads—and also continued reductions in unemployment.Dr Russel Norman: I seek leave to table the relevant Reserve Bank paper from August 2011—An estimated small open economy model—Mr SPEAKER: Order! That has been adequately described. Leave is sought to table that particular publication from the Reserve Bank. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Dr Russel Norman: Does he understand that if interest rates rise this year then families will pay more for mortgages businesses will pay more to borrow and the exchange rate will rise above its already record level hurting our exporters all of which adds up to fewer jobs for New Zealanders?Hon BILL ENGLISH: It is possible that some or none of those things might happen. But the member seems to be in a roundabout way at least questioning the current monetary policy framework. New Zealand has learnt some hard lessons in the last 30 or 40 years. If there is one thing that erodes confidence erodes household wealth and erodes jobs it is high and persistent inflation. That is why there has been until recently a bipartisan consensus on a Reserve Bank framework that targets keeping inflation relatively low because we have learnt from experience that in the long run that is the best setting to promote growth.Tim Macindoe: How has the Government’s economic programme since 2008 helped to keep interest rates lower for longer for New Zealand families and businesses?Hon BILL ENGLISH: Looking back to 2008 it has not been that difficult to help keep interest rates lower for longer because we have had a recession and very low interest rates. But looking ahead it is quite a challenge. What we know is that as interest rates begin rising if the Government starts spending more rapidly and house prices continue to grow rapidly then interest rates could end up over 10 percent as they did as recently as 2008 under the stewardship of the previous Labour Government.Dr Russel Norman: With regard to the Government’s responsibility rather than the Reserve Bank’s responsibility is he aware that house prices rents and power prices accounted for a third of inflation in the past year so if the Government had stabilised the housing market and tackled rising power prices there would be no need for the Reserve Bank to increase interest rates?Hon BILL ENGLISH: The Government has tackled those issues and I must say without the support of the Green Party. We have had a couple of years of hard work getting on top of the regulation of our housing market. The Greens like a few other people in New Zealand do not like any new houses anywhere. That is one of the problems behind the fast-rising housing market. We have also worked hard on a more competitive electricity market but again the Greens have not supported that.Tim Macindoe: What policy prescriptions would push up interest rates and put pressure on New Zealand families and businesses?Hon BILL ENGLISH: Two in particular. One is the expensive emissions trading scheme supported by the Opposition parties. The emissions trading scheme which they have stopped talking about would add $500 a year to household electricity bills and that is before we get to the NZ Power proposal which would almost certainly push up power prices.Dr Russel Norman: With regard to the Government’s success in controlling house prices and electricity prices given that there has been a 44 percent increase in Auckland house prices during this Government and a 20 percent increase in power prices over the course of this Government does he consider that his policies have been successful in controlling inflationary pressures coming out of the housing market and the so-called electricity market?Hon BILL ENGLISH: The first point is that the rate of increase in both housing and electricity prices has been much lower than it was under the previous Labour-Green Government. Secondly yes we do believe our policies will have an effect. Of course particularly in respect of housing markets it takes some time to change the mind-set promoted by the Greens that all housing development is bad. The price of that approach is that New Zealanders pay far too much for their houses. Against the opposition of the Greens we are trying to change it.Dr Russel Norman: With regard to the Government policy—which is what question time is about— of skyrocketing housing prices which have gone up by 44 percent over the last 5 years and with regard to the Government policy of skyrocketing power prices which have gone up 20 percent is it not the Government’s failure to control inflation coming out of housing and electricity that is driving the Reserve Bank to push up interest rates which all New Zealanders will have to bear the brunt of?Hon BILL ENGLISH: No I do not believe that is the case. The Government has been working for several years to ensure a more competitive electricity market and to ensure a more flexible market in housing supply so that as demand grows prices do not go up. It is notable that Labour and the Greens have opposed every measure the Government took in that respect. If there is one thing that would certainly push up inflation and interest rates it is a big-spending Government with an expensive emissions trading scheme that would put power bills up by $500 per household per year.Dr Russel Norman: Does the Minister realise that ordinary New Zealand families are being hit three different ways by the Government’s policies: firstly they are paying too much for housing and for electricity because of the Government’s policies; secondly they are about to see their mortgage payments rise as a result of the failure of the Government to control house prices and electricity prices; and thirdly on top of that there will be 30000 fewer jobs as a result of the interest rate rises?Hon BILL ENGLISH: No I do not accept any of that. The Government has had to work very hard to undo the damage the previous Government did to electricity prices—Hon Simon Bridges: 72 percent.Hon BILL ENGLISH: —which went up 72 percent in 9 years and undo the damage that the Greens and their fellow travellers have done to the housing market where they have forced regulation that ensures house prices go up. I admit that we could have perhaps unilaterally taken over local council planning functions but we have not quite done that. Instead we have worked with local councils to fix the damage done by the Greens and others who are opposed to all new housing development which is why we have one of the most expensive housing markets in the developed world.Dr Russel Norman: Aside from spreading misinformation about the Greens does the Government have any actual policy given that over the last 5 years—[Interruption]Mr SPEAKER: Order! The member has a right to ask his question. I cannot hear it. It would be helpful if the member would just address the question without the initial comments.Dr Russel Norman: I raise a point of order Mr Speaker. Every question during this question time you have allowed the Minister to attack Green Party policy when the questions were nothing about that. The one time I introduce it into my question you tell me that I am not allowed to say it—Mr SPEAKER: Order! If the member carries on like that we will move immediately to question No. 2. I did not rule the member’s question out of order; I simply pointed out that he had a right to have his question heard. I could not hear it. I believe the member was himself struggling to get his question out. I pointed out to the member that the way he started his question led to the disorder. I invite the member now to ask his question; otherwise we will proceed to question No. 2.Dr Russel Norman: Aside from spreading misinformation about the Greens’ policy does the Government have any actual policy to control inflation coming out of the housing market and the electricity market given that over 5 years house prices in Auckland have gone up by 44 percent and electricity prices have gone up by 20 percent as a result of the policies of this Government?Hon BILL ENGLISH: I think the last point the member made is the one where he is most obviously wrong. The Government has worked very hard to undo the damage done by the previous Labour Government to the electricity market and we have slowed the rate of increase considerably. The Opposition policy of a single buyer and an emissions trading system would certainly force prices up fast. In respect of the housing market I welcome the Greens’ new-found support for the idea of building more new houses because up until now like the Labour Party it has opposed all policy measures designed to enable New Zealanders to get better-priced houses.Grant Robertson: I raise a point of order Mr Speaker. As the Deputy Prime Minister has done throughout all of his answers today he has breached the Standing Orders. He is misrepresenting policies of parties that he has no responsibility for.Mr SPEAKER: That is very much a debating matter. The answers have been addressing the question. As I warned the member as he rose to ask his question the way he asked the question meant that he was likely to get a very robust reply.Hon David Parker: I raise a point of order Mr Speaker. I ask whether it is fair to sit Russel Norman down and criticise the form of his question right at the start of a question retaliating to similar jibes from the National Party three or four times and then for you to not stand up and stop the Deputy Prime Minister doing exactly the same in reverse.Mr SPEAKER: I have listened very carefully to the answers. I think they have fairly addressed the question. If I thought for one minute they did not I would address the matter. My job here is to attempt to be as fair as possible to all members in this House and I will continue to attempt to do that.Dr Russel Norman: With regard to the Minister’s claim that the NZ Power policy would push up prices has the Minister seen the report from Infometrics commissioned by Business New Zealand which says that the Green Party’s and Labour Party’s NZ Power proposals would cut power prices for families by 13 percent and add $200 million a year to the economy which means it would create at least 2000 jobs?Hon BILL ENGLISH: I simply disagree with it. There is one place that this policy has been tried. That is in the province of Ontario and it has led to the utterly predictable result of blackouts and higher prices. That is why we will not be adopting that policy. Secondly the emissions trading system which the Greens have stopped talking about will add $500 per household per year to their power bills.Dr Russel Norman: Will the Minister stand up tomorrow and explain to New Zealanders why his policies have pushed up housing prices and power prices which have put pressure on the Reserve Bank to increase interest rates and why it is that ordinary New Zealand families will have to pay more for their mortgages and more for their power prices because of his failed Government policy?Hon BILL ENGLISH: No. If I had the opportunity I would explain to them how Government policy has enabled interest rates to stay lower for longer—in fact at 50-year lows for longer—and I would also explain to them the risks of a big-spending Labour-Green Government which would certainly push up interest rates much further than it needed to like it did last time when first mortgage rates reached 10-plus percent in 2008.Government Financial Position—Return to Surplus2.JOHN HAYES (National—Wairarapa)to the Minister of Finance: How will the Government’s economic and fiscal policies ensure its accounts return to surplus in 2014/15 and help keep interest rates lower than during the previous economic cycle?Hon BILL ENGLISH (Minister of Finance):The Government will continue to focus its Government spending on programmes that make a real difference to the lives of New Zealanders such as investing to help people get off welfare and into work and investing to reduce crime. What we have learnt in recent years is that often the solution to the problems that the taxpayers pay us to fix lies with finding better more effective answers not with spending more money. By remaining on top of its spending the Government will help avoid a repeat of the sharp interest rate rises during the last cycle up to 2008 when floating mortgage rates actually reached almost 11 percent.John Hayes: What recent reports has he received on the Government’s finances and what trends are emerging in both spending and revenue?Hon BILL ENGLISH: The Government’s financial statements for the 7 months to 31 January were released yesterday. They showed that Government expenses are around $140 million below forecast at $40.1 billion for the 7 months indicating that the Public Service is doing a good job of containing expenditure but achieving better results for our communities. However despite stronger economic growth tax revenue continues to track below forecast. Although we have spending under control Government revenue is inherently more difficult to forecast. We are yet to see just how much of that shortfall of around $800 million flows through to the end of the year. In any case the Government is on track to deliver a surplus for the 2014-15 year and that of course will raise questions for New Zealanders about big-spending promises in election year and what damage they might do not just to the Government’s books but also to pushing up interest rates further.John Hayes: How does the Government’s current financial position and outlook compare with the position inherited by the incoming National-led Government in 2008?Hon BILL ENGLISH: We have learnt some lessons from the period particularly of about 2005-08 because by 2008 despite a decade of good economic conditions the New Zealand economy was in recession and floating mortgage rates were nearly 11 percent. This Government is determined not to make the same mistakes—that is to go on a spending spree just when times are better and secondly to allow the housing market to grow at very high rates putting pressure on our exporters.Hon David Parker: How can he claim to be a good economic manager when despite record dairy prices and the Christchurch rebuild boosting construction the Government accounts have still come in well under forecast for the third month in a row?Hon BILL ENGLISH: The commentary around the accounts points out some of the reasons for that. I am very pleased to see that this Labour Party spokesman unlike the rest of its spokesmen is so devoted to achieving a surplus. We look forward to pre-election policies that indicate that he is going to be as prudent in his fiscal management as he says the current Government should be.John Hayes: With the Government on track to surplus next year what policy prescriptions would put that return to surplus at risk and fuel sharp interest rate increases?Hon BILL ENGLISH: I think it is increasingly obvious that policies for instance that promise large amounts of cash to New Zealand households mean that not only is the Government unlikely to make a surplus but also it would be a pretty clear signal to the Reserve Bank that it should put interest rates up. Other policies such as an expensive emissions—Rt Hon Winston Peters: I raise a point of order Mr Speaker. It will be very apparent to you that seeing as the Minister is not talking about anything within his portfolio or Government administration or Government policies he should not be talking about it at all.Mr SPEAKER: No I cannot accept the point the member raises. Members have the right to ask a question. The question effectively was what policy prescriptions would put at risk a return to economic surplus etc. That is a legitimate question; it is allowed a legitimate answer.Hon BILL ENGLISH: I was just going to finish by referring to the emissions trading system policy that certainly is Green policy and may be Labour policy. An expensive emissions trading system would push up electricity prices and inflation.Rt Hon Winston Peters: I raise a point of order Mr Speaker. Again the Minister of Finance is not responsible for any other political party’s policy—the Greens’ the Labour Party’s or anyone else’s—so why is he being allowed to persist with his answer?Mr SPEAKER: He is certainly able in response to that question to talk about the potential that he considers would be aligned with an emissions trading scheme. It is unhelpful for the Minister in giving the answer to refer to the policy being adopted by any other party in this House.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With reference to your last ruling my simple question would be—and I agree with you—why he was not pulled up and why some action was not taken against him. He has done it before time and time again.Mr SPEAKER: It was. If the member had listened he would have heard me make a comment.Justice Minister—Investigation into Compliance with Cabinet Manual3.Hon DAVID CUNLIFFE (Leader of the Opposition)to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister):Yes.Hon David Cunliffe: Why did he tell the New Zealand public on Monday that “Yes they”—the Cabinet Office—“looked at the translation.”?Rt Hon JOHN KEY: Because I believed it to be correct and actually the Cabinet Office has written to me to say that the information it provided to me could well have left me with that impression. It apologised for that.Hon David Cunliffe: Did the Prime Minister personally or through directing his office specifically ask the Cabinet Office to look at the English translation of Oravida’s Chinese website when this issue first came to light last week; if not why not?Rt Hon JOHN KEY: I do not have all the details of who contacted the Cabinet Office but my understanding was they looked at all the information required.Hon David Cunliffe: I raise a point of order Mr Speaker. These are deliberately very straight and simple factual questions and a supplementary to—Mr SPEAKER: I am going to ask the member to repeat his question.Hon David Cunliffe: Did the Prime Minister personally or through personally directing his office specifically ask the Cabinet Office to look at the English translation of Oravida’s Chinese website when this issue first came to light last week; if not why not?Rt Hon JOHN KEY: It is the same answer. I do not have the information with me of what was asked for but—[Interruption]Hon David Cunliffe: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! This is a point of order.Hon David Cunliffe: The question asked—Mr SPEAKER: Order! I have heard the question.Hon David Cunliffe: Mr Speaker—Mr SPEAKER: Order! I have heard the question. You have put it twice. The Prime Minister has chosen to answer it by saying he does not have that information.Hon David Cunliffe: I raise a point of order Mr Speaker.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: I will hear from the Hon David Cunliffe.Hon David Cunliffe: Given that the question went to his own personal knowledge or direction and not to the actions of any other party how is it possible for him to not have the information about his own personal actions?Mr SPEAKER: Well I can easily answer that before I accept—Hon Member: He’s covering up.Mr SPEAKER: No it could be that the Prime Minister on this occasion feels he does not have the information because he cannot recall it accurately enough. It is in his hands; it is for him to decide how he is going to answer the questions. [Interruption] Order! If members want to stay for the balance of question time then when I am on my feet I expect them to be silent. I have attempted to assist the member to get an answer that is more helpful. The Prime Minister has chosen how he is to answer that question and that is his responsibility. The member then has further supplementary questions and who knows—he may get an additional supplementary question to help elucidate the answer he may require.Rt Hon Winston Peters: I raise a point of order Mr Speaker. By the nature of Mr Cunliffe’s question it may be that Prime Minister can seek a defence in not being prepared but if you look at question No. 7 where he is asked whether he gave honest answers to questions asked on this matter he has had now 4 hours to be prepared so he should be down here today ready to go and not be hiding behind the points he—Mr SPEAKER: And that is for this House and the public of New Zealand to judge.Hon David Cunliffe: I raise a point of order Mr Speaker. On previous occasions when there has been an apparent or possible obfuscation by a Minister to a direct question you have given members on this side of the House three opportunities to ask the supplementary question and the Minister concerned three opportunities to give a direct answer.Mr SPEAKER: I have ruled. I have given it—what two goes? I have determined that that is enough. The member has further supplementary questions.Hon David Cunliffe: Does the Prime Minister understand that the statement by his office that the deletion of the Chinese version of the website means there is no longer a conflict of interest means that there must have been an actual conflict of interest to start with; if not what does he understand by that statement?Rt Hon JOHN KEY: No the member is not correct.Hon David Cunliffe: Has the Prime Minister seen the Chief Ombudsman’s report from October 2012 that states: “if a Minister refers to Cabinet Office advice publicly in a way that is misleading or exaggerated the countervailing public interest in disclosure is likely to outweigh the need for confidentiality.” and will he therefore table the Cabinet Office advice now for members of this House?Rt Hon JOHN KEY: No but I do actively encourage the member to take the matter up with the Ombudsman. The Ombudsman will then look at all of the advice I have seen and the Ombudsman will—guess what—not release it because they will know that I am correct.Hon David Cunliffe: The underfunded Ombudsman. On what day—Rt Hon John Key: I raise a point of order Mr Speaker. The Leader of the Opposition as he got to his feet impugned the reputation of the Ombudsman of New Zealand. I think that is a very serious matter and the member might want to reflect on that.Mr SPEAKER: I did not hear the remark. If the member made a comment that he thinks is unparliamentary—[Interruption] I will hear from the member.Hon David Cunliffe: Speaking to the point of order if the Speaker did not hear it the words I said were “The underfunded Ombudsman.” That was going to the point—Rt Hon John Key: No you said “Government funded”.Hon David Cunliffe: If I may that goes to the point that the Prime Minister is hiding behind an officer of Parliament whom he has insufficiently funded in the full knowledge that there will be a long delay before an answer can be given. That is impugning himself—Mr SPEAKER: Order! I will accept what the member has said and therefore we will move forward.Hon David Cunliffe: Does he agree that there is a conflict of interest arising from revelations this morning that Judith Collins had a previously undeclared dinner with her “close personal friends” which included the chairman of Oravida and a senior Chinese border control official while on a taxpayer-funded trip to China in which she also visited Oravida and endorsed or promoted its products?Rt Hon JOHN KEY: I believe that the accumulation of meetings that the Minister of Justice held in China could lead to the perception of a conflict of interest and that is why I believe that transparency is very important. I believe for instance that if you get secret donations through a trust you should make those known. [Interruption]Mr SPEAKER: Order!Hon David Cunliffe: Does he consider it merely a perception of a conflict of interest that all this occurred with a company of which the Minister’s husband is one of only three directors which is supplied by a company substantially owned by the president of the National Party and from which his party has received $56000 in political donations?Rt Hon JOHN KEY: Firstly I think it can lead to a perception of a conflict of interest. Secondly what is important here is that we actually do know what has taken place. We do not when it comes to the trust funds of—Mr SPEAKER: Order! The Prime Minister has answered the question.Hon David Cunliffe: If Mrs Collins does not understand that this combination of circumstances reflects a serious conflict of interest is she fit to be a Minister in his Government?Rt Hon JOHN KEY: Yes she is quite fit to be a Minister. My own view is that Judith Collins is an outstanding Minister but I think that on this particular occasion she has got this wrong. All I can say to Mrs Collins is this: thank goodness you did not grant him citizenship in the Labour Party caucus—Mr SPEAKER: Order!Electricity Market—Performance Prices and Alternative Approaches4.KANWALJIT SINGH BAKSHI (National)to the Minister of Energy and Resources: What has the Government done to improve the performance of the electricity market in New Zealand?Hon SIMON BRIDGES (Minister of Energy and Resources):When this Government took office in 2008 it was clear that significant changes needed to be made. Power prices were rising at record levels there had been four dry-year emergencies where consumers had been asked to switch off their lights and conserve power there had been serious under-investment in transmission and we got too much of our power from non-renewables. This Government’s reforms of 2010 have halved power price increases and promoted the ability of consumers to shop around for the best deal. Security of supply is simply no longer an issue despite the fact that the first 6 months of 2012 were the driest on record. There has been much-needed investment in infrastructure with Transpower spending set to total $5 billion. Renewables have gone from 65 percent to 75 percent. The Government backs its record on electricity against the left’s any day of the week.Kanwaljit Singh Bakshi: How have consumers benefited from these changes?Hon SIMON BRIDGES: The market reforms have seen an expansion in the number of retailers with a wide range of innovative offerings available to consumers. Substantial savings are available from special deals for consumers who shop around. Discounts of up to $300 are available effectively reducing a power bill by up to 14 percent for the average consumer. Consumers in their hundreds of thousands are increasingly taking the opportunity to switch providers. The What’s My Number campaign goes from strength to strength with record numbers switching last year. This is all evidence of exactly how a competitive market can and should work.Kanwaljit Singh Bakshi: What reports has he seen on an alternative approach to the electricity market?Hon SIMON BRIDGES: Oh I have seen many many reports commenting on a vastly different approach to organising the electricity market. Former Labour Minister of Energy David Butcher said that it “would largely destroy the renewables industry”. An independent report by Sapere Research Group concluded “There is a very real risk that the proposals would result in higher electricity prices”—[Interruption] Mr Speaker I would like to be heard. [Interruption]Mr SPEAKER: Order! The Minister is appealing for some chance to finish his answer. The Hon Simon Bridges—if he could with haste complete his answer.Hon SIMON BRIDGES: Well I appreciate that these answers are embarrassing for the Opposition—Mr SPEAKER: Order! Just get on with it.Hon SIMON BRIDGES: Gareth Morgan called it “classic politicking; a solution in search of a problem.” Professor Frank Wolak once loved by the Opposition said it was “largely just window dressing.” They were all commenting on the half-baked NZ Power policy that the Labour—Mr SPEAKER: Order!Gareth Hughes: I raise a point of order Mr Speaker. You know that in the Standing Orders answers are meant to be succinct. We have had three speeches from the Minister. This is question time not speech time.Mr SPEAKER: The member makes a reasonable point and that is why I stood on my feet and concluded the answer.Hon SIMON BRIDGES: I raise a point of order Mr Speaker.Mr SPEAKER: Order! Is the member seeking a point—Hon SIMON BRIDGES: I am happy to give a more succinct answer to that question.Mr SPEAKER: Order! That would not be helpful at all to the House.Brendan Horan: What has the Minister done to lower power prices in his electorate of Tauranga which currently pays 15 percent above the national average?Mr SPEAKER: The Hon Simon Bridges in so far as he has ministerial responsibility.Hon SIMON BRIDGES: I refer the member to all of my succinct answers previously but I have already made clear that we have a system in New Zealand where power prices have gone from a 72 percent increase when Labour left office to half of that where security of supply is no longer an issue despite four near-blackouts when Labour was in Government where from under-investment we have gone to $5 billion of investment in transmission—Brendan Horan: I raise a point of order Mr Speaker.Mr SPEAKER: Order! The answer now has got nothing to do with the specificity of the question.Brendan Horan: That was what I was going to ask.Mr SPEAKER: Thank you.Hon SIMON BRIDGES: I raise a point of order Mr Speaker. Those matters all go to power prices in Tauranga.Mr SPEAKER: Order! The Minister ought to go back to his office study the Standing Orders and in future give more concise answers to the questions he is asked.Justice Minister—Compliance with Cabinet Manual5.GRANT ROBERTSON (Labour—Wellington Central)to the Minister of Justice: Did she seek advice from the Cabinet Office regarding any conflict of interest arising from her husband’s directorship of Oravida Ltd; if so when and why?Hon JUDITH COLLINS (Minister of Justice):I wrote to the Cabinet Office on 31 January 2013 advising that my husband had been appointed to a number of directorships including Oravida Ltd. This letter was in addition to the annual review of Ministers’ interests.Grant Robertson: Does she believe that her actions in China while on a taxpayer-funded visit including visiting Oravida’s office and having dinner with the chairman of Oravida and a Chinese Government official gave rise to a conflict of interest?Hon JUDITH COLLINS: No. However I do believe that there is a risk of a perception of a conflict of interest and that is important.Grant Robertson: What has changed between today and yesterday when she did not think there was a perception of a conflict of interest?Hon JUDITH COLLINS: Well that particular issue was not raised with me yesterday by that member.Grant Robertson: Did she consider the conflict of interest implications before the dinner of having dinner in China with the chairman of the company that her husband is a director of and a Chinese Government official; if so what did she do about that?Hon JUDITH COLLINS: No I really did not because I viewed it as—Grant Robertson: Really?Hon JUDITH COLLINS: No I really did not because I viewed it as that I was having dinner with two close personal friends. My adviser who is also a close personal friend was with us as well as another friend. Actually in the fullness of time and in hindsight I can see why there might look like there is something there. But I am sorry I just did not even think of it.Grant Robertson: What issues were discussed at the dinner with the Chinese Government official and the chair of Oravida?Hon JUDITH COLLINS: Not an awful lot because of English language issues. Having said that—Hon Annette King: Oh so none of our negotiations—Hon JUDITH COLLINS: No no negotiations. [Interruption]Mr SPEAKER: Order! Allow the Minister to complete her answer.Hon JUDITH COLLINS: Actually we talked mostly about me saying how it would be really good if more people came to visit New Zealand because it is the best little country in the world.Grant Robertson: Is the Minister telling the House that at the dinner that she held with the Chinese Government official and the chair of Oravida Ltd there was no discussion about Oravida’s business activity?Hon JUDITH COLLINS: Yes.Grant Robertson: Did she hold any other meetings with business contacts during her trip to China that she has not yet declared?Hon JUDITH COLLINS: I have declared meetings with business contacts in China already.Hon David Parker: I raise a point of order Mr Speaker. That was not the question; the question was whether there were any other meetings.Mr SPEAKER: In the normal course of events if the member who asked the question is unsatisfied with the answer he may appeal to me.Grant Robertson: I raise a point of order Mr Speaker. I do not believe that the Minister—Mr SPEAKER: I agree with the member so I will ask him to repeat the question.Grant Robertson: Thank you. Did she hold any other meetings with business contacts during her visit to China that have not been declared?Hon JUDITH COLLINS: They have all been declared either by way of the Official Information Act or in the House.Rt Hon Winston Peters: I seek leave—can you tell that guy on the camera to get there faster.Mr SPEAKER: I cannot hear the member’s point of order.Rt Hon Winston Peters: Well he has finally got the microphone to me. Through you can I ask him to get there faster. Right?Mr SPEAKER: Would the member just raise his point of order if he wishes.Rt Hon Winston Peters: I seek leave—[Interruption]Mr SPEAKER: Order! We have now finally ascertained that this is a point of order. It will be heard in silence.Rt Hon Winston Peters: I seek leave to table an article from the Oravida website and its English translation.Mr SPEAKER: Leave is sought to table that information from the website and its translation. Is there any objection to that being done? There appears to be none. They can be tabled.Documents by leave laid on the Table of the House.Better Public Services Targets—Businesses and Interaction with Government6.Dr JIAN YANG (National)to the Minister for Economic Development: How is the Government making it easier quicker and less complicated for businesses to deal with the Government?Hon STEVEN JOYCE (Minister for Economic Development):Mr Speaker—[Interruption]Mr SPEAKER: Order! [Interruption] Order! In a minute a member from this immediate quarter of the House will be leaving the Chamber. I rose to my feet. I called for order. The barracking that continued from a number of members is completely unacceptable.Hon STEVEN JOYCE: Yesterday the Minister of Commerce Craig Foss and I formally launched the New Zealand Business Number. Businesses have been requesting a universal identifier for business for many years. Similar approaches are used in other developed countries including Australia and Singapore. [Interruption]Mr SPEAKER: Order! I now require this answer to be heard in silence. If any member interrupts this answer that member will be leaving this Chamber.Hon STEVEN JOYCE: From the top Mr Speaker?Mr SPEAKER: Yes.Hon STEVEN JOYCE: Yesterday the Minister of Commerce Craig Foss and I formally launched the New Zealand Business Number. Businesses have been requesting a universal identifier for many years. Similar approaches are used in other developed countries including Australia and Singapore. Having a single business number means that by 2016 businesses will have to provide Government with their information only once and it will be shared across Government agencies. The New Zealand Business Number is a core initiative of the Government’s Better Public Services programme for business which is working towards making it easier for business to work with Government agencies.Hon Trevor Mallard: I raise a point of order Mr Speaker. Just so that we get absolute clarity because I am sure none of us want to leave was the requirement for silence for all of the answers to the supplementary questions or just to the primary question?Mr SPEAKER: That is a very good example of why the member would be better to keep his interjections to a minimum level and to listen. The requirement was for that particular answer but I still do not want to hear or have to listen to a return to the unruly barracking that I was hearing earlier.Dr Jian Yang: What are the benefits of a New Zealand Business Number?Hon STEVEN JOYCE: Rather than having a range of numbers and identifiers for businesses to deal with the New Zealand Business Number is a single identifying number for all businesses and commercial entities in this country. Initially the Ministry of Business Innovation and Employment the Ministry for Primary Industries the Customs Service Statistics New Zealand the Inland Revenue Department ACC Callaghan Innovation and New Zealand Trade and Enterprise are committed to the New Zealand Business Number and more Government agencies will follow as it is rolled out. The New Zealand Business Number will also help simplify business-to-business transactions making it easier for businesses to invoice out and pay bills apply for credit and authenticate other businesses. Software providers are already integrating the New Zealand Business Number into their software packages.Dr Jian Yang: How will businesses obtain a New Zealand Business Number?Hon STEVEN JOYCE: Registered companies were allocated a New Zealand Business Number in December last year. We are now consulting on how and when to allocate a New Zealand Business Number to the other half of all New Zealand businesses that are not companies. Business representative groups have told us that they want it to be as easy as possible to access their New Zealand Business Number and we are investigating how they can be allocated automatically. Ultimately the New Zealand Business Number is about ensuring businesses can spend more time on their business and less time with compliance costs for the Government. We are keen to hear from businesses on whom should be allocated a number what information should be linked the rules around using it and how to ensure information is protected.Hon David Cunliffe: Was Judith Collins making it “easier quicker and less complicated” for Oravida its directors or the National Party to make money?Mr SPEAKER: In so far as there is ministerial responsibility the Hon Steven Joyce.Hon STEVEN JOYCE: New Zealand Government Ministers work all the time to enhance the prospects of New Zealand companies operating in international markets. This Government is proud of that approach. It is building exports and growing business for New Zealand companies offshore. I appreciate that the Labour Party is a thin veneer—Mr SPEAKER: Order!Hon David Cunliffe: I raise a point of order Mr Speaker. The question was specific about Minister Collins—Mr SPEAKER: Order! The question has been addressed. It was a marginal question as to whether it had ministerial responsibility.Hon David Parker: I raise a point of order Mr Speaker. I ask why you say that the question was marginal. The question was in order so why did you say it was a marginal question?Mr SPEAKER: Because I considered that it was. Otherwise I would not have said anything else. I let the question go through and I advised the Minister when answering it to address it in so far as he had ministerial responsibility. The member is free to disagree with my opinion but he still must accept it.Justice Minister—Compliance with Cabinet Manual and Prime Minister’s Response7.Rt Hon WINSTON PETERS (Leader—NZ First)to the Prime Minister: Were all his answers to questions relating to the Hon Judith Collins and Oravida checked to ensure they were true; if not why not?Rt Hon JOHN KEY (Prime Minister):Yes. It is the standard practice of my office to ensure that reasonable steps are taken to check proposed answers to both written and oral questions I might give this House.Rt Hon Winston Peters: When Judith Collins had secret meetings with a Chinese border official her policy adviser and the Chinese managing director of her husband’s company Oravida and a New Zealand diplomat and New Zealand consul; did not merely stop for a cup of tea on the way to the airport but had lunch and dinner with the company; as the Minister of Justice and the Minister for ACC held meetings on trade matters well outside her portfolios; and facilitated access for products obtained by Oravida from Sanford a company owned in part by the National Party president’s family how can he now not sack her?Rt Hon JOHN KEY: As I said earlier I think that Judith Collins has been an outstanding Minister. I think that she has got a big contribution to make for New Zealand. I think that in this particular case she put herself in the place of being accused of a perception of having a conflict of interest. I think that that is unwise but I am sure that the Minister has learnt from that.Rt Hon Winston Peters: How can he say “transparency is a good thing. As Prime Minister I have led that charge.” when page 5 of the Judith Collins Cabinet travel report was blanked out entirely when the travel report was released to me?Rt Hon JOHN KEY: I am not responsible for the blanking out of that. That comes from her office. But here is the important point: that looks awfully like the number of donors that we know gave David Cunliffe—Mr SPEAKER: Order!Rt Hon Winston Peters: What about the number of donors in the Waitematā club if that is an issue?Mr SPEAKER: Order! I am not sure where the question is. If the member wants to ask a supplementary question—Rt Hon Winston Peters: I am asking a supplementary question but he decided to put that issue on to the last answer.Mr SPEAKER: And I heard that.Rt Hon Winston Peters: How can he say as Prime Minister “transparency is a good thing. As Prime Minister I have led that charge.” when he refuses to release the Cabinet advice on this matter when that advice was never checked against the Chinese translation when he totally misled questioners when he claimed the advice was checked against the Chinese translation and when the Minister herself has so grossly failed to tell the truth over the real extent and import of her meetings involving Oravida?Rt Hon JOHN KEY: I refute many of the assertions in that question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I think I am entitled to some accountability in this House and so is the country. I have asked a serious question.Mr SPEAKER: The difficulty was that the question was excessively long and the Prime Minister has chosen to answer it the way he has just saying he does not agree with the assertions. If the member wants specific answers he should ask a specific question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I will give you an example. When he admitted last night—Mr SPEAKER: Order! Could the member just come to his question.Rt Hon Winston Peters: I am raising a point of order and it is this.Mr SPEAKER: And would he come to his point of order.Rt Hon Winston Peters: How can he say he does not agree with the assertions when at the beginning of the week he said that the translation was checked and last night he said to the public on TV that it was not?Mr SPEAKER: Because the member started his question with the words “How can he say” and then went on with a whole lot of things. The Prime Minister got to his feet and said he did not agree with the assertions. That is an answer.Rt Hon Winston Peters: I raise a point of order Mr Speaker. No I did not begin it in that way. I began with his quote so how can he dispute that?Mr SPEAKER: I have ruled that the question has been addressed.Rt Hon Winston Peters: I know what your ruling is. With respect—Mr SPEAKER: Order! The member will resume his seat. My patience with the member will not last much longer. If the member wants to leave the Chamber I can ask him to do so. If he wants to conclude his questions he should move to his supplementary question otherwise we will immediately go to the next question.Rt Hon Winston Peters: How can he say “transparency is a good thing. As Prime Minister I have led that charge.” when he refuses to release the Cabinet advice the advice was never checked against the Chinese translation then he claimed that it was and the Minister has so grossly failed to tell the truth over the full extent and import of her meetings?Rt Hon JOHN KEY: Because I stand by the view that transparency is a good thing. Successive Governments have followed the same position that advice from the Cabinet Office is not released.Rt Hon Winston Peters: Given that he sacked Richard Worth as a precedent over a clear conflict of interest much less than this one what has the Minister of Justice got on the Prime Minister that he will not sack her in circumstances and for reasons far more serious than he has used to sack others?Rt Hon JOHN KEY: The member needs to pay attention. Richard Worth was not sacked for that. If he goes back and looks at the records in 2009 when there was a potential conflict of interest I took the same approach and said that I thought the Minister was being very unwise.Transpower—Dividends Debt and Investment in National Grid8.Hon DAVID PARKER (Deputy Leader—Labour)to the Minister of Finance: What is the total amount of dividends that the Government has taken out of Transpower since 2011 and what is the current debt gearing ratio of Transpower?Hon BILL ENGLISH (Minister of Finance):Dividends paid since 2011 total $610 million. The debt gearing ratio is 70 percent.Hon David Parker: Did he write to the chair of Transpower in 2008 and 2009 demanding that the company increase its debt so as to pay out larger dividends?Hon BILL ENGLISH: I would have to go back and check the records but it is likely that that is the case.Jami-Lee Ross: How much has Transpower invested in the national grid since 2008 and why has it made this investment?Hon Trevor Mallard: Because the Labour Government told it to.Hon BILL ENGLISH: Actually I agree with the interjection. Under a programme initiated by the previous Labour Government and its last competent Minister Trevor Mallard Transpower invested over 10 years from 2008 to 2018. Its investment will total $5 billion. This represented at the start of the programme and does still now a much-needed and overdue investment in transmission assets. It has increased reliability particularly in the upper North Island and enabled growing demand in Auckland to be met from mainly renewable generation south of Auckland. These investments are being made under the independent oversight of the Commerce Commission which requires investments to be made only in the long-term interests of consumers. Although the costs of this investment pass to consumers so do the benefits in terms of an improved network fewer blackouts greater competition between generators and more use of renewable energy.Hon David Parker: Did he receive a letter from the chair of Transpower dated 19 February 2010 that stated: “A target gearing ratio of 40 to 60 percent was appropriate for a business of our type and consistent with our peer group.” and “To go above this range would be imprudent.”?Hon BILL ENGLISH: I do not recall the letter but I think the member can be assured that the Government would have taken the best commercial advice available in setting the levels of debt applicable to Transpower.Hon David Parker: I seek leave to table the letter of 19 February 2010 from Transpower to the Hon Bill English which says—Mr SPEAKER: Order! It has been described well enough. Leave is sought to table that particular letter dated 19 February 2010. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Jami-Lee Ross: What is the process for setting Transpower prices?Hon BILL ENGLISH: Transpower is now independently regulated by the Commerce Commission which sets the prices Transpower can charge. It does so under the Commerce Act. The Commerce Commission’s price-setting process does not refer to Transpower’s dividends or debt—that is it does not matter what Transpower’s level of dividends or debt is the Commerce Commission applies its own criteria regardless. So the dividends paid by Transpower do not change the prices charged by Transpower. The Commerce Commission also determines whether investments over $50 million are in the long-term interests of consumers. Overall consumers are facing increases of an average of 2.6 percent in their electricity bills to pay for Transpower and lines company investment to improve the network.Hon David Parker: Is he aware that after the Government forced Transpower to borrow more money to pay higher dividends taking it over the debt gearing ratio that the chair had warned was imprudent Moody’s downgraded Transpower’s credit rating saying that it was because of “the company’s willingness to weaken credit metrics in favour of shareholder distributions”?Hon BILL ENGLISH: I am aware that that occurred. Shareholders have the rights of owners. The point I would have thought of the Government owning Transpower is that it can set those policies. We do not rely entirely on what the chairman or the rating agency thinks. Of course that is taken into account along with other advice and also the needs of the shareholder.Hon David Parker: Has the effect of increased indebtedness and interest bills been to increase Transpower’s costs?Hon BILL ENGLISH: That is arguable. The fact—Iain Lees-Galloway: That would be a yes.Hon BILL ENGLISH: It can be argued because if it had less debt it would pay fewer dividends and higher interest—exactly a point that Opposition parties have made when arguing against the sale of the other electricity generators. It is not obvious exactly what impact it would have. What the member needs to be clear about is that the Commerce Commission does not take account of those issues or Transpower costs in determining prices. The prices are set independently by the Commerce Commission.Better Public Services Targets—Reduction in Crime and Reoffending9.JOANNE HAYES (National)to the Minister of Justice: What recent reports has she received on Justice sector results?Hon JUDITH COLLINS (Minister of Justice):Today the justice sector Ministers have released the 2013 justice sector annual report. The sector has achieved fantastic results reducing crime and reoffending. Crime in New Zealand is at a 30-year low and the justice sector is on track to meet if not exceed all its Better Public Services targets by 2017. From June 2011 to September 2013 the total crime rate has fallen by 13 percent. The violent crime rate is down by 9 percent youth crime has fallen by a whopping 22 percent and reoffending rates are down by 11.4 percent. In real terms this means over 50000 fewer crimes have been committed against victims in this period. These are great results and speak of the great teamwork across the justice sector.Joanne Hayes: What new process has been developed for accessing the justice sector statistics?Hon JUDITH COLLINS: The Ministry of Justice has today launched its new online Justice Datalab tool which will enable better understanding and communication of crime statistics and safety information across the sector. There is a lot of information publicly available online but it is not easily accessible or easily understood. The Justice Datalab will be a useful tool for students journalists and members of the public generally to research crime statistics based on many variables such as region or type of offence and create graphics showing results and trends. The launch of the Justice Datalab is part of the justice sector’s desire to make justice sector information more widely available to the public and especially the Opposition.Joanne Hayes: What is one of the key initiatives that has contributed to these excellent results?Hon JUDITH COLLINS: The justice sector’s annual report highlights the success of the Hutt Valley Innovation Project as a prime example of what can be achieved when agencies work together across the sector and bring together supporting agencies and networks. During 2013 while the project was in its trial period crime nationally dropped by 3 percent but in the Hutt Valley it dropped by a remarkable 10 percent. Since June 2011 total crime in the area has dropped by nearly 25 percent with violent crime down 20 percent and youth crime down by more than 33 percent. These are fantastic results and I want to congratulate the team responsible for this project.Child Poverty—School Food Programmes10.HONE HARAWIRA (Leader—Mana)to the Deputy Prime Minister: What more is the Government planning to do to ensure all New Zealand children have food to eat each school day in light of the recent Treasury finding that the number of children living in poverty has increased to 285000?Hon BILL ENGLISH (Deputy Prime Minister):First I would disagree with the member’s assertion about the number of children. Treasury recently announced that it had discovered an error in its high-level statistics. No one’s actual circumstances in the real world have changed one bit as a result of its statistical error. Secondly the Government believes that parents have the primary responsibility for feeding their children and I think most New Zealanders would agree with that. But we do know that some children go to school hungry through no fault of their own so the Government co-funds a breakfast in schools programme with Fonterra and Sanitarium in any school in New Zealand that wants to run it.Hone Harawira: With the Ministry of Health figures showing that an estimated 100000 kids are going to school hungry each day and the KickStart Breakfast and KidsCan websites showing that they are feeding about 20000 kids on a good day meaning that 80000 kids are still going to school hungry every day will the Government now do what 70 percent of New Zealanders are calling for and that is to initiate a comprehensive Government-funded food in schools programme in all low-decile schools?Hon BILL ENGLISH: No we will not do that and there are a couple of reasons why. One is that although the Government does set out to support those schools that believe they need a breakfast in schools programme—and as I have said it is open to any school in New Zealand that wants to run it—we do not believe that the Government should take the place of parents in feeding children. We are happy to assist where there is need and we have in place a joint venture with Fonterra and Sanitarium to achieve that. Some schools have taken that up. Some schools feel that they do not need to.Hone Harawira: With child poverty now at record levels and students from Naenae College asking “Why can’t John Key make a smart decision and feed the kids?” can you please tell the House what steps the Government is taking to ensure that the tonnes of fish being dumped regularly by Countdown will be made available to feed the tens of thousands of New Zealand kids still going to school hungry every day?Hon BILL ENGLISH: I can only repeat the answer I gave and that is that the Government believes it has struck about the right balance for assisting those children where there is genuine hardship and an inability by parents to feed them without instituting some nationwide programme which would be quite likely to undermine the sense of responsibility that families have for feeding their own children. Of course in the longer run these children are best served by the other measures the Government is taking alongside the breakfast in schools programme to ensure that when they get to school they actually achieve something and that we do not tolerate a system that says that because they are poor and hungry they cannot learn.Brendan Horan: What would the Deputy Prime Minister say if he was asked by the parents students and staff of Naenae College whether he would commit to ensuring that New Zealand’s next cohort of children receive the best possible start in their first years as recommended by the Health Committee’s unanimous report and will he commit to policies to ensure that every child has adequate nutrition at school consistent with that unanimous report?Hon BILL ENGLISH: I would say to the students of Naenae College that the Government is committed to the best start for children and is working alongside those people who care for children every single day which is actually not the Government; it is the teachers and the parents. Where those children do come to school hungry the school already now has the option of going into the breakfast in schools programme. But just as important for those children is that when they get to school they get taught under policies from a Government that has aspirations for those young New Zealanders and that believes that every single one of them can learn and a Government that is willing to hold the public education system and itself to account for assisting those young children to achieve.Brendan Horan: I raise a point of order Mr Speaker. It was a very long answer but I did ask whether he would commit—Mr SPEAKER: Order! The member can resume his seat. I listened to the question. I listened to the answer. It has been addressed.Power Prices—Increases and Prepay Schemes11.DAVID SHEARER (Labour—Mt Albert)to the Minister of Energy and Resources: Further to his reply to Oral Question No 9 yesterday will he now tell me what is his Ministry’s best estimate for the percentage increase in retail electricity prices for the period 1 February to 1 August this year for a household of four persons averaged across New Zealand?Hon SIMON BRIDGES (Minister of Energy and Resources):It is 2.4 percent.David Shearer: Given his answer yesterday that the Prime Minister’s statements not Transpower’s were correct with regard to what has driven up electricity prices has he now gone back to Transpower to ask it why it is making misleading statements in the media?Hon SIMON BRIDGES: Yesterday I said I agreed with the Prime Minister. I still do but it is also equally possible that Transpower is right as well. They could both be right.David Shearer: Does he believe it is fair that Kiwi families who are forced to go on to plans where they are required to pay for their electricity in advance should pay up to 60 percent more or about $1500 on a standard plan given that their electricity company has already pocketed the money?Hon SIMON BRIDGES: I think it is important that there are different options and flexibility for consumers and I think that is what the prepay option should be seen as. I certainly know of at least one prepay scheme that is not charging more than that company pays for power.David Shearer: Given that he agrees with the statement that New Zealanders are not paying too much for electricity will the increases he is forecasting over the next few months force him to reconsider that statement?Hon SIMON BRIDGES: No because as I have said in earlier questions we have halved the rampant increases we saw in 2008. And all the while we have seen an unprecedented investment from transmission operator Transpower of some $5 billion. We have seen the share of renewables go up. We have seen excellent security of supply. So I think all in all we have a very strong system that we should not take for granted and that could be put at risk if Labour and the Greens were in power.Mr SPEAKER: Order!Bowel Cancer Screening—Waitematā District Health Board Pilot12.CLAUDETTE HAUITI (National)to the Minister of Health: What recent announcement has the Government made on the Waitemata bowel screening pilot?Hon TONY RYALL (Minister of Health):The screening pilot at Waitematā is detecting cancers at an earlier stage than expected and we know that bowel cancers found and treated early can often be cured. Figures show that more than 129 people of the 58000 people who have completed a bowel screening test have been found to have cancer. Many of these people had no symptoms at all. The $24 million pilot will run in the Waitematā District Health Board area certainly until at least 2015.Claudette Hauiti: What are the challenges involved in extending bowel screening across New Zealand?Hon TONY RYALL: That is a very good question. The single-biggest constraint to a larger roll-out of bowel cancer screening is having the workforce to do the colonoscopies. At the moment we simply do not have the professionals to do the procedures. Colonoscopies are performed by gastroenterologists and surgeons and I am advised that to roll out national screening would mean that we need around an extra 100 of these professionals. So we do need to consider a new approach. A symposium will be held in Wellington next month to look at ways of increasing New Zealand’s colonoscopy workforce capacity and efficiency and we need to look to countries like the UK that are now using highly trained nurse endoscopists as part of their endoscopy teams.