Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeQuestions for Oral Answer — Questions to Ministers[Sitting date: 12 June 2013. Volume:691;Page:11035. Text is incorporated into the Bound Volume.]Questions to MinistersGovernment Communications Security Bureau Review of Compliance—Investigation into Leak1.GRANT ROBERTSON (Deputy Leader—Labour)to thePrime Minister: Is it his responsibility to “get to the bottom” of who leaked the Kitteridge report; if not why not?Rt Hon JOHN KEY (Prime Minister):I saw it as my responsibility to attempt to determine how the report was leaked. Therefore I asked the Chief Executive of the Department of the Prime Minister and Cabinet and the Director of the Government Communications Security Bureau to launch an inquiry into the leaking of the compliance review. That inquiry has taken place and it has resulted in an outcome. Peter Dunne has resigned as a Minister. He did not meet the inquiry’s request for information and that inquiry is now over.Grant Robertson: Given Peter Dunne’s insistence that he did not leak the Kitteridge report why did he not give him the opportunity to go on oath and clear his name?Rt Hon JOHN KEY: I am sure that he could have chosen to do that if he had wanted to. That was not actually relevant. What was relevant was that he failed to comply with the inquiry.Grant Robertson: Why is he not now prepared to do what he said he would do when he called the inquiry and get to the bottom of who leaked the Kitteridge report?Rt Hon JOHN KEY: Firstly a Minister has failed to comply with the inquiry. I think in itself that speaks volumes and people can take their own conclusions from that. Secondly to take the matter further realistically would require me to reconstitute the inquiry and to demand those emails and to do that I would need to see both sets of the emails. As I have made clear I am not prepared to do that.Grant Robertson: Why is he not prepared to let Mr Dunne go on oath?Rt Hon JOHN KEY: Because there is no need for me to do that. The inquiry has been completed and the Minister has resigned.Grant Robertson: In light of that answer can the Prime Minister tell the House who leaked the Kitteridge report?Rt Hon JOHN KEY: Conclusively no. But I think we can determine from actions or inactions of people that will speak volumes for New Zealanders to make a call on what they think is taking place. But I would remind the member that a member of his party has written to the Privileges Committee. The Speaker will have to make a determination on whether that is referred to the Privileges Committee and if it goes to the Privileges Committee then members will have to decide whether firstly they want to follow the course of action that the member has discussed and secondly whetherthey wish to subpoena the emails from both a journalist and obviously the former Minister.Grant Robertson: Did he and Mr Dunne agree on Mr Dunne’s resignation on the evening of 5 June?Rt Hon JOHN KEY: No I am not quite sure I would describe it that way. What happened on the evening of 5 June was that I made quite clear to Mr Dunne my expectation that he was to comply with the inquiry. I made it quite clear to him that in the end if he failed to do that he would have to resign. He made it clear to me on that evening that he would not be complying with the inquiry. I think that spoke for itself. We finally got his letter of resignation on Friday 6 June or 2 days later whatever that date is.Rt Hon Winston Peters: Did the Prime Minister see the review of the Government Communications Security Bureau report that Sir Bruce Ferguson former head of the Government Communications Security Bureau described as not “just sensitive” and further “It was more than that.”?Rt Hon JOHN KEY: No.Rt Hon Winston Peters: Did the person the Prime Minister appointed to do the Government Communications Security Bureau review the Secretary of the Cabinet Rebecca Kitteridge show the Prime Minister the report Sir Bruce Ferguson saw or another version described by Sir Bruce as—[Interruption ]Hon Dr Nick Smith: Just show us your emails.Rt Hon Winston Peters: Would you shut “Noddy” up over there?Mr SPEAKER: Order! Would the member—[Interruption ] Order! Would the member just ask his question. [Interruption ] Order!Rt Hon Winston Peters: All in good time. Did the person the Prime Minister appointed to do the Government Communications Security Bureau review the Secretary of the Cabinet Rebecca Kitteridge show the Prime Minister the report Sir Bruce Ferguson saw or another version described by Sir Bruce as “a sanitised version” and where he went on to say “there was lots missing.”?Rt Hon JOHN KEY: I have three points. No I did not see that report; secondly no I did not see any other version than the final version. It might be an unusual way of running an inquiry but under this Government we let people get on with the job and present the final reports. And the third point is “Noddy” has a point.Mr SPEAKER: And the third point is not helpful.Rt Hon Winston Peters: Could the Prime Minister please explain to the House and the country why was classified information in the original report then moved into the appendices of the final report and then those appendices were withheld from final publication?Rt Hon JOHN KEY: I do not know whether deliberately or by accident or for whatever reason the member seems to be confusing different lines of questioning but is the member talking about the inquiry into the potential leak or is he talking about the Government Communications Security Bureau report?Rt Hon Winston Peters: I raise a point of order Mr Speaker. I am talking in this question about—Mr SPEAKER: Order! I think the difficulty I have now got is that the Prime Minister in answering has asked a question.Rt Hon Winston Peters: That is right and I am happy to answer it.Mr SPEAKER: The easiest way forward is that I am going to invite the member to re-ask his supplementary question.Rt Hon Winston Peters: Thank you Mr Speaker; it is very gracious of you. Could the Prime Minister please explain to the House and the country why was classifiedinformation in the original Government Communications Security Bureau Kitteridge report moved into the appendices of the final report and then those appendices were withheld upon publication?Rt Hon JOHN KEY: I have two points. The first is that I think the member is basing his question on a presumption of which I do not have any knowledge or may well not be correct. My understanding of the Government Communications Security Bureau report was—Rt Hon Winston Peters: I seek to table an article that debunks the Prime Minister’s claim that I am making assumptions. It is a spokesman for the Government Communications Security Bureau who is saying this and a spokesman for the Prime Minister who is saying it—Mr SPEAKER: Order! [Interruption ] Order! What is the source of the document?Rt Hon Winston Peters: Well it is theNew Zealand Herald  page 10 today.Mr SPEAKER: Order! I am not putting that leave. Has the member got a further supplementary question?Rt Hon Winston Peters: OK. If—Hon Trevor Mallard: I raise a point of order Mr Speaker. I am sorry to interrupt the right honourable member but we do have a problem when we have the spokesperson for the Prime Minister making a statement and the Prime Minister denying the facts of that statement.Mr SPEAKER: Order! The point of order was around the tabling of a document. I have ruled that we are not tabling bits of theNew Zealand Herald .Rt Hon Winston Peters: Having regard to the report in today’sNew Zealand Heraldpage 10 under the name David Fisher it says: “A spokesman for the GSCB said the production of the final report saw it prepared for public release with classified information moved into the appendices. A spokeswoman for the Prime Minister said the only copy Mr Key ever received was released in full with classified appendices withheld.” was the report sanitised because the Secretary of the Cabinet feared there was a leak in the Intelligence and Security Committee—Mr SPEAKER: Order! Bring the question to an end; it is a very long question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. With the greatest respect the Prime Minister gets up and denies—Mr SPEAKER: Order!Rt Hon Winston Peters: —a comment from his own spokesperson—Mr SPEAKER: If the member wants to stay in the House and continue his line of questions he will not object to me when I ask him to bring his question to a conclusion. It was an excessively long supplementary question.Rt Hon Winston Peters: I raise a point of order Mr Speaker. The reason why—and I thought it would be understood—I needed to put it on the record is that we had a denial in the prior answer of its existence and an inference that I was being confused on the issue. I am quoting from the Government Communications Security Bureau and the Prime Minister.Mr SPEAKER: I have heard quite sufficient. The difficulty the member has with this point of order is that as the Prime Minister was answering the member raised a point of order and sought to table a document. So he cannot really say the Prime Minister denied it. Is there a further point of order?Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With respect Mr Speaker you—Hon Gerry Brownlee: This will take us a long way. [Interruption ]Mr SPEAKER: The point of order will be heard and it will be heard in silence.Hon Clayton Cosgrove: I’ll save a sausage roll for you Gerry.Mr SPEAKER: Order! The member knows the rules. He objected to a point of order being heard with noise from that side and then immediately started his point of order with talk about a sausage roll. That is not helpful to the House and the member Clayton Cosgrove has to learn to behave himself in this House. Does the member still want to raise a point of order? [Interruption ] We will listen to the point of order in silence.Hon Clayton Cosgrove: My first shorter point of order—and I accept your ruling and admonishment completely—Mr SPEAKER: Would the member just get on with it.Hon Clayton Cosgrove: —is that I would just like some consistency when people are interjecting on points of order.Mr SPEAKER: That is challenging—Hon Clayton Cosgrove: My second point—Mr SPEAKER: Sit down please. That is now challenging me and suggesting that I am biased. That is a very serious offence. [Interruption ] Well the member is asking for consistency; I read it no other way. And if the member continues with those sorts of points of order he will not have the benefit of seeing out question time.Hon Clayton Cosgrove: I raise a point of order Mr Speaker.Mr SPEAKER: And this is a fresh point of order?Hon Clayton Cosgrove: Indeed it is.Mr SPEAKER: I am looking forward to it.Hon Clayton Cosgrove: As am I. My second point of order is on the length of answers and I seek your advice. You have as is your right with answers to questions allowed significantly long answers and that is as it should be. I would simply ask for your ruling in terms of what length is permissible for a question. I accept that Mr Peters’ question was slightly longer but you have allowed lengthy answers from Ministers in the past.Mr SPEAKER: Can I just ask the member to look at Standing Order 377.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Rt Hon JOHN KEY: I raise a point of order Mr Speaker.Mr SPEAKER: I have a point of order first of all from the Rt Hon Winston Peters.Rt Hon JOHN KEY: That is the point; I have not answered your question.Mr SPEAKER: Order! I have a point of order from the Rt Hon Winston Peters.Rt Hon Winston Peters: I asked a question of the Prime Minister and I am waiting for an answer.Mr SPEAKER: Yes that is true—and I presume that was the Prime Minister’s point of order so we will now hear from the Prime Minister.Rt Hon JOHN KEY: The answer to the last part of the question was no. It is also important to understand that the point I was making was quite correct. My office was asked about whether we saw multiple copies of the Kitteridge report. The answer to that is absolutely no. We saw the final report only. The point the Government Communications Security Bureau spokesperson was making which the member was trying to conflate was actually about why information was moved from one part of the report to the other. I was not advised about that but the assumption I have made—and it would be self-explanatory—is that one report the report itself was going to be fully released into the public domain. There was obviously confidential and sensitive information held in the appendices which were never going to be released.Rt Hon Winston Peters: When the Prime Minister says he was not advised does that include any member of his staff who was working with him on this matter; if so when the Prime Minister spoke to Mr Dunne who reportedly said “He couldn’t explain it.” what was the “it” he could not explain?Rt Hon JOHN KEY: I cannot answer for Mr Dunne. That is his quote.Rt Hon Winston Peters: You could ask him.Rt Hon JOHN KEY: Well that is his quote and no I cannot answer for Mr Dunne.Grant Robertson: Did any member of staff in his office or from the Department of the Prime Minister and Cabinet update him on David Henry’s progress in completing the inquiry before 5 June?Rt Hon JOHN KEY: I was not kept up to date with the inquiry from Mr Henry or Mr Kibblewhite. Mr Kibblewhite advised my chief of staff that there was an ongoing process and that things were taking some time—Grant Robertson: And he didn’t mention that to you?Rt Hon JOHN KEY: Well no I did not say that. I said there was an ongoing process that was going on. I did not see any final reports until the last report that came along.Grant Robertson: I raise a point of order Mr Speaker. My question asked whether any staff member in his office or from the Department of the Prime Minister and Cabinet updated him on David Henry’s progress. The Prime Minister did not answer that question. He described a conversation between Mr Kibblewhite and—Mr SPEAKER: Is the Prime Minister prepared to answer that question more specifically?Rt Hon JOHN KEY: What I made clear was Mr Kibblewhite kept Mr Eagleson broadly updated. Mr Eagleson made it clear to me it would take some time longer and there were issues of Ministers having to comply. I was aware of that issue and I made it clear to Mr Eagleson—Grant Robertson: But you got up in this House and you pretended nothing was wrong.Rt Hon JOHN KEY: You did not ask me when exactly that question took place.Intelligence Agencies—Contracts with Palantir and Use of Data-mining Software2.Dr RUSSEL NORMAN (Co-Leader—Green)to thePrime Minister: What intelligence agencies that he is responsible for have contracts with Palantir; if so what is the nature of those contracts?Rt Hon JOHN KEY (Prime Minister):It is not my practice to discuss the operational capabilities or contracts of the New Zealand intelligence agencies. I do not believe it is in the public interest to do so.Dr Russel Norman: Does intelligence data-mining company Palantir have any contracts with other New Zealand Government agencies or departments such as the Police or Defence Force?Rt Hon JOHN KEY: In terms of the intelligence agencies it is not my practice to talk about who they have contracts with and who they do not. In terms of the Police or others I am not in a position to answer that question.Dr Russel Norman: Will he allow Palantir to embed one of its analysts in his Government given that the company is advertising just such an embedded position?Rt Hon JOHN KEY: What takes place in terms of the operational matters of intelligence agencies and any company they may contract with is a matter for them and they would not reference that to me.Dr Russel Norman: I seek leave to table the job advert from Palantir for an embedded analyst in Government New Zealand—Mr SPEAKER: What is the source of the document please?Dr Russel Norman: It is a job advertisement from a company called Palantir—Mr SPEAKER: Yes but where has the member sourced the advert from?Dr Russel Norman: The document is from May 2013 and it was printed off the Palantir careers website.Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is.Dr Russel Norman: Given that it is obvious his Government is using Palantir will he cut Government ties with the company if it is proven to be involved in violating the privacy of New Zealanders through the PRISM spy system?Rt Hon JOHN KEY: As I have said on numerous occasions it is not my policy—nor has it been any other Prime Minister’s policy—to talk about the operational matters of the Government Communications Security Bureau or SIS. What I can reconfirm for the member though is the same point I made yesterday: I am confident on the legal advice that I have received from my agencies that they act within the law at all times and there have not been any occasions where the Government Communications Security Bureau has advised me that it has sought to circumvent the law.Dr Russel Norman: Is his Government using Palantir to replicate the US PRISM spy system so that it can more intensely spy into every aspect of New Zealanders’ online activity?Rt Hon JOHN KEY: The member is basing his question on a hypothetical assumption. As I said I am not in a position to comment about what capability our intelligence agencies have or do not have. But what I can say though is that the Government Communications Security Bureau and the SIS have very clear rules under which circumstances they can gather information about New Zealanders. Those rules require not least of all me as the Minister in charge to sign the warrant. That warrant has to be recommended and supported by the Commissioner of Security Warrants. It is a very detailed and significant process. The member knows that and the reason he shakes his head in answer to those questions is that he is trying to delude members of the public. He sits on the Intelligence and Security Committee he knows what goes on and if he wants to carry on the act he is free to do so but I do not think he will convince very many New Zealanders.Dr Russel Norman: How many times has he met or spoken to billionaire Peter Thiel Palantir’s largest investor and on what dates?Rt Hon JOHN KEY: I do not have those details with me but if the member wants to put that down in writing my office will be able to supply it to him.Dr Russel Norman: In his talks with billionaire Palantir co-founder Peter Thiel did they ever discuss the opportunities for intelligence-related work in New Zealand?Rt Hon JOHN KEY: I have made it clear yesterday that I have never spoken to Peter Thiel about Palantir.Dr Russel Norman: I raise a point of order Mr Speaker. That is an interesting answer from the Prime Minister but my question was more general than that. It was about whether they ever discussed opportunities for intelligence-related work in New Zealand.Mr SPEAKER: And the Prime Minister adequately addressed that question.Dr Russel Norman: The Prime Minister discussed—Mr SPEAKER: Order! [Interruption ] Order! I have ruled that the Prime Minister adequately addressed that question. Does the member—Dr Russel Norman: I raise a point of order Mr Speaker. Just for clarity—Mr SPEAKER: No the member—[Interruption ] Order! The member is now disputing a ruling I have given. The member has an additional—[Interruption ] Order! The member has an additional supplementary question if he wishes to use it.Dr Russel Norman: How would he describe his relationship with Peter Thiel; is he someone he barely knows like Ian Fletcher who turned out to be his friend who he eats breakfast with and whom he called and offered a Government Communications Security Bureau top job to and is this another example of the crony Government looking after itsmates at the expense of New Zealanders’ right to live free from constant Government surveillance?Mr SPEAKER: Order! The Prime Minister can choose to answer that if he so wishes.Rt Hon JOHN KEY: I would describe my relationship as cordial. I have met Mr Thiel on a few occasions—I would have to go to check exactly as I said if the member wants to ask me. I have never had a discussion with Mr Thiel about Palantir or about intelligence matters. He is someone who happens to live a certain period of time in New Zealand. He was extremely generous after the Christchurch earthquake as is a matter of record and just because “Noddy” over there does not seem to—Mr SPEAKER: Order! I acknowledge it was a very political question.Dr Russel Norman: I raise a point of order Mr Speaker.Hon Trevor Mallard: I raise a point of order Mr Speaker.Mr SPEAKER: Order! If the member is calling a point of order I will hear Dr Russel Norman.Dr Russel Norman: I take offence at that comment. I ask him to withdraw and apologise.Mr SPEAKER: And many on this side of the House would have taken offence at the question that was asked by the member.Hon Trevor Mallard: I raise a point of order Mr Speaker. [Interruption ]Mr SPEAKER: Order! This is a point of order.Hon Trevor Mallard: If members took offence at the question they should have taken a point of order. To describe members of this House as “Noddy” is just not on.Mr SPEAKER: Order! And I have ruled on the matter. In hindsight I would have been better probably to rule the question out of order. The member got as good as he gave on that occasion.Dr Russel Norman: I raise a point of order Mr Speaker.Mr SPEAKER: Order! If this is questioning a decision I have made I am not prepared to entertain it. If it is a—[Interruption ] Order! If it is a fresh point of order I am certainly happy to entertain it.Dr Russel Norman: Sure a fresh point of order. In an earlier supplementary question I asked the Prime Minister how many times—Mr SPEAKER: Order! No. The member is now starting to dispute a ruling that I have given.Dr Russel Norman: No I am not. It has got nothing to do with your ruling.Mr SPEAKER: The member had better not be.Dr Russel Norman: The Prime Minister gave an answer to that question on how many times he had met Peter Thiel by saying he did not know and he would have to look it up which is fair enough. It was a specific question. He now in answer to supplementary question No. 7 has said: “Well actually I did meet him”—Mr SPEAKER: Order! I have heard quite sufficient. The member now is using the point of order system because he does not agree with the answer from the Prime Minister. That in itself will lead to disorder.Clare Curran: Did the Government Communications Security Bureau—[Interruption ]Mr SPEAKER: Order! [Interruption ] Order! Would Clare Curran please ask her supplementary question.Clare Curran: Did the Government Communications Security Bureau receive information from offshore intelligence partners about Kim Dotcom’s activities in New Zealand during its spying operation in December 2011?Rt Hon JOHN KEY: I think that question is considerably wide of the initial question and I am not in a position to answer it. I do not have those details with me in the House.Clare Curran: Point of order. I am happy to rephrase that question.Mr SPEAKER: No. Order! The Prime Minister has answered it quite adequately. He said that he did not have those details in the House.Clare Curran: I seek leave to table selected pages from the affidavits supplied in the Kim Dotcom case providing selected data that sets out the Federal Bureau of Investigation as being the source—Mr SPEAKER: Order! Before I accept that I just want some advice from the Clerk as to whether that is now a matter before the courts. Leave is sought to table selected pages of the affidavit. Is there any objection to that being tabled? Yes there is.Financial Systems—Stability3.Hon TAU HENARE (National)to theMinister of Finance: What recent steps has the Government taken to help protect the economy and financial system from damaging boom and bust credit cycles?Hon BILL ENGLISH (Minister of Finance):Last month I signed a memorandum of understanding with the Reserve Bank Governor on measures aimed at providing extra security to the financial system. Banks already have to meet increased capital and liquidity requirements that make them safer. The memorandum provides four new measures for the Reserve Bank to apply if necessary. These measures allow the Reserve Bank to require registered banks to hold additional capital on their balance sheets as a buffer during an economy-wide credit boom; secondly to hold additional capital against loans in specific sectors if risks emerge; thirdly to adjust their funding ratios to use more stable sources of funding to avoid short-term funding shortages; and finally to apply quantitative restrictions on the share of high loan-to-value ratio loans in the housing sector.Hon Tau Henare: How will these extra capital and liquidity tools help to promote stability in the financial system?Hon BILL ENGLISH: Well it is important to have stability in the financial system because we have seen the effect on economies around the developed world when financial systems become unstable. These tools will not necessarily be the answer to all problems but they will certainly help at the margins. They will increase the resilience of the financial system during periods of rapid credit growth by requiring banks to make themselves safer and stronger in case excessive growth in credit and asset prices stops and those prices fall. Without these tools banks could be put at risk.Hon Tau Henare: Why is it important that the Government guards against excessive credit and house price cycles?Hon BILL ENGLISH: One reason is to avoid recessions of the nature that New Zealand had. We had an excessive credit and house price cycle through the 2000s which meant that by 2008 before the global financial crisis New Zealand was in recession. We have seen also around the world that where house prices rise rapidly on the back of fast credit growth this creates problems for interest rates and exchange rates on the way up through the cycle. Then when the house prices crash as they inevitably do that can create real problems for homeowners and for the wider economy.Hon David Parker: Has the Minister seen the report from the OECD this month that warns that house prices in New Zealand are overheating and that a capital gains tax as used in almost every other OECD country is very important to help deal with this imbalance?Hon BILL ENGLISH: I have seen that advice and do not necessarily agree with it. Economies that are struggling either through low growth or because of excessive housing prices generally had capital gains taxes and it has not prevented the kind of devastation that housing bubbles cause when they burst. We believe that a more direct approach is to dampen if not prevent the capital gain in the first place and that is by ensuring that there is more flexibility in the supply of housing so that when there are more people willing to pay more for houses more houses get built more quickly.Hon Tau Henare: Can the Minister tell us what are some of the risks for homeowners in the current environment of low interest rates and rising house prices?Hon BILL ENGLISH: I am sure banks are advising homeowners to ensure that they could afford to service substantial loans if or when interest rates rise. Whether they do is a matter for the Reserve Bank Governor. For instance some banks are currently offering shorter-term fixed mortgages at record low interest rates below 5 percent. Floating rate mortgages are currently at around 50-year lows. Homeowners are being advised by banks that they should not believe that this is a permanent state of affairs. It is possible that at some stage in the next few years interest rates will start rising. If house prices continue to rise very rapidly it is possible that interest rates could follow the track of the last housing cycle where first mortgage rates reached 10 percent at their peak.Export Sector—Performance4.Hon DAVID PARKER (Labour)to theMinister of Finance: Does he stand by his statement “There’s going to be a lot of jobs a high level of activity for the next three or four years that’s picking up speed now. But it does divert us a bit from the need to rebalance the economy and that is get our capital and our people and the export earnings sector”; if so how many jobs will be created in the export sector over the next three or four years?Hon BILL ENGLISH (Minister of Finance):Yes I do stand by my statement which was following on from a statement I made where I directly attributed that level of activity to the Canterbury rebuild. The Canterbury rebuild will cost $40 billion and most of this activity will be in the non-tradable sector. The necessity of rebuilding Christchurch is redirecting capital and people who would otherwise be available to an increasingly resilient and competitive export sector. This will put some pressure on the share of the economy that is in the tradable sector. On the second part of the question I am advised by Treasury that there is no forecast of export jobs. What I can tell the member is that exports have increased 16 percent in the last 3 years and we are looking forward to continued expansion of the export sector after it went into recession in early 2008.Hon David Parker: Is his own department forecasting exports to decline in value by 2.8 percent in the year to March 2014?Hon BILL ENGLISH: That may well be the figure that Treasury is using which I understand is driven by a view about declining terms of trade. Treasury has expressed I think correctly a concern that the persistent high level of the dollar up until about 3 weeks ago has made it difficult for exporters to be profitable and therefore to be able to reinvest in the expansion of the export sector. However in the face of those difficulties our exporters have proven to be remarkably resilient. They have continued to grow exports. It is the Government’s view that it would be very helpful to the export sector if the currency declined somewhat in value.Hon David Parker: Is it also correct that under current settings excluding primary processing manufactured exports have declined by 17 percent in real terms since 2008 with thousands of job losses?Hon Steven Joyce: So we’re trying to exclude areas that have grown as always.Hon BILL ENGLISH: That is right—as my colleague Steven Joyce has pointed out if you exclude the areas of manufacturing that have grown then you are probably going to show that the other ones did not grow. [Interruption ]Mr SPEAKER: Order! I have called the Hon David Parker for a supplementary question.Hon David Parker: Why is the Minister so sanguine about a forecast of 2.8 percent overall export decline in the year ending March 2014 on the back of a 17 percent decline in manufacturing exports since 2008 outside the primary sector?Hon BILL ENGLISH: It is not a matter of being sanguine; it is a matter of sticking to a plan that we believe will support our resilient export sector when it has been through a difficult time. It is not a surprise that when the currency has been at record highs some exporters have found that too hard including in the manufacturing sector. Others have been able to adapt to it or change their markets so the sector as a whole has grown. The Government’s Business Growth Agenda is a series of up to 300 initiatives all designed to support our businesses to make the decision to invest and employ. In the context of a difficult global economy a recession—the largest in a generation—and the damage wreaked by the last Labour Government that sector is doing pretty well.Hon David Parker: Does he agree that the flat projections for exports some real problems in some sub-sectors of exports like manufactured exports outside of primary processing and the fact that the current account deficit is projected by his department to get worse every year until 2017 show that he has failed to rebalance the economy?Hon BILL ENGLISH: No. If the member is going to insist on debating the current account deficit today then despite all the difficulties I have pointed out the current account deficit stands at half the level it was for the final term of the Labour Government when it enjoyed the best economic circumstances in a generation. Today the current account deficit is half the level than when it reached record levels of 8.6 percent. The previous Labour Government could not have done a worse job than it did.Business Research and Development—Primary Growth Partnership and Other Investment5.IAN McKELVIE (National—Rangitīkei)to theMinister of Science and Innovation: How is the Primary Growth Partnership helping to boost productivity in New Zealand’s primary sector?Hon STEVEN JOYCE (Minister of Science and Innovation):On Monday night I was privileged to attend a function alongside the Minister for Primary Industries to mark 3 years of the Primary Growth Partnership which has so far committed $658 million of combined public and private funding for 13 different projects designed to boost productivity in New Zealand’s farming forestry fisheries and food sectors. The potential benefit to the wider economy from these projects is over $7 billion per year by 2025. The Primary Growth Partnership is a key part of the Government’s Business Growth Agenda. These investments in productivity will play a big part in achieving the Government’s goal of doubling primary exports by 2025 as well as leading to improved environmental outcomes.Ian McKelvie: What are some examples of projects funded by the Primary Growth Partnership?Hon STEVEN JOYCE: There are many but let me focus on just two for the House. The Primary Growth Partnership is funding a $171 million programme over 7 years aimed at transforming the dairy value chain by creating new products increasing on-farm productivity reducing environmental impacts and improving agricultural education. The Primary Growth Partnership is also funding a programme along with Aotearoa Fisheries Sanford and the Sealord Group to develop a new wild fishharvesting technology that will result in more precise catches allowing fish to be landed fresher in better condition and of higher value. Both of these projects have the potential to significantly improve productivity in the dairy and fishing industries.Ian McKelvie: How much is the Government investing in business-related science innovation and research?Hon STEVEN JOYCE: Science and innovation are key drivers of economic growth and international competitiveness. That is why the Government is now investing hundreds of millions of dollars annually in co-funding business research and development across all sectors including food and beverage manufacturing digital technologies health technologies high-tech manufacturing and agricultural technologies. Overall the Government’s total cross-portfolio funding for science innovation and research has increased 28 percent over the last 4 years up to $1.36 billion in 2013-14.Child Poverty—Measurement6.JACINDA ARDERN (Labour)to theMinister of Finance: Does he stand by his statement “our priority of course is to focus on those in persistent deprivation”; if not why not?Hon BILL ENGLISH (Minister of Finance):Yes and I also stand by the accompanying statement I made in response to this parliamentary question asked by the Greens almost 12 months ago so it is good that the member has got round to it. The rest of the—Mr SPEAKER: Order! Would the member just answer the question without that.Hon BILL ENGLISH: The rest of my statement was: “Through one of the more significant recessions we have seen in many decades the Government has protected the income levels of those in our lowest-income households. … The Government is focusing on mobility—that in fact a lot of families who at some times and in some periods experience low incomes actually get out of that situation.”Jacinda Ardern: If his priority is persistent deprivation why after another 12 months will he not measure it or even set a target to reduce it as recommended by the Expert Advisory Group on Solutions to Child Poverty and as set out in my member’s bill on child poverty?Hon BILL ENGLISH: Because measuring it is not fixing it. I think that is why. There are many measures of incomes. We have no shortage of measures of income. The fact is that what those measures show is that income is a very poor proxy for deprivation. So the Government is focusing on the clear indicators of deprivation such as rheumatic fever such as housing overcrowding and such as high levels of interaction between particular families and social services. We are endeavouring to do a harder job than measure income; we are endeavouring to get results from the large amounts of Government money we spend on our most vulnerable most dysfunctional families.Jacinda Ardern: Does he agree with Hekia Parata’s use of a quote yesterday that “Without data you are just another person with an opinion.”; if so what does that say about his refusal to measure child poverty across income material deprivation relative poverty and persistence of poverty?Hon BILL ENGLISH: There is more data on these issues than anyone knows what to do with. What is lacking is a strong focus on action to deal with the problems. Of course we have a series of measurements around crime levels and around child abuse levels for vulnerable children and we will be publishing progress on those measures within a month or so. We have introduced some new issues to focus on recently with overcrowding and rheumatic fever.Jacinda Ardern: Does he disagree then with Treasury’s concern that “There is currently a gap in the monitoring of the material living standards of New Zealand children”; if so why?Hon BILL ENGLISH: Yes I do disagree with that. I do not think there is any lack of analysis. In fact for too long central government has spent tens of millions of dollars measuring problems as a substitute for trying to solve them. Trying to solve them means getting out of the office block and into the street knocking on the door going into the family home and understanding the complexity of difficult issues and pressures that make those families’ lives so hard. That is what we are focusing our efforts on.Budget 2013—Support for Low-income Families7.Peseta SAM LOTU-IIGA (National—Maungakiekie)to theMinister for Social Development: What initiatives in Budget 2013 provide further support for families on low incomes?Hon PAULA BENNETT (Minister for Social Development):A lot. There are a number of initiatives that are actually addressing support for families on low incomes. We have a strong record over the last 4½ years of targeting assistance to those who really need support the most. In Budget 2013 we announced a vast programme of initiatives and policies targeted to vulnerable and low-income families and particularly those with children. These initiatives will target them by providing an extra $1.5 million for budgeting services partnering the community to establish microfinancing loans and providing better value by procuring whiteware.Peseta Sam Lotu-Iiga: How will the Government’s microfinancing initiative make a difference for families?Hon PAULA BENNETT: A real issue of concern within our communities is the financial difficulties some families get into resulting in unsustainably high debt. We are looking into a microfinancing initiative where community-based organisations provide low or no interest loans to people with debt or who cannot access affordable credit and we are also looking at whether or not we consolidate the loans of those who have been in the hands of loan sharks.Peseta Sam Lotu-Iiga: How will the whiteware procurement initiative provide better value for both beneficiaries and taxpayers?Hon PAULA BENNETT: What we currently see is that taxpayers pay out about $10.6 million a year on whiteware for beneficiaries. That of course has to be paid back by them. More often than not they buy a second-hand poor-quality machine. It breaks down relatively quickly. They are then stuck in a situation of having to either get it repaired or get another one while they are still paying off the first one. This procurement means they can get a new machine for probably around the same cost that gives them a warranty and certainty that at least what they have got is of a high quality.Jacinda Ardern: Is it academic to measure a problem and set a target to reduce it as she has claimed via interjection in question time today; if so has she told that to her colleague Tony Ryall or to Hekia Parata or in fact to all of her colleagues who are content to measure and target everything related to poverty but not poverty itself?Hon PAULA BENNETT: The member misrepresents as usual. So what the situation is is that I am not debating whether we should have a measurement; I am saying we have got plenty of measures and the measures are there. I am saying actually the country does not need an academic argument on which measure one chooses; what it needs is action. What it needs are the real consequences that are happening in the streets and that is what this Government is addressing through the Budget initiatives that we have seen and the work that has been going on for the last 4½ years.Medical Equipment Subsidised—Glucose MetersBRENDAN HORAN (Independent):To the Minister of Health has MedSafe received users medical device incident reports in respect of the CareSens blood glucose meters; if so how many reports were received in 2012 and in the 2013 year-to-date?Rt Hon WINSTON PETERS (Leader—NZ First):I raise a point of order Mr Speaker. When a question is put down in this form for an oral question on any given day that question must be repeated exactly how it is written.Mr SPEAKER: I felt it was repeated—Rt Hon Winston Peters: I felt it was not because he added in the word “the” before CareSens blood glucose.Mr SPEAKER: Then on that basis—[Interruption ] Order! On that basis I will ask Brendan Horan to please repeat the question. I did not pick up that minor iteration.8.BRENDAN HORAN (Independent)to theMinister of Health: Has MedSafe received users medical device incident reports in respect of CareSens blood glucose meters; if so how many reports were received in 2012 and in 2013 year-to-date?Hon TONY RYALL (Minister of Health):I am advised that of the 90000 patients who have switched to CareSens blood glucose meters which includes 93 percent of eligible patients for a fully funded meter Medsafe has received 14 incident reports: three in 2012 and 11 in the 2013 year to date. For 12 of these reports no further action has been taken I am advised by Medsafe. Two of the reports remain open while further information is being requested. Pharmac has worked closely with the specialist diabetes subcommittee of the Pharmacology and Therapeutics Advisory Committee to obtain clinical advice on the CareSens meters. Their experts advise that the meters are clinically acceptable. All three of the CareSens meters have been tested in New Zealand for accuracy and precision. Each meter has also met regulatory standards required in the United States and Europe.Brendan Horan: Given that the reports are exponentially increasing is the Minister confident that when diabetics either submit incident reports or email the diabetesfeedback@pharmac.govt.nz email address regarding CareSens they receive responses that are clinically appropriate and focused on patient safety rather than bureaucratic box-ticking?Hon TONY RYALL: There have been 14 incident reports: three in 2012 11 in 2013. I suppose you could describe that as an exponential increase but there have been 90000 patients who have switched to the meters. Managing diabetes is an incredibly personal thing and of course many people do not like changing the devices that they have used. But the devices have been approved as safe by Pharmac’s advisers and all concerns and complaints are being dealt with.Brendan Horan: Is the Minister willing to work cooperatively with people including this member of Parliament to ensure that his officials Medsafe and Pharmac work with diabetics who have CareSens problems and to ensure that the focus is on patients’ safety and welfare?Hon TONY RYALL: I think it has been made very clear to Pharmac and everybody who is involved in this that patient safety is of the utmost priority. That is the reason why we have a number of systems such as the medical device incident reports so that complaints can be dealt with and investigated.Brendan Horan: I seek leave to table an email sent from the diabetesfeedback@pharmacy.govt.nz email account highlighting that if the meter is incorrect because it is too cold to warm it up under the armpit.Mr SPEAKER: Leave is sought to table that email. Is there any objection? There appears to be none. It can be tabled.Document by leave laid on the Table of the House.Hawke’s Bay Water Management—Ruataniwha Scheme9.EUGENIE SAGE (Green)to theMinister for Primary Industries: Is the Ruataniwha irrigation scheme one of the schemes he believes will have “real benefits for the environment”?Hon STEVEN JOYCE (Minister for Economic Development)on behalf of theMinister for Primary Industries: Yes.Eugenie Sage: If the Ruataniwha will have real benefits for the environment why is the Hawke’s Bay Regional Council promoting a plan change for the scheme that would increase allowable levels of nitrate in the Tukituki catchment by more than 1000 percent?Hon STEVEN JOYCE: I do not have all that information to hand. The reason that the Minister for Primary Industries is in favour of the environmental benefits of the Ruataniwha scheme is that it will return the summer flows in the Tukituki River to close to natural summer flows. It will provide enhanced recreational opportunities primarily with the reservoir. It will create a safe habitat for threatened species within the reservoir and it will reduce pressure on groundwater extraction because it anticipates replacing existing groundwater extraction with a combination of run of river and stored water. So improved summer flows and flushing flows will assist the management of nuisance weed and algae growth.Eugenie Sage: How does building a dam which would block fish passage and prevent threatened species such as long-finned eel from migrating provide real benefits for the environment and improve habitats for fish as the Minister for Primary Industries claimed in a press statement about irrigation in May?Hon STEVEN JOYCE: Again I think I probably answered that to some degree in the previous supplementary question in the examples I gave where I stated that it would improve the environmental benefits for the river and for the catchment. These examples were of course the returning of the summer flows close to natural levels enhanced recreational opportunities creation of a safe habitat for threatened species and reducing pressure on groundwater extraction. That last one is probably one of the most important ones. I would have thought that the Greens rather than just going through their standard response of “Don’t do anything.” would probably consider the environmental benefits of this project.Hon Chris Tremain: What reports has the Minister seen in opposition to the Ruataniwha dam?Hon STEVEN JOYCE: Well I think we can take it as read that the Greens are opposed to it. The interesting question is other people. I saw a news article from last month where a spokesperson from a particular organisation was quoted as saying that that organisation is against the dam and would not support the dam or indeed any future water storage schemes. Unfortunately there was another article from another spokesperson for that same organisation from October last year who is quoted as saying that the dam will potentially provide a big economic boost to the region. So it is little bit confusing. Of course that organisation is the Labour Party. But it is not the first time. Of course they opposed the Skycity convention centre but three of their members were actually in the Skycity box last weekend.Mr SPEAKER: Order! Supplementary question Eugenie Sage—[Interruption ] Members have had their bit of fun. I have now called Eugenie Sage for a supplementary question.Eugenie Sage: Does he consider—Hon STEVEN JOYCE: I raise a point of order Mr Speaker. I made an error in my previous answer. Apparently the number is four.Mr SPEAKER: Order! If the member wants to seek to change an answer there is a more appropriate way to do it.Eugenie Sage: Does he consider that the Hawke’s Bay Regional Council has received good advice on environmental and water-quality issues associated with the Ruataniwha scheme when the mayors of Napier and Hastings have said there is a risk around independent advice being provided to the council when the council has the same chief executive officer as the Hawke’s Bay Regional Investment Company which is promoting the dam scheme?Hon STEVEN JOYCE: I would note for the member that the consents and the application for consents for that particular project are actually being called in and heard by the Environmental Protection Authority which means it will not be a matter for consideration by any of the councils in the region. It will actually be dealt with by the independent board of inquiry which is probably the best place for it to be.Eugenie Sage: I seek leave to table a letter from the Mayor of Napier City Council Barbara Arnott and the Mayor of Hastings District Council Lawrence Yule to the Chair of the Hawke’s Bay Regional Council Fenton Wilson about their issues with the—Mr SPEAKER: Leave is sought to table that letter. Is there any objection? There is objection.Solid Energy—Deloitte Report on Crown Monitoring and GovernanceHon CLAYTON COSGROVE (Labour):My question is to the Minister for State Owned Enterprises and asks: does he agree with the finding of the Deloitte report on Treasury’s monitoring of Solid Energy that—Hon Steven Joyce: How was the beer and the sausage rolls?Hon Gerry Brownlee: Good old trotters.Hon CLAYTON COSGROVE: Well you did not get an invitation because there was not enough tucker.Mr SPEAKER: Order! That is what happens when we get interjections when a member is attempting to read out a question. Would the member please start again.10.Hon CLAYTON COSGROVE (Labour)to theMinister for State Owned Enterprises: Does he agree with the finding of the Deloitte report on the Treasury monitoring of Solid Energy that “The removal/refreshment of a Board by Ministers is a crude lever and has a high threshold for use. Notwithstanding this with the benefit of hindsight it is evident such a move may have been warranted”; if not why not?Hon TONY RYALL (Minister for State Owned Enterprises):With the benefit of hindsight yes. As is pointed out in the Deloitte report this would have ideally happened in 2008 when the previous Government could have rejected the company’s statement of corporate intent. I think at that time though the then Labour Government was behind the eight ball trying to minimise its looming defeat. It is worth understanding that the company’s collapse is due to two main reasons: its investment in non-core enterprises that ultimately proved unsuccessful and a 40 percent collapse in world coal prices in the middle of 2012.Hon Clayton Cosgrove: Does his Government take any responsibility for Solid Energy’s bank lenders having “a view that SOEs were backed by an ‘implicit’ government guarantee” as stated on page 52 of the Deloitte report given that in February of this year the finance Minister said in regard to Solid Energy: “We will not let it go into receivership.”?Hon TONY RYALL: It is absolutely clear that there is no guarantee from the Government to the lenders of Solid Energy. Those lenders made their decisions based on the information that the company made available to them and their understanding of the coal industry and the investments made and they must take responsibility for the lending that they made.Hon Clayton Cosgrove: Which of Solid Energy’s five major bank lenders—ANZ ASB BNZ Westpac and the Bank of Tokyo—had a view that the State-owned enterprise was backed “by an ‘implicit’ government guarantee” as found by the Deloitte report?Hon TONY RYALL: That would be a question that would be better put to Deloitte in another format—Hon Clayton Cosgrove: I raise a point of order Mr Speaker. That was a very simple and precise question. It may be the Minister’s opinion that it should go elsewhere but he is the Minister for State Owned Enterprises.Mr SPEAKER: The difficulty with the question is it asked which of the lenders and then it quoted that the banks had understood they had the implicit guarantee. Surely that is a question that only the banks could answer. I cannot see how the Minister could possibly answer it.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With respect the Deloitte report was about the monitoring of Treasury and the involvement of the Minister of Finance and the Minister for State Owned Enterprises in that. It was a report about a Government department and their monitoring. It was not about the banks’ view; it was about statements that were made by a Minister which the banks took account of.Mr SPEAKER: The difficulty is that they may well be so but the member’s question was which of the banks took an implicit guarantee. But if the Minister wants to add further I invite him to do so. [Interruption ] No he does not. Does the member have a further supplementary question?Hon Clayton Cosgrove: Given that all of Solid Energy’s major bank lenders—ANZ ASB BNZ Westpac and the Bank of Tokyo—have interests in State-owned enterprises and proposed mixed-ownership model companies can he rule out there being any flow-on effects from Solid Energy’s dire financial position such as lending constraints or higher lending costs as a result of the realisation that State-owned enterprises and mixed-ownership model companies are not backed by an implicit Government guarantee?Hon TONY RYALL: I think that matter is hypothetical. It is an evident fact that the State-owned enterprises are not backed by a Government guarantee. What lenders have to look at is the success or otherwise of the businesses and their balance sheets. In fact banks may have drawn opinions similar to this opinion that was given to Mr Palmer and Dr Elder and it is a quote: “you’re bringing private sector commercial disciplines and expertise obviously you must be because you’re performing well”. That is a quote that the member opposite made to Dr Elder in April 2012.Courts and Corrections Facilities—Audiovisual Links11.JACQUI DEAN (National—Waitaki)to theMinister of Corrections: What announcements has she made around using audio-visual links technology to improve public safety?Hon ANNE TOLLEY (Minister of Corrections):Today the Minister for Courts the Hon Chester Borrows and I announced a $27.8 million expansion of audiovisual links between prisons and courts. Over the next 2 years a further 14 district courts and nine prisons will have audiovisual links installed allowing a greater number of prisoners to appear in court while physically behind the wire. The risks—to the publicto corrections staff and to court staff—associated with transporting prisoners outside the wire are completely removed with the use of this technology along with any risk of escape. Audiovisual links also improve the security of our prisons because they reduce the opportunity for prisoners to smuggle contraband back behind the wire after appearing in court.Jacqui Dean: What other benefits will the use of audiovisual links bring to the corrections system?Hon ANNE TOLLEY: Approximately 40000 remand court appearances are made every year and where installed audiovisual links are expected to be used in a significant number of these. Audiovisual links mean that corrections staff do not have to spend time planning and carrying out escorts from prison to court and back again and they also reduce the cost to the taxpayer because it means the Department of Corrections does not have to spend money needlessly transporting prisoners back and forth from court.Jacqui Dean: What prisons already use audiovisual links to connect to courts and what benefits have been seen?Hon ANNE TOLLEY: The audiovisual links are a joint initiative between the Department of Corrections and the Ministry of Justice. Mt Eden prison Waikeria Prison Christchurch Men’s Prison and Whanganui Prison are already connected to the Hamilton Manukau and Christchurch district courts by audiovisual links. This technology has seen to date a saving of over 8000 external trips for prisoners to and from courts. This means that corrections staff can focus more on prison security and reducing reoffending rather than transporting prisoners to court for administrative matters.Education National Standards—Standardised Assessment Tool and Data12.CHRIS HIPKINS (Labour—Rimutaka)to theMinister of Education: Does she stand by all of the answers she gave to Oral Questions yesterday?Hon HEKIA PARATA (Minister of Education):Yes.Chris Hipkins: Does she stand by her assertion that the Ministry of Education did not change the results of individual student’s assessments in writing using the e-asTTle tool; if so how does she explain the notice that was posted on the e-asTTle website advising teachers that “changes to the levels” had been made and that there had been “changes to students’ e-asTTle scale scores.”?Hon HEKIA PARATA: I stand by my response from yesterday. I am advised by the Ministry of Education that it does not has not and will not adjust the assessment data provided to it by schools. The assessment data that teachers have put into the e-asTTle writing tool has not been touched. What has been changed is the alignment of the scores to the curriculum levels. I reiterate to the member that e-asTTle is just one of the assessment tools available to teachers to inform their overall judgments. As the member has himself said: “e-asTTle is only a tool and the results it produces need to be weighed up against a number of other things including teachers observations interviews and a child’s written work.” Schools were informed of the changes through both the system itself and the ministry’s website. This is a standard practice. In April 2010 e-asTTle reading was aligned. In September 2010 e-asTTle maths—Hon David Parker: I raise a point of order Mr Speaker. Earlier without any intervention you stood Mr Peters down for a question that was a fraction of the length of the answer we have already heard and I think one of the reasons why we sometimes have disorder in this House is that that is the sort of thing we find a little inconsistent.Mr SPEAKER: I acknowledge the point the member is making. It was a long answer and I fully accept that but there were quite a lot of questions around thisyesterday. The House was relatively silent which I interpreted as the fact that they were actually appreciative of the answer. I note members behind the Hon David Parker acknowledging that. The answer has now finished and the member has further supplementary questions.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I understand your ruling to be that you interpreted that the House was appreciative of the length of that question.Mr SPEAKER: Order! That is not what I said.Rt Hon Winston Peters: The length of the answer.Mr SPEAKER: Yes—certainly the answer; not the question.Rt Hon Winston Peters: Righto. I apologise that you thought it was that the House appreciated the length of that answer. What led you to suggest that the House was not appreciative of the length of my question on a very serious matter?Mr SPEAKER: Because I could certainly tell by the angst and noise and unrest that was coming as the question went on.Chris Hipkins: How many standardised assessment tools for writing are available to schools and teachers? [Interruption ]Mr SPEAKER: Would the member please repeat the question. It was not heard by the Minister.Chris Hipkins: How many standardised assessment tools for writing are available to schools and teachers?Hon HEKIA PARATA: I do not have that level of detail.Chris Hipkins: Given that only one standardised assessment tool for writing is available to schools and teachers—that being e-asTTle—and the Ministry of Education is altering the results it has produced without telling the schools on what basis are teachers expected to form their judgments about where an individual student is at with regard to the standards?Hon HEKIA PARATA: I gave quite a substantive response because I was dealing with the member’s assertion that the ministry has altered them and the ministry has not. I have explained what that process was. As to the point about the tools available to teachers they are observations in the classroom discussion with other teachers and an overall teacher judgment. We have chosen an approach that relies on the collective body of professional judgments and that is why we have not chosen a national test.