Parker David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeParker David: Questions for Oral Answer — Questions to Ministers[Sitting date: 18 September 2013. Volume:693;Page:13454. Text is incorporated into the Bound Volume.]3.Hon DAVID PARKER (Deputy Leader—Labour) to theMinister of Finance: Given that he disagrees with the advice of the Treasury on theTiwai smelter who advised it should not be subsidised by taxpayers because “it would result in a significant transfer of value from New Zealanders to Pacific Aluminium and RioTinto shareholders” does he then agree with theNew Zealand Herald that the $30 million dollar taxpayer subsidy paid to the RioTinto-owned smelter is “an abject piece of short sighted thinking”; if not why not?Hon STEVEN JOYCE (Acting Minister of Finance): No I do not agree with the premise of that essay. Treasury advised that there was no economic rationale for a long-term Government subsidy for theTīwai Point smelter. Treasury further advised there would be a significant transition cost in the event of any shutdown of the smelterespecially to the Southland economy and the wider electricity market. The Government agrees with that advice. In regard to the particular Treasury comment quoted by the member it was made in July 2012 and was in relation to the renegotiation of the long-term electricity price. At that time RioTinto asked for assistance worth hundreds of millions of dollars. The Government agreed with Treasury’s advice against a long-term subsidy and rejected the proposal.As to the second part of that question the Government had to make a decision. It was not a straightforward decision but the Government recognised the smelter’s role in the stability of the New Zealand electricity market and the value of certainty for 800 smelter workers and the wider Southland economy and chose to make a one-off payment to help close the negotiations. I look forward to the member maintaining that position on his next visit to Southland.Hon David Parker: If he disagrees with theNew Zealand Heraldthat the $30 million taxpayer subsidy to RioTinto is “an abject piece ofshortsighted thinking” does he agree with theNew Zealand Heraldthat the effective subsidy given to Chorus through the Government’s intervention over broadband pricing is “unfair to consumers” and “dangerous for the economy”?Hon STEVEN JOYCE: No I do not. The reality with editorial writers is that although they are of course entitled to their views they do not actually have to live with the decisions. The Government does have to live with its decisions and it believes that it made the right decision. It is interesting that the member raises two issues in relation to interventions in the New Zealand economy and I think it is valid of him to raise those. But if you think about them for a second withTīwai Point we are talking about 800 jobs and with ultra-fast broadband we are talking about 2000 jobs. Those members also hate the convention centre which is another 1000 jobs. Their new leader was out today criticising the snapper decision which is another 1200 jobs. That is 5000 jobs they want to nail in 2 days. At this rate it will be 75000 in just a month.Hon David Parker: Why should broadband customers who cannot get fibre installed or cannot afford to connect to it effectively subsidise Chorus through higher copper broadband prices than recommended by the Commerce Commission?Hon STEVEN JOYCE: That is simply incorrect. The reality is that nobody is proposing to put up copper prices. The question is what the appropriate way is for valuing the value of the network for which prices are determined. There are different views as there always are in this situation particularly between the infrastructure providers on the one hand and the retailers on the other hand. The member wants to be careful that he does not get sucked into one side of the debate.Hon David Parker: Does he now agree with the comments made by theNew Zealand Heraldcolumnist Chris Barton in 2011 that the then information and communications technology Minister Steven Joyce “has missed a one in a lifetime opportunity.” in designing the ultra-fast broadband scheme in that “over the next eight and half years most of the country is going to get fairly average broadband.” and that Chorus “carries so much baggage that it will inevitably become bogged down.”?Hon STEVEN JOYCE: No and with the greatest respect to Mr Barton I have never seen a worse analysis of broadband in New Zealand as in that one article which I recall well from the Minister for Communications and Information Technology showing it to me back in 2011. The reality of it is simply this: the Government has actually done a very very good deal with the ultra-fast broadband. If you compare it with the Australian situation which the new Government there is now having to unravel this Government is absolutely confident in its position and is delivering ultra-fast broadband to New Zealanders along with at least 2000 jobs in delivering that programme.Hon David Parker: Why is it that when members of the public cannot afford to pay their power bill it gets cut off but when those with the money the power and the connections like RioTinto do not want to pay their bill they get a discount and a $30 million corporate welfare subsidy?Hon STEVEN JOYCE: The member makes a mistake. He talks about it as if it is corporate welfare but the reality is that it is about jobs—jobs in Southland jobs on the ultra-fast broadband jobs on the convention centre and jobs in the snapper fishery. If the member wants to keep going down the path he is on I encourage him to do so because it will be disastrous for the Labour Party.Denis O’Rourke: Why did the Government’s largesse with theTīwai Point smelter not extend to saving New Zealand - owned productive capacity in Dunedin’s Hillside railway workshops?Hon STEVEN JOYCE: The difficulty in relation to Hillside was that there was no long-term future for that organisation whereas forTīwai Point the two companies have come to an agreement that allows for the medium to long term future of the smelter. Nobody can say it is for ever but the reality is that that is the situation. The Government has to make judgments on those every day and this Government is comfortable with the decisions it has had to make.Hon David Parker: Has the Minister of Finance received any criticism from the Minister for Economic Development of theTīwai Point deal or any acknowledgment that that Minister got it wrong in the 2011 ultra-fast broadband deal; if not is it because “Mr Fix-it” still cannot see the error of his ways or is it because he is a flathead?Mr SPEAKER: The Hon Steven Joyce can answer any of a number of supplementary questions.Hon STEVEN JOYCE: I do not think the Minister for Economic Development has a flat head. You could criticise him on many levels but I do not think you could suggest he has a flat head. The reality is simply that this Government in relation to ultra-fast broadband has put together a very good deal for New Zealand. The debate here is simply between the internet service providers on the one hand which are funded and organised by an interesting gentleman whom the Labour Party seems to have recently fallen in love with and on the other hand the infrastructure provider. We will land on a price through this process that works for everyone and will involve reductions in retail prices for consumers and we will deliver ultra-fast broadband which the Labour Opposition would never have done.Hon David Parker: I seek leave to table the Vodafone submission in response to the Government’s intervention proposal which shows that consumers pay more than was—Mr SPEAKER: Order! You have described the document. I just need to check its availability. Is it freely available to members?Hon David Parker: Well I have got a copy.Mr SPEAKER: So it is freely available. We are not wasting any further time.