Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeOral Questions — Questions to Ministers[Sitting date: 09 June 2016. Volume:714;Page:11853. Text is incorporated into the Bound Volume.]Questions to MinistersBudget 2016—Defence Force1.RON MARK (Deputy Leader—NZ First) to the Minister of Finance: Does he stand by his statement on the defence budget made in the House on Thursday 2 June; if so how?Hon GERRY BROWNLEE (Leader of the House) on behalf of theMinister of Finance: Yes; by standing up and saying so.Ron Mark: When he said the Defence Force “gets roughly a $100 million increase in its baseline. Over 10 years … that roughly adds up a lot of money.” did he not realise that that is $10 billion short of what the Secretary of Defence needed in January 2016?Hon GERRY BROWNLEE: The member is confusing quite a large number of figures. Firstly the approximate $100 million operating figure is added to the defence baseline each year. Over that 10-year period it would equate to something in excess of $5 billion operating. The figure that the member is interested in is an $11 billion figure that was signalled by the Ministry of Defence on 27 January 2016 which is a capital spend expected over a 10-year period.Ron Mark: Where in this defence white paper is the budgetary funding model that tells our serving defence personnel when and how the newly pledged $20 billion worth of new kit will be delivered?Hon GERRY BROWNLEE: That is a question that should be best addressed to the Minister of Defence.Ron Mark: Where is the funding in the Budget to increase serving personnel numbers to at least the numbers they were when National took office in 2008?Hon GERRY BROWNLEE: That would be in the $300 million addition to baselines announced in the Budget.Ron Mark: If only 1 week after Budget 2016 the Government’s forecast surplus dropped by $1 billion and there is no budgetary funding model in the white paper—Mr SPEAKER: Order! Can I have the supplementary question please.Ron Mark: —what confidence can any soldier or sailor or aviator have that this Government can and will deliver the $20 billion promised?Hon GERRY BROWNLEE: The $20 billion is made up of both operating and capital. Quite clearly this is a very different approach to military procurement from that of the past. So what this white paper does is it gives an overarching intent that is agreed by the military and by the Government about the sort of capability we have and the capacity we need in order to deliver that. What it then sets out is over a 15-year period a capital spend that the Government is prepared to agree to. It allows the military to go out now and on a case-by-case basis as they wish to replace aircraft inside the stipulation of surveillance strategic and tactical airlift of the ice-strengthened ships and the rest of the procurement that we know has to be replaced in the next few years—they can confidently engage in those purchases.Housing Auckland—Affordability2.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by all his statements?Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of theMinister of Finance: Yes in the context in which they were given.Grant Robertson: Will he now revise his statement that there is no housing crisis in light of the Reserve Bank Governor saying today that “House price inflation in Auckland and other regions is adding to financial stability concerns. Auckland house prices in particular are at very high levels.”?Hon STEVEN JOYCE: No. The Reserve Bank Governor—and I was not at the particular event this morning that the member refers to—references a lot of things at different times that may cause worry in terms of financial stability. That is his job. But in terms of house prices in Auckland yes they are high but also interest rates are at historically low levels which means that mortgage payments for people are probably significantly less than they would have been in say 2008. The challenge with that is of course that we want to make sure that people are not banking on low interest rates for ever.Grant Robertson: Why will he not agree to a mass State-sponsored affordable-housing building programme such as Labour’s KiwiBuild now that the Reserve Bank Governor has joined the chorus of people saying that additional housing supply is urgently needed?Hon STEVEN JOYCE: An additional housing supply is definitely happening. The member may not have seen at the beginning of the week Auckland residential construction topping $1 billion for the first time in the March 2016 quarter growing 13 percent in that quarter alone. I also note from the Reserve Bank’s Monetary Policy Statement that it is expecting that growth in supply to continue. I actually had a look back at the Labour Party’s KiwiBuild proposal and frankly it would have done hardly anything and already the private sector and the Government working together is doing far more than that.Grant Robertson: What specific actions will he take to give first-home buyers a fair go and to address the dominance of investors in the Auckland housing market who according to the Reserve Bank today account for 46 percent of sales?Hon STEVEN JOYCE: Investors always play a significant part in the Auckland housing market and in fact investors do serve a useful purpose in adding investment into the housing market. So the member complains that he wants more supply but he then wants to knock over people who are prepared to invest in more supply.Grant Robertson: No I want first-home buyers to get it.Hon STEVEN JOYCE: We are doing things for first-home buyers with the Minister for Building and Housing’s HomeStart programme which is actually seeing very significant investments in first-home buyers.Grant Robertson: Is there a housing crisis in New Zealand?Hon STEVEN JOYCE: No. There is a building boom there is a shortage in some areas and this Government is seeing the biggest and fastest growth in residential homebuilding that we have seen in many many years after inheriting a situation where the house construction business was in absolute collapse in 2008.Grant Robertson: Try an easy one Steven. Is there a housing crisis in Auckland?Hon STEVEN JOYCE: Give me an easy one and I will give you an easy answer. No there is not but there is a challenge in providing sufficient housing and this Government has been working on supply which the Labour Party has just woken up to. We have been working on first-home buyer grants which the Labour Party has just woken up to and we have been working to encourage construction generally. All the Labour Party can offer is a bunch of Government-sponsored builders.Hon Dr Nick Smith: Is the Minister aware that in 2004 when Auckland house prices went up by 26 percent in 1 year half the rate that they are then the then Minister said it certainly was not a crisis?Mr SPEAKER: Order! No the question is out of order for two reasons. There is—[Interruption] Order! Mr Twyford if you wish to stay for question time on Thursday—it is always good fun so I would advise you to cooperate. The question is out of order for two reasons: it is marginal whether there is Government responsibility and it is certainly a question that I deem to be designed to attack the Opposition.Economic Outlook—Monetary Policy Statement3.STUART SMITH (National—Kaikōura) to the Minister of Finance: What reports has he received on the outlook for the economy?Hon STEVEN JOYCE (Associate Minister of Finance): on behalf of theMinister of Finance: The Reserve Bank earlier today released its Monetary Policy Statement for June. It left the official cash rate unchanged at 2.25 percent. The Reserve Bank’s outlook for the economy is positive. Growth is forecast to accelerate from around 2.5 percent currently to 3.3 percent by the middle of next year. Overall growth is expected to average 3 percent over the next 3 years. The Reserve Bank’s view is consistent with Treasury’s Budget outlook of 2 percent to 3 percent annual growth over 4 years. The outlook is supported by accommodative monetary conditions low oil prices strong construction activity and migration.Stuart Smith: What does the Reserve Bank say about jobs growth and higher wages?Hon STEVEN JOYCE: The Reserve Bank forecasts that growth will translate to more jobs and higher wages over the next 3 years. The Reserve Bank expects employment to increase by 129000 jobs over the next 3 years. The unemployment rate is forecast to fall at a slightly faster rate than previously expected to around 5 percent by the middle of next year. The Reserve Bank is forecasting wage growth to exceed inflation meaning higher real wages which would be welcome for Kiwi households and the Reserve Bank forecasts higher household savings over the next 3 years as well.Stuart Smith: What are some of the risks included in the economic outlook?Hon STEVEN JOYCE: Although moderate growth of 3 percent is forecast over the next 3 years there are risks to this outlook. The Reserve Bank says global economic uncertainty has moderated in the first half of this year and there has been some improvement in commodity prices and that is expected to continue through to 2019. However the global economy remains weak and significant downside risks remain. Domestically the Reserve Bank cites inflation expectations the possibility of continued high net migration and pressures on the housing market as risks for the economy. The Government is helping to lift the resilience of the New Zealand economy through measures such as export diversification and market agreements including the Trans-Pacific Partnership.Stuart Smith: How are lower interest rates and low inflation helping New Zealand families get ahead? [Interruption]Hon STEVEN JOYCE: Well I note there are some members in the House who find the economy and households boring but certainly not on this side of the House. Mortgage rates are at their lowest levels in 50 to 60 years. As the Reserve Bank shows 2-year fixed rates are now approaching 4 percent. This is saving a family with a $300000 mortgage almost $16000 a year in interest costs compared with 2008 when mortgage rates were reaching almost 11 percent. To put it another way that is around $300 a week more in the pockets of those households. At the same time cost of living increases remain low—just 0.4 percent over the last year—which means pay increases for New Zealand households are going much further. In uncertain world economic times this country continues to head in the right direction.Emergency Housing—Te Puea Marae4.MARAMA FOX (Co-Leader—Māori Party) to the Minister for Social Housing: What assistance if any will be provided to marae like Te Puea who in an expression of manaakitanga are supporting homeless whānau?Hon PAULA BENNETT (Minister for Social Housing): I am advised that Ministry of Social Development staff have been made available and have regularly been at Te Puea to make sure the people there are having their housing needs assessed and are getting access to support wherever they might be entitled to it. Equally after representations from the member herself earlier in the week I have asked officials to look in to see whether there is other assistance that we could give to the actual marae and not just to individuals.Marama Fox: Does she agree that relying on the goodwill of marae to support homeless whānau is not a viable long-term solution; if so what does she intend to do about it?Hon PAULA BENNETT: I certainly do and I do not think that anyone considers the current situation as ideal. That is why we have got a number of new builds that are under way—more than 500—under community housing providers. We have got about 589 that are contracted or are under contracts with Housing New Zealand. Equally we have put $41 million extra into emergency housing of which we have opened up the request for proposal for those who are already in contracts so that I can speed that process up a bit. We have got 750 new houses that we have put $120 million into this year’s Budget for as well.Marama Fox: Is the Minister prepared to continue to work with the Māori Party to support marae emergency housing providers and community housing providers to provide the necessary assistance required to meet the emergency needs of the homeless whānau; if so how does she intend to target that $41 million not just in Auckland but also in the regions?Hon PAULA BENNETT: Of the $41 million from memory I think it is $32 million that will get divided up amongst emergency housing providers. Of that it is a spread throughout New Zealand. Of the 3000 places around half will be in Auckland and the rest will be in the regions. An example might be that somewhere like Hamilton—a city of that size—is likely to be eligible for about 60 places. A town the size of Nelson for example is more like 20 places. Part of it will be existing beds but the other part will be new beds as well. But what is raised by the member often is that also we have now got to have homes for them to go permanently into. So those are emergency places there which is why we have got the new build programme which is going on as well and a significant number of new houses are coming on board.Marama Davidson: If the Minister does give any funding to Te Puea Marae will the funding last till the end of the homeless housing crisis and will the Minister tell Aucklanders when that will be?Hon PAULA BENNETT: I do not agree with the second part of the question but with the first part of the question certainly I had people asking whether or not Te Puea Marae should be an emergency housing provider. I personally think that there are probably easier ways that we could help them. Te Puni Kōkiri has already put in I think $10000 and so we are now looking at whether there is something that we can do if that money is running out to help them keep going for a bit longer.Business Innovation and Employment Ministry—Payroll5.Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development: What is his current best estimate of the financial liability that the Ministry of Business Innovation and Employment’s use of the AMS payroll system has generated for the Ministry as a result of issues with its compliance with the Holidays Act 2003 since its use was approved in 2012?Hon STEVEN JOYCE (Minister for Economic Development): First I do need to correct the member’s question. The payroll provider has actually been used since 1999 and the contract was signed in 2004 for its use by one of the legacy agencies at the Ministry of Business Innovation and Employment (MBIE). At this point I am not—Grant Robertson: Whatever.Hon STEVEN JOYCE: Well it is quite important I think you will find. At this point I am not prepared to provide the member with any estimate as I am not satisfied that any estimate would be sufficiently robust and therefore it could be misleading to the House and the wider public. MBIE is currently working with the provider to resolve the issues it has identified with its payroll system. The most important aspect of that work is remediation of the issues which will allow both future and historic payments to be calculated correctly. Once that has been achieved I will be able to provide the House with an estimate of any outstanding liability.Dr David Clark: Is the Minister aware that according to his own department’s data 763000 New Zealanders may be owed hundreds if not thousands in back-pay for the past 6 years?Hon STEVEN JOYCE: I am aware of a range of estimates. I think the labour inspectorate has been very careful to provide lots of provisos on those estimates but in relation to the payroll it is important for the member to understand that I have the ministerial responsibility for the MBIE payroll and the Minister for Workplace Relations and Safety has responsibility overall. If he has some questions he wants to put down in relation to the wider issue with holiday pay those should best be put down to the Minister for Workplace Relations and Safety. [Interruption]Mr SPEAKER: Order! If the member wants to have the chance to ask supplementary questions just stand and ask them without the interjection.Dr David Clark: As it is 9 months since he first learnt of the issue when does he expect to have the liability properly quantified?Hon STEVEN JOYCE: I do not have a particular date for the member today but what I can tell him is that I am receiving regular updates on progress. The actual liability will be able to be determined once the remediation fixes are in place and any adjustments made to both current staff and prior staff. It is important to note that in terms of cash the Holidays Act impacts are not faced in cash terms until the employee leaves or otherwise cashes up that holiday entitlement.Dr David Clark: What is the average amount of back-pay owed to affected employees at his ministry?Hon STEVEN JOYCE: I believe that I answered that in both the primary question and the supplementary question. We do not have that information at this time.Dr David Clark: Has he seen advice from MBIE that shows that his current approach to this issue will result in many New Zealanders missing out on their rightful holiday pay?Hon STEVEN JOYCE: Again I think that the member might be confused. That might be a question that he wants to direct to the Minister for Workplace Relations and Safety. He should go right ahead.Public Transport Auckland—City Rail Link6.KANWALJIT SINGH BAKSHI (National) to the Minister of Transport: How is the Government supporting the increased uptake of public transport in Auckland?Hon SIMON BRIDGES (Minister of Transport): Last week alongside the Prime Minister and the Mayor of Auckland I had the pleasure of breaking the ground to mark the start of construction on the long-awaited City Rail Link. The project will be one of New Zealand’s largest-ever projects. This was made possible by the Government’s commitment made earlier this year with Auckland Council to bring forward a joint business plan for the City Rail Link and formalise our funding commitment from 2020. With Auckland’s population predicted to grow by more than 700000 over the next 30 years the City Rail Link will play an important part in getting people in and out of the city with ease and in boosting public transport use across the city.Kanwaljit Singh Bakshi: How will the City Rail Link project benefit Auckland?Hon SIMON BRIDGES: When completed the City Rail Link will double the capacity of Auckland’s rail network provide two new stations in the central city and benefit commuters whose travel times will be reduced significantly. For example Auckland Transport estimates that a commuter travelling between Henderson and the planned Aotea station will save on average 17 minutes per trip. The Government’s commitment to the project also provides certainty for large-scale projects like the $350 million NDG Auckland Centre and the $680 million Commercial Bay tower. Both of these projects will pump renewed investment into the central business district as well as create new jobs.Earthquake Commission—Liabilities Estimate and Remedial Repairs7.Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: On what date was he first advised that EQC would be increasing the estimate of liabilities left to pay as at June 2016 from $262 million to $1.9 billion and what amount of this increase is attributed to second-time repairs and reopened claims?Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission):I speak to the Earthquake Commission (EQC) on a regular basis and am advised on the progress with reducing the liability—reducing the number of claims is the same thing. So it was evident soon after the publication of that $262 million figure that land payments were not being made as speedily as hoped nor was the resolution of the last-remaining more difficult properties happening as quickly as we would like. This is very well documented and in fact was previously mentioned in this House by the questioner. As for the cost of the second-time repairs it is estimated that they will be in the vicinity of some $60 million to $70 million. Overall the liability is a reducing figure on the initial June 2011 estimate of some $11.5 billion. The member is unfortunately trying to confuse I think the practicalities of making payments to people with the requirements to report expectations of dates when those would be paid. It makes absolutely no difference to the total liability.Dr Megan Woods: What is the overall volume of post-repair inquiries and how many does EQC estimate will lead to remedial works?Hon GERRY BROWNLEE: I would stand corrected but my understanding is that it is in the vicinity of 5 percent of those repairs that have been done. Some of those will lead to further work; some will not.Dr Megan Woods: Does he have any confidence that EQC has the capacity to finalise claims associated with the liabilities for the coming financial year given the delays last year in addition to remediating the thousands of dodgy repairs; if so why?Hon GERRY BROWNLEE: Taking those many individual questions from the back to the front: firstly when it comes to the suggestion that they are dodgy repairs the important point to remember is that EQC is standing behind them as is the Fletcher EQR office. I think the thing to remember is that even on a new build the call-back rate is up to 85 percent. EQC has got a call-back rate of around 5 percent indicating quite a good performance. As for paying out what people are entitled to when it comes to increased land damage or vulnerability to liquefaction or increased vulnerability to flooding it is important that time is taken to get that right so that people get what they are entitled to. But I will make the statement again that the overall liability first calculated in June 2011 has not changed.Dr Megan Woods: Does he stand by his statements in the House on 10 May dismissing the impact of the EQC action group settlement and in particular his example that a damaged asbestos roof would need a full replacement; if so why is EQC insisting on repairing rather than replacing asbestos roofs?Mr SPEAKER: Again there are two supplementary questions. I will invite the Minister Gerry Brownlee to address one.Hon GERRY BROWNLEE: I would like to address them both because I think the member is raising one interesting point and has got herself completely in the wrong space in the other. The first point is that the action that was brought by the action group effectively with its joint statement meant no change. It is currently pursuing the EQC for very very expensive lawyer fees that are in excess of 10 times the amount spent by EQC in its own defence. There was an agreed statement that agreed the EQC was right all along. When it comes to EQC apparently wanting to repair an asbestos roof tell me where that asbestos roof is and where EQC is trying to repair it and I will make sure it does not happen.Dr Megan Woods: I raise a point of order Mr Speaker. To assist the Minister to know what is happening—Mr SPEAKER: Order! That is not a point of order. If the member wants to raise a point of order she has been here long enough to know how to do it.Dr Megan Woods: I seek leave to table an email to a claimant informing them that their asbestos roof will be repaired rather than replaced.Mr SPEAKER: Order! Leave is—[Interruption] Is there any issue of privacy being invaded—Dr Megan Woods: I’ll need to talk to the claimant.Mr SPEAKER: Well you put me in a difficult position. I was going to put the leave. Now you are saying that you will need to check with the claimant as to whether—[Interruption] Order! You have sought leave to table an email. I am trying to assist the member to put the leave. It is reasonable to know whether there are any privacy issues that would be breached by the tabling of it. If the member simply redacts I guess the name of the person—Dr Megan Woods: That’s what I’m doing yes.Mr SPEAKER: —then on that basis I will put the leave. Leave is sought to table that email redacting the author of the email so their privacy is protected. Is there any objection to that email being tabled? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon GERRY BROWNLEE: I raise a point of order Mr Speaker. You may have misunderstood what I was saying. I think it would be useful to know the claim number at least so that the claimants can be contacted so that this situation can be put right. I do not believe that an asbestos roof is being repaired with an asbestos roof.Mr SPEAKER: Order! All members of Parliament get on very well together. It will be easy for the Minister to take that up with Dr Megan Woods at the conclusion of question time.Dr Megan Woods: Why does he not front up and admit that he cannot give straight answers that EQC is telling claimants they cannot have what he says they are entitled to and that 5 years on there is no end in sight to the mess at EQC?Hon GERRY BROWNLEE: That was one of the best questions ever delivered in this House and it would win a seventh form debating prize any day of the week but it had absolutely no substance to it and is complete rubbish.Budget 2016—Pharmac8.ALASTAIR SCOTT (National—Wairarapa) to the Minister of Health: Can he confirm that Budget 2016 invests an extra $124 million over four years to provide more New Zealanders with access to new medicines?Hon Dr JONATHAN COLEMAN (Minister of Health) Yes. I am pleased to announce that today Pharmac has named the six new treatments they will be funding as a direct result of that investment. Since the pre-Budget announcement Pharmac has been consulting on the new medicines that it might fund and the decisions that it announced today show that New Zealanders continue to gain access to new and innovative medicines. This first package of new treatments will benefit over 40000 New Zealanders. These funding decisions show that Pharmac is continuing to provide New Zealanders with early access to new and innovative medicineswhich they deserve.Alastair Scott: What new treatments is Pharmac able to provide with this increased funding?Hon Dr JONATHAN COLEMAN: The extra funding in Budget 2016 means that Opdivo a drug for advanced melanoma is now fully subsidised. Other drugs announced today include treatments for brain tumours patches for menopausal women and a treatment for renal disease in children. Pharmac is also funding two new hepatitis C treatments that are a major advance in treatment with cure rates of more than 90 percent and that is potentially going to benefit 50000 New Zealanders. This is hugely beneficial for a wide range of people and shows that the investment has been very worthwhile.Jan Logie: Can he confirm that Budget 2016 did not include any money for equal pay for women like Kristine Bartlett and the 50000 other care and support workers waiting for payment?Mr SPEAKER: If the Minister is prepared to answer it I will let it go but it is so far from the original question that it is strictly out of order.Jan Logie: I raise a point of order Mr Speaker. The primary question was very specifically about health funding in the 2016—Mr SPEAKER: Order! The member may not have heard me. I said it was too far away; it is out of order. I do not appreciate the member then arguing with me in this House.Alastair Scott: How has Pharmac’s budget increased since 2008?Hon Dr JONATHAN COLEMAN: Overall the Government has increased Pharmac’s budget by $200 million since 2008 bringing it to a record $850 million and of course widening access to medicines is a key priority for this Government. The $39 million for Pharmac in this year’s Budget is part of an extra $568 million that the Government has invested in health in 2016-17 the biggest increase in 7 years and almost $170 million more than last year.Hon Annette King: Will the Government’s direct contribution of $39 million to the Pharmac budget which reduces to $29 million in the next two Budgets require the district health boards (DHBs) to pick up the $42 million shortfall if the budget is to stay the same over the next 3 years?Hon Dr JONATHAN COLEMAN: We are quite clear: there is $124 million of new money put in there for Pharmac over the next 4 years.Hon Annette King: I raise a point of order Mr Speaker. I know you were listening carefully. My supplementary question was very specific about whether Pharmac’s budget would have to be supplemented by the DHBs over those 3 years and I set out the figures. Would you like me to repeat it Mr Speaker?Mr SPEAKER: I think the member needs to be very aware of Speaker’s ruling 187/4 when effectively I suspect the member is demanding a yes or no answer which she is not entitled to do. It is Thursday I am in a very good mood and I will allow the question to be repeated.Hon Annette King: Will the Government’s direct contribution of $39 million to the Pharmac budget which reduces to $29 million in the next two Budgets require DHBs to pick up the $42 million shortfall if the budget is to stay the same for the next 3 years?Hon Dr JONATHAN COLEMAN: The member knows that DHBs have always made some contribution but the key thing is that there is $124 million on top of the $400 million for DHBs this year—in fact $1.6 billion for DHBs over the next 4 years—so there is a lot of money going in there. And of course that is providing more access to more services for more New Zealanders all the time—very dissimilar to when you were in charge.Mr SPEAKER: Well not me.Hon Annette King: I raise a point of order Mr Speaker. I am sure that if you were in charge Mr Speaker it would be much better.Mr SPEAKER: Order! Can I just have the point of order.Hon Annette King: The point of order is that he should not bring you into the debate.Mr SPEAKER: I think on that occasion that is something that the Speaker will determine not the Hon Annette King.Spending—Defence Force Climate Change and Housing9.JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his Government’s policies?Hon GERRY BROWNLEE (Leader of the House) on behalf of thePrime Minister: Yes.James Shaw: How is it that his Government has been able to put together a 15-year plan and find $20 billion for new defence spending but still after 8 years does not have an equivalent plan for the housing crisis or climate change?Hon GERRY BROWNLEE: On behalf of the Prime Minister firstly may I thank you for the compliments paid to my defence Minister; and secondly may I also direct you to the plans that are clearly being put in place by the housing Minister. May I ask the question of why the Greens do not support any of them? We have 40 houses a day being built in Auckland. We have an increased workforce in Auckland in the construction industry of over 20000 people. We have 56000 sections for house sites produced under the special amenities area. None of those things of course wins the support of the Green Party which wants to stop immigration does not like urban development and of course generally likes to say anything it can to talk down the economy.Question time interrupted.