Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeOral Questions — Questions to Ministers[Sitting date: 05 April 2016. Volume:712;Page:10139. Text is incorporated into the Bound Volume.]Questions to MinistersTax System—Overseas Trusts1.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: How does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): On foot. [Interruption]Mr SPEAKER: Order! [Interruption] Order! We now need to get to the serious business of question time with substantially less interjection from quite a number of prominent people in the House.Rt Hon Winston Peters: How can he stand by his statements yesterday that New Zealand “is not a tax haven” and that we “also have an extensive disclosure regime” when specialist law firms on trusts for foreigners point out there is no need for disclosure of identity or trust registration or for any such trust accounts to be audited?Rt Hon JOHN KEY: Because I am right. [Interruption]Mr SPEAKER: This is now the third time I have asked for a little bit of cooperation and I am going to have to expect it in the future.Rt Hon Winston Peters: How can he argue that he is right and that our legal requirements and obligations are both transparent and require disclosure when the Inland Revenue Department is not required to share information with foreign jurisdictions unless that jurisdiction suspects offending and then asks it for information?Rt Hon JOHN KEY: Because I am correct and the member is wrong.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I am not saying that I am right. I am asking him a simple question that does not require that flippant answer now twice.Mr SPEAKER: No the question started with “How can he argue that he is right” and the Prime Minister gave an answer that satisfied that. The member might not agree with it but it addressed the question.Rt Hon Winston Peters: Does he agree with John Christensen the executive director of Tax Justice Network that: “Trusts are used in many instances as one of the basic building blocks of these sophisticated tax evasion structures.”; if not why not?Rt Hon JOHN KEY: I am not here to be a tax trust expert but people use trusts for all sorts of reasons. They use them because they want to have their assets held because they may for instance be sued or they may use trusts for all sorts of other reasons. Members of this House use them all the time.Rt Hon Winston Peters: Quoting from this long statement from the Prime Minister: “Tax havens are where there is non-disclosure of information. New Zealand has full disclosure of information so all you’ve got is a situation where New Zealand has taken a different view from a lot of jurisdictions and that’s because the way we tax is we tax a settlor in other words it’s all about making sure that New Zealanders”—Mr SPEAKER: Order!Rt Hon Winston Peters: —“pay their fair share of tax.”Mr SPEAKER: Order! I do need a supplementary question not a long quote.Rt Hon Winston Peters: Well having to conclude: “it’s all about making sure that New Zealanders pay their fair share of tax.” What on earth does that mumbo-jumbo really mean?Rt Hon JOHN KEY: Well it sounded a lot better when I said it but the answer was that we tax a settlor and the reason we tax settlors is that it is good tax policy. It stops New Zealanders actually creating taxes in all sorts of foreign jurisdictions and avoiding paying tax in their home country called New Zealand.Rt Hon Winston Peters: If he is right why are so many international commentators and now the Australians having a go at us for being in their words “a tax haven”?Rt Hon JOHN KEY: As the member knows people throw around all sorts of comments but New Zealand is not a tax haven.Rt Hon Winston Peters: Can he assure this House that none of his present or former Ministers—that is him as Prime Minister—have been and are involved in tax haven activity?Rt Hon JOHN KEY: I cannot speak for any other member because we have a pecuniary interests list that people have to record but as I have recorded on my pecuniary interests I have two trusts. One of them has been the long-established trust I have had in my wife’s name the JP & BI Key Family Trust and the other is the Aldgate Trust which was established so it could be a blind trust so that when I became Prime Minister all of my assets could go in there. [Interruption]Mr SPEAKER: Order! [Interruption] Order! The Hon Amy Adams I have called for order.Rt Hon Winston Peters: Is that blind trust one with 20/20 vision?Rt Hon JOHN KEY: I have no ministerial responsibility there other than to say that a blind trust was established as other Prime Ministers have because it is good practice to do so.Rt Hon Winston Peters: Why since he has become the Prime Minister has there been a threefold increase in offshore trusts operating in New Zealand were it not for the discovery internationally of just how lax our tax money - laundering disclosure regime is?Rt Hon JOHN KEY: That is not true. Tax laws around trusts were established in New Zealand in 1988. The disclosure regime change was implemented in 2006. Subsequent to that there have been a number of other things that have been done to improve aspects of trusts. In 2013 the OECD gave a report on New Zealand and fully cleared New Zealand.Rt Hon Winston Peters: If that is the case why subsequent to that date he gave as the reason why we should be all relaxed about it have the Ministry of Business Innovation and Employment and Treasury expressed their concern about the existence of tax haven activity in New Zealand and why should we believe him and not them?Rt Hon JOHN KEY: As I said in 2013 the OECD gave New Zealand a clean bill of health. What has also happened is that New Zealand continues to work with the OECD about its base minimisation but the Inland Revenue Department regularly puts up a menu of options that could be looked at as part of its work programme. It was not the No. 1 priority for the Government at the time because compared with other measures where we could have them working it would actually be about collecting more tax for New Zealanders.Tax System—Overseas Trusts and Disclosure Regime2.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that New Zealand is not a tax haven because “New Zealand has full disclosure of information” given Cone Marshall a law firm specialising in establishing trusts for foreigners says “The identity of the settlor need not be disclosed and the trust deed is not registered with any tax or Government authority” and “There is no obligation to file any trust accounts with any person or institution or to have such accounts audited”?Mr SPEAKER: As I call the right honourable Prime Minister my office has been advised that this answer may well be longer than normal.Rt Hon JOHN KEY (Prime Minister): Yes because there is more than one step in the disclosure process. Initially a New Zealand resident trustee must submit a foreign trust disclosure form an IR607 which simply records the name of the trust and the trustee’s contact details. However the trustee must also keep detailed financial and other records including the trust deed; details of settlements and distributions including the recipient’s name and address; details of the trust’s assets and liabilities; the identities of the settlors and the beneficiaries of the trust; and money that the trust receives and spends. The Inland Revenue Department can get this kind of information and will give it to the tax authorities in any other country if requested under a relevant tax agreement or proactively if that country wishes. I am advised by the Inland Revenue Department that New Zealand has always been able to comply with these sorts of information requests from treaty partners. This is certainly full disclosure of information. The income in these trusts is quite rightly outside our tax base. It is foreign income earned by foreigners. It is up to other tax authorities around the world to enforce their own tax laws on this income and on their own residents. We can help them do that by providing detailed information to them on request about trusts that are administered from New Zealand. I make the second point which is that we automatically disclose that information to Australia. It is the one jurisdiction that has asked us; no other jurisdiction has. These disclosure regimes which by any definition are broad and deep were the ones passed by the Labour Government in 2006. [Interruption]Mr SPEAKER: Order! [Interruption] Order!Andrew Little: Is he seriously telling the House that the only obligation that a foreign trust is obliged to make which is completion of an IR706 form and nothing else constitutes a full disclosure regime for this type of vehicle?Rt Hon JOHN KEY: For a start off it is an IR607 form not an IR706 form. And secondly as I pointed out in the answer which was very long and very detailed that is but the starting point which requires them to keep hugely detailed information of what is in there and report that when required. Those are the rules that Labour thought were right when it passed this disclosure in 2006. If the member is now telling us that Labour got it wrong he should get on his feet and apologise.Andrew Little: Why has he failed to heed the warnings from the New Zealand Law Commission the Chartered Accountants Australia and New Zealand the OECD and the Inland Revenue Department that New Zealand’s weak offshore tax laws allow wealthy foreigners to subvert laws and dodge taxes?Rt Hon JOHN KEY: I am prepared to accept that I made one mistake and that is relying on Labour. It passed the rules.Andrew Little: Can he guarantee that no offshore trusts registered in New Zealand are being used to hide illegally obtained assets or dodge tax?Rt Hon JOHN KEY: No Prime Minister can give that assurance any more than Helen Clark could have when this law was passed no doubt with the support of David Parker in 2006. What is quite clear is that New Zealand gives all of that information not only to Australia but to any jurisdiction that asks for it. We have been able to comply with every jurisdiction that has asked. I also note that we have 40 double tax agreements and 11 information-sharing agreements one of which includes Malta.Andrew Little: What effect does he think it has on New Zealand’s reputation when we are viewed as a tax haven harbouring billions of dollars and his only reaction is to boast that it earns us $24 million a year in lawyers’ fees and accountants’ fees?Rt Hon JOHN KEY: New Zealand is not a tax haven. Tax havens do not have the disclosure regimes that New Zealand has. It is as simple as this: if it is such a bad idea it was Labour in 1988 that passed the trust legislation it was Labour in 2006 that had—Rt Hon Winston Peters: Point of order.Rt Hon JOHN KEY: —the disclosure—Mr SPEAKER: Order! [Interruption] Order! When I rise to my feet it requires the Prime Minister to cease his answer.Rt Hon Winston Peters: I raise a point of order Mr Speaker. For countless answers now the Prime Minister has departed from doing his job of answering the question and attacked another political party for a law that is 10 years old and 7 years after he got the job. Please ask him to act responsibly and answer the questions he is being asked.Mr SPEAKER: Order! The Prime Minister addressed the question almost immediately and then because he was then responding to interjections which were not—[Interruption] Order! Because the Prime Minister was then responding to interjections it is inevitable that some politics will enter into the argument.Andrew Little: How does he expect to go to international forums and stop multinational corporations dodging their New Zealand tax when he is letting foreign tax-dodgers use New Zealand as a tax haven?Rt Hon JOHN KEY: Firstly I believe the latter part of the question from the member to be wrong. Secondly in all of the international forums that I have been in in the nearly 8 years that I have been Prime Minister no one has ever raised this issue with me. I am not aware of them ever raising it with a Minister of Revenue and as I said in 2013 New Zealand was given a clean bill of health by the OECD.James Shaw: Does he acknowledge that the Inland Revenue Department said in 2013 that “our foreign trust rules continue to attract criticism including claims that New Zealand is now a tax haven in respect of trusts.”?Rt Hon JOHN KEY: I have not seen the particular quote but as I said earlier the Inland Revenue Department has come up with a whole range of things it wants on the work programme and I would have thought the most important thing was making sure that New Zealanders actually pay their fair share of tax and that has been the priority.James Shaw: Is he disagreeing with Inland Revenue Department’s advice in 2013 that the way forward is to strengthen our disclosure and reporting requirements with New Zealand foreign trusts?Rt Hon JOHN KEY: What the Government is doing is working with the OECD on its base erosion programmes. It is quite happy to take advice and suggestions from others and over time there may be arguments about things we could strengthen. But if you look at what the requirements are under IR607 they are extremely broad and deep.James Shaw: So is he opposed to greater transparency for New Zealand foreign trusts when greater transparency will only hurt people using foreign trusts for illegitimate purposes?Rt Hon JOHN KEY: Clearly not because we have the ultimate in disclosure when it comes to Australia because we give it full disclosure without even making reference to the Australians because they ask for it. We would do it for any other jurisdiction that asked us to do that. If any country wants to come to New Zealand and have the same requirements as Australia has asked us for we will provide it with all that information. As I said in my answer to the primary question which was quite long New Zealand actually collates a great deal of information and it shares it with every jurisdiction that asks us.James Shaw: So would the Prime Minister agree with me that for foreign trusts with nothing to hide they should have nothing to fear from greater transparency?Rt Hon JOHN KEY: In the end if a foreign trust is established in New Zealand it is really important that it does understand that we have a full disclosure regime. It is for it to assess that. We are quite different from the sorts of places that are tax havens where they do not have disclosure regimes.James Shaw: I seek leave to introduce a member’s bill in my name that would end the secrecy around foreign trusts in New Zealand by imposing a registration and disclosure scheme on foreign trusts to be set down as members’ order of the day No. 1.Mr SPEAKER: Leave is sought for that purpose. Is there any objection? There is objection.Andrew Little: How proud is the Prime Minister of the company he is now keeping when the Panama Papers lump New Zealand in with such auspicious company as Belize the Seychelles and Costa Rica in the list of 21 tax havens?Rt Hon JOHN KEY: I think New Zealand can stand quite proudly on the regime that it runs here in terms of disclosure. I am sad that the member is running a country mile from what his colleagues around him did but no wonder they are quiet as—Mr SPEAKER: Order! That answer will not help the order of this House.Andrew Little: Does he not see when faced with the biggest tax-dodging scandal in history and when New Zealand is named internationally now as a tax haven and his only response is to side with the mega-rich tax dodgers rather than cleaning it up under the law that his moral compass is completely broken?Rt Hon JOHN KEY: The outrage would be a little bit better if the answer was not actually correct and I will read it to the member again because he clearly did not hear it the first time. Initially a New Zealand resident trustee must submit a foreign trust disclosure form an IR607 which simply records the name of the trust and the trustee’s contact details. However the trustee must keep detailed financial and other records including the trust deed; details of settlements and distributions including the recipient’s name and address; details of the trust’s assets and liabilities; the identity of the settlors and the beneficiaries of the trust; and money that the trust receives and spends. If that is not full disclosure when it is given in totality to any jurisdiction that asks for it I do not know what is.Andrew Little: I seek leave to table a document. It is the OECD 2013 report on New Zealand tax compliance which makes criticisms of our foreign tax regime.Mr SPEAKER: Before I put the leave I just want to check. Is it freely available on the OECD website?Andrew Little: I cannot confirm that. It has been supplied to me in hard copy only.Mr SPEAKER: On the basis that it cannot be confirmed I will put the leave and the House can decide. Leave is sought to table that particular 2013 OECD report. Is there any objection? There is not. It can be tabled.Document by leave laid on the Table of the House.Grant Robertson: I seek the leave of the House to table a combined Inland Revenue Department and Treasury paper entitled Tax Policy Report: Taxation of Multinationals dated 15 August 2013 in which the department says: “To protect our international reputation it may be necessary to strengthen our regulatory framework for disclosure and record-keeping.”Mr SPEAKER: Leave is sought to table that particular Treasury and Inland Revenue Department report. Is there any objection? There is objection. [Interruption] Order! I have put the leave. Any member has the right to object.Economy—Export Sector Performance and Household Savings and Debt3.BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Finance: What reports has he received showing total New Zealand exports are growing despite the dairy downturn?Hon BILL ENGLISH (Minister of Finance): Reports of continued export growth and diversification. Statistics New Zealand reports that in 2015 total exports rose by $1.9 billion supported by a $2.3 billion increase in spending by international visitors and an increase of $895 million in exports of meat products. Partly offsetting this was a $3 billion fall in dairy exports. Other exports are also growing. Annual beef exports are up a third in the last year; international education is now worth $3.1 billion in 2015 supporting 30000 jobs; and wine exports are now worth $1.5 billion up 14 percent in the year.Barbara Kuriger: What reports has he received showing improvement in the net international investment position supported in part by growing exports?Hon BILL ENGLISH: The net international investment position measures New Zealand’s total level of indebtedness to the rest of the world—that is Government households and the private sector. Statistics New Zealand reports this is now 61.4 percent of GDP which is a considerable improvement from the peak in early 2009 when it reached 84 percent of GDP. Net external debt is now 55 percent of GDP down from a peak of 83 percent in 2008. We are moving steadily in the right direction of reducing New Zealand’s indebtedness to the rest of the world. The Government is supporting further improvements by staying on top of spending and remaining on track to pay down debt.Barbara Kuriger: How are higher household savings helping to support resilience in the New Zealand economy?Hon BILL ENGLISH: Since the global financial crisis New Zealand households are saving more probably because they were a bit frightened by the prospect of financial meltdown then. This is reflected in part through higher bank deposits. The latest figures from the Reserve Bank show household deposits in banks totalled $152 billion in February 2016. That is up over 10 percent in the last year and growth in deposits has been 7.8 percent per year since 2009. In fact household deposits in banks have doubled in just 8½ years since August 2007. It means many householders will be better placed to manage through uncertainty.Barbara Kuriger: What recent reports has he seen on trends in household debt?Hon BILL ENGLISH: Interesting trends. Last week the Reserve Bank reported home mortgage lending increased 7.9 percent from the year previous to a total of $214 billion. This growth rate compares with an annual growth rate of 4.8 percent a year earlier. So it has picked up. Overall household debt to disposable income reached 162 percent which is high by international standards. However the ratio of household debt servicing is down because of lower interest rates. So debt levels are higher but the cost of servicing that debt has dropped from 9.5 percent of disposable income to 9.1 percent of disposable income.Housing Market Auckland—Affordability4.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement from 2013 that if Auckland prices continue at the same rate the bubble would burst and “you would leave a lot of potentially first home buyers with very large loans and an over-valued property and effectively negative equity where they owe more than the property’s actually worth”?Rt Hon JOHN KEY (Prime Minister): I stand by my actual statement which was “If we continued to leave the housing market completely unchecked in Auckland and it continued to go up at the rate it’s going up then eventually that would be a bubble that would have to burst.” I am pleased to report that since then there have been a number of important steps to increase housing supply and assist first-home buyers. Consents in the city are the highest in more than 11 years interest rates remain very low and we are supporting more home buyers into their first home. We are seeing some early signs that Auckland house price increases could be moderating.Andrew Little: Is he aware that since he made that statement Auckland house prices have gone up nearly $300000 leaving first-home buyers more indebted than ever?Rt Hon JOHN KEY: I made that statementin 2013 I think so it sounds like a substantial increase but in the time that we have been in Government—or the last few years in fact since that period of time—we have named and set up 120 special housing areas. There have been 24000 houses and sections consented in the first 2 years of the housing accord. We are reforming the Resource Management Act which we are more than happy to get Labour’s support for if it wants to. An extra 80000 new homes are forecast to be built in Auckland in 6 years in 2020. Interestingly as well Massey University’s Home Affordability Report of today showed that the Auckland property market became more affordable over the past quarter.Andrew Little: How does he expect first-home buyers to realise the Kiwi Dream of homeownership when a standard deposit on an Auckland home has nearly doubled from $100000 to $185000 since he became Prime Minister?Rt Hon JOHN KEY: Firstly as the member knows it is possible for banks to lend over the loan-to-value ratio for a certain percentage of the loans they make. Secondly the Government has introduced KiwiSaver HomeStart which as we know for a significant number of New Zealanders is now assisting them in owning their own homes. We also know that interest rates—as opposed to under the previous Labour Government when they were high and expensive—have been dropping dramatically under a National-led Government. The prudent and good economic management of this Government has allowed New Zealanders to enjoy lower interest rates.Andrew Little: How does he expect first-home buyers to realise the Kiwi Dream of homeownership when servicing the mortgage on a lower-end home costs almost half their income nearly 10 percent more of their income than in December 2008?Rt Hon JOHN KEY: I just do not get all of the relevant information but if one looks at interests rates—which were up at 8 9 and 10 percent when Labour was in office and are now significantly lower—what we do know is that the capacity to service a house is actually the lowest it has been in New Zealand in about 50 or 60 years.Andrew Little: Is Fran O’Sullivan correct when she says about him—that is the Prime Minister—that “He is frankly unapologetic about the massive increase in Auckland residential property values which has resulted in many established Aucklanders becoming relatively rich but younger people being locked out of the market.”?Rt Hon JOHN KEY: One learns when one has been in the job long enough that columnists will make their own assessments and write their own comments all the time. I have read some stuff about Andrew Little that frankly I find a bit disturbing—but it is OK. If the member wants to say that every columnist who writes every column is right in what they say it is going to be a very interesting proposition to stand by.Freshwater Management—Regional Councils5.MARAMA FOX (Co-Leader—Māori Party) to the Minister for the Environment: What steps is he taking to ensure that regional councils are effectively implementing the objectives of their regional resource management plans related to the protection of water quality from further degradation?Hon Dr NICK SMITH (Minister for the Environment): The Government is progressively strengthening the requirement on all regional councils to better protect our water resources. Prior to 2009 the Government set no minimum standards or requirements and just left it all to the regional councils. The three significant steps that we have taken as a Government are requiring compulsory metering in 2010; the National Policy Statement on Freshwater Quality which requires it to be maintained or improved; and committing over $300 million in clean-ups. I am also currently consulting on further strengthening the national requirements including new national rules on excluding stock from rivers and lakes.Marama Fox: Given that Ngāti Kahungunu had to spend more than $100000 to mount its appeal in the Environment Court to protect environmental standards what steps is he taking to ensure that other iwi and community groups will not have to spend those amounts of money to ensure regional councils will improve water quality over time?Hon Dr NICK SMITH: The national policy statement introduced by this Government is having a positive effect. Ngāti Kahungunu succeeded in the Environment Court only because it was able to attribute to the national policy statement the requirement to maintain and improve water quality. A further measure that is going to help iwi to drive improvements in water quality are the measures that the Māori Party has advocated in the Resource Legislation Amendment Bill which ensures a stronger voice in making sure that we look after New Zealand’s precious freshwater resource.Marama Fox: Given that the Hawke’s Bay Regional Council argues that it is impossible to achieve no degradation through the groundwater quality of the Heretaunga Plains and the Ruataniwha Plains aquifer system how will he keep the council honest to ensure it complies and gives effect to the Environment Court’s order to maintain and improve water quality?Hon Dr NICK SMITH: The Hawke’s Bay Regional Council as with a number of other regional councils does have the problem of long hydrological cycles where some pollution that has occurred over 30 or 40 years will take some time to work through the system but that does not take away our responsibility and this Government’s role to ensure that we set those strong long-term targets. A further measure that we are taking to strengthen that is the Environment Reporting Act which we passed last year with the support of the Māori Party which for the first time will require regional councils to openly disclose exactly what their water quality is and for it to be independently audited. That will be published for the first time in New Zealand in April next year. I am also undertaking a review of the national policy statement and its implementation by regional councils and I am open-minded about constructive suggestions to further strengthen it.Health Services—Rural Communities6.SCOTT SIMPSON (National—Coromandel) to the Minister of Health: What initiatives has the Government put in place to support health services in rural communities?Hon Dr JONATHAN COLEMAN (Minister of Health): We know that it is a difficult time for many farmers and supporting the regions is a key focus for the Government. A good example is the $500000 that we announced last year to support rural mental health. As a result of that money we have recruited and trained 60 additional rural support trust facilitators appointed 12 regional mental health clinical champions and a medical director to help rural support trust clients in accessing support and held 40 workshops run by Rural Health Alliance Aotearoa New Zealand to raise awareness of suicide prevention.Scott Simpson: What is the Government doing to encourage health professionals to work in rural areas?Hon Dr JONATHAN COLEMAN: The Government supports a number of workforce initiatives to ensure that New Zealanders living in the regions have access to the services they need. The Voluntary Bonding Scheme incentivises new graduate doctors midwives nurses dentists and sonographers to work in hard-to-staff communities. To date over 1000 health professionals have been funded through the scheme and just over $23 million has been paid out to eligible participants.Scott Simpson: How has the Government supported health services in the Coromandel by improving access to specialist care?Hon Dr JONATHAN COLEMAN: The Coromandel is part of the Waikato District Health Board catchment area. Forty-nine thousand Waikato patients received a medical or surgical first specialist assessment in 2015 compared with 39000 in 2009. That is a 26 percent increase and a record for the region. The answer to increasing demand is to do more and that is supported by the $257 million funding increase that the Waikato District Health Board has received over the last 7 years. That includes $44 million of new money for this year taking the Waikato District Health Board’s total funding to $1.1 billion for 2015-16.Tax System—Overseas Trusts and Disclosure Regime7.JULIE ANNE GENTER (Green) to the Prime Minister: Does he stand by his statement that “New Zealand has full disclosure of information” with respect to allegations of New Zealand being a tax haven?Rt Hon JOHN KEY (Prime Minister): Yes as I said in answer to question No. 2 the Inland Revenue Department (IRD) gets information on foreign trusts and gives it to tax authorities in other countries if requested under a relevant tax agreement. Tax havens on the other hand are characterised by financial secrecy so it is ridiculous to suggest that New Zealand is a tax haven. We have a strong tax treaty and information exchange network that helps to discover and prevent tax avoidance through exchanging information between tax jurisdictions. New Zealand has also been a very active participant in the OECD and G20 work to combat tax avoidance. We continue to be a strong voice in this area.Julie Anne Genter: How does an overseas tax department access all of that information if it does not know the name of the foreign trust registered here or the trustee?Rt Hon JOHN KEY: It asks for it.Julie Anne Genter: I raise a point of order Mr Speaker. Perhaps I did not clarify my question. [Interruption] I meant how do they ask for it if they do not know their name.Mr SPEAKER: Order! I am going to invite the member to ask her question again. I could not hear the question because of the level of interjection that was occurring across the Chamber. Can we start again?Julie Anne Genter: Thank you Mr Speaker. How does an overseas tax department ask us for that information if it does not know the name of the foreign trust registered here or the trustee?Rt Hon JOHN KEY: It depends on the country. In the case of Australia that information is automatically given to it as it is in some other cases. Secondly each country will have a different regime and I am not an expert in them but many of those countries will ask for trusts to be registered listed and named so that they can get disclosure.Julie Anne Genter: Have there been any changes to the rules since the IRD warned his Government in 2013 that “there was a risk to New Zealand’s reputation” because of limited disclosure requirements?Rt Hon JOHN KEY: The member would have to direct that question to the Minister responsible for inland revenue. They are the ones who have done all the work with the OECD on the base evasionprogramme. But as we know things like factor and anti - money-launderinglegislation have been changing.Julie Anne Genter: I seek leave to table an email dated 24 March 2016 from the IRD that states that it has not progressed any reform in this area.Mr SPEAKER: In view of the answer given I will put the leave. Leave is sought to table that particular email. Is there any objection? [Interruption] Order! Is there objection? There is objection.Julie Anne Genter: How does he reconcile his statement that New Zealand has full disclosure with the Auckland-based Equity Trust International website which advertises its services in the following way: “in New Zealand law a properly structured trust is unbreakable which makes New Zealand at a par with jurisdictions like the Cook Islands but without the stigma of offshore. … This is the secret that wealthy families have been using for years …”?Rt Hon JOHN KEY: Lots of companies and organisations come out with slogans. I remember in 1999 the Labour Party slogan was “For a kinder more caring New Zealand”. They were the days before they wanted to throw out Chinese chefs and name Chinese people as bad people in New Zealand.Julie Anne Genter: So is Covisory Partners in Auckland wrong when it wrote in a paper entitled New Zealand A Tax Haven for Foreign Trusts that our foreign trust tax advantages “make New Zealand a great alternative to various tax havens which have negative inherent stigma attached to them.”; and is he concerned that that negative stigma is now getting attached to us?Rt Hon JOHN KEY: They are patently wrong if they are Australian and they may well be wrong if they are from any other country that has asked for that information.Julie Anne Genter: Will his Government beef up the rules around foreign trusts in New Zealand by adopting the member’s bill that my colleague James Shaw tried to table earlier; if not why not?Rt Hon JOHN KEY: The Government is not opposed to making changes and we will continue to work with the OECD on base erosion and the like. But if the member really thinks that we are going to adopt their member’s bill that wants to actually name taxpayers’ IRD numbers for instance the member has got to be barking mad if she thinks that information should be in the public domain.Metiria Turei: I raise a point of order Mr Speaker. That insult was personal and unnecessary and I ask that he be required to withdraw and apologise for that.Mr SPEAKER: On this occasion—[Interruption] Order! I do not agree with the member. When I consider the tone and the length of the question it was a highly political question that was asked. [Interruption] Whilst I am on my feet if I can identify any interjector I will have no hesitation in asking that person to leave. I considered it carefully. I can understand the member may be a little bit upset. It is an expression I have heard used quite frequently by the Prime Minister—not in this House—but I do not think it is a matter for requiring the Prime Minister to withdraw unless the member was to stand to her feet and say she was personally offended.Hon David Parker: I raise a point of order Mr Speaker.Mr SPEAKER: Order! Just before the member starts the same rules apply to this point of order. I want to hear it without interjection.Hon David Parker: In the prior supplementary question you allowed the Prime Minister to raise irrelevant matters relating to the immigration policy of the Labour Party. If you want to keep order in this House you have to enforce the rules.Hon Gerry Brownlee: Speaking to the point of order.Mr SPEAKER: I will hear from the Hon Gerry Brownlee.Hon Gerry Brownlee: I do not want to prolong things but when a question is asked and there is a theoretical or a hypothetical statement put it is not unreasonable for the Prime Minister to say: “Well here was a statement made by a political grouping and look what was achieved.”Hon David Parker: Speaking to the point of order.Mr SPEAKER: I will hear from the Hon David Parker.Hon David Parker: That is not correct. You cannot raise irrelevant matter relating to another question that attacks another party on a subject matter that is not even the subject of the question. The Leader of the House is just wrong. [Interruption]Mr SPEAKER: Order! We will have only one at a time.Rt Hon Winston Peters: I raise a point of order Mr Speaker. There are clear rules on innuendo and epithets. If you were saying that some member has to get up and protest himself or herself otherwise you will not take redress it suggests that that member now suffers the embarrassment of repeating the offence. Frankly he might say it outside the House but he surely should not be allowed to say it inside the House.Mr SPEAKER: I am not sure what the point of order that the member has just raised in relation—Rt Hon Winston Peters: Well I will repeat it for you again slowly—Mr SPEAKER: Very slowly—and refer to the—Rt Hon Winston Peters: It is that the phrase “barking mad” is an epithet an innuendo and it should not be acceptable in this House. No one should have to tolerate having to get up and put it right and repeat the offence. Have you got that part clear?Mr SPEAKER: Order! No we are getting to the stage where this has gone on quite long enough. As I repeated earlier it is a remark—I think the Rt Hon Winston Peters makes a reasonable point but if the member Julie Anne Genter is offended by the remark she should stand to her feet and say so.Julie Anne Genter: I raise a point of order Mr Speaker. I am not offended; I am more disappointed that the Prime Minister will not answer a reasonable question.Mr SPEAKER: And that certainly is not a point of order.Chris Hipkins: Point of order Mr Speaker.Mr SPEAKER: Order! I have ruled on this matter. If it is a fresh point of order—Chris Hipkins: I raise a point of order Mr Speaker. It is a fresh point of order. In your earlier ruling you made it clear that a political question would get a political answer. I wonder whether you would consider differentiating between a political answer and simply an insulting answer because I think that is an important distinction to make: one that simply hurls insults at the member asking the question versus one that is giving a political answer that is a legitimate exchange.Ron Mark: I raise a point of order Mr Speaker. It is a totally new point of order. The ruling that you have just given could I ask you to possibly reflect? It appears that you have just now countered completely a previous ruling you gave with reference to members taking offence. Previously you have sat members down for taking personal offence and said that it is not whether the member is personally offended; it is whether you the Speaker determine that for the House as a whole this statement was offensive. Now you are saying that we can stand up and take personal offence.Mr SPEAKER: I gather the point. I will decide and in this case I did not think it was particularly offensive so I decided not to do anything about it. As has already been well and truly stated now I invited the member—if she was particularly offended then I would reconsider the matter. The member said that she was not offended. So the matter is now resolved.Hon David Parker: I raise a point of order Mr Speaker.Mr SPEAKER: Just before you ask—we have spent quite a lot of time on this—is this a fresh point of order?Hon David Parker: It is. It seems to me the problem is that I could now stand and the House would not be offended by me calling you barking mad. That cannot be the standard of this House because I should not be able to make that epithet—Mr SPEAKER: No. [Interruption] Order!Hon Gerry Brownlee: Point of order.Mr SPEAKER: I will hear from the Hon Gerry Brownlee.Hon Gerry Brownlee: I raise a point of order Mr Speaker. I think if you have a look later at the Hansard transcript of this and the later television replay which I know you watch every evening with some interest you will find that there was no specific insult. There was a hypothetical preceded with the word that indicates that by saying “if”.Mr SPEAKER: Order! As I said we have spent enough time on this matter. When I took it from the Hon David Parker that it was a fresh point of order it seemed to me we were just relitigating territory that we had already been through.Ron Mark: I raise a point of order Mr Speaker.Mr SPEAKER: I will just check—we have spent a lot of time on this—whether it is a completely fresh point of order but if it is in any way canvassing where we have been in the last 5 or 10 minutes I will be asking—[Interruption] Order! I have ruled. There is no need to give me any further help. The member can come and see me later if he wants to but I do not need to prolong this debate. Is it a fresh point of order?Ron Mark: Well it is clarification—Mr SPEAKER: Order! [Interruption] Order! Would the member just resume his seat. I want to just make it absolutely clear because if the member is raising a fresh point of order I am happy to hear it but if we are in any way relitigating the territory we have covered now for a considerable length of time I will have no hesitation to ask the member to leave the Chamber.Ron Mark: I raise a point of order Mr Speaker. It is a fresh point of order regarding Standing Order 386(2)(c). Can you confirm that that applies?Mr SPEAKER: That is exactly the point that was raised by the Hon David Parker about 10 minutes ago. [Interruption] No. Order! We have spent quite—supplementary question?Hon Michael Woodhouse: Yes. Has the Prime Minister seen any reports on how others might attempt to change the foreign trust disclosure rules?Rt Hon JOHN KEY: I have. I have seen a recommendation from another political party that says that the IRD should disclose personal information including passport numbers and people’s IRD numbers. This is from a political party that says that it believes in privacy.Rt Hon Winston Peters: I raise a point of order Mr Speaker. Could I ask you what happened to the rule that the Ministers and the Prime Minister cannot spend their time referring to another party’s policy? The reason we have question time is to ask the executive as to what—Mr SPEAKER: Order! [Interruption] I do not need any assistance. The question was a legitimate question asking about other reports. I was listening very very carefully to see whether it went into a territory of attacking another political party. Up until the time the member got to his feet and took a point of order it certainly did not do so.David Seymour: Has the Prime Minister considered the possibility that wholesale public disclosure of trust details might endanger people at risk of persecution extortion and oppression under repressive regimes overseas—i.e. the type of people the Green Party used to stick up for?Mr SPEAKER: Order! No. That is a question that was in order until the last part of it. I now rule it out of order.Workplace Health and Safety—Legislative Changes8.BRETT HUDSON (National) to the Minister for Workplace Relations and Safety: What changes were made yesterday to modernise New Zealand’s health and safety law?Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): Yesterday saw the first major legislative reform of workplace health and safety laws in 20 years come into force to help New Zealand achieve the goal of reducing workplace death and injuries by 25 percent by 2020. These changes modernise our approach to health and safety by ensuring that everyone from company directors to casual labourers has health and safety responsibilities that reflect their ability to influence or control work. They create the right legal framework. It is now over to every Kiwi from chief executive officers to the newest employees to work together to ensure that they all go home safely at the end of the day.Brett Hudson: Will these changes adversely impact on small and medium businesses?Hon MICHAEL WOODHOUSE: No. The Act strikes a balance between ensuring workplaces are safe and not imposing unnecessary red tape on businesses. The new Act requires all businesses to target risks and eliminate or mitigate them. Low-risk businesses can take a proportionate response but they will be expected to encourage all staff to participate actively in health and safety to achieve those goals.Tax Avoidance—Multinational Enterprises9.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Revenue: Has he sought advice from the Treasury on the impact of multinational company tax avoidance on the Government’s fiscal position; if so what was the advice he received?Hon MICHAEL WOODHOUSE (Minister of Revenue): As I explained to the House during question time last week the Inland Revenue Department (IRD) does not distinguish on the basis of whether companies are multinational or not. Treasury and the IRD do provide estimates of revenue gains from specific policy initiatives—for example GST on online services and intangibles. Tax avoidance where companies are not paying what they legally owe is cracked down on. I expect all companies to pay the correct amount of tax on their net taxable income regardless of where they are owned.Grant Robertson: I raise a point of order Mr Speaker. The question asked the Minister whether he had sought advice. He offered some views about what Treasury and the IRD might or might not do but he did not answer that part of the question.Mr SPEAKER: On this occasion I do not believe that answer has adequately addressed the question. It was an attempt to answer it and the Minister is responsible for his answer. The way forward is to allow the member two extra supplementary questions.Grant Robertson: Thank you Mr Speaker. Has he sought advice from Treasury on the quantum of multinational company tax avoidance and its impact on the fiscal position of the Government?Hon MICHAEL WOODHOUSE: The question cannot be answered in the way the member asks. [Interruption]Mr SPEAKER: Order! The question has been asked. It does not require a commentary now as the answer is being given.Hon MICHAEL WOODHOUSE: It would require the IRD to make an assessment of a fact that it does not know. It is a quantum question to something that is not known. What I expect is that it works diligently to ensure that all organisations and individuals pay their fair share of tax and I am satisfied it is doing that.Grant Robertson: I will do it slowly: has he sought advice from Treasury on the quantum of multinational tax avoidance and its impact on the Government’s fiscal position?Hon MICHAEL WOODHOUSE: Slowly—no because asking such a question would be a ridiculous waste of the IRD’s time because you would be asking it to chase its tail.Grant Robertson: How is it responsible for the Government to have not asked its chief financial advisers to quantify the impact of multinational tax avoidance on its overall fiscal position when estimates range into the multibillion-dollar area?Hon MICHAEL WOODHOUSE: Estimates are just that. They are fingers in the air based on people’s value judgments about what organisations that have certain turnovers in this country should be paying on tax and I cannot remind that party often enough—they do not seem to get it. New Zealand entities do not pay tax on their gross revenue. They pay it on their net taxable income and I am satisfied that that is what they are doing.Grant Robertson: How does he defend his failure to even quantify the scale of multinational tax avoidance to a small-business owner who is working hard doing the right thing and paying their fair share of taxes—or would he rather join the Prime Minister on the side of mega rich tax dodgers?Mr SPEAKER: The last part of the question is out of order. The first part can certainly be answered.Hon MICHAEL WOODHOUSE: I encourage the member to take a slightly broader perspective on this issue. There is a number of large companies that use their New Zealand - based entities as a means of getting product into New Zealand. Along the retail pipeline for example products like—I do not know—fuel would be then retailed by companies in New Zealand that pay the tax. The analogy would then be for say Silver Fern Farms selling lamb to London to have to pay UK tax. It is not; Waitrose is Asda is.Grant Robertson: What credibility can New Zealand have in being part of international discussions about cracking down on multilateral tax avoidance when it emerges that we are in the club of 21 tax havens revealed as part of the Panama Papers and his Government refuses to acknowledge that that is even a problem?Hon MICHAEL WOODHOUSE: It is not for me to re-answer the very good answers that were given by the Prime Minister to his questions. Suffice it to say I agree that New Zealand is not a tax haven when the definition of such is absolute secrecy. Quite the opposite is the case. But I would also remind the member that to the degree that there is multinational tax avoidance taking place this is a global problem that requires a global solution which is why we are working with the OECD.Grant Robertson: Can he not see that New Zealand’s ability to argue for our fair share from multinationals is fatally compromised by his Government siding with the mega rich tax dodgers who are exploiting our trust laws or is that actually an intentional policy so that lawyers and accountants can get some money and our reputation gets trashed?Hon MICHAEL WOODHOUSE: The question simply does not warrant a response but I will say this: the member needs to be careful what he wishes for. Silver Fern Farms selling lambs into England and Fonterra selling formula into China would on the regime that that member suggests be liable for tax in those countries. Our responsibility is to ensure everybody pays their fair share of tax in New Zealand. This Government deployed $20 million to ensure that that was happening and I am satisfied that that is money well spent.Grant Robertson: Why did he not respond to the IRD’s statement to his predecessor in 2013: “To protect our international reputation it may be necessary to strengthen our regulatory framework for disclosure and recordkeeping.”? Why did the Government not respond to that warning?Hon MICHAEL WOODHOUSE: The question is now delving back into the area of foreign trusts not base erosion and profit shifting by multinationals but I am satisfied that the IRD is nimble in making the changes to things like the thin capitalisation rules the permanent establishment rules the non-resident withholding tax rules and rules for GST on online purchases that ensure the maintenance of this country’s revenue base.Local Government—Better Local Services Reforms10.MARK MITCHELL (National—Rodney) to the Minister of Local Government: What recent reforms has he announced to improve local government services for ratepayers?Hon Peseta SAM LOTU-IIGA (Minister of Local Government): I have recently announced reforms to the local government sector that will enable councils to more easily develop shared services. The Better Local Services reform package will also give the Local Government Commission enhanced powers to work with councils to create shared council-controlled organisations or CCOs. They will provide scale and expertise across the local government sector and drive better outcomes for ratepayers.Mark Mitchell: How will the local government reforms improve services to ratepayers?Hon Peseta SAM LOTU-IIGA: We have got 78 councils across New Zealand responsible for 66 water authorities plus roads parks recreational facilities local planning and building consent processes. The cost of delivering these services is rising much faster than incomes and ratepayers’ ability to fund them. In some regions populations are declining while in other areas population growth and tourism are placing increased demands on local services and infrastructure. Combining to form shared council-controlled organisations for water roads and consenting processes will lift the performance of these services across regions by increasing access to technical expertise and greater use of technology and reducing duplications. Efficiency gains will result in much better value for money and better quality services for ratepayers.Mark Mitchell: What changes are proposed for the Local Government Commission?Hon Peseta SAM LOTU-IIGA: The current legislation restricts the Local Government Commission to responding to proposals put before it and councils are not able to lead reorganisation processes. Under the Better Local Services reforms the Local Government Commission will be able to initiate its own investigations into possible reorganisations. The commission will work proactively with councils to support shared services reorganisations. It is also required to consult affected iwi and local communities. Polls are still intended for any commission-led proposal for amalgamation and for any proposed major transfer of water transport or Resource Management Act assets or functions. There will be increased ministerial oversight of the commission’s operations and these changes will give the commission together with councils and communities better tools to improve services for ratepayers.Freshwater Management—Water Quality of Rivers11.Hon DAVID PARKER (Labour) to the Minister for the Environment: Does he accept that people wanting a swimmable standard for rivers are seeking to stop pollution by farms factories and towns making otherwise swimmable rivers so dirty that they are unsafe to swim in at normal rather than flood flows?Hon Dr NICK SMITH (Minister for the Environment): I have heard the views of hundreds of people at the 10 public meetings to date on the Government’s proposals to strengthen the national freshwater requirements on councils but it is impossible to define them as a single point of view. Some have expressed a view that we should legislate for all water bodies to be swimmable all of the time even though this is not practical. Most people including myself want tougher pollution rules that will ensure that our rivers are swimmable as often as possible. I am open-minded about the swimmability provisions and about making it more explicit to regional councils that New Zealanders expect to be able to swim in their local river as long as these provisions are practical and enforceable.Hon David Parker: Why do he and the Prime Minister keep putting up false excuses against swimmability like poor water quality when rivers are in flood?Hon Dr NICK SMITH: I would note that when Prime Minister John Key was elected to office New Zealand had no national rules around water quality—absolutely none at all. So I do take it as a little bit rich for a member of the former Government to be complaining about the rules that this Government has put in place because they are the toughest rules around improving freshwater quality in New Zealandand improving swimmability of our waterways that have ever been put in place by a Government.Hon David Parker: I raise a point of order Mr Speaker. That was an interesting answer but it did not address my question which was short and straight.Mr SPEAKER: No the member in his question used the words “putting up false excuses”—[Interruption] Order! The Minister took the opportunity to rebut that quite strongly.Hon David Parker: I raise a point of order Mr Speaker. He did not. He did not provide any explanation as to why they are saying that flooded rivers are why they—Mr SPEAKER: Order! He addressed the issue of whether the Prime Minister and he were putting up false excuses.Hon David Parker: Does he accept that he made the Prime Minister look foolish on Radio New Zealand National yesterday by adopting the “flooded river” excuse for polluted rivers when New Zealanders do not go swimming in silt-laden rivers in flood that could sweep them away to their deaths?Hon Dr NICK SMITH: The only politician I have seen looking foolish is the Leader of the Opposition which occurs so frequently that it is almost a daily event—Mr SPEAKER: Order! I accept that the question had a political tone but if the Minister could address the question.Hon Dr NICK SMITH: There are others who are demanding that it be a legal requirement that every river and every stream be swimmable 100 percent of the time. And as a practical engineer I point out that passing such a law would mean that most water bodies would always breach that standard during high-flow events and that is why both the Prime Minister and I are saying that we want tougher rules and we want better water quality but that we want rules that are also practical for councils to enforce.Hon David Parker: Does he believe that New Zealanders should normally be able to swim in their local river?Hon Dr NICK SMITH: Yes I do. And that is why this Government has invested over $300 million in clean-ups. That is why this Government has put the first national regulations in place in respect of water metering.Dr Megan Woods: They’re getting dirtier. They’re getting worse.Hon Dr NICK SMITH: And for those members who say that it is getting worse I point this out: the very first time that a dairy farm expansion or new consent has been turned down has been under our Government as a consequence of national policy statements. If they travel to Southland if they travel to Hawke’s Bay if they travel to those areas that are water quality then any honest water-quality scientist will say firstly that these problems go back a good 20 or 30 years and secondly that this Government is making more progress than any in our history.Hon David Parker: Given his quite proper acknowledgment last week that the main cause of declining water quality is pollution from livestock effluent and fertiliser why can he not also admit that it is his failure to stop increased farm pollution of our rivers that is causing the problem and why he is so out of touch with New Zealanders who just want their rivers to be swimmable?Hon Dr NICK SMITH: This Parliament this afternoon is about to debate the Environment Canterbury legislation. In that legislation the commissioners have actually put red zones in a third of Canterbury which have actually limited agricultural expansion. Actually the regional council was in place for 20 years and never put any limits in place on the expansion of agriculture. In areas like Southland in areas like Hawke’s Bay in areas like the Waikato it is only during the term of this Government that those diffuse pollution issues that are so challenging are actually being addressed.People with Disabilities Employment—Project 30012.MATT DOOCEY (National—Waimakariri) to the Minister for Disability Issues: How is the Canterbury employment pilot scheme Project 300 helping disabled people and people with health conditions into work?Hon NICKY WAGNER (Minister for Disability Issues): In April last year taking advantage of the Christchurch rebuild and the region’s low unemployment rate I launched Project 300 which was a Christchurch-based employment pilot scheme for people with disabilities or health conditions to get them into sustainable employment in 12 months. To date over 159 employers have committed to providing vacancies and better than that as at the end of last month 255 clients have full-time work 67 clients have part-time work and 10 clients have commenced full-time study and more employers and clients are showing an interest every day.Matt Doocey: What reports has she received about the positive impacts of getting into work?Hon NICKY WAGNER: I have heard lots of inspirational stories about how getting into work has changed people’s lives. One participant who had suffered a brain injury has started work reassembling crates. He is enjoying his job and it has helped him remain drug-free. Another participant has been on and off the benefit for 25 years and through Project 300 has gained work experience and following a glowing reference from that work experience has a full-time job. And thirdly a participant who has been on and off the benefit for the past 13 years and has several criminal convictions has been linked up with a range of supports that have boosted her confidence and now she has started part-time work with the option of more hours as they become available.