Questions for Oral Answer — Questions to Ministers 
Questions for Oral Answer — Questions to Ministers 
[Volume:672;Page:18771] 
Wednesday 18 May 2011 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Tax System Changes—Fairness 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: In stating that “this Government introduced a balanced package of tax cuts” was he saying that his tax changes and the tax system are fair to all New Zealanders? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 The tax changes we introduced in Budget 2010 were fair. They increased the fairness of the overall tax system compared with what we inherited from Labour. For example two-thirds of the total cost of the income tax cuts went to reducing the tax on the bottom two income brackets—that is on income under $48000 a year. Almost three-quarters of income earners now have a top statutory rate of 17.5 percent or less. A number of groups now pay a fairer share of tax including property speculators and leveraged foreign companies. We removed the incentive for people to shelter income in trusts and we invested $120 million over 4 years in the Inland Revenue Department in Budget 2010 to improve the policing of and compliance with tax rules. 
Hon Phil Goff 
: How is it fair that a person on the average wage of $48000 coping with a soaring cost of living got just a tax cut of $28 a week to cope with that but somebody on say $393000 a year got $350 a week in tax cuts? 
Rt Hon JOHN KEY 
: It is fair in the sense that one looks at the tax burden of what people pay; someone on $393000 a year pays a lot more tax. Secondly someone who earns a lot more pays a lot more in GST. The reality of the New Zealand tax system is that New Zealanders on higher incomes pay more in that area and a lot of the tax burden is met by those in the higher-income brackets. 
Hon Phil Goff 
: Does he think that the tax cut of $13.77 a week gained by a person on the minimum wage has fully compensated that person for the soaring cost of living? 
Rt Hon JOHN KEY 
: What it has compensated them for is the change in GST. What the member opposite is trying to do is confuse a position where there is a difference between GST rising from 12.5 percent to 15 percent and an overall increase in costs because of inflation or other issues that might be prevalent—seasonal adjustments for instance. I know that because for instance in the last 2 years of the Labour Government cheese went up 50 percent—and we had waited 9 years for a tax cut. I know that because the price of chickens went up 44 percent. I know that because the price of milk went up 23 percent the price of petrol went up 22 percent— 
Mr SPEAKER 
: I think the House has heard sufficient on that. 
Hon Phil Goff 
: Why is it fair that in the Budget tomorrow he is intending to take from people who are on low and middle incomes and are KiwiSavers over $500 a year that they were otherwise entitled to but he is not touching the tax cuts of thousands of dollars a week that he gave to the highest income earners? 
Rt Hon JOHN KEY 
: The first thing is that the member has only one more sleep before he has a chance to see the Budget so I would not necessarily make assumptions. The second thing is— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. We have worked very hard to get straight questions and starting an answer in that gratuitous way does not help. I also put in a second point of order which has to do with whether Ministers are still required to address you when they are answering rather than the backbenches or the gallery and nothing in between. 
Mr SPEAKER 
: I will deal with the latter part first. It will be no surprise to the member that it has often been a practice of Prime Ministers for years to address the back of the House. [ 
Interruption 
] I am on my feet. I am not too troubled by that as long as members are aware that when I get to my feet they should be silent. The Prime Minister did sit down pretty promptly when I got to my feet. To deal with the first point I believe the Prime Minister’s comment was not particularly unkind. It simply pointed out that there is one more day until the Budget. The question asked about a matter to do with the Budget and asserted that something would be happening in the Budget. It is kind of dangerous prior to the Budget to make assertions about what is in the Budget. For the Prime Minister to make some reference in a light-hearted way—and it was not made in a nasty sort of way—that the Budget is still to come is not I think desperately bad. That is why I did not pull up the Prime Minister but I will be listening carefully to make sure that when straight questions are asked the questioner is not attacked. I do not think it was particularly unfair at all to make a light-hearted reference to the fact that there is still a day to go until the Budget. 
Rt Hon JOHN KEY 
: As I was saying the member has only one more sleep until he will be able to see what is in the Budget. The second thing I would say is that it is worth noting that if we look at the top personal tax rate and the tax cut changes of 2010 we see that they amounted to about $400 million to $500 million per year which is something that Labour goes on and on about out of a $2.5 billion personal tax package. In other words 20 percent of the tax package went to the highest income earners. 
Hon Phil Goff 
: Are the Inland Revenue—[ 
Interruption 
] 
Mr SPEAKER 
: I want to hear the question. 
Hon Phil Goff 
: Are the Inland Revenue Department figures quoted this morning correct in stating that the tax paid by 17244 dairy farms in 2009 totalled $26 million representing the average annual tax paid by those farms of $1506 each; if not in what respect are those figures incorrect? 
Rt Hon JOHN KEY 
: There is a huge difference between turnover and profit just as there is a big difference between lamb chops and sausages. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: The senior Government whip should know that when a point of order is called there should be no further interjections. 
Hon Phil Goff 
: The question was very specific. I did not talk about income or turnover. I asked whether three specific sets of figures were correct and if not in what respect they were incorrect. I could not have asked a straighter question than that. 
Mr SPEAKER 
: Forgive—[ 
Interruption 
] I have just called the senior Government whip to account so the deputy leader of the Labour Party will also not interject. If the member cannot see what he is walking into in asking a question like that with those figures I cannot assist him. 
Hon Phil Goff 
: Oh no Mr Speaker. 
Mr SPEAKER 
: The member will not interrupt me. I listened very carefully to the question and I just grimaced because I could pick what kind of answer the answer would be. I cannot help members if they do not think about the questions they are asking. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I ask you to examine the question that I asked. It was a straight factual question about whether three sets— 
Mr SPEAKER 
: The Leader of the Opposition will resume his seat. I will examine it I promise him but I am absolutely certain that what I heard was very clear and I am not remotely surprised at the response to it. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I know that some members opposite have a special interest in this area. Mr Speaker— 
Mr SPEAKER 
: The member will resume his seat immediately. Some members will be leaving the House very soon. The point I have been emphasising day after day is that members need to think about their questions when they ask them. They should not ask the Speaker to help members who walk into traps when they are asking questions. Forgive me but that is the reality of life. I am warning members that I am not of a mood to be trifled with on this. For example I saw this just yesterday—I cringed when I heard a supplementary question asked because I could just see what the answer would be and I thought “Surely not!”. I ask members to think about it. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I seek your leave to ask the supplementary question again word for word identical to how I asked it last time and to let you make a judgment as to whether any of the comments that you have just made relate to the question I asked. 
Mr SPEAKER 
: The question was absolutely in order. I have no problem with that whatsoever but the nature of what the member actually asked including his question made me cringe as I heard it. Forgive me but I listen to questions very carefully because I have to protect—I say to members of the Opposition that I have sat down Ministers. I sat down the Prime Minister in the previous question. I have not seen a previous Speaker do that. I have helped the Opposition more than I have seen previous Speakers do but I cannot assist—[ 
Interruption 
] There will be silence; some members of the front bench of the Labour Party will be leaving this House very shortly if they are not careful. I cannot assist if members do not think through the questions they ask. I listen very carefully. Yesterday I stopped the Deputy Prime Minister on a straight question from the shadow Leader of the House because the question was a straight question and the Deputy Prime Minister started to launch into an unfair comment. I cannot assist where questions are asked that lead to answers on which I simply cannot provide any help. 
Hon Phil Goff 
: Are Inland Revenue Department figures reported this morning correct in stating that the tax paid by 17244 dairy farms in 2009 totalled $26 million representing the average annual tax paid by those farms of $1506 each; if not in what respect are those figures incorrect? 
Rt Hon JOHN KEY 
: I cannot confirm whether they are correct but I can say that they are a small slice of what is paid by dairy farmers if one was to accept it at face value. The press release put out by DairyNZ said: “We need to set this straight. Our figures show that on average approximately $300 million tax is paid per year by dairy farms”. I say to the member that if he does not know the difference between turnover and profit then goodness knows what his Budget will look like one day. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think it should be obvious to you from the tail end of that question that there was no discussion of turnover in the Leader of the Opposition’s question. There was no suggestion of turnover. It was all about profit and tax paid. I ask you to tell us that you think the Prime Minister’s reply was appropriate and to also indicate now whether you think that that question was wrong— 
Mr SPEAKER 
: Regarding my comments I made about the question previously having heard all the material that the question related to forgive me but I do not change my position on it whatsoever. 
Hon Phil Goff 
: Is the Prime Minister saying that the material provided by the Minister of Revenue in written answers to a member of this House were therefore wrong? 
Rt Hon JOHN KEY 
: No. I am saying that that reflects one portion of what may be paid by those farmers at one snapshot in time. 
Hon David Parker 
: Tell us what the other portion is. 
Rt Hon JOHN KEY 
: Well here is the other portion. There are lots of people that work on farms and they actually pay PAYE. There are many other years that go into farms. There are many other parts of the industry. [ 
Interruption 
] Let me say to Trevor Mallard that if he is telling us he is changing the company tax rules and the way they work for every company in New Zealand then I say he should go for it. He should go out there and tell New Zealanders that they now pay tax on turnover and that they do not pay it on profit. I tell members that that will be a staggering speech considering that David Cunliffe was in the paper today saying there will be some remarkable new things that we will be surprised about. Wait until New Zealand companies find out that they are paying tax on turnover—what a cracker that is going to be. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. The Prime Minister’s answer related to turnover. I never mentioned turnover anywhere in the question. 
Mr SPEAKER 
: Enough steam has been let off on this one and I accept both sides of the House feel quite strongly about it. I did not stop the Prime Minister on that occasion because he was responding to a very loud interjection. The Prime Minister was answering in a pretty straightforward way until there was a series of interjections and I did not want to kill that exchange. But I think we now have let off a lot of steam on this question and we will come to some form of order now. 
Hon Phil Goff 
: If the figures given by the Minister of Revenue are not incorrect as the Prime Minister conceded does the Prime Minister think it is appropriate that the average dairy farmer paid half the level of tax that is paid by a married couple earning only superannuation? 
Rt Hon JOHN KEY 
: Well I just do not accept the proposition put up by the Leader of the Opposition. As I said to quote DairyNZ which probably has a pretty good idea of these things: “on average approximately $300 million tax is paid per year by dairy farms”. The average dairy farmer is paying about $28000 in tax I think I saw in the release. 
Dr Russel Norman 
: Does the Prime Minister agree that what stands behind the figures on the front page of the  
Dominion Post 
 today is that a lot of farming in New Zealand is done for capital gains and that is where a lot of the income comes from and that under our current tax arrangement there is no taxation of those capital gains? 
Rt Hon JOHN KEY 
: It is not true actually that there is no taxation of capital gains in New Zealand. If someone buys a farm with the intention of selling it then that will be subject to capital gains tax. It is not subject to capital gains tax if they are undertaking the farming business and that is typical of many industries in New Zealand. 
Stuart Nash 
: Was the Minister of Revenue correct—[ 
Interruption 
] 
Mr SPEAKER 
: I say to the National Government backbench that I want to hear the question from Stuart Nash. 
Stuart Nash 
: Was the Minister of Revenue correct in his answer to written question No. 2383 when he stated that the total tax paid by the dairying other livestock farming viticulture horticulture and service to agriculture industries totalled $247 million for the 2009 tax year compared with $486 million worth of tax for the mining industry? 
Rt Hon JOHN KEY 
: I am sure that the Minister of Revenue is right. He provides the right answer to all these questions. But I say once more to the member that ever since Walter Nash was Prime Minister we have been taxing people on profits not revenue and turnover. 
Dr Russel Norman 
: Does the Prime Minister stand by his answer to me given in this House yesterday with regard to the fiscal impact of the last two Budgets that “over the 4-year forecast period there will be an increase in net revenue of $1 billion.” when the Budget papers released by the Minister of Finance in last year’s Budget show that the net fiscal impact over 4 years will be a loss of $1 billion in revenue? 
Rt Hon JOHN KEY 
: I think actually the correct answer is that it is a positive $4.8 billion over that period. I should have correctly said that it was an average gain of $1 billion a year. 
Budget 2011—Main Objectives 
2. 
LOUISE UPSTON (National—Taupo) 
 to the  
Minister of Finance 
: What will be the main objectives of Budget 2011 tomorrow? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Budget will set out the next steps in the Government’s plan to build faster growth and more jobs for New Zealanders and to turn round forecasts of significant debt on the Government’s books. In particular the Budget will focus on building faster growth and national savings setting a credible path back to surplus and rebuilding Christchurch at the same time as protecting the most vulnerable New Zealanders and improving front-line services. 
Louise Upston 
: How will the Budget build faster growth around higher national savings? 
Hon BILL ENGLISH 
: The Budget will take a number of steps to ensure that more of the growth in future savings is not based on the Government borrowing money for incentives and subsidies. The Budget forecast will also show stronger economic growth forecasts with increases in the number of new jobs and in real wages. It is essential that this growth is driven by the private sector. Since the mid-2000s too much of that growth has been driven by excessive Government spending and housing speculation. 
Louise Upston 
: How will the Budget set a credible path back to surplus and repaying debt? 
Hon BILL ENGLISH 
: The Budget will take a number of responsible and balanced measures to better target large Government programmes to those most in need and also to ensure that public services deliver better value for taxpayers. In fact we will take a lot of the steps that New Zealand households and businesses have already taken over the last 2 or 3 years. 
Hon David Cunliffe 
: Will he keep his promise to New Zealanders in tomorrow’s Budget not to cut KiwiSaver; if so how does he square that with the effective $10-a-week KiwiSaver tax increase he has already announced? 
Hon BILL ENGLISH 
: The Government has kept its promise to New Zealanders and in July I think we will pay out hundreds of millions of dollars of tax credits into KiwiSaver accounts. Any changes we make will not affect people until after the election. They will have the opportunity to express their views on that in an election. I am sure they will take into account the overall picture: that where the Government needs to get on top of a very large overdraft a very large deficit it is making balanced and responsible decisions to get it under control. 
Hon David Cunliffe 
: If it was the Minister’s intention to seek an electoral mandate for those KiwiSaver cuts why did he not campaign on them in 2008 or perhaps defer them to Budget 2012 if he thinks he will still be the Minister rather than legislate now and pretend he has not broken yet another promise? 
Hon BILL ENGLISH 
: I do not quite understand the logic of that. The National Government made one very significant change after the 2008 election: it cancelled two tranches of its tax cuts because of the depth of the global recession. We think it is a pretty straight-up deal. We will put the propositions up in detail before an election before it affects people and they will have the chance to have an opinion on it. 
Louise Upston 
: What reports has he seen on public support for the Budget’s direction? 
Hon BILL ENGLISH 
: This morning I saw an online poll asking New Zealanders how the Budget had affected their families. I was a bit surprised to see this question because the Budget has not been delivered yet and it might be difficult for those families to be able to tell. However the results were impressive: 88 percent of families who responded to this poll were feeling better off as a result of the Budget decisions. I thank the Opposition’s finance spokesperson for running this poll on his own website which has now been mysteriously removed because of the outstanding results. 
Louise Upston 
: I seek leave to table poll results from David Cunliffe’s website which are no longer on line and have been mysteriously taken down. 
Mr SPEAKER 
: I do not think website material is— 
Hon Simon Power 
: I raise a point of order Mr Speaker. The point that the member makes is a fair one. If it was still available online your point would make sense but as the Minister of Finance said it is no longer available online. 
Hon Trevor Mallard 
: It is very rare that I agree with the Leader of the House and Louise Upston at the same time. I think having the precedent of having websites that have been taken down tabled in the House is a very good one. 
Mr SPEAKER 
: I will leave it to the wisdom of the House. Leave is sought for that document to be tabled. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
GST Increase—Compensation 
3. 
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Prime Minister 
: When he said “In most cases the tax switch more than compensated people for the increase in GST” in which cases had people not been fully compensated? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Budget 2010’s tax switch meant that at all levels of income the reduction in people’s income tax was greater than the effect of increasing GST so ordinary people earning a wage or salary and paying income tax were better off as a result of the tax switch. Superannuitants were also better off. Benefit payments were increased to compensate for the increase in GST. The only people who would not have been fully compensated for the increase in GST were people who were sheltering income in trusts or otherwise earning income that was not fully taxed at the personal tax rates. 
Hon Annette King 
: If a family such as the Alexander family featured on  
Campbell Live 
 received an $11-a-week tax cut but their food costs alone increased by $25 a week—not just over 1 month but over 6 months—does he believe that they have been “more than compensated”; if so how? 
Rt Hon JOHN KEY 
: The family has been compensated for the change in the increase in GST by the reduction of their personal tax rates. That is absolutely factually correct. What is also correct is that there may be increases—or decreases actually—in food prices. As I say to the member in the last 2 years in which Labour was in office—I could have picked any two frankly but I could not get enough data going back—basically cheese went up 50 percent chicken went up 44 percent milk went up 23 percent petrol went up 22 percent lamb chops went up by a certain amount sausages and mince went down by a little bit more but I am not sure of the exact numbers vegetables went up 21 percent bread went up 20 percent electricity went up 13 percent and from memory people did not get much of a tax cut. 
Mr SPEAKER 
: The Hon Annette King. 
Hon Member 
: Try again Anne. 
Hon Annette King 
: I certainly will thank you very much. What then is his response to people like Sharon who does not think she has been “more than compensated”? She is a single parent who is a qualified financial worker who knows how to budget who has had to toss up between filling her car up with petrol or buying groceries who is finding it very stressful to feed her kids and who said “John Key will lose another skilled person. As soon as I finish my degree I will leave New Zealand.” 
Rt Hon JOHN KEY 
: I will be very disappointed if Sharon leaves New Zealand because by the sound of things she could make a great contribution to New Zealand. What I would say to her is that in the 3 years that National has been in Government we have done the following things. We have reformed the tax system and made it more effective for people to work save and get ahead in their life. We have halved the levels of interest rates that are in place in the New Zealand economy today. We have reduced the size of Government as it operates today. We have saved billions of dollars of wasteful expenditure by the previous Government. We have made sure that her children— 
Hon Trevor Mallard 
: BMWs? 
Rt Hon JOHN KEY 
: Yes it is a shame Helen bought those BMWs but that is the way it goes I suppose. I mean it was a bit late once we arrived—but that is the way it goes. 
Mr SPEAKER 
: I think the House has heard sufficient. 
Hon Trevor Mallard 
: In light of his comment that Helen bought the BMWs why did the Prime Minister not read the papers in his office that confirmed the purchase this year? 
Rt Hon JOHN KEY 
: I am the first to admit that the process was a bit sloppy and we should have had better paperwork but I tell you what talking of papers I was interested to read in John Armstrong’s column today that Labour is getting out of the gutter. We will see whether that lasts to 2:45 this afternoon. 
Mr SPEAKER 
: The Hon Annette King. [ 
Interruption 
] 
Hon Annette King 
: That is right. Go for it. 
Mr SPEAKER 
: We are not going to have any of this. I ask the member to resume her seat for a moment. Both front benches will come to order and especially on this occasion the National front bench. 
Hon Annette King 
: What does he say to another person who responded to his comments about the tax cuts—on  
Campbell Live 
 for those who do not believe it—and who is prepared to speak up? She said that she cannot afford the diet necessary for her diabetes and her husband’s heart condition due to the rising cost of living and the GST rise and that her family is not living now; they are existing. Is that what he meant when he said people would be better off under National? 
Rt Hon JOHN KEY 
: There are a couple of things. Let us examine the facts. In the 9 years that Labour was in office real wages went ahead 3 percent in the entire 9 years. Under a National Government real wages have grown considerably faster than that in the 2½ years we have been in office. Let us look at health seeing that the member raised it. We are spending more money on health than New Zealand has ever had before. New Zealanders are waiting 4 weeks or less for cancer treatment. We had 20000 more elective surgery operations committed this year than last year. More New Zealand children are being immunised than before. And tomorrow even more money will be going into health. 
Hon Annette King 
: Does he think his lack of empathy towards people who are struggling and his own nonchalant attitude towards his own finances as shown in the  
Dominion Post  
today—that he has not had to check his superannuation balance for the last 8 or 9 years—makes him more or less likely to understand the pressures that a family has every day in counting their pennies? 
Rt Hon JOHN KEY 
: There is a very good reason why I have not checked my superannuation balance and that is because when one is Prime Minister one is extremely busy on the thing that really matters which is the future of New Zealand. 
Hon Trevor Mallard 
: I seek leave to table a Facebook page of the Hon Bill English where he says— 
Mr SPEAKER 
: Order! 
Hon Trevor Mallard 
: —that the Government— 
Mr SPEAKER 
: If it were not for the fact that the member is seriously injured and therefore takes longer to sit down I would be dealing with him pretty severely. He knows he failed to establish the status of this document. If this document is from a website that has been taken down then I am very happy to put the leave but the member should have established what the document is before describing what was in it. 
Hon Trevor Mallard 
: I can confirm that this document is a Facebook page from a website of the Hon Bill English saying stop asset sales that has subsequently been taken down. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Dr Don Brash—Prime Minister’s Statements 
4. 
JOHN BOSCAWEN (Leader—ACT) 
 to the  
Prime Minister 
: Does he stand by the statement he made in his post-Cabinet press conference on Monday that “Everyone needs to understand that what Don Brash is talking about is hardcore”; if so why? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes; I was thinking of some of the policies from the 2025 Taskforce when I made that comment about the task force that Dr Brash chaired. These included for example abolishing all KiwiSaver subsidies introducing interest rates back on to student loans lowering the top personal tax rate to 20 percent selling all State-owned enterprises in New Zealand encouraging local government to sell all its trading companies winding up the Superannuation Fund and reducing the minimum wage. I think most New Zealanders would consider those policies to be hard core. This Government has chosen to take a more balanced approach to management. 
John Boscawen 
: Does he think it is hard core to have one law for all New Zealanders a policy that National campaigned on at the last three successive elections; if not why is he not implementing that policy? 
Rt Hon JOHN KEY 
: No; and we do. 
John Boscawen 
: What is hard core about a plan to return Government spending as a percentage of GDP to what it was under Helen Clark? 
Rt Hon JOHN KEY 
: The ambition of reducing Government spending as a percentage of GDP is one that this Government holds dearly and that will be reflected actually when one looks at the Budget tomorrow. But it is about the pathway to get there and I go back to the member and I say to him that this is what Don Brash wants to do: abolish KiwiSaver subsidies put interest back on to student loans drop the top personal tax rate sell all State-owned enterprises raise the age of eligibility for the pension encourage local government to sell all its trading companies wind up the Superannuation Fund and reduce the minimum wage. I think that is hard core. 
John Boscawen 
: What is hard core about the statement that youth rates give “employers a reason to hire younger people and give them a chance to get experience” as stated by the then Leader of the Opposition John Key in December 2007 and supported by the ACT leader Don Brash? 
Rt Hon JOHN KEY 
: Given that I said it nothing. The basic point here is that although that may be one particular small part of the tranche I think we all understand that the range of policies being advocated by ACT is extreme and hard core. That has not changed; that has always been the position. It does not mean we cannot have a constructive Government with ACT as we have enjoyed for the last 3 years. 
Tax System Changes—Impact on Operating Balance  
5. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: What is the total impact on the operating balance over the forecast period of the fiscal impact of the tax changes in Budget 2010 according to page 70 of the 2010 Budget and Economic Fiscal Update and how does he reconcile that with the Prime Minister’s statement in the House yesterday that “National’s tax plan 2010 … was fiscally neutral”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 According to the table the member refers to the total impact over the forecast period—5 years—is $240 million. Over those 5 years the average impact is around $48 million a year. In a tax package that involves many billions of dollars of reductions in income tax and increases in GST this is a very small net impact. As the member will see the final year of that tax package shows a positive fiscal impact which means that as time goes on that tax package will result in the Crown collecting more tax not less. 
Hon David Cunliffe 
: In view of the fact that the primary question was very specific in relating to page 70 of a Budget document which shows a fiscal hole of $1.085 billion over 4 years I seek leave to table— 
Mr SPEAKER 
: If the member is seeking leave to table a document he should have made that clear. 
Hon David Cunliffe 
: —that document from page 70 showing— 
Mr SPEAKER 
: No we do not table pages from Budget documents. We all have those. 
Hon David Cunliffe 
: Will he concede that the difference between his claim of fiscal neutrality and the actual $1.085 billion tax hole over 4 years according to page 70 of last year’s Budget has been created because of the rose-tinted growth forecasts in that Budget which have not eventuated? 
Hon BILL ENGLISH 
: No and as I have explained to the member and in fact I have tabled a summary of figures from two Budgets and the late 2008 tax package the Government’s tax changes of which there are three significant ones—the tax package in December 2010 the tax package in December 2008 and the announcements in the 2009 Budget where we cancelled two tranches of tax cuts—have had the overall effect that the Government’s tax take has increased. If the member looks at the Budget he will see that tax as a percentage of GDP is rising. 
Hon David Cunliffe 
: Which if any of the following four tests of a successful Budget—building a stronger economy promoting savings and New Zealand ownership of New Zealand assets tackling the rising cost of living and promoting debt reduction and fiscal responsibility—is met by borrowing for tax cuts? 
Hon BILL ENGLISH 
: The Budget tomorrow will pass all those tests. The member persists in an error. He is wrong to say that the tax changes implemented by the National Government have meant borrowing for tax cuts. They have not. He has spent a lot of time complaining about the tax changes we implemented to fund income tax cuts such as the increase in GST the abolition of the research and development tax credit and changes in KiwiSaver subsidies. The published Budget documents show over three significant sets of tax changes that the Government’s tax packages raise more revenue. In fact they reduce borrowing. We have not borrowed to fund tax cuts. It does not matter how often the member says it he is wrong. 
Hon David Cunliffe 
: When the Minister has by his own Budget documents spent $23 billion on forgone tax revenue in the 2009 and 2010 Budgets and he is currently running a $16 billion deficit how could some component of that tax remission possibly not be borrowing for tax cuts? 
Hon BILL ENGLISH 
: The member needs to go back and do his homework because the one significant piece of information he leaves out is that the Government in 2009 cancelled two tranches of tax cuts which maintained several billion dollars of revenue. When he adds it all up—he can get the Auditor-General to look at it and he can get Treasury to look at it—the Government’s tax packages over three significant tax changes collect more tax revenue not less and he is simply wrong. Being persistently wrong does not make you right it just makes you wrong. 
Mr SPEAKER 
: I hope it is not the Speaker the member is referring to. 
Chris Tremain 
: What has been the total impact on the operating balance over the forecast period of all the Government’s tax changes? 
Hon BILL ENGLISH 
: According to the official Budget documents the total impact over the current forecast period of all the Government’s tax changes is expected to be positive $4.8 billion. In other words all our tax changes together will generate $4.8 billion of extra revenue which will no longer need to be borrowed. So the truth is actually the opposite of what the Labour members are saying. The biggest contribution to this total is the $4.5 billion we saved when we cancelled tax cuts that both Labour and National had scheduled for 2010-11. We cancelled $4.5 billion of tax cuts. The other $300 million is the wash-up from our tax packages which are broadly fiscally neutral. The member is still wrong. 
Prisons—Container Units 
6. 
ALLAN PEACHEY (National—Tamaki) 
 to the  
Minister of Corrections 
: What reports has she received about the first year of container units being used in New Zealand prisons? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am pleased to report that New Zealand’s first prison unit constructed out of second-hand shipping containers is outperforming all expectations. The unit which was 30 percent cheaper to build than comparable traditionally built units houses 60 prisoners at Rimutaka Prison. In its first year of operation the number of incidents within the container unit has been significantly lower than in standard units. There have been no incidents involving drugs alcohol cellphones or weapons and there have been no assaults on staff. Maintenance costs for the unit are 34 percent lower than expected and vandalism is extremely low. 
Allan Peachey 
: How could containers be used in future to meet prison capacity needs? 
Hon JUDITH COLLINS 
: The department will now conduct a full evaluation of the unit and consider how containers can be used further in the New Zealand prison environment. However given their speed of construction and flexibility in terms of design the department has developed up to nine different layout configurations including multi-storey options that could be used in future. Container cells could also be used for other purposes—for example to provide a low-cost option for adding audiovisual links between prisons and the courts. The container unit is attracting a lot of interest including from corrections operators in other countries that are keen to learn from our success in this area. 
Broadband Ultra-fast—Regulatory Forbearance 
7. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
 to the  
Minister for Communications and Information Technology 
: What was the motivation behind the decision to remove regulatory forbearance from the Telecommunications (TSO Broadband and Other Matters) Amendment Bill? 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 Although the telecommunications industry is overwhelmingly supportive of the ultra-fast broadband policy some stakeholders were concerned about the regulatory forbearance over the 8½-year build period of the contract. I think these concerns were more theoretical than real given that everybody has been happy with the very competitive prices announced by Crown Fibre Holdings to date. But we have been able to find an alternative solution that continues to provide confidence to the network builders to be committed to their low capped prices and confidence for customers that they will continue to get the best prices over that 8½-year period. I thank the Maori Party for its assistance in developing this change. 
Rahui Katene 
: What confidence can Maori have that there will be specific opportunities within the Ultra-fast Broadband Initiative and the Rural Broadband Initiative that will assist in lifting economic development for Maori? 
Hon STEVEN JOYCE 
: A lot of confidence. The prime motivation for Crown involvement in the ultra-fast broadband development is to foster economic growth. Fibre will transform this country with enhanced productivity improved global connectivity and enhanced capacity for innovation becoming available for everybody. In particular for Maori the Minister of Maori Affairs and I have developed Nga Pu Waea to assist the Government on Maori interests and development opportunities in broadband and to work to ensure that Maori communities as well as Maori health and social service providers benefit from the roll-out of broadband wherever they live. 
Rahui Katene 
: How can Maori constituents consumers and industry participants all of whom are affected heavily by telecommunications costs be assured that pricing is appropriate and competition is encouraged? 
Hon STEVEN JOYCE 
: There are two safeguards in place to ensure competitive pricing. Firstly by prescribing for a wholesale-only open access network we will ensure the maximum competition at the retail level. As mentioned in answer to the primary question everybody has been happy with the very competitive wholesale price caps announced by Crown Fibre Holdings today. Secondly the Commerce Commission retains its ability to investigate and recommend regulations should anti-competitive behaviour emerge. 
Hon Parekura Horomia 
: Has the Government agreed to any further spectrum for Maori as part of this arrangement? 
Hon Member 
: What do you know about broadband? 
Hon Parekura Horomia 
: A lot more than that member. 
Hon STEVEN JOYCE 
: No nothing about spectrum has been considered in the Ultra-fast Broadband Initiative. 
Earthquake Christchurch—Full-time Workers Required for Rebuild 
JACINDA ARDERN (Labour) 
:  
My question is 
to the Minister for Canterbury Earthquake Recovery and asks: does he stand by the Prime Minister’s statement in relation to Christchurch— 
Mr SPEAKER 
: Forgive me for interrupting the honourable member. When members interject it is surprising how difficult it is to hear sometimes with sound echoing around the Chamber. Once a question has been dealt with there is no need for ongoing interjection. I do apologise to Jacinda Ardern. 
8. 
JACINDA ARDERN (Labour) 
 to the  
Minister for Canterbury Earthquake Recovery 
: Does he stand by the Prime Minister’s statement in relation to Christchurch that “it looks like the residential rebuild alone will require up to 12500 full-time workers” if not how many full-time workers does he believe will now be needed? 
Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake Recovery) 
 on behalf of the  
Minister for Canterbury Earthquake Recovery 
: Yes. 
Jacinda Ardern 
: Does he believe that his Government’s trades training package announced last week with new funding for 1500 training places in Christchurch will be enough to meet reconstruction demands? 
Hon MAURICE WILLIAMSON 
: What I would say is that it is too early in the cycle to know the numbers precisely. The 12500 figure is the best estimate at this point but I can tell the member that the Department of Building and Housing says it will have a better idea of what the real number will be as the Earthquake Commission finishes the insurance assessments process. Secondly the 12500 workers required will not come just from new trainees. They will come from people who have been in the construction workforce have exited but will come back in they will come from outside of the Canterbury region and they may also come from an opening up of the immigration system to allow in workers from elsewhere. No one knows what those numbers are and until the process goes a little further down the stream no one will know the exact requirement. 
Jacinda Ardern 
: Will the Minister guarantee that overseas labour will not be imported to fill any projected shortfall in workers for the Christchurch rebuild? 
Hon MAURICE WILLIAMSON 
: It would be foolish to make any guarantees about this. There are too many unknowns. Too much of this is imprecise. It will probably be 2 to 4 years before the peak of the rebuilding occurs and therefore it is impossible to know whether we will be able to fill the shortfall. But the package announced this week as part of the Budget—the $42 million for trades training and the 3000 more construction-related training places at polytechnics in Canterbury—is a very good start to gear up for the process. I can assure the member that the Government will keep a watching brief and as the demand grows so will the supply of workers. 
Jacinda Ardern 
: Has he seen Tertiary Education Commission reports that show that under his Government the number of building and construction trainees has dropped by over 2000 and as such does not this package at best correct the shortfall that already existed before the earthquake? 
Hon MAURICE WILLIAMSON 
: I think a question like that would be way better put to the Minister for Tertiary Education because I would be floundering if I tried to answer it. [ 
Interruption 
] 
Mr SPEAKER 
: I want to hear Lianne Dalziel’s question. 
Hon Lianne Dalziel 
: Will he ensure that all Government-led Christchurch reconstruction contracts require contractors to take on local apprentices so that they can be fully trained in time to benefit from the expected peak in activity in 2 to 4 years’ time? 
Hon MAURICE WILLIAMSON 
: I think that taking on local apprentices and doing training would certainly be a key factor that would be taken into consideration as part of letting a contract—yes I do. 
Hon Phil Goff 
: In the 8 months since the 4 September earthquake how many new trainees or apprentices have been taken on so far specifically to meet the huge demand that will exist because of the need for reconstruction of 10000 houses? 
Hon MAURICE WILLIAMSON 
: I give the same answer as before. I am answering this question on behalf of the Minister for Canterbury Earthquake Recovery; I am actually the Minister for Building and Construction. I think it is the Minister for Tertiary Education that that question should be put to. 
Community Social Services—Community Response Fund 
9. 
Hon TAU HENARE (National) 
 to the  
Minister for Social Development and Employment 
: What recent announcements has she made to support community social services? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 We have announced the successful applicants to the sixth round of the Community Response Fund and I am pleased that nearly $14 million has been granted to 345 organisations. We created this fund to help organisations to keep delivering services to families through tough times and it has done just that. Since the fund began more than $55 million has been paid out to 694 community organisations and on top of that there was a special round just for Canterbury of $7.5 million. 
Hon Tau Henare 
: Has the Community Response Fund provided any support for budgeting and financial services that are facing an increasing workload? 
Hon PAULA BENNETT 
: Yes $2.3 million has been given to 57 organisations in round six. To date under the Community Response Fund budgeting and financial assistance organisations have received about $5.3 million in total. 
Broadband Ultra-fast—Regulatory Forbearance Cost 
10. 
CLARE CURRAN (Labour—Dunedin South) 
 to the  
Minister for Communications and Information Technology 
: What is the best estimate of the additional cost to the Crown of the change he announced to the ultra-fast broadband network this morning? 
Hon STEVEN JOYCE (Minister for Communications and Information Technology) 
: 
 The current best estimate of the additional cost to the Crown is zero. 
Clare Curran 
: What precedents are there for the Crown indemnifying a private company for its technological and financial risk? 
Hon STEVEN JOYCE 
: It is quite common in public-private partnerships for the Crown to be involved. 
Hon Members 
: Oh! 
Hon STEVEN JOYCE 
: No it is. In countries around the world it is common for Governments to be involved to provide support for regulatory risk. That is how they get prices down and that is what we have done in this case. [ 
Interruption 
] 
Mr SPEAKER 
: I want to hear Clare Curran. 
Clare Curran 
: How does he propose that the winning private contractor will be compensated in the event that the Commerce Commission decides that the contractor’s market dominance is unfair and forces a price cut? 
Hon STEVEN JOYCE 
: Firstly I should say that I think that that is a highly unlikely scenario because the prices that Crown Fibre Holdings have announced at this point for the contracts they have done have been seen to be highly competitive and supported by most of the industry contractors which have said that they are surprised they are on the cheaper side than what they expected and they are very competitive with current copper prices. So to say that that will be a problem one would have to assume that the Commerce Commission would come in and regulate over the top of what is already a very competitive price which I think is a very high assumption. But if it were to occur—and as I say it is not very likely—then I would expect that that would involve a change to the financial terms which would perhaps delay repayment of the Crown’s investment. It would not involve extra money and it would not involve a reduction in the footprint of the ultra-fast broadband. 
Hon Trevor Mallard 
: If as the Minister says that is highly unlikely why is he legislating to protect Telecom from that event? 
Hon STEVEN JOYCE 
: Firstly the member assumes the outcome of the bid negotiations. He must know more than me. The second point is that I think the entire point of the change to the regulatory forbearance is to not legislate so I think he needs to keep up with what has been happening today. 
Clare Curran 
: Why is he using the $15 million that was allocated to connect the most remote schools in New Zealand to broadband to now connect up to 108000 New Zealand school students from up to 470 schools who were mistakenly left out of both his urban and rural broadband schemes as identified in a report written by independent consultant Jonathan Brewer and is this not just another almighty screw-up in his broadband scheme? 
Hon STEVEN JOYCE 
: No although I am not quite sure how close that question is to the primary question. But let us humour the member. The reality of the situation is that there was always a boundary between the ultra-fast broadband network and the rural broadband network and it has always been the intention that schools within that geographical area would be tendered separately. That is what has happened. There is no conspiracy here I say to Ms Curran. 
Clare Curran 
: I seek leave to table three documents. The first two are reports from the independent consultant Jonathan Brewer. The first is titled “Ultra Fast Broadband for Schools—By the Numbers” and the second is titled “Broadband for Schools—Rural Communities Miss Out”. 
Mr SPEAKER 
: Leave is sought to table those two documents. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
Clare Curran 
: I seek leave to table a third document. It is a letter to the Minister of Education Anne Tolley and the Minister for Communications and Information Technology Steven Joyce signed by InternetNZ Telecommunications Users Association of New Zealand and Federated Farmers. It is titled “Zone 3 Schools Missing Out on Fibre Broadband” and attached is a list of 470 schools. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Housing Innovation Fund—New Projects 
11. 
TIM MACINDOE (National—Hamilton West) 
 to the  
Minister of Housing 
: What recent announcements has he made regarding the Government’s Housing Innovation Fund? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 On Monday I announced a further three projects in Hamilton Flaxmere and Napier that will receive $2.7 million from the fund. They include an 11-bedroom home in Flaxmere to be used as an affordable rental property for kaumatua four properties in Hawke’s Bay for people experiencing mental illness and seven accessible homes for affordable rental in Hamilton. 
Tim Macindoe 
: What is the aim of the Housing Innovation Fund? 
Hon PHIL HEATLEY 
: The fund encourages partnerships with community housing organisations. It is about making the taxpayer’s dollar go further. So far this year the $6 million contributed by the Government to help to fund new houses has been met by $7.1 million from community organisations. As part of this Government’s commitment to increase the quantum of social housing I am currently looking at ways to move from the Housing Innovation Fund to an even more attractive deal for third sector organisations. We want to work with them. 
Moana Mackey 
: Does he agree with the Prime Minister that New Zealand is not facing a housing shortage; if not will he guarantee that Labour’s Housing Innovation Fund will continue in one form or another in the next financial year with the increase in funding that he has been promising the sector? 
Hon PHIL HEATLEY 
: In the time that National has been in Government we have funded with community organisations 212 houses. Under the Labour Government’s Housing Innovation Fund which Ms Mackey mentioned the previous Government funded barely any houses. Interestingly enough we are into housebuilding. That Government was into capacity building which did not keep the rain out. 
Greenhouse Gas Emissions—Coalmining 
12. 
GARETH HUGHES (Green) 
 to the  
Acting Minister of Energy and Resources 
: What is her response to the statement of leading scientist and NASA director Dr James Hansen currently touring New Zealand that “coal is the single greatest threat to civilisation and all life on our planet.” and we should leave it in the ground? 
Hon HEKIA PARATA (Acting Minister of Energy and Resources) 
: 
 Fossil fuels will continue to play an important role in the global economy and in New Zealand as we transition to a low-carbon economy—for example the judicious use of coal in New Zealand at the Huntly power station ensures the lights stay on each winter. 
Gareth Hughes 
: Does she agree that our children and our grandchildren have a right to live on a planet not threatened by catastrophic climate change; if so will her Government stop the development of dirty lignite coal in Southland? 
Hon HEKIA PARATA 
: I do not believe that the first part leads to the second part of the question. Of course all Governments are interested in creating a safe and good environment for children and their families. 
Gareth Hughes 
: What is the Minister’s response to the finding in the report of the Parliamentary Commissioner for the Environment that companies developing lignite in Southland on a large scale are likely to receive millions of dollars of subsidies from the taxpayer? 
Hon HEKIA PARATA 
: The fact is that under our emissions trading scheme as soon as coal is mined the miner has the liability for the emissions and must either pass on the costs to the end user or carry the cost themselves. There is no cost to the Government for emissions from coal as coal mining is not eligible for an allocation under the emissions trading scheme. 
Gareth Hughes 
: Does the Minister agree with the Parliamentary Commissioner for the Environment’s recommendation that until carbon capture and storage technologies are proven New Zealand’s lignite coal should remain in the ground? 
Hon HEKIA PARATA 
: This Government has implemented a number of policies including the emissions trading scheme which is focused on pricing carbon and we are invested in a number of technologies that strengthen our portfolio of energy resources across the board. 
Gareth Hughes 
: I raise a point of order Mr Speaker. It was a very clear question: “Does the Minister agree”— 
Mr SPEAKER 
: To save the member time he can repeat his question. 
Gareth Hughes 
: Thank you. Does the Minister agree with the Parliamentary Commissioner for the Environment whose recommendation was that until carbon capture and storage technologies are proven New Zealand’s lignite coal should remain in the ground? 
Hon HEKIA PARATA 
: No. 
Gareth Hughes 
: Does the Minister agree that think-big projects that exploit dirty lignite coal are like pulling up the floorboards of our homes to throw on the fire to keep warm and that a smart green energy strategy would keep our children and our grandchildren warmer and more secure? 
Hon HEKIA PARATA 
: I am not aware that the Government is involved in any think-big projects.