Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeOral Questions — Questions to Ministers[Sitting date: 30 June 2015. Volume:706;Page:4837. Text is incorporated into the Bound Volume.]Tuesday 30 June 2015Mr Speaker took the Chair at 2 p.m.Prayers.Questions to MinistersBudget 2015—Support for Families1.ANDREW BAYLY (National—Hunua) to the Minister of Finance: What Budget policies will soon take effect and help to distribute dividends from the growing economy to New Zealand families?Hon STEVEN JOYCE (Associate Minister of Finance)on behalf of theMinister of Finance:All seven of the National-led Government’s seven Budgets have included measures to help New Zealand families get ahead. From tomorrow 1 July children under 13 will have access to free GP visits and free prescriptions; paid parental leave payments will increase with the maximum weekly rate for eligible employees and self-employed parents going from $504.10 to $516.85 gross; and the average ACC levy for a private motor vehicle will fall by around $130 a year which is part of a $440 million levy reduction across the New Zealand economy. These are just three of the policies that this Government is introducing to support families on the back of our strengthening economy.Andrew Bayly: What other recent Budget measures are already in place to help New Zealand families and children?Hon STEVEN JOYCE: The Government included a number of other measures in Budget 2014 that took effect from 1 April this year just under 3 months ago. These include paid parental leave increasing by 2 weeks to 16 weeks and that will increase by another 2 weeks from 1 April next year. The parental tax credit rose from $150 a week to $220 a week and the entitlement will increase from 8 weeks to 10 weeks. The Government’s new HomeStart scheme will help around 90000 Kiwis into their first home over the next 5 years. Average ACC work levies paid by employers and self-employed people fell to 90c per $100 and New Zealand superannuation increased by another 2 percent meaning it has increased by 31 percent since April 2008—more than double the inflation rate over that period.Andrew Bayly: How does this year’s Budget build on the policies of previous Budgets particularly in the area of support for families and children?Hon STEVEN JOYCE: Budget 2015 included a number of measures in a $790 million package of support for children living in hardship. The following will apply from 1 April next year: benefit rates for families with children will rise by $25 a week after tax—this is the first time that core benefit rates have been increasedsince 1972 apart from inflation adjustments—extra support for low-income working families with both the minimum family tax credit and the base rate of the in-work tax credit increasing; childcare assistance for low-income families will increase reducing barriers for parents moving off welfare and into work; and there will be increased work expectations for parents on a benefit. The package targets around 160000 families—300000 children—with incomes of less than $36350 per year.Andrew Bayly: How did Budget 2015 build on the Government’s wider programme to support more jobs and higher wages for New Zealand families?Hon STEVEN JOYCE: One of the most important things we can do for vulnerable families is to help get the parents into work. Treasury’s Budget forecast shows there were 194000 extra jobs since late 2010 and another 150000 jobs are projected by 2019. Unemployment is expected to fall below 5 percent in 2016. Average annual wages have increased by $5700 in the last 4 years and they are forecast to rise to around $63000 a year in 4 years’ time which is an increase of a further $7000. So a growing economy supported by the Government’s responsible economic plan is working for New Zealanders and their families.State and Social Housing—Sale of Housing Stock and Social Housing Providers2.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “Locally-based providers can be closer and more responsive to their community” in relation to the Government’s policy to sell State houses to private providers?Rt Hon JOHN KEY (Prime Minister): Yes and registered community housing providers will need to have a local presence and a strong capacity to meet the needs of their tenants.Andrew Little: How would a company based in Brisbane be “closer and more responsive” to the needs of Kiwi families in social housing?Rt Hon JOHN KEY: Because they will have to be not only registered in New Zealand but have a presence in New Zealand and be subject to the community housing provider regulatory authority. If the head office of a company or an organisation rules somebody out from doing anything then I suggest the member never go and have another Big Mac because and this will come as breaking news the head office is in America. [Interruption]Mr SPEAKER: Order! I am wanting to call the Leader of the Opposition.Andrew Little: What lessons can a company that provides housing on the Gold Coast teach New Zealand about running social housing in Invercargill?Rt Hon JOHN KEY: Firstly this organisation would have to be if it bought those properties registered in New Zealand subject to the Community Housing Regulatory Authority be subject to regular engagement with its tenants be a responsible tenancy manager have routine inspections and be responsive when it comes to repairs and maintenance—so it would have to run a New Zealand operation. I am a little surprised that the New Zealand Labour Party hates Horizon Housing because here is a press release from the Deputy Prime Minister of Australia when the Labor Government was in office saying what an amazing organisation it is and how good it is and what a great job it has done. I know that something Australian is very scary to the Labour Party but over here we just want somebody who can provide a good service.Andrew Little: What precise measurable provable benefits would be realised by selling these houses to an Australian company that cannot be realised by Housing New Zealand?Rt Hon JOHN KEY: The member is asking a wider question about what the benefits are of social housing. If Horizon Housing were to buy these properties it would have to provide the same role as any other community housing provider. So what I can say in regard to that is that there is widespread support for community housing providers from all parts of this Parliament. In fact one member of Parliament has gone on to say in relation to this area that there is “no controversy” and “I see huge benefits in this vision of a bigger more diverse social housing sector.” That of course comes from Mr P Twyford of the Labour Party.Andrew Little: Point of order. [Interruption]Mr SPEAKER: Order! This is a point of order. I wish to hear it.Andrew Little: I raise a point of order Mr Speaker. My question was very straight and it was pretty concise—Mr SPEAKER: On this occasion I agree with the Leader of the Opposition. I am going to ask him to ask that question again.Andrew Little: What precise measurable provable benefits would be realised by selling these houses to an Australian company that cannot be realised by Housing New Zealand?Rt Hon JOHN KEY: The same as New Zealand ones.Tim Macindoe: What support has the Prime Minister seen for the Government’s policy of transferring ownership of houses to grow the community housing sector?Rt Hon JOHN KEY: I have seen lots of support including a good summary of the Government’s social housing reform legislation that passed last year. It says as follows: “What does this bill do? It shifts housing stock out of the hands of Housing New Zealand into the community housing sector. This is something that Labour is perfectly comfortable with.” It goes on to say: “The bill is extending—Chris Hipkins: I raise a point of order Mr Speaker. Last week you made it very clear and you have repeatedly done this over the last 2 weeks that the Government should not use Government supplementary questions to attack the Opposition which is exactly what the Prime Minister is doing.Rt Hon JOHN KEY: Point of order.Mr SPEAKER: No I do not need assistance. That is a judgment that I make. But when I look at the question “What support has the Prime Minister seen for this change of ownership the Government is proposing.” that is a legitimate question in my mind.Rt Hon JOHN KEY: I raise a point of order Mr Speaker. I would just urge you—your ruling is absolutely correct—to go away and consider what Mr Hipkins has just raised. What he is essentially saying is that it is impossible within a debate for the Government to point out in question time within a wider debate about social housing what has been said on all parts of this debate. That would be a ridiculous notion.Mr SPEAKER: That is exactly the point that I am trying to make in responding to Chris Hipkins. There will be questions that I think are put down that are no more than a cheap opportunity by a Government to attack another political party and they are the ones that I will not accept. In this case I think it is quite a legitimate question to ask about what support is out there in the community. If that answer happens to refer to another political party in this Parliament I cannot help. The Prime Minister can complete his answer if it is required.Andrew Little: In relation to the Government’s announced proposal to sell State houses to an Australian owner and given that the Salvation Army in New Zealand has backed out of the proposal to it to purchase State houses and also that iwi in New Zealand only want the houses for free so that he now resorts to Aussie buyers will his Government press ahead with selling State houses even if no New Zealand providers can afford to buy them and there are no tangible benefits to the families living in them?Rt Hon JOHN KEY: The member’s question is incorrect.Andrew Little: Is not the truth of it that this policy was always about the ideology of selling off State houses whatever the cost not about improving the lives of the families in those houses at all and like all his policies it is now falling apart?Rt Hon JOHN KEY: What was falling apart were the Housing New Zealand houses we inherited after 9 years of a Labour Government because it failed to maintain them. What everybody knows actually is there is more demand and has been under numerous Governments than there is supply. In Australia and actually in many countries we see the equivalent of social housing providers or community housing providers adding to the overall stock and that is why in a place like Australia the Labor Deputy Prime Minister gets up and celebrates this. This is the reality. The Labour Party in New Zealand is scared of an Australian charity coming to New Zealand. They must be incredibly scary because—Mr SPEAKER: Order! The answer has gone on for long enough.Tim Macindoe: What other support has the Prime Minister seen for the Government’s social housing reforms?Rt Hon JOHN KEY: I have seen a series of statements supporting the Government’s approach including for example: “The Minister’s vision is that Housing New Zealand should become just another tenancy provider competing in a contestable market with the community housing sector for both tenants and subsidies. We want to see a larger more capable empowered community housing sector. It is certainly a view that Labour shares.” That again was Phil Twyford.Andrew Little: Given that the mass sell-off of State houses was meant to be his defining policy for the year as outlined in January what is left after 6 months of fiasco and why does he not just give up on this failed experiment?Rt Hon JOHN KEY: On the latter because I actually care about New Zealanders who deserve some accommodation and I am not going to be driven by a bit of mumbo-jumbo into not providing more social houses to New Zealanders. And secondly that was an important policy announcement at the start of the year but also I have made a great many other policy announcements this year and so far we are waiting for Labour to have one policy announcement and guess what? Mr Little has not announced a single one yet.Paid Parental Leave—Increases3.STUART SMITH (National—Kaikōura) to the Minister for Workplace Relations and Safety: How is the Government helping to support young New Zealand families through paid parental leave?Hon MICHAEL WOODHOUSE (Minister for Workplace Relations and Safety): Good news. Tomorrow paid parental leave payments will increase across the board with the maximum weekly rate for employees and self-employed—[Interruption]Mr SPEAKER: Order!Hon MICHAEL WOODHOUSE: They do not like good news do they? The maximum weekly rate for employees and self-employed parents is going from $504.10 to $516.85. This increase comes on top of changes that came in on 1 April this year that extended the provision of paid parental leave from 14 weeks to 16 weeks and increased the parental tax credit.Stuart Smith: What further changes can New Zealand families expect around paid parental leave?Hon MICHAEL WOODHOUSE: Last year the Government announced a $172 million—Hon Annette King: It’s a Labour Party policy.Hon MICHAEL WOODHOUSE: Shh!Mr SPEAKER: Order! The level of interjection from one particular member is now unacceptable.Hon MICHAEL WOODHOUSE:—a $172 million package over 4 years to boost paid parental leave. Another extension that will take place from 1 April next year will see a further increase to paid parental leave to 18 weeks. In addition I will soon be introducing legislation to the House that will extend eligibility to include other than biological or formal adoptive parents a wider range of non-standard workers and primary carers such as permanent guardians Home for Life carers whāngai parents and grandparents. More than 26000 New Zealanders take paid parental leave. Tomorrow’s increase and the further extensions that this Government has committed to will further help families and carers to give our youngest New Zealanders the best possible start in life.Sue Moroney: Will he honour his commitment to ACT leader David Seymour to introduce 26 weeks’ paid parental leave for babies born with disabilities for those born prematurely and for multiple births in exchange for David Seymour withdrawing support for my bill delivering those outcomes?Hon MICHAEL WOODHOUSE: I will certainly honour all commitments that I have made to our confidence and supply partner. That was not it. I am corresponding with Mr Seymour about what is already in place and about the supports that are being provided by this Government to multiple birthparents and parents of prematurely born babies and that is what we will do.Building and Construction Industry—High-alkali CementHon Gerry Brownlee: Who’s your deputy?Rt Hon Winston Peters: Well it wouldn’t be somebody like you.Mr SPEAKER: Order! [Interruption] Order! I have called the Rt Hon Winston Peters. [Interruption] Order! We are back to question No. 4—the Rt Hon Winston Peters.4.Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Building and Housing: Does he stand by all his statements?Hon Dr NICK SMITH (Minister for Building and Housing): Yes and particularly my statement today welcoming the third consecutive year of 20-plus percent annual growth in residential building in Auckland and the record $9.7 billion spent on residential construction in the last year.Rt Hon Winston Peters: Does he still stand by his statement on 19 February: “I have been assured by officials that imported cement must meet the New Zealand standard that the Drymix product referred to does in fact meet that standard”?Hon Dr NICK SMITH: Yes that is the advice that I continue to receive from appropriately qualified independent engineers. I have repeatedly challenged the member to provide me with some engineering advice that there is a problem with this product. I have asked him to do that three times. I have had zip.Rt Hon Winston Peters: Can he guarantee that the concrete used in the $40 million taxpayer - paid for Manukau District Court does not exceed the alkali content for normal concrete as specified in New Zealand concrete standard 3104 of 2013; if not why not?Hon Dr NICK SMITH: No it is not possible for me as Minister for Building and Housing to guarantee the millions of cubic metres of concrete that are produced every year.Hon Member: Why not?Hon Dr NICK SMITH: Well actually that is the responsibility of the commercial manufacturers of that concrete. There is a good system of quality control and there were issues as there were last month with some concrete being manufactured that was substandard and had to be replaced. If the member has got evidence of that then he should provide it—although I would say that he should provide it not from parties with commercial vested interests but from technical engineers and about legitimate concerns.Rt Hon Winston Peters: Talking about commercial vested interests when such non-standard cement causes concrete to rot from the inside out does he believe that he and the Cement and Concrete Association should have confidence in the supposedly independent report into this matter—this report here—when it was in fact paid for by Drymix; if so why?Hon Dr NICK SMITH: For a very wide range of building products it is the job of the person requiring certification to get a commercial company such as the Building Research Association of New Zealand and others to provide for it. I can assure the member that the advice I receive from my own engineers employed by the Ministry of Business Innovation and Employment—I have total confidence in their independence.Rt Hon Winston Peters: Is he confident that cement imported from Vietnam by Drymix was brought up to New Zealand standards through blending with other cement as Drymix claims and as he has said?Hon Dr NICK SMITH: I do not have any specific reports on a particular batch of cement. My officials have assured me repeatedly that they are satisfied that both cement and concrete being produced in New Zealand meet the standards of 3104.Rt Hon Winston Peters: How can he defend when Drymix claims to have blending facilities and it does not that it would have blended the cement when the only cement blending facility is Golden Bay Cement which has never ever blended cement for Drymix? Why is he now repeating his argument that the cement was blended and that it was therefore satisfactory?Hon Dr NICK SMITH: I had difficulty in deciphering that jumbled question. I have never made statements about blending—Rt Hon Winston Peters: I raise a point of order Mr Speaker. If he finds it—Mr SPEAKER: Can I just have the point of order please.Rt Hon Winston Peters: If he was confused with the question I am happy to repeat it. He started by saying that.Mr SPEAKER: No I think the Minister has understood enough of it to be answering. He was in the process of it. [Interruption] Order! I will allow the Minister to complete his answer and then if I am not satisfied with the answer I may think about it.Hon Dr NICK SMITH: I made no claims about this particular cement being blended. Those claims were made by the member.Rt Hon Winston Peters: When the claims in respect of blending are made in this report which says that because of that they became satisfactory and when Drymix never had the capacity to blend the cement because only Golden Bay Cement has it and it did not do Drymix’s concrete in that case and there are 39000 tonnes yet unaccounted for why will he not actually take a simple core sample of the Manukau District Court to tell us whether or not it is safe in the future? Why would he not do that?Hon Dr NICK SMITH: I simply lay back the claim to the member that I have now given to him three times: give me a chartered professional engineer’s advice that the cement is unsatisfactory and I will look into it. While he continues to peddle the arguments of other commercial interests I will not take him seriously.Cycling—Urban Cycleways Programme5.JONATHAN YOUNG (National—New Plymouth) to the Minister of Transport: What is the Government doing to support the development of urban cycleways across New Zealand?Hon SIMON BRIDGES (Minister of Transport): Last week alongside the Prime Minister I announced that $333 million will be invested in urban cycleways. Forty-one projects in 15 centres across the country will see world-class cycling projects get under way much sooner than may otherwise have been the case bringing the total number of projects delivered under the programme to 54. This is the single biggest investment in cycling in New Zealand’s history and will change the face of cycling in New Zealand. I am really proud to be part of a Government that is leading the way on cycling in this country.Jonathan Young: What centres are set to see new cycleways delivered through the Government’s Urban Cycleways Programme?Hon SIMON BRIDGES: Many—many. The country’s three main urban centres of Auckland Wellington and Christchurch will see significant investment that will change the cycling landscape in these cities.Ron Mark: What about rural New Zealand—the roads?Hon SIMON BRIDGES: I am excited that we have been able to deliver more than $87 million worth of projects Ron Mark in regional centres including Whangarei Hamilton Tauranga - Western Bay Rotorua Gisborne Hastings Napier New Plymouth Whanganui Palmerston North Blenheim Nelson and Dunedin. I would like to take this opportunity to also thank all of the local councils and leaders for sharing the Government’s vision and partnering in this great programme.Jonathan Young: How does the increased uptake of cycling benefit communities?Hon SIMON BRIDGES: The Government’s clear goal here is to make cycling a safer and therefore a much more attractive transport choice. That is because cycling contributes to healthier communities and safe and attractive cycling infrastructure can encourage people in urban areas to change their travel patterns. These benefits are why the Government committed to the Urban Cycleways Programme and I look forward to seeing Kiwis around the country enjoying the multiple benefits of the cycleways as more and more are completed in the coming 3 years.Denis O’Rourke: If the Government can find $333 million for cycleways why can it not find the funds needed to assist councils to seal and maintain rural roads to repair the damage done to regional roads caused by logging trucks to restore rail links like the Napier-Gisborne line and many other examples of transport neglect in the regions of New Zealand?Hon SIMON BRIDGES: The member must have missed the most recent news because this Government has been part of a $13.9 billion plan for the next 3 years—a 15 percent increase and the largest spend on land transport in this country ever.Ron Mark: Point of order. [Interruption]Mr SPEAKER: Order! This is a point of order.Ron Mark: I seek leave of the House to table a New Zealand Transport Agency document that shows that many rural provincial councils—Mr SPEAKER: Order! The member will resume his seat. Is it available on the website?Ron Mark: Not immediately no. You have got to look for it. [Interruption]Mr SPEAKER: Order! The member will resume his seat. I am assured from my right-hand side that it is. I will not be putting the leave.State and Social Housing—Sale of Housing Stock and Social Housing Providers6.PHIL TWYFORD (Labour—Te Atatū) to the Minister responsible for HNZC: Does he still intend to sell 1000 to 2000 Housing New Zealand houses by January 2016 and that “houses will not be transferred unless tenants get better services and taxpayers get fair and reasonable value”?Hon PAULA BENNETT (Acting Minister responsible for HNZC): In January the Prime Minister said: “These areas”—the areas where we will transfer the first houses—“will be determined after engagement and consultation including with community housing providers and iwi to ensure we understand everyone’s rights and interests. We’ll then look to sell between 1000 and 2000 Housing New Zealand properties over the following year for use as social housing run by approved community housing providers.” So it is unlikely to be by January 2016 but it is by the timetable that we had previously laid out. In answer to the second part of the question yes.Phil Twyford: Will he tell the public who the community housing providers are that the Government is considering selling to in Tauranga and Invercargill or does he agree with Paula Bennett that his policy is now so toxic that it would be a “poisoned chalice” for them?Hon PAULA BENNETT: On behalf of the Minister I certainly think that any comments like that by Paula Bennett have been taken completely out of context. So what I will say in answer to the question from the member is yes—in fact just in the last week we had more than 160 different people at meetings with Treasury about transactions. That will be made public on the website towards the end of the week.Phil Twyford: Is forcing our most vulnerable New Zealanders—including the elderly the disabled and people with mental illness—to pay their rent to an Australian company part of the compassionate conservatism he was bragging about at Budget time?Hon PAULA BENNETT: What I would say is that it seems that what the member believes is that the status quo for those very people is good enough. We do not think it is on this side of the House so we think we can provide them with better housing and better services around them. We want more of those and that is the commitment that we on this side make to those people who want it.Phil Twyford: What advice has he had that cashing up the State house portfolio in a fire sale to Australians or giving them away free to iwi will improve the Government’s books and better protect the most vulnerable New Zealanders?Hon PAULA BENNETT: Neither of those things is happening. So let me make it very very clear that neither of those things is happening. What we are looking at is doing what the very member himself has said both in this House and publicly that actually growing the community housing providers is better for vulnerable New Zealanders. That is the commitment that we make. Actually looking at building the asset base of some of those community housing providers so that they can provide better services is completely the motivation behind the work programme of this Government.Phil Twyford: Which of his three excuses so far is the most credible: that the houses are in the wrong place and the wrong size and that will be magically fixed by selling them; that the Salvation Army and iwi are keen as mustard to buy the houses; or that local groups can do a better job than Wellington but he is now selling the houses to Brisbane?Hon PAULA BENNETT: I think what needs to be clear is that there are a number of criteria that any purchaser would have to go through. One of them is having a local presence and the ability to actually look after those tenants better. So we have a number of community organisations that are actually already international organisations. They have branches throughout regional New Zealand and in our cities. That is exactly what it is. I know the member himself thinks that this is as good as it gets for those tenants; we believe that it can get better.Phil Twyford: Is he aware that the Dominion Post has described his State house sell-off as bizarre and muddled; if so will he follow Nick Smith’s example and set them straight by organising a magical mystery bus tour for the media to show them the houses that he wants to flog off to the Australians?Hon PAULA BENNETT: No I do not agree with that. What I do believe is that we are putting the interests of New Zealanders and tenants first. That member can go on and get on the sort of muddled hierarchy if he likes to but actually it is about providing better services for New Zealanders and that is exactly what we are intending to do.State and Social Housing—Social Housing Providers7.METIRIA TUREI (Co-Leader—Green) to the Minister responsible for HNZC: Does he stand by his statement that “Anyone that wants to have a go at this will have to show that they’ve got the capacity to manage the properties to manage the finances to look after the tenants and to help redevelop our social housing community”?Hon PAULA BENNETT (Acting Minister responsible for HNZC): Yes.Metiria Turei: Will the Minister guarantee to New Zealanders that every State house property sold to a community housing provider will be retained for social housing indefinitely so that vulnerable tenants are properly looked after?Hon PAULA BENNETT: As we have said previously part of the contract will be that they have to be taking on the tenants. If they wish to sell—to redevelop for example so where there are two or three houses to build five or six—they would have to go to the Community Housing Regulatory Authority to seek permission to do that. We would then have to know that it was in the best interests of the tenants and not a reduction in the number of houses.Metiria Turei: Has the Minister any of his officials or any other Government MP told Horizon Housing or other potential community housing providers that they can sell the properties on for a profit in the future as a sweetener for the deal?Hon PAULA BENNETT: I can only really speak for the Minister responsible for HNZC and certainly for the Minister for Social Housing when I say absolutely not and it is certainly not to our knowledge that anyone else has as well.Metiria Turei: Has the Minister any of his officials or any other Government MP suggested to Horizon Housing or other potential community housing providers a time frame by which they can stop providing social housing and sell the properties on for a profit?Hon PAULA BENNETT: No not to our knowledge and if they were doing that it would not be at the direction of Ministers.Metiria Turei: Will the Minister guarantee that if the Government permits the providers to sell the properties on for a profit at a later date the Crown will have the first right of refusal to buy back those properties and keep them for social housing purposes?Hon PAULA BENNETT: We are working our way through what that contract will look like as far as when the purchase is done and how we ensure that they need to go to the Community Housing Regulatory Authority for that but the purpose behind it most certainly is to ensure that we are still providing services to tenants and housing for them. So we cannot predict every situation that might occur but what we will be doing is ensuring that they are in the interests of tenants and not just a profit they are making for that.Metiria Turei: Has Horizon Housing or any other potential community housing provider discussed with the Minister his officials or other Government MP that any purchase would be reliant on those providers being able to sell the houses on for a profit at a later date?Hon PAULA BENNETT: I can speak only on the behalf of the Minister responsible for HNZC and the Minister for Social Housing and say absolutely not. If anyone else has it has certainly not been at their direction.Metiria Turei: What discount has the Government offered Horizon Housing or other community housing providers on the sale of the State-house properties given that New Zealand State-housing providers have said that they would have to be sold at virtually nil in order to make long-term social housing financially viable for those providers?Hon PAULA BENNETT: We have received no bids and we are not at the negotiation stage.Dairy Industry—Domestic Milk Prices8.DAVID SHEARER (Labour—Mt Albert) to the Minister of Commerce and Consumer Affairs: Is he satisfied that New Zealanders are not paying too much for their milk; if so why?Hon NATHAN GUY (Minister for Primary Industries): on behalf of theMinister of Commerce and Consumer Affairs: Yes; the Government does not set the price of milk in stores. Our job is to ensure there is sufficient competition in the dairy market. The Commerce Commission looked at this issue in 2011 and decided that no inquiry was needed. I would note that the price of milk has actually dropped over the past 12 months.David Shearer: Does he agree with the Ministry for Primary Industries or the then Ministry of Agriculture and Forestry in 2011 when it stated that “As an exporting nation New Zealand domestic milk prices are intrinsically linked to international prices which are trending upward.”; if so why are New Zealand prices not reducing now with the fall of global prices?Hon NATHAN GUY: I have seen that report. Yes there is some linkage but that is only part of the story. The retail price is affected by costs such as processing production and distribution and the member should be aware of that.David Shearer: Is the current price of milk too high for Kiwi families when families in Sydney and London can buy milk more cheaply there than they can here?Hon NATHAN GUY: You could drive a milk tanker right through the middle of that member’s argument. What he has not thought about is the different pricing mechanisms overseas. In particular GST is included here but it is not in the UK and there is a price war currently going on between those two countries. The member should keep up to speed with what is happening.Darroch Ball: Does the Minister not agree that attacks on farmers are unwarranted when this Government is creaming at least 42c in GST off a $3.19 2-litre bottle of milk while nothing is being done about the cosy supermarket duopoly?Hon NATHAN GUY: I would refute certainly the second part of that question and I would refer the member to the review of the Commerce Commission in 2011 to do with this issue.David Shearer: Given that the Prime Minister said yesterday “If the argument is solely one of price in New Zealand you could drink water out of a tap and that’s for free.” would he encourage Wellington mother of two Amanda Gardner who uses up to 5 litres of milk a week and can no longer afford to encourage her children to drink milk to drink water instead?Hon NATHAN GUY: I think when the Prime Minister was asked that question he was actually asked about Coke—nothing to do with water. And what I would say to that particular consumer is that there is a huge amount of competition in the New Zealand retail market and consumers should continue to shop around for good deals.Housing Market—Tax Reform9.BARBARA KURIGER (National—Taranaki - King Country) to the Minister of Revenue: What reports has he received about changes which will bolster the tax rules around residential property speculation?Hon STEVEN JOYCE (Minister for Economic Development) on behalf of theMinister of Revenue: Yesterday the Minister welcomed the release of a consultation document on the proposed brightline test which will require income tax to be paid on any gains from the sale of most residential property bought and sold within 2 years. The brightline test will help clarify whether or not gains on the sale of residential property are taxable. Currently when assessing whether tax should be paid on a gain from a sale the Inland Revenue Department relies on a seller’s intent to either live in the property or sell it for a quick gain. The proposed new brightline test makes it clear that property buyers including overseas buyers who buy and sell a residential property within 2 years will be taxed on those gains.Barbara Kuriger: Will there be any exemptions from the brightline test?Hon STEVEN JOYCE: Although most property bought and sold within 2 years will be subject to the test there are some exceptions. In particular property that is a person’s main home including a main home held in trust is exempt as are property that is transferred after a relationship breakdown and homes that are inherited.Barbara Kuriger: How can New Zealanders have a say on these proposed changes?Hon STEVEN JOYCE: Public feedback is important and I would encourage everybody to have a look at the consultation document on the Inland Revenue Department website. We want to ensure that everybody pays their fair share of tax and New Zealanders can help by participating in the process. The consultation paper proposes new definitions of “residential land” and “main home”. It also clearly identifies the dates a property is deemed bought and sold so a seller and the department know whether a sale falls within the brightline test. The closing date for submissions is 24th of next month. Once enacted the brightline test will apply to residential properties bought on or after 1 October this year.Gaza—Prime Minister’s Statements10.Dr KENNEDY GRAHAM (Green) to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes.Dr Kennedy Graham: Given that the Prime Minister has said he wants New Zealand to champion peace between Israel and Palestine will he condemn the Israeli boarding of the Freedom Flotilla yesterday with two New Zealanders on board?Rt Hon JOHN KEY: No but I will encourage both Israel and Palestine to continue to try to find a peaceful resolution to the problems in Gaza.Dr Kennedy Graham: Will the Prime Minister condemn Israel’s actions last year on the basis of the recent UN report on war crimes in Gaza which criticises both sides—but especially Israel—for its excessive use of force in using “huge firepower of 6000 airstrikes and 50000 artillery shells”?Rt Hon JOHN KEY: I do not think that it would be terribly conducive to the good relationship that New Zealand enjoys with Israel and Palestine to start throwing stones on either side in particular. I think the reportunderlines as I am sure the member knows yet again the inescapable reality that reaching a negotiated and lasting peace agreement is vital for the future well-being and prosperity of the people of that region.Dr Kennedy Graham: How can New Zealand even attempt to bring peace to the region as the Minister of Foreign Affairs has indicated it will when the Prime Minister is unwilling to condemn Israel’s war crimes and illegal blockade of Gaza—a clear indication that New Zealand has surrendered its impartiality?Rt Hon JOHN KEY: I think it is the opposite. I mean New Zealand enjoys a good relationship with both Israel and Palestine. We are one of a relatively small number of countries that do. We are not going to resort to megaphone diplomacy but we do encourage both sides to find a credible and constructive way through the issues and we do think a two-State solution is the right long-term answer to the issues between Israel and Palestine.Duty-free Limits—Tobacco11.MARK MITCHELL (National—Rodney) to the Minister of Customs: What effect is the lower tobacco duty-free limit having on the amount of cigarettes and tobacco being brought into New Zealand at the border?Hon NICKY WAGNER (Minister of Customs): In the first 6 months since the tobacco duty-free limit was lowered on 1 November last year a staggering 2.5 tonnes of tobacco—that is a small truckload—has been abandoned by passengers at the border. But the message is getting through: the amount of tobacco abandoned at airports has dropped considerably from about 100 kilograms a week to 30 to 40 kilograms a week. This drop in the duty-free limit works hand-in-hand with the great work that the Minister of Health Jonathan Coleman and Associate Minister of Health Sam Lotu-Iiga are doing to reduce harm caused by cigarettes.Mark Mitchell: How has the Customs Service ensured that passengers are aware of the lower limit for tobacco?Hon NICKY WAGNER: The change was well signalled in advance and a public awareness campaign informed travellers of the reduction of the duty-free limit leading up to the 1 November change. Passengers can also use the website or the What’s My Duty? app to calculate their tobacco concession. I am very pleased that this change in the duty-free limit is working to reduce the harm from smoking in New Zealand.Vehicle Registration—Levies and Risk Ratings12.SUE MORONEY (Labour) to the Minister for ACC: Why will people with older cars pay $90 more per year to register their vehicle than those who can afford the latest model Rolls Royce?Hon NIKKI KAYE (Minister for ACC): Firstly I am happy to let the member know that everyone is paying less due to this National Government’s $440 million ACC motor vehicle levy reductions. Secondly I disagree with the member’s question because not all people with older cars will be paying more. As I have said before a significant number of cars that are older than 10 years will attract the lowest levy which will be the same as for some of those cars that she has mentioned.Sue Moroney: Can she confirm the information tabled with the select committee last week that all motorists would have had their registration levies for petrol-powered vehicles reduced to $104.09 tomorrow if the Minister had stayed with the current system?Hon NIKKI KAYE: Obviously I do not have those figures in front of me but what I can say to the member is everybody would be worse off if it was not for a National Government whereby we have given $2 billion of levy reductions. That is because we have got the books in order so everybody is better off due to a National Government.Sue Moroney: I seek leave to table the document tabled with the select committee showing that—[Interruption]Mr SPEAKER: Order! I am having trouble hearing. I am going to invite the member to start that point of order again.Sue Moroney: I seek leave to table the information put in front of the select committee that said that the vehicle charges would have been reduced to $104.09 for all categories of motor vehicle registration—Mr SPEAKER: Order! The document has been described. I will put the leave. Leave is sought to table that particular information. Is there any objection? There is objection.Sue Moroney: Is it fair that under her new system more than 1 million New Zealand motorists driving older vehicles will collectively pay $41 million more than what they would have under the current system?Hon NIKKI KAYE: I believe it is fair because we are interested in reducing the road toll. Under our Government we have seen the road toll decrease. That is saving lives. That is a combination of things from reducing speed reducing issues like alcohol but also bringing in things like vehicle-risk rating to actually save lives. [Interruption]Mr SPEAKER: Order! Can we just have a little less chatter going on and it is occurring particularly on my right-hand side.Sue Moroney: Does she think it is fair that a person on a fixed income like New Zealand superannuation who has never had an accident in her life has to pay $90 more a year than the business executive who has a habit of driving his Merc—his brand new Merc—after long boozy lunches just because she can afford only an older car?Hon NIKKI KAYE: Well let me make a number of points. The first point is everybody is paying between $40 and $130 less because of our ACC motor vehicle levy reductions. The second point is that she has made a number of assumptions in that question about the kind of car that people drive and the point that I would make to her as I have already said is more than a large proportion of cars that are over 10 years old will attract the safest bands and will then attract the cheapest levies. So I think she has made a number of incorrect assumptions.Sue Moroney: Well can she please explain why the 2009 Toyota Avensis achieved the highest safety rating from an organisation composed of seven European Governments and motoring organisations from every European country but is given the lowest safety rating in her system requiring owners to pay $158.46 for car registration rather than the $104 it would have cost them if she had kept the current system?Hon NIKKI KAYE: I am making a number of points. The first point which I have already made is that people are paying less because we have actually managed the ACC accounts a lot better so she has made an assumption in terms of the document that has been tabled at the select committee. The second point that I would make is that obviously I do not memorise all of the cars and their exact vehicle-risk rating. So for me to actually answer that question in the House I think is a bit unreasonable. And then the third point that I would make is as I have said before everybody is paying between $40 and $130 less—that is 2.7 million car owners getting notices in the mail showing that they are getting less levies under us.Tim Macindoe: How will all New Zealanders with older cars be better off as a result of the ACC motor levy reductions?Hon NIKKI KAYE: The average motor vehicle levy as I have said before including the annual licence levy and petrol levy will fall by an average of $330 to $195. All car owners will receive annual licence levy cuts of between $40 and $130 for petrol cars and between $80 and $170 reduction for diesel cars. Also the ACC petrol levy falls to 6.9c tomorrow from 9.9c per litre. That is good news for New Zealand.Sue Moroney: How many more motorists risk being charged the wrong amount for their car registration because of the data-matching error that ACC admitted to on Saturday in the New Zealand Herald and how much will it cost to fix that data-matching error?Hon NIKKI KAYE: I think she raises a good point in terms of ensuring that that issue is fixed. I can tell her that my understanding is there are about 9000 people who have paid incorrect levies out of 2.7 million car owners—so that is way less than 1 percent—but what I can say to her is that we are working through to fix that and people will be getting a refund. So they may be getting another cheque in the mail.