Post-Cabinet Press Conference: Monday, 13 August 2018

Kai ora folks.

Obviously, this is a key feature of our coalition agreement, but it lies at the heart of what are the practical things we can do to enable domestic-based investment to do the heavy lifting in terms the broader climate change obligations upon us as a society. Of the $240 million approximately that we’ve allocated, a sum of about $120 million is going to be allocated towards enhancing the grant scheme.

We are focused the surge regions. I remind you the surge regions—Tai Tokorau, Tai Rawhiti, Manawatu, Whanganui and the deep south into Tai Poutini. These are areas where regional government was telling us that too much soil was slipping into the ocean and unless we do something about, rather than just talking about it, we’re going to have on going set environmental challenges.

The funding that we are announcing today will not represent the entirety of the capital required to create the value and to meet the target. Later on, my colleague Mr Shaw is talking matters related to his decarbonisation strategy and what forestry might do in that regard. We have the changes in the OIO legislation wending its way through Parliament, and we have our grants scheme.

The split will be at least one-third exotic, and my colleagues are very keen to achieve at least two-thirds of native planting. The partnerships mean we’ll be working with NGOs, we’ll be working with community groups, regional council, local council, commercial investors, and a host of service clubs. And it’s not an insignificant amount of money—the thick end of $245 million—and there are big challenges as to who’s actually going to do the mahi, and, in that regard, Minister Meka, she’s going to outline some of the programmes that we’ve got to get my figurative “nephs” off the couch, into the work.

Some of the industry are keen for us to race out and increase our reliance on overseas labour, but that is not the priority of Te Uru Rākau—or, indeed, as the Prime Minister’s said on numerous occasions, we want to focus on developing our own talent.

So I might hand over to Meka Whaitiri the more technical details. There’s a broader array of sources of information we can make available to you.

Kia ora tātou. Today’s announcement of additional support for the 1 billion trees programme will deliver a measurable boost of opportunity for forestry workers and Kiwis looking for innovative new career paths.

I mean, this Government is committed to revitalising the forestry sector and jump-starting our regional economies. I’ll be leading work towards a more diverse, skilled, resilient, and safe workforce to meet the needs of the 1 billion tree programme, including increased participation by Māori and women, alongside forestry Minister, Shane Jones. Through a combined effort, as Shane has outlined, with regional councils, training organisations, trusts, iwi, and landowners, this Government will be supporting initiatives that reduce barriers to tree planting and to improve the options that landowners have, creating a true legacy.

The Provincial Growth Fund will also be used to leverage further training and development opportunities across the sectors, and forestry will be a key focus of this as a priority sector. And I’ll be watching closely the recently announced mana and mahi, strength and work, programme to open opportunities for young people aged 18 to 24 years old who have been in receipt of a benefit for six months or more, to earn while they learn. Having a subsidy paid to an employer who takes on one of these young people and supports them to work towards a level 4, or industry-required qualification—this definitely has a potential in the forestry sector.

As the Prime Minister outlined, our guiding principle of right tree, right place, right purpose will see this industry embrace technology and innovation, learn from recent events in Murahou and Tolaga Bay, by ensuring that our forests protect and enhance the landscape, and enable our regions to define their economic futures.

So I’m fiercely proud that the target for these new simple and accessible direct grants is for two-thirds of the trees planted under this scheme to be natives. Questions?

How many jobs will the $240 million create?

So the $248 million is obviously not just about workforce development, as important as that is as part of the announcement today. Clearly, we want to work with landowners who may not have the capital investment—so those are smaller landowners, Māori landowners, but, for us, it is incredibly important that those that are accessing this grant have a key workforce development programme when receiving this grant course. As I travel round the country, as does Minister Jones, one of the first things a lot of forestry owners say to us is they need 2,000 workers to help plant their trees. So we want to work with forest owners to make sure the workforce is there, but we want to make sure we’re investing in Kiwis first, so part of the requirement as we develop the grant is to ensure that those that are taking up the grant have a clear workforce commitment to actually investing in young people throughout the country.

So how many jobs will that create?

The industry at the moment are hoping that will allow 500 people to come in from overseas and plant. We have not followed their entreaties. Up to a thousand people are going to be employed in rolling out the remainder of the programme; a number of them will obviously come through the employment initiatives, work-readiness, but it’s an enormous figure. The challenge, which we won’t shy away from, is that these are not jobs that you can live in South Auckland to do, so it’s a matter of transitioning a lot of the people, for example in the Māori case, maybe the descendants of the owners to go into the provinces, train them up, and relocate them to work in those areas.

Is this of value for money, do you think—a thousand jobs for quite a large investment?

Yeah, I think that we should tick off all the boxes. Regional development is a key feature as to why the Government has signed up to the billion tree strategy. But I say to you is that the real value lies in the fact that trees are going to help do the heavy lifting for an enormously high bill—I think Nick Smith put it at 30-odd billion—i.e. the impost on the New Zealand economy in terms of not getting our climate change incentives right. So every tree that’s planted is not only employing someone; it’s actually allowing us to rely on forestry to do the heavy lifting to meet a number of our climate change obligations. And if we overlook that, then I think we’re short-changing the policy.

Just to be clear, 500 people will be coming from overseas to do this?

No, no. I’m sure if you asked the industry, and I’ve said this publicly, they had petitioned me as the forest Minister: “Can we have 500 people?” But in terms of the number of Kiwis that we want to get work-ready and get cracking, it’s up to a thousand people.

And could potentially double by 2023.

path?

And what’s the ratio between skilled and unskilled within that, and is there a career

I think that’s a fair point. A number of the people from, for example, the union movement, whilst they’re very supportive of this kaupapa, they’re fearful that we just attract the so-call “nephs” and there’s no career trajectory for them. So the work that the PGF will be partly funding, and Willie Jackson and Minister Meka are rolling out, really is to do with this being an entry point, and people receiving the skills to actually create a long-term career in what’s going to be a much larger industry, both native and exotic forests, and we have the money to do it insofar as preparing people to move form entry level into greater skills.

What’s the breakdown of skilled to unskilled?

Well, to start off, most of the work is actually getting out with a spade, fit enough, and starting to plant trees. So a lot of the work, to borrow your phrase, will be at the lower skill level.

Just on some of the figures, you’ve got $240 million today and that’s in addition to the $245 million that’s been announced—

Yes.

Correct.

So together that’s roughly $500 million; is that right?

Correct.

How does that match against comments that you made earlier in the year when you said that you’d be using just $180 million of the $3 billion fund?

Oh, no, the reference I was making to the 180 related to what I thought was the upper figure in terms of JVs. I would remind us that when the Government goes into a JV, unfortunately because of accrual accounting, we have to take account of at least 10 years of the capital required investing into the asset. But I don’t think anyone ever doubted that to enable the Crown to lead a one-billion tree outcome, it wasn’t going to cost a power of dough.

When you said before that it would be likely that you’d need to top this up in future, how much were you expecting more that you’ll have to add into this fund?

Well, there may be additional specific initiatives. I know of a few around. But they’re of a limited nature. I’m imagining that this, the thick end of half a billion dollars that the Government is committing to out of the Provincial Growth Fund, is pretty much the upper end of what we’re going to be able to chew through prior to 2020.

Was it always the plan to spend a six digit fund on the billion trees project?

Yeah, well there are people who would want to spend more, but the reality is that it’s a $3 billion fund: do the maths yourself; you know, 485 into $3 billion, and whilst it’s a significant amount of dough, it’s a broad—and I mean the Prime Minister outlined it in the Speech from the Throne. When you’re improving the number of the acreage of permanent forests, it takes a lot of dough to develop those forests, when you’re improving the erosion-prone ground in Manawatū and in Gisborne. We could middle along, as we have been over the last few years—we’ve decided, and the Ministers have mandated me, to roll out this programme. It’s a significant amount of money, but it was never going to be cheap.

You’ve said that with $246 million you’ll get 24 million trees. Is that right?

Well, it’s not entirely—the $245 million, I would remind everyone, that underwrites the initial investment in a lot of our JV forests. But as you enter into a JV—for example, the one up north, you have to account, as well, for future expenditure, because that’s just Treasury and the Crown’s asset-holding rules; you can’t just write it all off as a grant in one year.

Because a couple of weeks ago, one of your officials at the EES conference said you were buying seedlings for 50c, buy the seedling for 50c; what’s the other $9.50 going on?

Yeah, well, that’s the price of a Pinus radiata seedling; that is not the price of native seedlings, as is the case—

Five dollars for them?

Yeah, well, up to $5. And, really, that lies at the heart of the challenge that the Government’s got with this programme. The nurseries themselves are having to scale up. They want the confidence that they don’t suffer the problems of five or six years ago, when they did scale up. No one turned up to buy the trees, and some of them went broke. So boosting the size of the native plantations, or the native plantings, is a lot more expensive. However, I think it’s fair to say that the officials have a view that over the lifetime of a native forest they do sequester an enormous amount of carbon. It just takes a long time for them to reach maturation.

The cost of the seedling, of course, is not the only cost.

How close to the one billion trees will this total get?

So the industry at the moment tell us that between 50 and 55 million per year is what they plant. So the counter at the moment, I think, is up to 68/69 million, if I’m not mistaken, and this should get us, by the year of the election, very close to our figure, and the magic figure is as close as possible to 100 million. What impedes us is the ability of the nurseries to scale up, and in terms of JV forests, overcoming some of the indifference that has been shown by the farming community, but I’m hoping, once the full array of policies to do with soil and water quality come to pass they’ll see the great rationality in what I’m announcing.

Where’s the potential for urban forestry within this current scheme? In larger cities, like Auckland, there’s a role for forestry planting and many virtues associated with it. How is urban forestry going to fit within this brand that you’ve developed? Do you have any comments about that?

Well, just as an introductory point, I mean, I guess the whole point of the grants and partnership scheme is to open up the opportunity for either NGOs or local government to raise the potential in their region, in their district, in their purview, that they see as being a potential source of partnership between the Government and them for tree planting, particularly around natives. So that’s the challenge. We’re not the ones putting up all of the proposals; there’s an opportunity for them to make a pitch to us, as well.

Two-thirds seems like a relatively large amount of forestry to be planting, given how difficult it is, perhaps, to plant native forest and how slowly it grows—

Thank you for understanding the challenge.

—so possible getting at whether it’s actually working in terms of the carbon gains you’d have to make—

Yeah, well, for the small number of you who actually follow this debate actively, exotic forests do enable us to take the baddies out of the atmosphere a lot quicker. A pine tree sequests over its 25-year life very quickly a lot of the carbon baddies in the atmosphere, but the reality is we have taken the advice of our officials at Te Uru Rākau, we’ve sought advice from a whole host of other players in the broader forest sector, and it’s a feature of the Government’s commitment. We do want to both restore and expand native cover on land, in particular that land that has been degraded as a consequence of poor land-use decisions. You’re right, Patrick, it is expensive but, hey, it’s a policy that we’re confident over the life of the 2050 decarbonisation strategy, the native trees will continue to play a bigger and bigger role. And I’ve found, going around the country, young people, when I talk to them, they seem, I don’t know, more engaged and more enthused about the restoration of biodiversity and habitat through native forests than I do about industry.

Is the Government looking at all at long-term bond-type funding that could assist with planting?

Yeah, Te Uru Rākau has been—we get no shortage of people coming to talk to us about financial innovations to do with trading carbon and all that sort of business, so the officials continue to meet with them. There are no announcements today about such innovations but, you’re right, no shortage of people are keen to promote them to us.

Any other questions on forestry, before we move on to general? Thank you, Ministers. All right; other questions.

Prime Minister, the Children’s Commissioner has come out and said that the P epidemic is having a major effect on children in New Zealand and that urgent Government action is required. Do you agree?

Yeah, look, the effect of methamphetamine on our communities is devastating.

Naturally, the effect, therefore, on families and children is devastating. I would say in the same way that we need to make sure that we address alcohol harm for families and children, we need to make sure that we look at the harms of other drugs, and I definitely include methamphetamine in that.

So what is that urgent action that the Government will be taking?

Of course, already there’s screening, which allows us to capture, early on, if there is an issue around alcohol or drug use, particularly in a family at the time that a family knows that they have a child on the way. It’s then what we do with that screening. 2016—my understanding is that the Budget at that time put aside specific funding for pregnant women who may be using methamphetamine. What we need to look at is how that money’s being allocated, whether it’s been successful, and what further work we need to do. As you’ll know, the Government, of course, is doing work as we speak on making sure that we address drug and alcohol harm and addiction, and the next step will be making sure we’ve got the services that when people are identifying as using drugs and alcohol, particularly in pregnancy, that the services are there for them.

BNZ came out this morning saying that the collapse of the Turkish lira could threaten emerging economies, and if that happens it will further weaken the New Zealand dollar, which is now at a 2-year low. Is this something that worries you, concerns you, or do you welcome that?

Yeah, look, of course, currently we are at a position where the dollar is looking a little bit closer to where we were in 2016, and, as I said when asked about this on Friday, that will be probably welcome news for our manufacturers. As the Governor of the Reserve Bank has already said, he forecasts growth over the next two years to be based on the stimulus of the Families Package, but also growth for our exporters. So the dollar where it is I think will be welcomed by them. Of course, there are international effects that can mean that will changeable, but currently it’s not something to be alarmed by.

Would you be concerned if it fell further, dramatically further?

Look, that’s a hypothetical. I would want to see where it was landing. But of course New Zealand’s not immune to the changes that other currencies will be experiencing off the fluctuations from other countries’ own currency.

[Inaudible] talking about a case of a sex offender who was placed in the same motel as a vulnerable family. Have you been briefed on that situation?

Yes, I’ve seen some information on that, not in huge detail. What I’ve raised already with officials—it seems to be a case where obviously Government departments have not communicated with one another. It seems to be a huge oversight, and we have to expect better. I’m certainly asking for them, once they’ve got to the bottom of what’s happened, to give me an update.

Do you think it is acceptable to put sex offenders in motels?

Oh, when Government departments are putting two categories of at-risk people into the same environment, then we need to be accountable for that. I don’t think anyone would think that passes the test of a sensible placement.

Is there [Inaudible] information sharing?

And that’s what I’ve asked the departments to tell me.

Have you also been briefed on the case of Tim Fairhall? He’s the 39-year-old man with Down’s syndrome who has a—so he’s not going to reach the age of 65 and has asked about whether he can get his KiwiSaver early, and there is nothing in the law that says that he can.

No, I have not been briefed on that, but happy to get you further information.

Nurses [Inaudible] strike action [Inaudible] for months. Do you see this as a failure of the Government, not being able to—

No, no, not at all. In fact, I would have characterised—the first strike action, of course, now has reached resolution. That’s something we’ve been able to successfully negotiate, and it was, of course, a dispute that we came into halfway through. When it comes to teachers, an offer has been made that’s been rejected, and now we find ourselves with strike action. Of course we prefer to be at the table, and we hope to be in that position again soon. There are a number of issues that the teachers rightfully have raised, but that I think we’re making good progress on—for instance, support in the classroom. We’ve boosted the funding for those children with special needs. We’ve already dealt with national standards, which has been of significant concern, and charter schools, which has rightly been raised by the education community. Our hope now is that we can raise outstanding issues at the table.

Do you agree [Inaudible] teachers striking too soon?

Oh, I would rather still be at the table.

Do you agree with the education Minister that the amount the teachers are asking for is unreasonable?

Oh, look, they’ve set out some expectations in the media already. Our view is that we need to have those discussions around the negotiating table, but what we have indicated, of course, is that we have expectations that we have to meet for the wider electorate, and it isn’t an endless amount that we have available to us in order to meet those expectations.

Do you think there are too many MPs in Parliament?

No, I do not. Yeah, I think we actually have a democracy, particularly in the current international environment, we have good reason to feel very proud of. We have a stable democracy, and one that serves New Zealand’s needs really well. This has been canvassed many times before. It doesn’t save a huge amount for taxpayers, but if the member wants to have a discussion about what he believes to be the right size of Government, then all power to him, but I think we’ve got the measure about right.

What about the Māori seats; do you think they should stay?

Yes, I do. I think, ultimately, that’s for Māori voters to determine, and that’s always been, at least, the Labour Party’s position. We have no plans to make any changes in that regard. That’s, as I say, for Māori voters to determine.

The results for the Māori electoral roll came out today; more people from the Māori roll to the general roll than the reverse.

Yes, I think in fact I’ve seen an increase overall though, in real terms.

Yeah, there was an increase overall, a net increase, but more and more people are moving off the roll onto the general roll.

And you see people move in and out. Of course, they get a limited time in which to do that; that doesn’t coincide with election time. But I think we’ve seen, overall, a net increase in the number who are on the Maori roll, but, ultimately, that’s for Māori voters to determine. At the moment I think there’s a view that they’re well served by the system that we have, and we have no intention of changing it.

That net increase is the lowest it’s been in the last two decades. It went down since 2006 to 1,200 now. A lot of people are complaining about the fact that it only targets the results . Do you think that’s too rigid?

And that’s more about the way in which the Māori electoral option is put in between cycles. A think there is a debate to be had as to whether or not the way it’s aligned now works, but I don’t think that brings into question the existence of the seats themselves.

Where would you sit in the debate; do you think it should be that people can switch rolls whenever they want?

I think it makes good sense to have a time at which that occurs but whether or not that should be better aligned with a general election or more regular, I think that’s something that’s open for discussion.

The next time is six years away.

Yeah, and I think there’s an argument to made for it to be made more regular. But I can see why having it a carte blanche wouldn’t necessarily be workable either. But perhaps better aligned with elections; perhaps more often—I think that there’s good arguments for those.

Why would it not work for anyone to be able to switch rolls all the time; I mean, you can enrol at any time, can’t you?

Yeah, I think that you’ve got to make sure that the seats, the number of electors, that there’s some proportionality, as I understand, in the way that the seats are allocated, and if you had people constantly chopping and changing, it makes it difficult to make those calculations.

Do you think part of the problem with people leaving the roll, as the Māori Party covice president said, the reason why is that one party has [Inaudible] for so long?

No. I wouldn’t want to speculate on behalf of voters. As I say, overall we’ve seen a net increase, so I think it’s hard to draw that assumption.

How often do you use your Crown car?

Oh, I don’t keep a tally, I’d have to say, but I certainly keep a watch of look of how it compares against last quarter. I’m certainly mindful of its use because I acknowledge it’s a cost against the taxpayer.

Do you use it probably—you can’t use it less than—

I have to acknowledge, my set of circumstances are somewhat different. I have the option to jump in the back of the security car from time to time, and so that does mean that sometimes my use isn’t comparable to other people’s.

Are you going to go electric soon?

My self-drive car is an electric car.

You announced an award for public servants . Why now, why was that a priority for you?

Look, I think it’s actually, really, rather than calling it a priority or a mission, that we’ve got an oversight in our system. There’s an expectation that the honours system isn’t routinely used to acknowledge public servants but, at the same time, we have thousands of New Zealanders who do exceptional work, and very few means and mechanisms to acknowledge that. This is a specific way that we can, and I think it’s another way we can show the support for people who, day in and day out, do exceptional work on behalf of other New Zealanders.

Adrian Orr said on Q+A this weekend that Auckland house prices could follow those in Sydney and London, and fall. What are your views on that?

Yeah, I don’t—he himself has said that he wouldn’t characterise that as a decline in value but rather a cooling in the rate of increase. And I think in New Zealand, you know, there has been considerable alarm at what’s been happening, particularly in Auckland—at the rate at which the market is moving well beyond, for instance, people’s incomes. And so I think we’re seeing now a little bit of cooling, and that’s something that, obviously, for many people, will be welcomed.

While you away Winston Peters said that people on the living wage will be able to purchase a house at around five times their income. We calculated that to be around $280,000 $250,000. Is that a house price that would be a goal—

Look, currently in Auckland that’s obviously—the Auckland market is at a pretty exceptional level, and obviously we as a Government have wanted to make sure that we are providing more affordable housing in the bracket where we’re just not building housing at that level, and so that’s been our focus.

Would that five times number for someone on the living wage be a long-term aspiration for you?

Look, in some regions that is more attainable that it currently is in Auckland. We’re making sure that at the moment we increase supply at a range that’s more affordable, but obviously our KiwiBuild programme—even then, we acknowledge is a significant cost for many.

Have you seen that advertisement for Quinovic, the rental agency, has put out, effectively saying that landlords are financing their tenants’ social lives by undercharging for rent?

No, I have not seen that. I don’t think—

Is that an outrageous claim to make?

I think that anyone who’s renting, particularly in the Auckland market, would find that pretty laughable.

On KiwiBuild, Kiwibank are offering 90 percent mortgages on KiwiBuild homes [Inaudible] Do you need [Inaudible] of those 90 percent mortgages to be affordable?

Oh, look, I think if you ask a first-home buyer what the biggest barriers for them are in purchasing, I think they would acknowledge the lack of affordable housing in the market, but also the threshold that they need to meet for a deposit. There’s no doubt that is a barrier for first-home buyers. Look, Kiwibank’s taken an initiative which, hopefully, will make it easier for those first-home buyers and make KiwiBuild even that much more accessible.

[Inaudible] deposit of a $580,000 home—is that affordable?

I think that is a significant amount of savings for a number of New Zealanders; I think we should acknowledge that.

Don’t you actually need house prices and particularly land prices to fall substantially for housing to become affordable?

Well, what we’ve always acknowledged, though, is the problem in our market currently is that people aren’t building in the affordable range—that for a long period of time houses being built in Auckland tended to be much, much larger than, for instance, their 100 square metres that a first-home buyer might be seeking, and with much larger land parcels, because of our planning rules. And so what we’re doing is intervening in the market, making sure we’re building in a more affordable range, and increasing supply to try and ease the pressure but also make sure first-home buyers have an offering that meets their needs.

Do you think that Don Brash should have been nominated for New Zealander of the Year.

Yeah, I think, look, it’s free for anyone to nominate anyone that they choose, and I understand that at the same time you’ve also, I believe—I think Sue Bradford’s also been nominated. So I think probably we’ve got a whole mix of people in the pot. It’s up to the judges to determine then who that’s awarded to.

Would you pick him as your New Zealander of the year?

I’m not the one who determines who’s nominated, and certainly not the one who determines who receives that award. I do have the pleasure and privilege of presiding over the honours programme in New Zealand, and I have to say I’m constantly humbled by the range of New Zealanders who are up for those awards.

[Inaudible] Don Brash and [Inaudible]

Well, that’s for the people who are on the panel to determine. I imagine they’ll be going through a process once all the nominations are in, but there’s certainly been a high calibre of New Zealanders of the year in the past.

On the Māori seats, Prime Minister, do you ever see a point at which the Māori seats might not exist in the future?

That’s for Māori to determine. OK everyone.