Budget Debate 
Budget Debate 
[Volume:647;Page:16469] 
Budget Debate 
Debate resumed from 27 May on the Appropriation (2008/09 Estimates) Bill. 
JACQUI DEAN (National—Otago) 
: 
 One of the most disappointing aspects of this Budget—this “block of cheese” Budget—was the real downgrading of the Government’s commitment to the environment. As I said last night nothing said that louder and more clearly than when Dr Cullen in giving his speech downgraded the Sustainable Water Programme of Action—a statement that was a huge regret to me and also to other members of the National Party. 
Recently just to illustrate the Government’s lack of commitment to the environment and utter lack of commitment to the concept of sustainability—a word the Prime Minister has been known to say up to 33 times in a single speech—a senior Ministry for the Environment official cancelled at the very last notice a whole series of workshops that were part of the Government’s much lauded Sustainable Water Programme of Action. These workshops were to be held throughout New Zealand but they were cancelled at the last minute. Why were they cancelled? They were cancelled because the official had a better offer. This Ministry for the Environment official had the offer of a trip to Australia to accompany a delegation to talk about—guess what? Members have guessed it—to talk about water in Aussie. Well I suppose one would have to think about it if one were a Government official. The choice is either trolling around the provinces of New Zealand and talking about the same old same old water plan of action that has been around since 2003 and that has had about three Ministers or—for goodness’ sake what a choice this is—a gold-plated trip to Aussie which would be much more exciting for that official. What is worse the official cancelled all those boring provincial workshops around New Zealand because he did not think that anyone else in the ministry was up to taking his place. In the whole of the Ministry for the Environment no one else was capable in that official’s eyes of running a series of community workshops in places like Christchurch and Dunedin—talk about arrogant! 
What about the Sustainable Water Programme of Action? Well it does not matter does it? It does not matter because it has been around forever. Why would anyone let that get in the way of a gold-plated trip to Aussie? What is a few thousand bucks in lost airfares? What is a few thousand bucks in lost time? What is a $14000 gold-plated trip to talk about water in Aussie all about? What a waste of money! What was the Minister’s response to all of this? What did Minister Trevor Mallard have to say? Well he was disappointed and he has been assured that such an occurrence will not happen again. 
What about the Government’s Sustainable Water Programme of Action? Where are the national policy statements on fresh water management? Where are the national environment standards on water-measuring devices? Does the Government not care about the environment? It certainly does not look like it to me. I do not believe that this Government is committed to sustainability; I do not think that this Government cares at all about the important issues of water allocation and water quality. Regional councils up and down this country are falling over themselves working hard to figure it out for themselves. The Government appears to have moved on from responsible policy response to pressures on the environment. It has run out of ideas it has run out of steam and luckily it has very nearly run out of time. 
Hon CHRIS CARTER (Minister of Education) 
: 
 I stand in this House today with a great deal of pride. First of all I am very proud to be a member of the Labour caucus which has delivered a Budget in negotiation with our coalition agreement partners—a Budget that for the ninth time has delivered an enormous amount for the people of New Zealand. It has delivered in health in the environment in transport in justice and particularly in education. 
My second great source of pride is to be the Minister of Education in this Government because in any Labour-led Government no job could be as honourable as exciting or as full of opportunity as that of being the Minister of Education. I am sure that every member of this House would agree with me that education provides the pathway for individuals to lift their skills in order for them to fulfil their potential and to lift themselves out of whatever family or economic circumstances they are in that might be a barrier to their advancement either socially or economically. Education is the ladder the individual can climb to fulfil his or her potential. 
In addition besides being that ladder for the individual education also gives the opportunity through which we can lift the skills of the whole society. Being smart and well-educated as kids is not just important for those kids but it is really important for New Zealand. They are our investment in the future. It is the talents and skills of those young people that will build a stronger New Zealand and this Budget this really important document that a Government produces each year contains if you like resources that it uses to build the sort of society it wants and that is really important for education. 
Every year that Labour has been in Government we have delivered for education. In fact we have delivered a whopping $5 billion extra in education—$5 billion over 9 years. This Budget delivers again for education. First of all it delivers $171 million for schools’ operational funding. Operational funding is the cash schools use for their everyday running. It is not for teachers’ salaries or for buildings and classrooms; it is about paying for the delivery of quality teaching and learning in the school. The $171 million in this Budget constitutes a 5 percent increase in operational funding. Actually there has not been a single year when Labour has been in power that we have not upped operational funding. We have upped it by over 50 percent. 
What is the operations budget today compared with what it was in 1999 in real terms—that is above the rate of inflation? It is 18.5 percent—it has lifted almost one-fifth in 9 years. That is just the cash that schools use for their everyday running. When I announced this last week at a school in my electorate in west Auckland Matipo Primary School the National Party’s spokesperson on education Anne Tolley put out a press statement that was headlined “More Labour Pork for Schools”. I did not agree with the term “pork”—I did not agree with much in the statement—but I did agree with her that it was extra cash for schools. I am proud to deliver that because it is for our kids. It is about allowing them to fulfil their potential and about building a stronger society. 
It is actually really interesting when one thinks about National’s education policy. So far we have not heard much about it. We have heard Mrs Tolley say I should not have given schools a 5 percent increase in operational funding. We have also heard Mr Key say that he would increase funding for private schools. Of course every dollar that goes into private schools is a dollar taken away from our State school system. Only 6 percent of New Zealand children go to private schools but those 6 percent are clearly more important to Mr Key than the 94 percent of New Zealand children who are in State or State-integrated schools. 
We have also heard so much nonsense in this House about education bureaucrats. Let me share with the House and anyone listening to this debate today just how many so-called bureaucrats the Ministry of Education has. On 31 December last year 2547 staff were working directly for the Ministry of Education—that is 2547. Mr Key likes talking about percentages. What we never hear about of course is what he factors into his percentages which is something that I revealed in the House yesterday. It is that 1300 staff were transferred from special education services directly into the Ministry of Education. I tell members to remember we are talking about a total now of 2547 staff. At least 1300 of them were transferred from special education services. Another 83 were transferred from early childhood education services. So at least 1400 of those 2547 bureaucrats are people who were already there and who are doing incredibly important work for children with special needs in New Zealand and for early childhood education. So much for the bureaucratic abundance in the Ministry of Education! 
What we have created are 6046 extra teachers above what is required by roll growth. That is where the real numbers have been—6046 extra teachers above what is required by roll growth. I make no apology about that to this House or to anybody else. Those teachers are important. Those teachers are in classrooms and schools all around New Zealand trying to lift up the learning opportunities of the young people of this country. So the extra staffing that has gone into education is actually in the classroom not at the Ministry of Education. There are some staff at the ministry and they are doing really important jobs dealing with everything from special education to school bus routes in rural areas information and communications technology development in schools and professional development for teachers—who would argue with that? Mr Key would say that that is where he will get the money for his tax cuts by axing that small group of people. I hope anyone listening to this debate—I suspect the National Party will not be listening as usual—will be asking where these extra bureaucrats are. The extra staff in education by and large are in the classrooms and we want them to stay there. We do not want to see them being axed. 
Let us talk about exactly what was in the Budget. There was as I said an extra $171 million for schools’ operational funding. There was also an amazingly large sum—$1.8 billion—for teachers’ salaries. Teachers’ salaries have gone up in the largest chunk in living memory. This Government believes that teachers should be well paid they should be well resourced and they should be recognised for the incredibly important job they do in teaching the next generation. No matter how much equipment technology or teaching aids we put in a classroom nothing is more important for a child’s education than a teacher. We recognise that. In the time that this Government has been in power teachers’ salaries have gone up on average 35 percent for classroom teachers and 43 percent for school principals. As the leaders of learning in their school principals have an incredible responsibility to lift the performance of every school and to make sure that effective teaching and learning is going on. So $1.8 billion will go into teachers’ salaries over 5 years. That is a really significant and important investment. 
I also recognise in the Budget that information and communications technology in schools is very important in building knowledge for the 21st century among young New Zealanders. Of the $171 million that has gone into schools as extra funding $63 million is targeted for information and communications technology support. That is an area that I have received a lot of feedback on in the 104 schools that I have visited since I became the Minister of Education at the beginning of November last year. You know sometimes we hear some nonsense from the other side of the House that this is a tired Government. As Minister of Education I would challenge any of the members opposite to go to 104 schools in the first 5 months of being in the job if any of those members ever becomes the Minister of Education. I have done that because I believe in getting out and promoting education in New Zealand. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 Last Sunday’s newspaper had the headline “150000 homeowners risk losing their home”. What particularly concerned me as the member of Parliament for Nelson was that 42 percent of the homeowners in my home community of Nelson are under mortgage stress—that is they have to spend more than 45 percent of their income on meeting their mortgage costs. This afternoon in debating this Budget I want to drill down below the Government’s spin and look at the substance of what is going on for New Zealanders in respect of their housing costs. You see in this Budget the Government and Maryan Street the Minister of Housing have said that the answer was the Government’s home equity scheme. The Minister said it would make an enormous difference to families who are struggling to meet their housing costs. Well let me go through the numbers as to just what that policy means. 
The policy involves 700 home equity loans. They will be allocated on a population basis between Auckland Wellington Christchurch Nelson and Queenstown. That means that my electorate of Nelson will get 20 loans over 2 years—10 loans per year. 
Jill Pettis 
: They’ll get nothing under National. 
Hon Dr NICK SMITH 
: I tell Jill Pettis that the Government then says under this scheme that if someone buys a house it must be for less than $240000. The member opposite obviously has not been out there in the real world because if she had she would know very few homes are available in Nelson for $240000. The Government’s scheme says it will provide an interest-free loan of 10 percent of that value. It is an interest-free loan of $24000 for 10 people a year. That means help of 40 bucks a week—that is the value of an interest-free loan—for 10 families in Nelson this year and next year. 
I went to the library and asked in respect of the newspaper reports of mortgage stress how much Labour’s interest rate policies are costing my constituents in Nelson. The library calculated the number of mortgages in Nelson; 5712 families have mortgages. As a consequence of increased interest rates under this Government they face average increased costs of $160 a week. Let me recite that again for the benefit of members. In my electorate 5700 families have to pay an extra $160 a week and Labour says it will give 10 families 40 bucks and the problem will all be solved. I say to members opposite that that is a fraud. I say to members opposite that that will make not one iota of difference for families in my electorate that are struggling. 
I can put it in another way. Labour proposes to spend $40000 a year in Nelson on the much-publicised home equity scheme. But the increased cost of mortgages is costing my constituent families in Nelson $50 million a year. Let me just say that again. The increased cost to families in my electorate from high interest rates is $50 million a year and Labour in this Budget says it will solve that problem with a home equity scheme that will put 1000th of that amount into my electorate. 
Perhaps I could express it in another way as well. I asked my local council to tell me by how much the Government has put up the charges for building a house in Nelson. Some members will be aware that in 2004 Labour put up the building levy. In 1999 the building levy in the Nelson area was $31000 a year. That was the amount of tax that the Government put on every time someone in Nelson got a building consent. Do members know what it has gone up to? From $31000 a year it has risen exactly tenfold. It has gone up by 1000 percent. The Government has put up the tax on owning a home in Nelson tenfold and taken another $280000 a year not just in 2008 but in 2007 2006 2005 and 2004. It has increased the charges by $280000 a year and now it is to give us $40000 back in this Budget and is expecting the people of Nelson to be grateful for that. 
Then yesterday in this Parliament the Minister of Housing defended her Housing New Zealand Corporation officials going to one of the most luxurious lodges in New Zealand to live it up big time spending $65000 in one of the flashest pubs in the country at the same time as the Government is telling the families of Nelson it can spare only $40000 to help them with their housing costs. What has happened to the conscience of the Labour members in this Government that they think it is OK to spend $65000 on a lair-up for housing officials while 42 percent of the homeowners in Nelson my home area are under extreme mortgage stress? I know that Jill Pettis is defending the $65000 that Maryan Street said it was OK to spend on housing officials living it up at a luxury lodge at Tongariro while families in New Zealand cannot afford to pay for a basic roof over their head. 
I say to members opposite that this Budget is dishonest. In this Budget it is dishonest to state there is $40000 for the people of Nelson to help with housing costs when they face increased mortgage costs of $50 million a year and when this Government has increased tenfold its costs to those who want to build a home in my community. I say to members opposite that their big Government policies have increased interest rates in every year that Labour has been in Government. When Labour took office interest rates were but 6.7 percent; they are now 10.4 percent. I do not think members opposite understand the sort of stress that puts on families that aspire to own their own homes. I say to members opposite that the Government’s home equity scheme announced in 2004 in 2005 and in 2006 and finally delivered in 2008 is a joke for the people of Nelson. I say to the Minister of Housing that one of the reasons this Government will be thrown out of office is that it does not understand the aspiration of New Zealanders to be able to own their own home. They want a Government that will know that getting interest rates down is the most important thing a responsible Government can do in order to allow them to achieve that. 
R DOUG WOOLERTON (NZ First) 
: 
 Before I begin I would like to thank the Labour Party and Minister Mallard for ceding to me his place in this Budget debate because there are some issues we want to cover that I have previously talked to the House about. I say thanks to him. 
New Zealand First is very concerned about the Overseas Investment Office tick-off for the Russian company Nutritek to buy up to 100 percent of New Zealand Dairies Ltd based in southern Canterbury or northern Otago whichever; Studholme is the place. We are concerned about that because this is a precedent-setting decision. This is the first time in this country that we have seen a situation where we could have 100 percent overseas-owned dairy companies. We believe that it is precedent-setting for that reason. I said in a letter to both Ministers Cullen and Parker that I do not believe that this should be given permission to go ahead because how will they stop this in any other situation that arises throughout the dairy industry in New Zealand? These small dairy companies are sprouting up around the country but when I say “small” they are $100 million - enterprises so they are not small in terms of overall business but they are small in terms of the dairy industry. 
I wrote to them and said that if a hostile takeover were mounted on any one of these companies it would not be able to be withstood by the New Zealand shareholders. Even Open Country Cheese Co. in Matamata one of the bigger and better ones run by Messrs Luxton and Creech who used to be in this House has to all intents and purposes been taken over by Talley’s Group Ltd. We have never raised any question about that. We in this House all know Mr Talley. We know he has extensive interests in the food producing business and he is a New Zealand company. That is the point of difference. We are not going on about the sale of a company; we are going on about the sale to overseas interests. 
In this particular case we have had a recent communication that led to Mr Peters seeking leave this afternoon to talk about this issue. I shall read a part of that communication to the House: “We recently became aware of the extent of these issues.’’—that is relating to the takeover of Nutritek. “This has given Nutritek Group cause to look afresh at the situation which developed last year with respect to New Zealand Dairies Ltd and the actions of certain parties within the negotiating process. We are conducting an internal review into these matters. While this is taking place certain employees of our company have been asked temporarily to stand aside from their duties.” 
So even there at the heart of this matter we have concerns. We were told in this House that there were no concerns from the participants to this deal but in fact there were. I have reason to believe that certain people brokered this deal behind the backs of the original shareholders and I believe—and this is in the  
North and South 
 article as well—that a situation was manufactured where this company was seemingly short of money for development in the developmental stages. 
Mr Cliff Skeggs who is not exactly a person without mana in this country said that in his view this shortfall was not “due to stainless steel”. In other words in dairy company terms it is not due to the manufacturing of the plant. It is not due to any of those things. This was an event that was made to happen and it was made to happen in his view by a certain gentleman who was operating on both sides and whose interests clearly lay with ensuring that the Russians put their money into this company and subsequently as we now know they took it over at a later date. 
That is a mechanism in our view and we should not be saying that it is OK to gain a company by a financial mechanism. We believe that if people come in here and make a bid and truly want to invest in this country there are avenues through which they can do so. But to take over a fledgling dairy company by a mechanism is something this Government should not be seen to be associated with. 
We know that this company was set up by dairy farmers in that area and we know there is one very big dairy farmer a guy called Aad van Leeuwen. I have been to visit him and his lovely wife. They had views of vertical integration and good on them for that. They set this company up with other shareholders. There is anther guy who actually set up Open Country Cheese Co. in Matamata a guy called Greg Missen. I am also in constant contact with him. He was the brains behind the manufacturing plant and he went about setting that up. Both these people believe they were ripped off and manoeuvred out. 
These are New Zealanders. Mr van der Heyden is the chairman of Fonterra and Mr Aad van Leeuwen is a gentleman who came to this country and has made a huge success of his dairying enterprise. These people wanted to make sure that New Zealand’s produce was manufactured in New Zealand and sent across from these shores to other countries in a finished state. This company Nutritek has interests throughout Asia. It hails from Russia and its interest—and this a serious point—is in the raw product. It has no intention of adding value to this product in this country. I noticed that in replies to my questions at question time today it was said that these people would add value and technological expertise. That is not correct. That added value will take place in Singapore and countries outside of New Zealand. 
Their intention with the Studholme plant is to do the most basic things. They will turn the raw milk product to powder which is the first process—they take the water out of it. They then ship it offshore to the other plants that then make the highly valuable baby products—nutraceuticals I think they call them—and that is where the value will be added. We in New Zealand are missing out on all the upstream opportunities on this product. That is why we are opposed to this Nutritek thing. We now have reason to believe that it is these underhand methods—fraudulent could be the word—that have allowed this Russian company to take over New Zealand Dairies Ltd. We will not rest until we have got to the bottom of this and we will hold these people to account. 
TIM GROSER (National) 
: 
 I think that New Zealanders understand and I am almost certain that the Government understands that the debate taking place not just here but in the media and around the country—in bars and everywhere else that New Zealanders get together to speak about matters political from time to time—is a debate not about just one single Budget; it is a debate about a Budget that this third-term Labour Government has made on behalf of New Zealand in the context of 9 years of a set of political choices. 
Had the Labour Government in its first couple of Budgets come out with a $16 a week tax cut for the average Kiwi most Kiwis would have said: “Fair enough. It’s a good start. Let’s see where we can move from there.” But after 9 years I do not believe that it is accurate even to call this measure a tax cut. I believe that it is a tax adjustment for the wonderful phenomenon known amongst economists as fiscal drag—an adjustment for inflation. After 9 years I do not think there is a lot of generosity out there in New Zealand over a $16 a week tax cut for the average New Zealand worker. I do not think there is a lot of generosity of spirit at all when we look at the tax cut in this context. 
Was it not great when the good times rolled? Was it not great when things were just trucking along in New Zealand when we had the highest terms of trade for a quarter of a century and when inflation peaked at 14 percent in 1991? Inflation had tracked right down to about 2 percent by the turn of this century. Unemployment had tracked down from around 11 percent to about 6 percent and in the first few years of the Labour Government it was set to go down further—because the roots of good policy are always laid many years in advance. Was it not good when interest rates were lower for the average Kiwi family? The average family is now struggling to make ends meet as their mortgage bears the brunt. Was it not great when interest rates were around 6 percent at the start of this 9-year period? 
These factors were fuelling the surplus. I have to give the Hon Dr Cullen an AA+ for his intriguing efforts to deny the reality of that surplus for about 7 years. It was a remarkable performance when everybody else could see it except Dr Cullen. These factors fuelled large structural surpluses which gave this Government the opportunity to actually build on the successes and to take this country forward. 
Yeah it was great when the good times were rolling but members all know that we are now looking at tough times and that there are literally people out there in Struggle Street who are asking what has happened to those good times. What has happened to the opportunities to take New Zealand forward that those good times offered? I think the answer for those people is essentially a political choice that the Labour Government made quite early on. I saw it at the Catching the Knowledge Wave conference which I know from having been involved in it in a minor way was set up to provide the political vocabulary for Prime Minister Helen Clark and her Ministers and to provide them with ideas about how to take this country forward. 
But as members of the Government well know the Labour Party had been torn asunder politically in the previous decade. There were 17 Alliance members of Parliament. You would know Mr Assistant Speaker—you were here at the time. Probably one-third of the Labour caucus was more inclined towards the Alliance MPs and the Government of the day—Helen Clark’s Government—made a conscious political choice that if it came down to a choice between advancing policies that would help to move New Zealand forward or advancing policies that would help to solidify the Labour Government’s political interests it would choose to solidify the political interests of the Labour Government. 
And that has been the story. That is why Prime Minister Helen Clark dropped the chairman of the conference Dr John Hood right in the proverbial. I saw it happen. When she looked at the agenda of that very interesting event in New Zealand’s political and economic history and then looked across at the tattered situation of the Labour Party in the 1990s she made a choice. And now we are seeing the effects of that choice. We see that choice in favour of Labour’s political interests in not just this Budget but the Electoral Finance Act and a series of ancillary decisions made around us. It is all explained by the same dynamic down to the point where I have to ask a disturbing question. Is this Government as it retreats poisoning the well? Is this Government as it retreats poisoning the well for those who follow? 
If we sit down and look at the decision to renationalise the railways I think we realise that that disturbing question has to be raised. There are a number of different aspects to it and one is the price. Even this Budget starts a process whereby Treasury bound by the Fiscal Responsibility Act and bound by its commitment to accounting practice has to start marking down the value of the assets to their actual market value. We already know that that is one part of it. 
For those New Zealanders who are not aware of what the phrase “my Helen Clark moment” means in relation to the price of the railways let me quickly rehearse it. It is actually an Australian joke—it is a bit like our Tui ads—that refers to a particular event. The Australian who cleaned up with the bonus from Dr Cullen of $250 million more than what the asset was worth—it was at least that; we do not know quite what the figure is—referred to a “Helen Clark moment”. This was of course a reference to I believe Rupert Murdoch referring to his “Packer moment” when he sold one of the television channels—I think it was Channel 9 but I am not sure about that—to Packer for a $1 billion or thereabouts. When Kerry Packer got into financial trouble Rupert Murdoch bought it back again for I think a quarter of a billion dollars or something close to that—a quarter of the price—and in public he referred to it as his “Packer moment”. We have to understand the significance of the quotation from the Australian company that the sale was “my Helen Clark moment”. 
There is the price issue but also there is a whole set of management issues. One of the things that I find really intriguing around the nationalisation of the railways given what we know about the rorts of the past when they were under State control was the extraordinary relative silence of the union movement. It was quite extraordinary. By the way I think it was very very wise to be quiet. In fact I would liken it to the prudent silence of someone in a small country town who has just won Lotto. It is very prudent to remain quiet about winning Lotto in a situation like that. The unions know what the nationalisation implies; they can see an opportunity. If National is the Government they might find they have a stiffer time of it. 
We then look at the tax cuts— 
Jill Pettis 
: What does that mean Tim? 
TIM GROSER 
: It means that we will defend the taxpayers’ interests. We then look at the tax cuts not simply in terms of the issue I have been discussing—whether they were a good investment by the average voter who voted for Labour over a 3-year period—but also in regard to their economic effects. Thank you. 
RON MARK (NZ First) 
: 
 It gives me great pleasure to make a contribution on behalf of New Zealand First in this 2008 Budget debate. I guess it is worthwhile recapping a couple of the comments that have been made throughout this debate by principally the National Party whose leader seems to call himself the Leader of the Opposition. I always have a problem with that. I really think it is time that this Parliament started being more open and transparent about its Budget. We need to examine whether we have a case of fraud in the House. Under the Standing Orders Mr Key is designated as the Leader of the Opposition. I do not see anywhere in this Budget any reference to his leading an Opposition. He leads a gaggle of 48 lemmings—those things that go over cliffs—and no one else. I have never seen anywhere in the country’s accounts any account of any board meetings held between Mr Key and the other leaders of the Opposition. No minutes are ever taken. But I do see about $7.5 million worth of expenditure coming out of the taxpayers’ coffer to support a man who drives around in a limo. He chastises Government Ministers for driving around in a BMW 7 Series when he himself careers around the nation in a limousine. 
It is about time we had some transparency from the National members who tell everybody there is a huge wastage of taxpayers’ money while being very silent about their own expenditure of $7.5 million of taxpayers’ money on looking after their own interests. Is there another party in the House that gets that sort of funding? 
Jill Pettis 
: No. 
RON MARK 
: No I do not think so. What could we get for $7.5 million? 
Jill Pettis 
: 37 staff in the leader’s office. 
RON MARK 
: Crikey it is bigger than some of the Pacific Island economies that Winston Peters has been talking about. 
Let us take a look at what New Zealand First has secured for the Maori wardens. We are over the moon that once again we have an allocation for Maori wardens. We are over the moon and very very happy with the talks we brokered between the Minister of Police the Commissioner of Police the Maori Wardens Association and the Maori Council with a view to getting the Maori wardens up and functional and back operationally in our communities because we know the work they can do. But in fact Mr Key spends three times the amount of money that the Maori wardens have been allocated. The Maori wardens get $2.3 million out of this Budget which is fantastic. It will go towards capital costs to help them do their job and to re-establish themselves in some communities where they have virtually died out. That is good because in Rotorua alone we have seen a 29 percent reduction in crime as a direct result of New Zealand First’s initiative supported by the Government to reinstate Maori wardens in Rotorua and have them back on the streets and the results have been immediate. 
We could do three times as much if we had the amount of money that Mr Key and his caucus are spending whilst tripping around the country and staying at flash hotels when they have their caucus retreats. We know they need to retreat. We know they are heavily on the back foot. We know they are in serious trouble. We know they are in disarray—Kate Wilkinson has already let a little bit of it out of the bag. I think we need a little bit of openness and transparency about the expenditure of taxpayers’ money. 
Let us look at what New Zealand First has received for superannuitants with the golden age card. “Granny Herald”—the  
New Zealand Herald 
—which is not seen as a great favourite of New Zealand First has finally admitted that superannuitants are the one sector group that is now ahead of its Australian counterparts. So I guess we will see a whole bunch of superannuitants in Australia coming back home because they can do better here with their totally free transport. The other day I heard the prattling of some National Party member asking what free transport would do in the provinces. Well let me tell members about the Wairarapa. I live in Carterton and it costs about $10 a ticket to take the train from there to Wellington—in brand-spanking-new carriages I might say. People can plug in their 230 volt laptop and work in total comfort for the 1 hour trip. It is a great ride. The Government has made a great investment in buying back rail. People can come across to the Wairarapa for a little over 10 bucks. Wrong! Superannuitants can come for free. If they want to travel to Wellington and back three times a week that is 60 bucks free per week. And the National Party wants to take it off them. Well it has a fight coming. If it tries to do that cost-cutting exercise and whack into the superannuitants New Zealand First will be right there to stop them. National should take on board that it is not going to cut those areas when it finally gets into Government—if it gets into Government. 
I want to talk about the police. National members call what is in the Budget for the police a gimmick. They should go and talk to the communities that now have the benefit of more police officers on the beat and with the third tranche rolling out more community police officers. There will be more police going into rural communities. The Budget allocates $180 million towards that. If I have a criticism of Labour it would be that it should stop putting its members on television who are telling people that Labour raised the minimum wage when it was made to do that by the Greens and New Zealand First. I hope that in future when Government members are on television doing these interviews they will say they raised the minimum wage because of an agreement with the Greens and New Zealand First and that they reduced corporate taxes because of an agreement with New Zealand First and United Future. Labour members should stop hogging all the credit when in fact they would never have done those things had they been left to their own devices. They did it because they wanted power. They did it because they wanted to be in Government. They did it because they wanted to be Cabinet Ministers. They did it because they needed our votes. We have honoured our agreement and so have they. Let us be honest with each other and recognise it. That is my only criticism of the Government. 
Let us talk about something else that is great news: the RSA. Through discussions with the Rt Hon Winston Peters in New Zealand First it became clear to us that the RSA was short of a bit of money so we made a pledge to it that we would do everything we could to help. It wanted $1 million. Well holy heck! If we look at the Budget we see that $1 million has been appropriated to the Royal New Zealand Returned and Services Association to help it with its welfare services fund. We are proud of that. We are pleased with that. We have just had the President of the RSA Robin Klitscher congratulate us and thank us very much on behalf of the association. My question to National member colleagues over there is that if they get into Government and they are looking to cut Government expenditure will they take the money back off the RSA? I want a clear emphatic answer from the next speaker. Just simply say no and we will all be happy. Say nothing and we will not. 
The National Party cannot roll out policy or give any answers when its members go on television day after day. I have a message for Television New Zealand. It should save some taxpayers’ money and stop putting John Key on TV until he is prepared to roll out policy. If all that the taxpayers see on television interviews is John Key saying for half an hour: “We’ll tell you later. We haven’t decided yet. We’re still working on it.” then there is no point in putting him on television.” It should put Rodney Hide Jeanette Fitzsimons Winston Peters Peter Dunne or Jim Anderton on. At least they have policy so they do not have to go to other people’s websites and steal it. 
The office of the leader of the National Party is staffed by 37 people yet the party is still doing its best research on other parties’ websites. There are 37 people in the leader’s unit. It has 48 members of Parliament and 138 staff in this building. That costs taxpayers $7.5 million and the best National can do is steal policies off other people’s websites. We say to cut out the middlemen save $7.5 million give three times more to the Maori wardens and let us be better off. Get rid of them! If that is the sign of a new Government’s innovative forward-thinking vision then people do not have to go for the pirated copy. They should say no to stealing DVDs and to stealing party policy. They should vote for the original even if it is the Greens; even if it is the Maori Party. They should vote for the original. They should not buy a pirated copy particularly a tardy and scratched old DVD such as the one we are looking at. Talking about that I say that Nick Smith Maurice Williamson Lockwood Smith Bill English and Tony Ryall are the old hacks of this House. They should get out and let some of those backbenchers come through. When Chris Finlayson and Chris Tremain come to the front bench we might then see a little bit more transparency out of that party. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 I start by congratulating Kate Wilkinson—there is a person who has actually told the truth. We can compare her with some of the front-benchers on the other side members such as Maurice Williamson. 
Ron Mark 
: The tired and the restless. 
Hon GEORGE HAWKINS 
: Well the statue of King Dick outside Parliament does a lot more than Maurice Williamson does. We have the young David Carter; he is only as good as the seagull sitting on King Dick’s head. Then there is Anne Tolley the education spokesperson. All those people are on the front bench. I see “Dr Paul” Hutchison over there. He should be on the front bench. He does not work—I know that. But what happens is that National has poor old Maurice Williamson on the front bench. But why? He is no use whatsoever. 
Today in this Budget debate I want to talk mainly about a wonderful place called Manurewa. Manurewa has been very fortunate in having a Labour-led Government over the last 9 years. What has happened there over the last 9 years? Well Manurewa has had two new police stations and I was the person who actually signed them off. I was very pleased to do so. Manurewa happened to get two new fire stations. Who signed those off? I did. We got a women’s prison as well. When no one else wanted it we put our hand up because we do not believe that South Aucklanders should be sent away from their community. We even have a kiddies’ jail— 
Craig Foss 
: What’s Helen trying to do with you? 
Hon GEORGE HAWKINS 
: If that member keeps quiet rather than sitting there being Johnny Appleseed he might find something out today. 
Craig Foss 
: Maurice Williamson is a very good electorate MP. 
Hon GEORGE HAWKINS 
: Stop him cursing Maurice Williamson! Maurice does not do anything; he is probably asleep right now. 
Then Manurewa got a new secondary school. And what else did the Government give us? It gave us lots of new classrooms in Manurewa. A little later on I want to talk about some of my schools. 
One of the things the Government has said that I really like is that there is to be a royal commission on the future of Auckland’s governance. You see I believe that somehow local authorities have become out of control. One has only to look back to an article in the  
Sunday Star-Times 
 about staff numbers. In 2001 Manukau City Council had 792 jobs. Now in 2006 it has 1050. That is a 32.5 percent increase. The salary bill went from $40.3 million in 2001 to $69.4 million—a 72 percent increase. But it is worse than that. Do members think that that means more staff to do more work? No it means more consultants as well. What has happened is that the council has increased its spending on consultants by 120 percent—a cost rise from $9 million to $20 million. That is the sort of thing that I think is pretty shocking. 
I want to talk about the council about the way it is spending its money and about the way it is charging its ratepayers. You see I believe there has to be a vertical integration of Auckland’s regional water industry. Right now the wholesaler Watercare Services collects the water in its dams stores it and distributes it to the retailers including Manukau Water for 45c per 1000 litres. But what does Manukau City Council charge its customers? $1.20! So all of a sudden the charge has gone from 45c to $1.20. By comparison with Watercare Services the council has only to continue to distribute the water through the pipes; Manukau City Council is ripping off its own people. I think that that is something everyone should be aware of. 
I want people to know that I believe that Manukau City Council does some fairly good stuff but there are problems it is not facing up to. There is a rail spur going to Manukau but now it will not be going the full way. The council has decided to save a whack of money which some media have reported as being about $10 million. It is very interesting that that amount seems to be about the same amount that the council is spending on doing up the council building. In these hard times that is not very good. 
When Manukau has had problems the community has tried to deal with them. The council has tried to deal with some of the problems. The council of course wanted to make sure it could get rid of graffiti and I was happy to take a local bill through the House for the council. I am pleased to say that the bill received very good support. 
I had also tried to take through an earlier bill for the Manukau City Council on street prostitution. It was a bill that I believed was put up by a council that was quite serious about the control of street prostitution. But what has the council done since? It now has civic-sponsored brothels in the name of public toilets in Maich Road Manurewa. I wrote to the mayor on 20 January and the council has decided that it will have a meeting about the issue. It will hand it on to the community board to deal with. If a problem is too tough the council gives it to the community board but it does not give the board any money to fix it. Community boards do not get a cent extra and they are expected to fix problems in some other way. I say to the Manukau City Council that that attitude is not good enough. I am prepared to fight for the city council. I am prepared to fight for ratepayers and other citizens but in the end the council has to take some responsibility. 
The council has now allowed a topless bar. Why does it have a topless bar? The reason is that competition to sell liquor is so strong. I think that when those sorts of things are happening we must try to do something about them. I know that when piles of liquor are collecting around and swamping the streets of Manukau something has to be done. So I have written a bill entitled Sale of Liquor (Objections to Applications) Amendment Bill and again it is focused not as a local bill but as applying to places all over New Zealand where dairies now make more money from selling booze than from selling milk. We have a situation that I think is very important and we have to deal with it. Its victims are Pacific Islanders and Maori—families in the main—because those areas are where liquor outlets operate. Outlets go to places where people do not have money and they then decide very cunningly to open up there. Well I do not think that that is very satisfactory. 
This Budget is a good Budget. The oldies love this Budget. My dear old mum God bless her loves it. She probably loves it as much as John Carter’s mother probably loves it. Mum will be able to go on the train or on the bus at off-peak times and now with a bit more money in her purse to spend at 83 she will be able to live it up. That is absolutely superb. This is a caring Government. This is a Government that really is getting on with the job. I believe that when Labour continues in office after the election people will continue to see more and more innovations. 
I seek leave to introduce the Sale of Liquor (Objections to Applications) Amendment Bill in my name despite Standing Orders 276 and 277 and for the bill to be set down for first reading. 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: Leave is sought to do that. Is there any objection? There is objection. 
CHRISTOPHER FINLAYSON (National) 
: 
 I start my speech by praising the previous Labour speaker George Hawkins and I say to that honourable member “Hang in there!”. The ninth floor hates him and he hates the ninth floor but we are on his side. He is genuine Labour not an identikit apparatchik like so many on that side of the House. 
Genuine George Hawkins aside this House has been exposed to dreary speeches from the Labour members that were prepared by spin doctors. They contain such tiresome phrases as “every problem in this country can be traced back to National in the 1990s” but not to Labour in the 1980s. 
Chris Auchinvole 
: That’s right. 
CHRISTOPHER FINLAYSON 
: “I’m waiting for just one policy.”—I ask Mr Auchinvole how often we have heard that phrase. It really means “We’re too embarrassed to admit all the policy we’ve stolen from National.” Then the New Zealand First member Ron Mark got in on the act and we heard: “Tell us what your policy is.” That for Ron is shorthand for: “I’m so illiterate that I can’t read policy announcements on the National Party website.” 
But there is another spin line that is starting to do the rounds in Wellington. 
Chris Auchinvole 
: What’s that one? 
CHRISTOPHER FINLAYSON 
: I tell Mr Auchinvole that it concerns Treaty negotiations and the stellar role of the Deputy Prime Minister as Minister in charge of Treaty of Waitangi Negotiations. The Government is now pushing the idea that settlements have gained momentum only because of the high-profile offices held by the Deputy Prime Minister. One has to admire the gall of this Government. When it runs out of opportunities to blame the 1990s for the woes of this country when it runs out of excuses it simply erases the past and starts over. So now Dr Cullen is being promoted as the great saviour of Treaty negotiations; the previous 8 years of failure under two incompetent Ministers are simply ignored. 
Members of this House who play golf will understand the term “mulligan”. 
Chris Auchinvole 
: What’s a mulligan? 
CHRISTOPHER FINLAYSON 
: I am very disappointed that Mr Auchinvole asked that because as a Scot he should know. In golf parlance it means a “do-over”; if one hits a bad shot one takes a mulligan and tries again. Apparently it is named after a chap called David Mulligan who played golf in the 1920s. He let it rip off the tee one day was unhappy with the result re-teed hit again and took no penalty. Real sportsmen like me never take mulligans. Bill Clinton was apparently a chronic taker of mulligans and it is rumoured that the Deputy Prime Minister is quite a liberal taker of mulligans although I cannot prove it because people tell me he does not have any friends to play with at the Napier Golf Club and always plays by himself. 
The Government’s approach to Treaty negotiations this year has been to take a mulligan. For 8 years it has been hitting bad shots or in the case of the MP for Taupo completely missing the ball. But that does not stop those members from in their ninth year re-teeing and ignoring the past bad mistakes. It is almost like what Pol Pot did in Cambodia in the 1970s. He simply abolished the past. That is what Dr Cullen is doing in Treaty negotiations. He has abolished the past 8 years and has started again. Therefore no mention is made of the first Labour Minister in charge of Treaty of Waitangi Negotiations. Her arid intellectual approach yielded nothing in this area except a barren wilderness and a loss of momentum. The second Labour Minister is also erased from history. It is as though Mark Burton’s bewildered and confused administration of the portfolio never happened. When thinking of him I always recall the quote from Oscar Wilde: “Some cause happiness wherever they go; others whenever they go.” 
Now we have only the present in the form of Dr Cullen. The Government spin around Wellington is that because the Deputy Prime Minister is both the Minister of Finance and the Minister in charge of Treaty of Waitangi Negotiations he can open the cheque book and spend. But that is what he did with Toll Holdings. Faced with a rent dispute he bought the whole house at four times its market value. There were no checks and balances. 
Chris Auchinvole 
: He failed to negotiate. 
CHRISTOPHER FINLAYSON 
: He does not know what negotiation is. The net result I say to Mr Auchinvole was disastrous. The railways were purchased for $1.47 billion when they were valued at around $350 million to $400 million. 
We have been told that when the Deputy Prime Minister wants to do something it gets done. In the last few months a number of agreements and principles have been signed up. But when we look at these agreements we see that far from their being evidence of significant progress they illustrate just how slow Treaty negotiations have become under this Government. Let us look for example at the agreement in principle for Taranaki Whanui which comes nearly 5 years after the release of the report on the Wellington district by the Waitangi Tribunal. The Government’s failure in this area is indicated by the multi-year appropriations for Vote Treaty Negotiations at page 320 of the Budget 2008 Estimates. The estimated actual appropriation for 2007-08 is $56 million whereas the estimated actual appropriation for 2008-09 is—guess what—$60 million. This indicates to me that Michael Cullen’s ambition in this area is to achieve as much as the great Mark Burton achieved last year. Mark Burton’s success was so stellar so intergalactically spectacular that Helen Clark stripped him of all his Cabinet portfolios. 
Just as with tax cuts for long-suffering New Zealanders in Treaty settlements this Government is moving from being Dr No to being Dr Dolittle. The reality of the matter is that no Government can insolently take a mulligan or abolish the past like Pol Pot tried to do and like Dr Cullen is trying to do this year. This Government has to take responsibility for its actions; a point made so admirably last night by that rising star of the Labour Party Clayton Cosgrove the Minister of Immigration. He made a plea in his speech for the Government to be judged by its actions over the last 9 years. All I can say to that is “amen”. He is exactly right; I could not agree more. Notwithstanding the recent flurry of activity this Government’s performance in Treaty negotiations is lamentable. Just one settlement has been taken from start to finish in more than 8 years. Despite all the talk and the ninth floor Goebbels department Government spin Government members are a failure. They stand condemned for negligence in conducting one of the most important historical projects in the life of this country. It was commenced by Mat Rata in 1975 when the tribunal was established and continued in the 1990s with the magnificent work of Doug Graham and Jim Bolger. I can understand Labour’s desire to erase from memory the appalling administration of two earlier Ministers in charge of Treaty of Waitangi Negotiations but it cannot be done. This Government has to take its medicine. 
Then the Deputy Prime Minister puts on the hat of Attorney-General. He is a flop in that area as well. I note from the Estimates that legal advice and representation by Crown Law will cost a lot more this year; I certainly hope it will improve. Just last week we had the debacle of the Amalgamated Engineering Printing and Manufacturing Union case. The union appeared before the Justice and Electoral Committee advocating strongly for the Electoral Finance Bill yet it was in court the other week saying that the Electoral Finance Act inhibited freedom of expression and the union was the first victim. Crown Law gave advice on the meaning of the word “person” in section 13 of the Act. It was an appalling exercise in statutory interpretation. Even a first-year law student would have said that to interpret section 13(2)(f) one must look at section 13(1) but the Crown Law opinion glossed over that. 
Where do the failures end? The Government has run out of ideas in arts culture and heritage and has to resort to promoting impractical schemes like resale royalties for artists. It has made no attempt to address difficult issues in the arts like sustainability for recurrently funded organisations. The Prime Minister does not seem to realise that the arts portfolio involves more than self-promotion and that it is not enough to delegate to the Associate Minister Judith Tizard who is not up to the challenge. These are just a sample of the failings in the areas in which I have responsibility. 
The reality is that this Government has run out of ideas and has run out of energy. In describing it I can do no better than quote from Disraeli’s magnificent speech at Manchester in 1872 when he said this about Gladstone’s failing administration: “As I sat opposite the Treasury Bench the Ministers reminded me of one of those marine landscapes not very unusual on the coasts of South America. You behold a range of exhausted volcanoes. Not a flame flickers on a single pallid crest.” A range of exhausted volcanoes—what better imagery is there to describe the front bench of this tired and useless Government? 
Hon TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker tena tatou katoa. I would like to thank Labour and National for allowing me to give my speech. Tena korua. 
The World Health Organization has revealed that we have broken another record. New Zealand has the highest ratios of foreign-born and foreign-trained doctors in the OECD countries and amongst the highest for nurses. As well as that it reports that the retention of health professionals is a key issue because attrition rates for doctors and turnover rates for nurses are so high. But it gets worse. The number of health workers who are actually New Zealand born has also deteriorated as they leave our shores for other lands. In fact the number of New Zealand-born nurses living in other OECD countries is matched by the number of foreign-born nurses in New Zealand. It is not just those who are currently in the system who are our concern. The 2005 study  
Doctors and Debt: The Effect of Student Debt on Doctors 
 revealed that two-thirds of respondents in the study stated they would consider leaving New Zealand within 3 years of graduating such is the level of pressure in the health workforce. 
The effects of a system under stress are felt in many forms. We have heard about the desperate shortages that are affecting waiting lists up and down the country. In the Auckland District Health Board region for example the average wait for treatment for heart disease has increased from 27 days in 2002-03 to 64 days now. We recall the litany of sentinel events—major medical mishaps or incidents; mistakes that in some cases cost patients their lives. The report of 182 serious and sentinel events showed us that if someone enters a public hospital he or she has a 15 percent chance of suffering an adverse event. In maternity health we know that 15 of the 21 district health boards say their communities are at least 85 midwives short. All of this in context leads the World Health Organization to conclude that New Zealand faces serious challenges with demand from health professionals set to outstrip supply by 2011. 
What can we do about the situation? Three years is not much time to overturn the health system. The 2008 Budget contained a mere $60 million to improve the health workforce—not much in the context of the additional $2 billion allocated to Vote Health. The Budget also included a specific allocation for Maori nursing workforce development and Pacific health provider and workforce development. I want to be quite clear that we in the Maori Party welcome the initiative to increase the numbers and skill base of Maori nurses and to develop and encourage secondary students to take a health career pathway. We are also pleased to see the support for Pasifika health providers included but our concern remains with the analysis put forward by the World Health Organisation which stated: “Despite the key role of the health workforce in the health system it has not been at the core of the various health system reforms in New Zealand.” Such a concern was mirrored by the comments of the New Zealand Medical Association which was extremely disappointed that the Budget failed to provide comprehensive funding to address health workforce shortages. 
We ignore at our peril the advice of our medical specialists and our health professionals. In March this year a pan-professional medical forum was called which concluded that the New Zealand medical workforce is in crisis because of its inability to train and retain enough doctors to provide the health services that New Zealanders deserve. We think too of the criticism from the New Zealand Nurses Organisation that the Budget failed to include wage increases for aged-care workers—those workers who fall into the lowest paid part of the health sector—or for Maori and iwi primary health care providers to be funded adequately so that workers will achieve pay parity with district health board professionals. It is little wonder that the World Health Organization warns that our health system is vulnerable and that the Government needs to take urgent action to address the chronic workforce shortages. 
There are some particular crisis points for Maori and Pasifika health workers. We know that Maori and Pasifika health workers are concentrated in less senior and less well-paid positions such as in the community work health promotion and health education fields. The Ministry of Health suggests that half of the full-time public health workforce earn less than $43000 per annum and most of these are Maori and Pasifika workers. Pay is important as are conditions but it is also vital that the health workforce is viable and has patient safety at its core. 
There is no shame in admitting that we are in a crisis and that we must call on all parties to turn the situation around. So where to begin in addressing an already stressed workforce? I think that this is an area where we can look to our communities—particularly to tangata whenua—for leadership. One of the areas in desperate need is that of recruitment. I have been extremely impressed by the programmes offered at Victoria University—Te Ropu Awhina Putaiao and Te Ropu Awhina Waihanga Hoahoa—which are the whanau support systems for Maori and Pacific nation students enrolled in science technology architecture and design. There is the work being led by the Auckland University of Technology with Nga Pae o te Maramatanga—the National Institute of Research Excellence for Maori Development and Advancement at University of Auckland—in expanding our knowledge about the participation and retention in the Maori health and disability workforce. For those practising doctors there is the intensive clinical training programme offered by Te Ohu Rata o Aotearoa—the Maori Medical Practitioners Association—and the Royal New Zealand College of General Practitioners to enhance the number of Maori doctors training as general practitioners. There is the network known as hauora.com which brings together Maori health professionals health providers and health workers to strengthen the capacity and capability of the workforce and there is also the excellent work being led by Health Care Aotearoa. Another Maori-led collaborative venture focused on workforce is Te Rau Matatini which is singularly focused on enhancing the capacity of the Maori mental health workforce in order to improve the health of Maori communities. In short Maori are providing huge leadership in the area of health workforce development and it is one that maybe the Government could look to. 
There are many excellent initiatives already in place that must be called on to recruit and retain staff. It is evident to all of us that the health workforce is under increasing and relentless pressure in our hospitals and accordingly the quality of the service provided is compromised. I know from my experience as Associate Minister of Health how willing Maori health providers and Maori health professionals are to share their networks their experience and their expertise to make the change happen. Calling on their leadership would be a big start in turning the crisis around. Perhaps then we will come to a time when the health workforce will be placed at the core of the health system. Kia ora. 
Hon DAVID PARKER (Minister of State Services) 
: 
 I thank the previous member Tariana Turia for that considered contribution. In contrast I refer to the prior contribution from Mr Finlayson who accused the Labour Party of being involved in spin and said that the Budget was not grounded in reality. The reality is of course different. New Zealand has great transparency laws around its public accounts. It is actually probably the only decent thing that Ruth Richardson did when she was here—she brought forward good public finance laws that ensure that we have transparency in respect of the Crown accounts before every Budget. That of course was necessary because of the former excesses of the Muldoon National Government when it left the accounts of this country in such a terrible state and when Government debt was 60 percent of GDP and $1 in $5 of tax was spent on interest. 
The reality is that the Government accounts now show that New Zealand has had a sustained period of growth which is amongst the highest in the world since 1999. It is just a little bit higher than Australia quite a bit higher than Japan quite a bit higher than Great Britain quite a bit higher than the European Union and quite a bit higher than the United States. We also have achieved something that I am particularly proud of because it is so important to the well-being of New Zealanders and that is we have higher rates of employment and lower rates of unemployment. Unemployment under Labour has been lower than 4 percent for 4 years in a row. This is amongst the best in the world and is one of the reasons why the Government’s financial accounts are in such good shape. During that same period average household incomes have increased by 25 percent in real terms. Now as a consequence of this the Government’s books are in good shape. Government debt is now 20 percent of GDP. Gross debt is 20 percent of GDP down from over 30 percent of GDP when we took over from the previous National Government. 
There have already been substantial tax cuts and other forms of tax relief in prior Budgets—these total $4.6 billion per annum. They are made up roughly of a third from Working for Families which helps families with children through very significant tax relief—often putting $100 a week into their pockets—that provides assistance for so many New Zealanders. More than half a million New Zealanders are already on KiwiSaver and they get tax relief and other assistance from the Government and that is substantial. Then another third comes from the business tax package in the last Budget which amongst other things dropped the corporate tax rate because we all know that we need to have a strong economy. We dropped the corporate tax rate we increased the tax incentives for research and development and of course National voted against that as well. 
As a consequence of maintaining debt at prudent levels at a time when the rest of the world has economies that are tanking—many parts of the world are in trouble particularly the United States—New Zealand is in a position to have affordable tax cuts without increasing Government debt or at least without increasing Government debt under a Labour Government. Debt stays constant at around 20 percent of GDP. It increases in nominal terms because the economy of course grows every year but the percentage of debt stays constant at 20 percent of GDP.  
The tax relief including tax relief from Working for Families for a two-income family with two children at home earning say $65000 which is a moderate income is worth $42.76 per week from 1 October this year. We hear the National members say that this is a block of cheese. Well it is just nonsense to suggest that that is a block of cheese. The reality is that that is someone’s power bill. For most families one of the most substantial bills they receive every month is their power bill. Now that family will be $42.76 better off in their pocket from 1 October 2008. And it gets even better—by 2011 that amount rises to $84 per week. This is in addition to of course improvement to their circumstances through the years as they get normal wage increases. 
Superannuitants are another group who do well under this Budget. Married superannuitants will be $45 per fortnight better off from 1 October. Again this for many people is close to their total power bill. It is not a block of cheese; it is close to their total power bill. It has been described in derisory terms by some people in National who obviously go out and buy giant blocks of camembert or something because they have champagne tastes and incomes to afford that. But for most superannuitants $45 per fortnight is a lot. It gets even better from 1 April next year because superannuitants will be better off by $75 per fortnight. We have been very careful stewards of the economy. 
Despite that these tax cuts do come at a cost. The Government has less money as a consequence and our forward spending plans are fewer than they have been in recent Budgets. This will put pressure on us to reprioritise within existing spending and that is a good thing—I approve of that. We ought not to forget though that $750 million each year is the additional money that the health system needs to effectively stay still—to buy a few more of the modern drugs that come through not too many but some to take advantage of some of the new medical technologies not all of them but some and to maintain the same level of services for the increasing numbers of people who need services as New Zealand’s population ages. It costs $750 million per annum for the health system to be topped up for extra spending. If the Government did not do that health services would go backwards relative to those that we enjoy today. It is true that there will be some pressure on the reprioritisation of expenditure but we will still be able to afford those increases for health and for the core increases needed for education. 
I turn now to what would happen if New Zealand had a different Government that was going to cut taxes more. That Government could cut taxes in only three ways. It could flog off the family silver effectively sell some of the State-owned electricity companies which are the most valuable of the State-owned enterprises that are already owned by New Zealand increase Government debt above 20 percent of GDP or substantially cut services—not mere reprioritisation but substantial cuts to core services in expensive areas like health or education. 
I turn briefly to one of the other issues raised by the Budget: the emissions trading scheme. Until 2 weeks ago the emissions trading scheme was backed by National. National members said in the first reading debate and they had consistently said so until 2 weeks ago that they accepted that the scheme was a good way to respond to the challenge of climate change. Climate change is a challenge for the world. The world has agreed it is real even though there are a few sceptics around. The world has come to an agreement on how we share the burden of reducing emissions and that burden is set out in the Kyoto Protocol. The Kyoto Protocol has been agreed to by virtually every party in this Parliament. It implies an obligation to take responsibility for increases in emissions. Those are the things that create some cost to the economy—not a huge cost but some cost to the economy. The emissions trading scheme was a way of minimising that cost. It does not create any cost for the economy; it minimises the cost to the economy because it gives the right signal to the economy to encourage people to decrease emissions and to discourage them from increasing emissions. It really is as simple as that. It does not create a cost; it minimises the cost because it gives the right economic signal to the economy. 
Two weeks ago National came out and said that it had had a road to Damascus experience and that all of a sudden the emissions trading scheme was bad policy. All of a sudden National said there were six key principles—that is the phrase used—that it wanted us to address in order for it to back the emissions trading scheme. You know none of those six principles were show-stoppers. The Government showed within a day that none of those principles were show-stoppers. So what have National members said as a consequence? Well in the last day the Hon Dr Nick Smith has come out in  
Carbon News 
 and said that even if those six principles were dealt with in the legislation National would not back it. It is all hot air on that side of the House. It is worse than Russian hot air; it is National hot air. National was never going to do what it said. It cannot be trusted on these issues. Instead of six key principles there are actually six key excuses from Mr Key and really they ought to be pilloried as they are by various newspapers from the  
New Zealand Herald  
to the  
Sunday Star-Times 
. These newspapers are saying that the emissions trading scheme is good policy and that National should back it. I look forward to dealing with smaller parties on the issue. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I can only conclude that the Minister reads different newspapers from the ones that are publicly published. The editorials have actually been telling the Government that there is no need for a rush. I guess Mr Parker is always outflanked on this issue and no doubt he had to hear about this on the radio. The Prime Minister said: “Actually we don’t need to have transport fuels in the scheme by 2009. Let’s leave that out until 2011.” And why do we not work more closely with Australia? It is no wonder that David Parker is walking out. He does not want to hear the truth; that is the truth of it. It is simply fatuous for the Minister to say he is meeting the six key principles. He is not. Does he know what Australia will do? No he does not. Why can I say that? It is because Australia is not actually publishing what it will do until this month with legislation coming later this year. 
This is surely one of those areas where one would expect both countries to work in tandem. That is what CER is all about: trans-Tasman markets. It makes sense for an emissions trading scheme to also be a trans-Tasman market. By the Prime Minister’s own admission we have extra time. We should take that extra time and not end up trying to fix it in 2010 as inevitably will be the case if the Government insists on running headlong into this legislation. 
The Minister of Finance took 40 minutes to read the Budget. That is one of the longest Budget speeches in recent history. The best he could do in his 40 minutes was a $16 tax cut which for the information of members—and I have checked in the supermarket—will buy people a 1 kilogram block of Mainland cheddar cheese. Members opposite will say that people can use that money to pay their power bills or fill up their cars. Well who can fill up a car for $16? Who can pay a power bill with $16? What are Government members suggesting? People can fill the car pay the power bill or buy food. They can do only one thing or the other; they cannot do them all with $16. 
The other thing I have noticed is that Labour members have been smirking all this week. Do members know why they are doing that? It is because they think they have snookered National. They have said: “We’ve spent the lot. There’s no room for savings. Even though we’re spending $60 billion there is no room for a single item of saving and therefore there is no room for additional tax cuts.” Well elections are actually about choices—National’s programme against Labour’s. 
Hon Mark Burton 
: What programme? 
Dr WAYNE MAPP 
: The Minister will simply have to wait because we are not dancing to Labour’s tune; we have our own programme and our own agenda and the public will know in good time to make that decision. How can Labour possibly think that every single cent of expenditure is justifiable? Well let us look at the programme set out in the Budget. Apparently there is $620 million for the Ministry of Foreign Affairs and Trade. Is every single dollar of that necessary—$620 million? It is virtually a doubling of its budget and do members know what the Minister of Foreign Affairs will do? He will vote against the single most important initiative of the decade the free-trade agreement. That is what the Minister of Foreign Affairs will do. So obviously that expenditure was a waste of time anyway because it did not convince even the ministry’s own Minister on the single most important issue. 
There is $70 million for extensions to the National Library and $47 million for Government House. The core bureaucracy has grown in each and every year under Labour’s administration. There are at least 10000 extra bureaucrats not around the country but in Wellington. It is symptomatic of the sleaze and slush of this Government that it did not monitor the $65000 that was spent on a plush conference for Housing New Zealand Corporation management—in fact the Minister defended it. Every day I get brochures and booklets from Government departments which are hugely expensive to produce—Government communication costs tens of millions of dollars a year—so how can the Government possibly suggest that every single dollar is wisely spent and that National is locked in and has no choice but to implement Labour’s plans? 
The Government’s strategy seems to be one of “We’ve spent it all you can’t spend anything and even if we lose the election which we might do you’re going to have to implement Labour’s policy.” Well I say “Yeah right!” to that. We will get elected to implement Labour’s policy? Hardly! 
I shall focus on the portfolio I have a particular interest in—defence. The Auditor-General is reviewing 10 major acquisition projects all of them started under the Labour administration. The Auditor-General does not usually review every project in a particular department unless there are problems. Well I can tell the House that the Auditor-General does believe there are serious problems in acquisitions ranging from Project Protector—we all know the problems of the  
Canterbury 
—the NH90 helicopters and the light armoured vehicles to the anti-armour weapon and numerous other projects. 
We can take just one of them: the NH90 helicopter contract. The Ministry of Defence said in its initial statements that it would cost $500 million. That is $60 million per helicopter. Most people would say that that was a pretty substantial sum of money. But do members know what the contract is actually for? Nearly $900 million! How on earth does anyone get that sort of inflation in price in just 1 year unless there are problems with management? Frankly we believe that things can be done better in the Ministry of Defence with its acquisitions and clearly the Auditor-General thinks so too because he is reviewing all 10 of the contracts and will be reporting back to the select committee soon. 
That is just one example of one department—which actually had hardly a mention in the Budget—with serious problems of expenditure. So National knows that savings can be made. Every week in select committees we have seen wastage by this Government and that is why John Key has said that what this country—and what this Government—needs is a line-by-line review of expenditure basically to hunt out the waste. That will provide the headroom necessary for a different set of priorities. 
I can understand people saying “Oh well the embassy in Stockholm will cost only $3 million.” but it would not be just one item—would it be I ask Mr Dail Jones. There is in fact $620 million going into the Ministry of Foreign Affairs and Trade. I say to the members of New Zealand First that frankly not all of that is necessary. There are choices to be made in that area alone. None of that affects front-line services—doctors teachers nurses and educational workers. It simply does not affect those services; we are talking about what happens in Wellington. 
I will raise just one other point. Did the Budget have anything looking forward? The truth is that it did not. In fact Labour’s looking forward programme is to buy rail—not for just $650 million but for $1 billion. National’s alternative is that we will concentrate on broadband and I think that that sums up everything. Labour is looking to past technology; National is looking to the future for this nation. That is the choice that will face electors this year. Yes I can say to members opposite that there will be a clear choice in the programmes offered by the two parties and symbolic of that choice will be the question of whether they are looking forward. In National’s case the answer is clearly yes; in Labour’s case I can say based on its priorities the answer is no. 
On that basis National is looking forward to this election. That is a contest in which we are confident of being able to show to the country that looking forward is where we will find the answers. But looking back 150 years into 150-year-old technology will not provide the answers. I say to this Government that if that is the best it can do then we are looking forward to the contest. 
GORDON COPELAND (Independent) 
: 
 On Tuesday of last week I asked Dr Michael Cullen why he has never in the 8½ years that he has been Minister of Finance seen fit to cut income tax in line with the increased cost of living that Kiwis have experienced since the current tax rates were established on 1 April 2002. I specifically pointed out that although tax relief has been given to qualifying families through the Working for Families package about 2.5 million Kiwi taxpayers in this country have received no income tax relief whatever since the current rates and thresholds were established. 
In reply the Minister stated that he had good news for me because he would be announcing such tax relief in Budget 2008. He said that he looked forward to my support for those tax cuts as they would be consistent with the views that I have expressed over many years. He is right on both counts. I am of course delighted that consistent with the position I have been strongly advocating to the Minister since I first entered Parliament in 2002 he has at long last decided to adjust the tax thresholds thus bringing a measure of relief to those 2.5 million taxpayers. I guess I will go to my grave however wondering why the Minister simply did nothing for 8½ years to address the problem of fiscal drag between 1 April 2000 and 31 March 2008 because the cumulative increase in the consumer price index during that time has been a massive 23.8 percent. 
Let us be crystal clear about the matter. If the tax thresholds are not regularly adjusted to take into account the increase in the consumer price index then in real terms taxes are year in and year out being continuously increased as taxpayers move from below to above the 15c 33c and 39c tax thresholds simply because of the flow-through effect of inflation on their earnings. When that reality is understood fiscal drag becomes unconscionable. The Minister of Finance can use all of the spin smoke and mirrors he likes but he cannot conceal the fact that in real terms he has systematically allowed taxes to increase over the last 8½ years simply by doing nothing. 
So of course I share the relief of New Zealanders that something is at long last happening. But John Key is right when he says these cuts are both too little and too late. They are too little because if Michael Cullen had wanted to offset the effects of inflation from 1 April 2000 until now he would have needed to move the 33c threshold from $38000 to $47000. He did not do so. When a $9000 shift was necessary he shifted that threshold by just $2000 to $40000. He did a little better with the 39c tax bracket whose threshold should have been moved from $60000 to $74000 which is a $14000 increase. That was necessary just to cover inflation but instead he shifted the bracket by just $10000 to $70000. It is all too late because the enormous tax windfall that he has systematically extracted from the purses and pockets of New Zealanders by refusing to offset fiscal drag until now will not of course ever be refunded. 
Michael Cullen has used fiscal drag as a dragnet and used it very deliberately to draw in billions of dollars in increased taxes over that 8½-year period. When we think about it we know that fiscal drag should be outlawed. Michael Cullen boasts about his automatic stabilisers but I ask him why he does not put in place an automatic stabiliser that by mandating a regular adjustment to the tax threshold for inflation would work—just for once—in favour of the taxpayer rather than in favour of the Minister’s Treasury and its coffers. Taxpayers should demand no less because the truth is that they have simply been unable to trust successive Ministers of Finance including Dr Cullen to act justly on this issue. It is a policy whose time has come and I commend it to all New Zealanders. 
I will use the balance of my speaking time to outline the tax policies of the Kiwi Party and I begin by saying that we have a policy to increase the minimum wage from the present $12 per hour to $15 per hour but with an offsetting tax credit to employers. Other parties in the House also want to go to a $15 minimum wage but those parties expect employers to magically produce that amount so that they can pay extra money to their staff even though in New Zealand 87 percent of all businesses employ fewer than five people. Those employers simply do not have the money to lift the minimum wage and that is why we need to have an offsetting tax adjustment. Boosting wages from $480 per week—or $12 per hour—to $600 a week will give a huge boost to workers on that rate. After applying the new tax rate of 21c which comes in on 1 October that extra $120 per week will see a take-home boost pay of $94.80 per week in the hand of those workers. I repeat that it provides a boost to take-home pay of $94.80 per week for workers who are currently on the minimum rate of $12 an hour. There will also be significant benefit for those on $13 or $14 per hour. 
Again it is a policy whose time has come. There is a huge gap between our wages and those in Australia. We need to bridge it; we need to do something urgently to do that. The increase in the minimum wage to $15 an hour will lift all boats because it will eventually work its way right through our wage structure. We can begin to recover some of that gap with Australia and as a result we will see a lot more New Zealanders deciding to live work marry and raise their families here rather than going across the Ditch simply because wages there are so much better. 
The Kiwi Party also of course—and I say “of course” because this will not be news to people in this House—support income splitting for couples raising dependent children. This would be particularly beneficial to single-income Kiwi families. For example such a family with an income of $70000 will from 1 October pay tax of $17110. Under income splitting $35000 would be allocated to the wife and $35000 to the husband for tax purposes and that family’s tax bill would reduce to $12320. That is a saving of $4790 per annum or $92.12 per week for that family. This change is right and just because both partners are contributing to the raising of the family and their different but complementary roles are recognised by this change. Let me say very clearly that we recognise specifically the value of the work done by the parent who stays at home to raise the young children. That work is not only real work but also the most important work that any human being ever gets to do. 
We will also allow taxpayers to direct $100 of their own tax every year to a community charity of their choice. We believe that would be an efficient and effective way of getting about another $290 million a year to community charities and it would allow the Government to scale back the help that it gives. At the moment help is given in return for a box full of papers and against the undertaking that the charities will actually implement what the Government thinks they should do rather than what these grassroots organisations know they should do. 
We will remove GST from rates. We will make health insurance premiums tax-deductible so that more funds flow into the health sector both public and private so that we can continue to provide a world-class health care system for more and more New Zealanders. That is an obvious thing that we should be doing. We will return to local councils a percentage of the GST that is collected. We believe that doing that combined with taking GST off rates would mean that there would be no need to increase rates at the local council level for at least a 3-year period. That move would be very welcome by all citizens of towns and cities throughout the country. 
On New Zealand superannuation we accept and go with the changes that have been announced in the Budget but in addition we want to change the formula that adjusts superannuation every year on 1 April from being a retrospective adjustment to being a prospective adjustment. That would give a married couple an extra $670 per annum or about $13 per week. In addition to that the effects of our policy of having a minimum wage of $15 an hour will flow through into an increased rate of superannuation as of course it will increase the average weekly wage. 
Those policies are good policies and as a party we will be promoting them in Parliament after this year’s national election. 
Hon MARK BURTON (Labour—Taupo) 
: 
 One of the great things about political life—and I have certainly seen a few years of it now having spent 14½ years as a member of Parliament—is that one gets to be around for milestones. Some of them are marked here as nationwide milestones and some of them are very local. On Wednesday last week for instance I spent some time with the Country Women’s Institute which was celebrating its 60th birthday in the fine town of Tokoroa. That was an important local milestone. The next day I was down here in Wellington for an equally important milestone—I think it was at least as important as the Country Women’s Institute’s 60th birthday in Tokoroa. It was the ninth Budget for Dr Cullen which I have to say is an enormous milestone in the life of this Government and of this Parliament and is certainly a profoundly important milestone for this country. 
We are engaged now in the 14-hour Budget debate following the delivery of the Budget. That 14 hours was allowed for even under the streamlined review of Parliament’s Standing Orders because in their wisdom those who considered the length of time allowed for debates obviously understood that the debate on the annual Budget is indeed a matter of great moment and of great issue and that it requires that parliamentarians have sufficient time to explore the Budget to challenge it and of course to offer their alternatives to it. I have listened and listened for an alternative Budget. I say that Mr Copeland whom I do not have a great deal of agreement with on a lot of matters delivered in his 10 minutes more policy alternatives and more ideas than we have heard during 4 hours of speeches from the National members of Parliament. There was more in 10 minutes from Mr Copeland than in 4 hours of droning repetition from the so-called National Opposition for goodness’ sake! It is an embarrassment—it is truly an embarrassment. The issue gets down to the fact that the Budget is about the Government of the day putting forward in detail a programme of what it will do and how it will do it. The job of a serious Opposition in any year—but in particular in an election year—is to put forward an alternative Budget. 
What have we heard? Well in Budget 2008 we have put forward a real plan and it is a plan of substance for a sustainable future for our country. This Budget brings tax relief and it tells all New Zealanders how we will do it what it will mean for them and that help is on the way for them in managing their living pressures. This Budget for instance rolls out a world-class broadband network proposition. It has the largest-ever public investment in science and research funding in the areas of innovation and of sustainability in food and in the pastoral sectors. Those are critical elements of New Zealand’s economy and New Zealand’s future. It is about putting food on the tables I say for the benefit of the member who is squawking from the backbench over yonder. I would have thought that member might be a little more careful because we have seen the danger of National Party backbenchers offering opinions this week. We have seen the real danger of Opposition backbench members offering opinions this week. We have instant policy noodles from Mr Key. It is sort of like adding hot water stirring and pouring out something that resembles a policy but that lasts only about as long as instant noodles last. It suddenly goes cold and before we know it we have a new creation passing itself off as policy. 
Planning for our response to climate change is a fundamental element of this Budget. There is also a real and serious promotion of our arts. Talking about the arts I listened to Mr Finlayson one of the members opposite get up and speak in this debate. Often Mr Finlayson and I have debated and disagreed with each other in the House but he is a member who I thought finally would be too ashamed and embarrassed to get up and simply regurgitate the same sad little lines that National’s research unit had put forward. But what did we get from that member? 
I will read this quote to the House. This was in an opinion piece provided by Mr Finlayson to GayNZ.com. He stated: “I am not interested in the abuse nastiness and petty point-scoring that consume my opponents.” Well I invite members opposite who were not here—some were—to read Mr Finlayson’s  
Hansard 
. They should read every word of the 10 minutes of it. They will find that if we strip out of it the—sorry; let me quote it again—“abuse nastiness and petty point-scoring” then there would be nothing left. It would have been a 10-second contribution to the debate in this House. There we have it. That member who I am given to believe has some potential had nothing of substance to contribute to this debate except personal abuse petty point-scoring and certainly nastiness. Sadly that is all we heard from that member this afternoon rather than finally a fleshing-out of the words that have been focus-grouped to death by the National Party. 
What did the National members tell us? What have they said in 4 long hours of this debate? They talked about vision saying they have a programme hope an agenda freshness and above all an aspiration. In every second sentence we heard about aspiration. I say to members opposite that the cat is really out of the bag. When we get New Zealanders into focus groups of course they say they like hope freshness and aspiration. They actually think there is something more behind the one-liners. But there is not. There is not a word of policy. As I said before the member of the one-member party who sits at the farthest reach of the back corner of this Chamber offered more policy in 10 minutes than there was in 4 hours of National Party contributions including one from Mr Key. 
Of course we know that this Budget was delivered in a time of serious economic challenges—many of them external to New Zealand. Commodity prices the cost of food petrol costs and all of those things are severely impacting on ordinary New Zealand householders. But is this Government in a position none the less to respond to the challenges faced by those families? Yes it is because of 8 years of careful stewardship of the New Zealand economy. We have seen 377000 new jobs created in this economy and 140000 fewer people are relying on working-age benefits. That is the legacy of a Government that has carefully managed the economy. It has conducted itself in its stewardship of the economy appropriately carefully and responsibly. 
Ultimately the question is why the National Party will not debate the Budget. Why is it that even when National put up Mr Finlayson one of its most experienced public debaters all we heard was 10 minutes of abuse nastiness and petty point-scoring? Mr Finlayson would not stoop to those things he said in his maiden speech in this House. Why did he do that? Because that is all there is. There is no policy. We have seen that from Mr Key’s endless flip-flops. In the end I suppose it is why John Campbell said to Mr Key: “I also think you’re as slippery as a snake in wet grass in terms of telling me where you’re going to get money from to pay for the tax cuts.” That is not what I am saying; I would not say that. [ 
Interruption 
] If the member would stop interjecting she would hear that it was a quote from Mr John Campbell on television. 
I say it is a tragic wasted opportunity that Her Majesty’s Opposition in this Parliament has failed utterly to measure up to its responsibility to front up to the people of New Zealand and offer an alternative Budget. This Budget offers a way forward. This Budget offers a genuine aspiration for a future. That Opposition is an utter abject failure. 
JUDITH COLLINS (National—Clevedon) 
: 
 The Hon Mark Burton the former Minister who has just sat down has asked for an alternative. Well I have one for him—Louise Upston for Taupo. She is the alternative for the people of Taupo. We heard from that member a 10-minute speech railing against personal abuse. It was full of personal abuse against the members on this side of the House including John Key our leader. Of course Mark Burton is the same member of Parliament who it was reported to us turned up on Anzac Day in Taupo and when he was asked to contribute something he sat down with a guitar and sang a little ditty against John Key. That is the sort of contribution we get from that member who sits there saying: “Oh we should not be indulging in personal abuse.” Well actually we do not do it on Anzac Day. We do not muck around with Anzac Day. 
One of the things I would like to talk about today is what this Government and this Budget will do about doctors who are being bullied by Work and Income staff into signing off people for a sickness benefit when frankly they are not sick. I have raised this question time and time again in the House over the last 4 years and there has been nothing from the Labour Government. In fact last year the Hon Steve Maharey said: “Oh there is no correspondence at all—no notes no nothing—from doctors complaining about this practice.” Yet today in the  
Dominion Post 
 a senior staff member in the ministry has fronted up and said: “Yes we are getting these complaints all the time.” and we know that they are. 
I ask this question about what is being addressed in the Budget. I ask whether the Government is addressing this issue. Why is it under a Labour Government for the last 5 years the number of people who are getting a sickness or invalids benefit because of depression has increased from 4825 in the year 2002 to a staggering 11690 in 2007? What is it under this Labour Government that makes people so sick for so long? What happens under a Labour Government that makes people so stressed that the number of people on a sickness or invalids benefit because of stress has increased from 5014 in the year 2002 to 7500 now? What is it about a Labour Government? 
I will tell members what it is. It has a lot to do with child poverty it has a lot to do with the issues that this Government does not want to talk about it has a lot to do with intergenerational welfare dependency it has a lot to do with poor parenting and it has a lot to do with the fact that this Government spent 9 years in Opposition in the 1990s whingeing about the benefit cuts of 1991 and then turned around and has been in power for the last 9 years—during the best economic times we have seen for decades in terms of trade and everything else—and what has it done? Nothing except everyone got sick. That is about it. 
We know that there have been jobs. We know that there have been things that we could have been doing to get people into work but we also know that this Government has been satisfied to leave a large number of people 130000 working-age New Zealanders on sickness and invalids benefits. Many of those people could be brought back to wellness if they are given the right treatment if they are given the right work to do and if they are treated as human beings not as numbers. But this Government has been happy just to let them stay there let them rot there and let them live in a situation where it is very hard for them to come out of poverty; it has just left them there. 
Last election time the Government said that it would sort it out and that there will be a single core benefit. That was to sort it all out. Do members remember the single core benefit? The Government also announced it in 2002 and in 1999. The Government also announced it when Michael Cullen was the Minister of Social Welfare and that was in 1989. Whatever happened to the single core benefit? Every time I ask the question I am told that it is about to come it is about to be here. These people have been wasting taxpayers’ money since 1989 on looking at a single core benefit. What is it? 
Do members remember closing the gaps? Whatever happened to that? Whatever happened to the knowledge wave? It just went off into the ocean like a wave. It came up on the shore and then it disappeared. Whatever happened to sustainability? Whatever happened to the single core benefit again? But what really did happen to “We are going to be in the top half of the OECD.”? Whatever happened to that? Oh the Government forgot about that. In fact the Czech Republic is now higher up the OECD than we are along with Slovakia and pretty much almost every place that has ever been part of any Eastern European area. There are all sorts of issues there but those countries seem to be doing better than us at the moment. We must be doing better in New Zealand because we have a great country. 
Chris Auchinvole 
: What about Portugal? 
JUDITH COLLINS 
: I think Portugal is on a par with us on the OECD at the moment. But I have to say that it is coming up the OECD too. There is nothing in this Budget that is going to help us with that. 
This Budget is all about the Government spending every cent the taxpayer has every single cent it can to try to leave the cupboard bare. That is what it is. In 1990 the previous Labour Government did the same. In 1990 the Labour Government with Helen Clark as Deputy Prime Minister Michael Cullen as Minister of Social Welfare and David Caygill as Minister of Finance said: “You will have a surplus of $89 million.” That is what it said. It was the first time in history that there was to be a marvellous surplus. What was really there was a $1.5 billion deficit. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JUDITH COLLINS 
: I am very pleased to see the Minister for Social Development and Employment the Hon Ruth Dyson in the House because I am hoping she will take a call and tell us where the Budget starts to address issues of child poverty such as the poverty of the children of beneficiaries. That Minister and her like spent all of the 1990s talking about the terrible Budget cuts of 1991 and about how benefits had fallen behind wages which she said was a terrible thing. But during the last 9 years of good economic conditions—which we notice are slowly turning the other way—she has never done one thing to address child poverty. There is a word for that; we are not allowed to use it in this House but members might care to consider it. After all these years the Minister has had every chance and has never done anything about child poverty. 
I would like to hear from the Minister as to where the Budget addresses the issue of children who go to school hungry and stay hungry all day—children who do not have breakfast or lunch and who have something very insubstantial when they get home. Where does the Budget deal with that? When John Key gave a speech about the need for schools to feed children who were not being fed at home so that we could make sure that those children received some nutritious food he was accused of wanting to deliver something called “Tory charity”. I ask members opposite—and I would like to hear from the Minister—how we in a country like this can look away and let children go to school hungry and not be prepared to address the issue. Whether the money comes from Tory charity or somewhere else why can we not address the issue? 
Children do not get a chance at a second childhood; that is it. One year in their lives is a huge amount of time. They cannot wait for 5 years for things to turn around. They cannot wait for 10 years for their parents to get things together. They have to do things now. Children get one chance to learn to read write and do maths yet after 9 years of a Labour-led Government—during the best economic times we have had for decades—I ask why 20 percent of young New Zealanders leave school unable to read write or do maths to the standard they are expected to attain to be able to work in this society. Where does the Budget address that issue? 
One of my other portfolio areas is veterans’ affairs. I was very pleased today—as I am sure everyone in the House was—with the multiparty accord in relation to the apology to our Viet Nam veterans. I also note that there is extra money in the Budget for the Returned and Services Association which as an associate member of the Papakura RSA I have an interest in. That money is an acknowledgment of the fact that Veterans Affairs New Zealand has been failing—absolutely failing—its veterans for years. Many veterans complain to me that it takes so long to get anything through in terms of pensions or assistance needed. Sometimes people die before they get any acknowledgment of their issues and that is unacceptable. Welfare officers at the RSA have done a lot of the work that should have been done by Veterans Affairs. The payment of money to the RSA simply acknowledges the fact that this has been happening. So I am pleased for the RSA but that does not absolve the Government from the need to get Veterans Affairs actually working once and for all for veterans. 
There is not a lot in this Budget for the people of Papakura apart from a block of cheese in October. A year later they will probably get another block of cheese but that is about it. Frankly after 9 years and all these opportunities to give people something back— 
Lindsay Tisch 
: Lost opportunities. 
JUDITH COLLINS 
:—lost opportunities—it is time this Government went home and retired. 
Hon RUTH DYSON (Minister for Social Development and Employment) 
: 
 That was a tired speech from a tired member of a tired and embarrassed party. The National Party is slip-sliding all over the show on every fundamental policy that this country wants to hear about in this critical election year. On the most recent occasion my Canterbury colleague Kate Wilkinson admitted to an audience in front of parliamentary colleagues and senior reputable political journalists that the National Party would get rid of the compulsory employer contribution to KiwiSaver. For many people the KiwiSaver scheme is their big chance for help into their first homes and with the additional costs that people face in their retirement. 
Kate Wilkinson—who frankly not many people outside the House had heard of prior to yesterday—announced at a breakfast meeting that National did not believe in compulsion so the compulsory contribution from employers would go. Well John Key did not like his policy being announced so the next minute he said that that was not his policy. He was asked what his policy was and he said that he did not actually have one but what Kate Wilkinson said was not it. John Key’s position is that National does not have a policy; he is still working on it. Kate Wilkinson will not be part of the team that is working on it regardless of whether she is National’s spokesperson on labour. She is the National Party spokesperson on industrial relations. 
The employer contribution towards KiwiSaver is a critical issue for workers unions and employers when they are negotiating future pay increases and it is critical to the ability of low-paid workers in particular to save for the future. So what is John Key’s position? Who knows? New Zealanders up and down the country say to me that they want to know clear policy before the election. They do not want John Key’s slip-sliding policy which is different every day. In fact we had an example yesterday when John Key changed his position during a question in the House backed up by Bill English. It was quite extraordinary. I have become used to National members changing their position from one week to the next but changing position between a primary question and a supplementary question really takes the cake. 
The member who resumed her seat just prior to my taking the call Judith Collins reminded the House of a word we are not allowed to use. I am not surprised that she constantly thinks of words like that. She and her party voted against the single biggest redistribution of wealth in our country when taxpayer funds were moved to the most vulnerable families in our community through the Working for Families package. 
Allan Peachey 
: You’re not boasting about that are you? 
Hon RUTH DYSON 
: I say to Mr Peachey that the combination of that package and increased employment has lifted 130000 New Zealand children out of poverty. 
Children under the previous National Government were living in poverty because of National’s benefit cuts. Benefits were never adjusted to reflect the price of living nor was the minimum wage increased. I apologise that is not true. It is not true to say that during the 9 long years of the previous National Government the minimum wage was not increased. It was increased once because its coalition partner New Zealand First ensured that it would be increased. Even with New Zealand First pushing for an increase the total increase in the minimum wage—which is paid to literally our lowest-paid workers—over the whole 9 years was 87.5c an hour. 
Sue Moroney 
: How much? 
Hon RUTH DYSON 
: There was an 87.5c an hour increase in the minimum wage in 9 years. I ask Mr Peachey how that could be justified in a time of what he would describe as a strong economy. We in New Zealand now know what a strong economy is but we also know what responsible management of our economy is. We know that the benefits of our strong economy are going towards the people who were it not for a Labour-led Government would not be able to get that financial support. 
Working for Families has an automatic threshold adjustment; it is in the legislation. We are bringing that adjustment forward because we have heard from our constituents about the additional pressures they are facing at the moment. We are facing an international situation in terms of petrol prices. Our dairy products are receiving very good prices overseas and our farmers do not want to give discounts locally—tragically we do not get a better deal because we happen to live in the country where those fine dairy products are produced. We know that families are feeling pressure because of that. 
I will give members an example of the Working for Families entitlements that will increase from 1 October this year. A two-earner family with two children under 13—with the dad earning $45000 and the mum earning $20000—will receive a $42.76 increase per week from 1 October. That would not be able to be matched by the National Party because it is very clear from the statements made by its leader John Key that his priority will be to ensure that the people who earn the most money in our country get the big tax cuts. Those are not the people who need it. John Hayes has been on public record as saying not only that this should happen but also that it will happen under a National-led Government. That is not what a Labour Government would support. 
Our Working for Families package has been incorrectly described as supporting only those in paid work. That is only one of the four components. It has a family tax credit for every child whether his or her parent is a beneficiary or in paid work; it has a childcare subsidy; it has an accommodation supplement; and it has the in-work tax credit which is specifically designed to recognise the cost of work and to ensure that work pays. We can now ensure as a result of our strong support and focus that people who are able to work are supported into paid work. There are 140000 fewer people on a benefit and not just on one benefit but on all working-age benefits. 
Labour has increased the minimum wage every single year and this year it reached an agreement with the Green Party and New Zealand First of $12 an hour. Because of the promotion of Sue Bradford from the Green Party young people have to work for only a very short period of time before they get recognition for the work they are doing and go on to the same rate as an adult. Labour has ensured that the benefit is adjusted every year in accordance with the CPI level. That ensures that our beneficiaries have the relativity of their income matched with the increasing cost pressures that they might be facing. 
The final point I want to make is in relation to older New Zealanders and the absolute joy that this Budget brings for them. We have done very well for superannuitants in New Zealand and we have a very long list of achievements. Tragically I cannot take a second call in this Budget so I will not go through them all now. The combination includes an increase in New Zealand superannuation firstly to 65 percent as a result of Labour’s commitment then subsequently for a married couple that will be lifted to 66 percent of the net average wage in accordance with Labour’s agreement with New Zealand First. Of course we have adjusted the portability which gives people better security as they return to their home countries. In respect of the personal tax cuts that were the highlight of the benefit superannuitants will receive an additional $45.88 for a married couple per fortnight from 1 October. That is a significant increase in their budget. 
Bob Clarkson should be interested in that increase because his current constituency has a large number of superannuitants and I am pleased that for once he is able to support good policies and not be inappropriately whipped into line with bad calls from his leader and his whips. In fact over the next 6 months I look forward to seeing people who are clearly frustrated with their lack of involvement in policy and the lack of use of their talents within the National Party—the Mark Blumskys the Kate Wilkinsons and the Bob Clarksons of the world—standing up more to their leadership and demanding a right to have a say in the development of policy. [ 
Interruption 
] Jackie Blue might not think much of Bob Clarkson Mark Blumsky and Kate Wilkinson but other members do think they should have a say in the development of National Party policy and they certainly should know what that policy is when it has been agreed on. 
When the National Party comes to a clear decision on KiwiSaver on tax and on Working for Families I and other members of the New Zealand community look forward to hearing it. 
LINDSAY TISCH (National—Piako) 
: 
 National members are clear on one thing and it is that this Government is gone. This Government is on its last legs. We have just had the ninth and final farewell Budget from Dr Michael Cullen. It is a Budget that goes nowhere. It is a Budget of lost opportunities. It is a Budget that conveniently just before the election will give taxpayers a slice of cheese. How convenient is that? 
National has called for tax cuts for years. Last election as part of our policy we said we would have tax cuts and Dr Michael Cullen said that was irresponsible. He said that the country could not afford tax cuts. However now that the economy is starting to tighten and as things start to move backwards and get tight and as taxpayers are struggling to meet their home budget with higher interest rates— 
Bob Clarkson 
: Unemployment! 
LINDSAY TISCH 
: —we are also seeing higher unemployment already. 
Dr Jackie Blue 
: Interest rates! 
LINDSAY TISCH 
: Now that interest rates are going up as is the cost of fuel and everything else the Government says it is going to give us some tax cuts. 
Do members remember what happened back in 2000? This Government set as one of its priorities that it would move New Zealand income levels back into the top half of the OECD. Well we have actually dropped— 
Darien Fenton 
: No we haven’t. 
LINDSAY TISCH 
: The member does not read the figures. We have actually dropped. There was absolutely no mention in this Budget about lifting our economic performance and getting into the top half of the OECD which Australia and Ireland have done. This has been a Budget of lost opportunities. 
Dr Cullen says that we need 4 percent growth and we agree with that. But he also says that his policies will deliver only 2.5 percent over the next 4 years. That is far short of the 4 percent he said we would need. We are falling further behind Australia and that is evidenced by the mass exodus of Kiwis who are deciding that their future lies offshore. It is an indictment on this Government that our brightest and best find life more attractive offshore. They are not going just for their big OE which we would expect them to go for; they are going because they see their future as being offshore and that is an indictment on this Government. 
There was nothing in the Budget to grow the economy—to grow the cake. Government members talk about redistribution. They cannot redistribute something unless they grow the pie—unless they grow the cake—and there was nothing in the Budget to allow for that. 
What was in this Budget for small businesses? Ninety-seven percent of our businesses are small businesses. We are a nation of small businesses. Does raising the bar for GST registration by $10000 from $40000 to $50000 make it easier to pay the bills? The answer is no. Does the Budget reduce compliance costs which affect development and growth in business? The answer is no. Does the Budget provide for world-class infrastructure? The answer is no. There is a little bit for broadband. Well we announced our policy for broadband which involved expenditure of $1.5 billion. This Government has come up with just a measly little bit because it thought it seemed right. Does the Budget provide an environment where the levels of expenditure and taxation promote economic growth? No it does not. Does it provide for a high-skill high-wage economy? No it does not. We are looking for a focus on productivity being the norm but the answer is no. Does it provide for a culture of entrepreneurialism where investment growth occurs through innovation? No it does not. Does it provide for a business-friendly environment whereby success is celebrated? The answer is no on all counts. 
On my score sheet this Government has failed dismally. That is what New Zealanders are saying as well. They know that the writing is on the wall for this Government because in a very short time it will be out. 
This Budget is about securing votes and increasing dependency. That is what it is about and that is its target—increasing dependency and securing votes. That is what socialist Governments do. They make people dependent on them and that is exactly what this Budget is about. 
Although the corporate tax rate has been reduced to 30 percent—and we accept that—one of the key things is that most small traders and partnerships are unincorporated. They are actually not companies. So those earning a taxable income of up to $70000 on 1 October this year are facing a tax rate of 33 percent and those earning over $70000 at 1 October will still be taxed at 39 percent. These business folk are paying the top rates and this Budget does absolutely nothing to address that. It is inefficient and it is unfair. 
I note that the Minister for Small Business Clayton Cosgrove hosted Australian Ministers associated with small business at a conference last week which he chaired. They came not only from the Federal Government but from the states and the territories. He went there to find out about how we might become competitive with Australia. Well businesses in Australia are far more productive and entrepreneurial than businesses are here. Why? Because this Government stifles initiative and investment and there was nothing in the Budget to address that. 
The Small Business Advisory Group was set up by the Government. All the people in it are appointed by the Government and they made 16 recommendations. Not one of those 16 recommendations appear in this Budget. [ 
Interruption 
] No they will be disappointed in this Government and they are Government appointees. They were appointed by this Government and they have made some sensible recommendations. But they will be bitterly disappointed in this Government. 
I note that the Minister of Tourism Damien O’Connor is here and that is good. Tourism is the world’s fastest-growing industry and it is important to New Zealand. But when we look at the Budget—and I know that the Minister will probably speak shortly to defend the policy in it—under Vote Tourism we see that the 2007-08 figure of $74.6 million to promote New Zealand has been reduced to $73 million for the next year. The Minister will have an answer for that. He will say that 2.5 or 2.6 percent of that was for promoting the Rugby World Cup overseas. I accept that but the important thing here is that if we look at the out-years we see that the vote for tourism will go down and down and down. In fact the cumulative loss in Vote Tourism over the next 4 years if we take last year as the base year is $22 million. What does the Minister say about that? Tourism is New Zealand’s most important industry. It is our biggest export earner and what does this Government do? There is to be a cumulative loss. Using last year as a base year the vote is going to decline by $22 million. If we go back 2 years to 2005-06 when we had the highest vote for tourism the cumulative decline is a staggering $52 million. That is an indictment on this Government in terms of its process. 
This Budget does not meet the expectations of New Zealanders. It does nothing to provide for growth in productivity and prosperity. It does nothing to retain and attract back those thousands of Kiwis who have decided that their prospects are better offshore. This is a Budget of lost opportunities. 
Hon DAMIEN O’CONNOR (Minister of Tourism) 
: 
 That was a typical Tory speech in this House—all tall talk from Mr Tisch and not much substance at all. The arrogance! What was his statement? He said that this Government is gone. Well I say to National members opposite that they should not take New Zealanders for granted because all that John Key does is dither while we deliver. That is the difference: John Key dithers and Helen Clark delivers. Those members should just remember that. I know that New Zealanders are smart enough to work that out for themselves. 
This Budget has been brilliant. It blew away most people because I think they did not have high expectations. They realise that we are facing some challenging economic times that oil prices have been at record levels that although commodity prices are high there has been a credit crunch and that we have a challenging international economic situation. New Zealanders did not expect a huge amount. But Michael Cullen delivered more than they expected in a way that was fair to each and every New Zealander because even those people who do not need a tax cut—even those people who are living on $150000 $250000 or $250000 like most of the people in this House—got a tax cut under Michael Cullen. But we gave the greatest percentage of tax cuts to those people who need it—those at the bottom. 
And we have done that every single year we have been in Government. We have increased the minimum wage. We have delivered bigger tax cuts by way of the Working for Families package and other forms of assistance such as lowering the cost of going to the doctor and ensuring that the lowest-income people do not pay more than 25 percent of their income in rent when living in a Housing New Zealand Corporation house. Those are the things that this Government has done for the real people in New Zealand. 
We do not believe that we need to give huge tax cuts to the wealthy. Mr Tisch says that the structure of the tax cuts was all wrong. What would he do? Would he give more to the wealthy? Is that what Mr Tisch would say? Yes it is. There is absolutely no denial because National members know they have to repay their mates for all the favours they will do for them like selling off State assets and all the things they will do to deliver to their mates if they think they should get into Government. Well New Zealanders are not as stupid as that. New Zealanders remember the 1991 Budget which really hurt them. That was the first Budget after National came into power in 1990. The National Government slashed the incomes of the most vulnerable and the most exposed and it would do that again. 
Lindsay Tisch says that the structure of the tax cuts was all wrong because it did not deliver enough for his wealthy mates and it gave too much to the people who need it. Well tough I say to Mr Tisch. I think New Zealanders are fair-minded and if he thinks he can go around saying that this Government is gone well I can assure him that that kind of arrogance will be dealt to by New Zealanders at the next election. Labour will just get on and manage this country in the way we have done so successfully for the last 8½ years. We have reduced—we have slashed—unemployment we have increased income for the most exposed and we have given tax cuts to those people at the bottom through Working for Families. 
We have given tax cuts to companies. In spite of all the ranting and raving by National Party members they voted against tax cuts for companies. They voted against tax cuts for the poor and they did not deliver tax cuts for anyone in their whole time of 9 years in Government—not for anyone. So it is absolutely duplicitous of them to stand in this House and say they advocate tax cuts. New Zealanders do not believe them. They do not believe John Key either. All John Key’s promises have evaporated in uncertainty in hesitation or in flip-flops that have left this country wondering just what National does stand for. What policy can it possibly put on the table to challenge what we are doing for this economy? 
Sandra Goudie 
: Ha ha! 
Hon DAMIEN O’CONNOR 
: They are laughing. Well I am sure that every New Zealander in this country laughs whenever they hear something from the National Party because within a day a week or half a day sometimes of course there will be a flip-flop on it.  
We know that the truth is that Kate Wilkinson a new member of the House and an honest member exposed exactly what that bunch of Tories would do to superannuation and KiwiSaver. They would slash them by reducing the contribution from central government because the Tories will need that money to pay for their tax cuts for the wealthy. That is the most outrageous thing so I will do everything possible right up to election day to make sure that people know what to expect if they consider that National should run this country ever again. 
National members have not changed but Labour on the other hand has delivered. We have not dithered; we have delivered. We have put money into rural broadband and into broadband across the nation in a way that works with the current telecommunications system. We have not undermined the current system like John Key’s promise would. He has promised nirvana through a promise of $1.5 million which he will probably never ever deliver that would tip the whole telecommunications system on its ear and would just hand to Telecom in one big fat cheque a nice big fat profit. We know that Telecom will not get out there and deliver for New Zealanders; we will have to incentivise the whole telecommunications system in order to deliver us a world-class broadband system. We have a long way to go but our funding and commitment to one-for-one at least means that we will make progress in that area. 
The tourism industry promises the world “100% Pure New Zealand” and we had a choice of whether we would spend more money marketing or whether we would spend more money ensuring that the “100% Pure New Zealand” promise was delivered on. We have a spectacular country we have amazing scenery and we have wonderful wildlife but we also have an impact on the environment. The growth in tourism that we have enjoyed represents a 61 percent growth in visitor numbers since we came to power in 1999. Those extra people have an impact on the environment and if we do not spend on infrastructure then there is a risk that the “100% Pure New Zealand” brand will not be delivered on by the tourism industry. That is why in the Budget we committed money to things like rail and public transport. That is why we committed $40 million to help small communities with sewerage schemes. That is why we continue to deliver additional funding for rural health services—to ensure that those visitors are well protected are cared for and will get their “100% Pure New Zealand” experience. 
Lindsay Tisch can rant all he likes but companies in the tourism industry have had a tax cut. The rate is down to 30 percent but National voted against that reduction. There is an “h” word for that action and that is exactly what those members are when it comes to tax cuts. People in the tourism industry appreciate the fact that their companies have had a tax cut. They appreciate that this Government has committed to infrastructure that will underpin the “100% Pure New Zealand” national tourism brand and will provide the infrastructure to drive this economy be it broadband rail or transport and roading. Every single key area of infrastructure that was run down under the previous National Government—or flogged off of course—we have had to upgrade and bring back to First World standards. That has cost us a fortune. 
I guess that National—although it would not admit it—would sell Air New Zealand and sell all the State-owned enterprises just to pay for tax cuts for their wealthy mates. If that were to happen it would be outrageous. It is not the Kiwi way. New Zealanders will not consider that fair. If National members were ever honest enough—like Kate Wilkinson has been—to stand up and say what they would do if they ever got into Government again then I think that New Zealanders will make a very wise judgment. They will realise that in the end through this Budget and previous Budgets under this Government we have reinvested in this economy and we have reinvested in our people in our infrastructure and in our future in a way that those Tories have neither the ability nor the will to deliver on. They lack vision and they lack motivation. While John Key dithers Helen Clark delivers. I stand behind each and every member of our party and what we can do for this country into the future and New Zealanders will know that the National Party—the Tories—will never deliver because they have no vision and they have no hope. Kia ora. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 We have just heard the last dying dirge from the departing member from West Coast - Tasman. I wish to concur with the National Party leader John Key in his reply to Michael Cullen’s Budget. He said: “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” 
We have just heard Lindsay Tisch make the comment that 9 years ago an incoming Labour Government said it would lift New Zealand into the top half of the OECD. What happened? We have fallen two notches down to the lowest quartile of the OECD and that condemns New Zealand and New Zealanders to a much lower standard of living relative to other people who are in the OECD. It means that our ability to afford good health services good education services and good welfare services will be substandard. Over and above that New Zealanders actually work long hours but unfortunately under this Labour Government productivity has remained statically low. This is in stark contrast to the French. The French work fewer hours but they have far greater skills and use technology to a far greater extent and consequently they have far greater time to enjoy their very fine wine and cheese—something that at the end of the nine Budgets of Michael Cullen New Zealand workers are not able to do in a timely fashion. 
Why has New Zealand’s productivity been so low? What is the legacy of this Labour Government particularly in the field of education? After these 9 years we know that something like 50 percent of young Maori males leave school without having even achieved National Certificate of Educational Achievement level 1. A quarter of our 15 to 18-year-olds leave school without any qualification whatsoever. So this indeed is the legacy of the Labour Government and now what is it doing? It is emphasising the need for numeracy and literacy foundation learning in our polytechs and wananga. That must be an absolute indictment on the fact that Labour has neglected primary and secondary schools and there is a whole cohort coming through at the ages of 18 17 and 16 who cannot even read or write. 
That of course brings up Labour’s even more disastrous record in tertiary education. In the fine print way under the radar screen and totally ignored by Labour in all of its Budget spin-doctoring it failed to mention that in Budget 2008-09 spending by the Tertiary Education Commission is going up a whopping 44 percent. 
Lindsay Tisch 
: How much? 
Dr PAUL HUTCHISON 
: It is 44 percent! This is the same Tertiary Education Commission that presided over what the OECD has described as a “continuous series of reforms”. Those reforms are estimated to have cost in bureaucracy alone $419 million. At the end of those reforms things were so bad that Steve Maharey has set the commission on another set of tertiary reforms. We should remember that these were the reforms that encompassed the now infamous soft courses such as twilight golf singalongs massage for marsupials homeopathy for pets “pendulism” and many many other extraordinary things. 
These extraordinary occurrences under Maharey cost the New Zealand taxpayer approximately $1 billion in precious education money that could have been spent on quality education. Now the Labour Government wants to seal in the disastrous educational record by having those who presided over it—the Tertiary Education Commission—awarded another 44 percent of its budget so that the bureaucracy will swell in just the same way that it has in the last 5 years and it can preside over more such waste. 
At the Education and Science Committee meeting just a few weeks ago we heard how the turnover in 2006-07 was something like 25 percent and we heard that the consultants they had hired estimated a certain amount and overspent it by 300 percent. Now this Government is awarding this same organisation 44 percent more. Yesterday Helen Clark had the gall to comment that Labour is fuelling the Tertiary Education Commission by this extra 44 percent “in order to bring better quality tertiary education”. After 9 years she has had her chance. She has had her chance; it is a little bit too late. 
This is the same Helen Clark who in 2002 ignored the advice of the Knowledge Wave Trust. It was pretty clear that if her Government really wanted to drive economic growth it would focus on the appropriate macroeconomic settings which also included concentrating on research and development. What has it done? Steadily as a percentage of GDP this investment has gone down under Labour. In fact in 2005 the Speech from the Throne which was written by none other than Helen Clark said that science and innovation are critical to driving New Zealand’s economy. In the 2006 Budget what did the Government do? It spent $3 billion of the new money on areas that arguably will only cement in intergenerational welfare dependency and of the new money a mere $19.4 million went into science research and development. Three billion dollars went into intergenerational welfare dependency and a mere $19.4 million went into the area that Helen Clark said was critical for driving New Zealand’s economy. 
Here in the ninth year of this desperate dying Labour Government it suddenly spends $10 billion in every direction that it thinks can conjure up a vote. It has abandoned the top half of the OECD it has abandoned closing the gaps it ties up the New Zealand economy in massive knots of tangled unfettered bureaucracy and it freezes the chances of economic growth that is vital if we wish indeed to have good health good education and good welfare for New Zealanders in the future. But worst of all it not only has totally failed to do what it set out to do 9 long years ago but has abandoned the most vulnerable in New Zealand. 
I want to read out a press release from IHC. It states: “The Budget has ignored the 35000 most needy people in New Zealand. People with intellectual disabilities consistently have the lowest life expectancy lowest income poorest education outcomes and worst health of any other group in society. This budget offers nothing for people with intellectual disabilities. In fact it doesn’t even mention them.” 
Labour has blown the books. It has failed to improve our international economic position and now it does not even mention the most vulnerable in our society. It should be ashamed. 
LESLEY SOPER (Labour) 
: 
 We have just heard another “blond moment” speaker from the National Party. Once again there were no ideas no substance and no policies; National members have been reeling out the same old stuff and relying on reading other people’s press releases. By contrast I am rising very proudly to take a call on this Budget debate. I am proud because this is exactly the sort of Budget that invests in a strong sustainable future and delivers so much to my people in Invercargill and Southland many of whom have already sent messages of congratulations to Dr Cullen through me. The people I deal with see this Budget as fair affordable and responsible with a meaningful reduction in tax for all taxpayers including superannuitants—$10.6 billion seems a pretty good number to them. 
People see strong public investment in the future. In education there is $215 million to reduce class sizes and more to go into operations grants. The Budget grants student allowances to 12000 extra students and there are more bonded scholarships. In social services $446 million has been provided for non-governmental organisations for essential services like anti-violence programmes parenting programmes youth programmes and delivery to families. In health there is $3 billion extra over 4 years with $160 million more going into elective surgery and $52 million to fight obesity. In transport and infrastructure public transport spending has now increased more than 1000 percent since this Government was elected. In justice there will be funding for 1000 extra police. What is wrong with any of this? In housing and in the provision of skills for workers $168 million is budgeted for over the next 4 years. In broadband there is an answer that is far better than National’s idiotic proposal of subsidising Telecom. There is more for science and research—in particular $700 million for agricultural research which Mr Key managed to reject as a gimmick to the astonishment of Federated Farmers among others. 
This Budget is about a strong future for New Zealand and it is no accident at all that Budget 2008 delivers personal tax cuts amounting to $10.6 billion over the next 3½ years on top of the $4.6 billion already delivered through Working for Families KiwiSaver and business tax cuts. It is no accident at all because it is delivered by a Government that can deliver relief for workers who are coping with rising living costs without driving the public accounts into debt or slashing public services. It is no accident because it is the next step in the Government’s planned—a word the National Party does not seem to recognise—programme to deliver fairly to all New Zealanders. Those personal tax cuts will be delivered while meeting the crucial four tests the Government set itself. They will not lead to greater social inequality they will not increase inflation they do not require borrowing to fund them and they do not require cuts to public services. This Budget delivers more to New Zealanders who already know that 377000 more jobs have been created since Labour became Government—that is about 1000 jobs per week—who already know that unemployment has been under 4 percent for 4 years who already know that 140000 fewer people are relying on a benefit who already know that they are paying less for doctors’ visits and benefiting from 20 hours’ free early childhood education and who already know that 130000 children have been lifted out of poverty. 
In contrast what can those hopeless National members on the other side of the House offer in their wittering speeches? It appears that they have nothing to offer—no ideas no policies not a single speech that has been anything but a series of blond moments. They are even now avoiding debating this Budget. There were no oral questions about it to the Minister of Finance this week. There was no Mr Key fronting on  
Checkpoint 
 or  
Morning Report 
 today; there was just the “slippery as a snake in wet grass” interview of 22 May and in the following few days more “ums” and “ahs” from Mr Key on whether National really has a tax policy—or any policy—what that tax policy is if it has one and how it is going to pay for it. There has been just a frantic backtracking from the statement of Mr Key that National’s tax cuts would be “north of $50” per week for everyone. 
Sue Moroney 
: Everyone? 
LESLEY SOPER 
: Everyone they said; everyone Mr Key said in several quotes I could make but I will not waste the House’s time. Mr Key and Mr English are at sixes and sevens over exactly what they think they can say about Labour’s tax cut package. And while they are at sixes and sevens in a policy vacuum that has been illustrated in every speech from the other side what comes to fill that vacuum? What indeed—the real National Party agenda! Did anyone notice that Kate Wilkinson reportedly National’s employment spokesperson came out today with the revelation that National would not keep compulsory employment contributions to KiwiSaver? Was that not strangely reminiscent of Tony Ryall’s revelation of the true National Party health policy a short while ago—that it would remove the cap on doctors’ fees? Did members notice that the same frantic slipperiness and flip-flops happened on the latest Kate Wilkinson gaff? First there was an attempt to bully Barry Soper not to report what Kate Wilkinson said. Then Mr Key confirmed that she did indeed say it but that she was wrong. 
Then Mr Key flip-flopped on KiwiSaver again. Once the scheme appeared Mr Key said that it was a glorified Christmas club and fundamentally flawed and he said: “No no—we wouldn’t keep it.” Now that it is there there will be a compulsory employer contribution but members will notice that he is fudging the details. Mr Duncan Garner said that he thought Mr Key was not being entirely upfront—being a bit exposed on the detail was Mr Key. Was it 1 percent or 4 percent—another flip-flop? Well who knows? John Key does not the National Party does not and Kate Wilkinson does not. None of the National speakers yesterday or today seem to know where they are on anything. 
But we know that that National Party front bench is still the front bench of the 1990s: Mr Ryall Mr English Mr Brownlee Mr Smith Mr Williamson and Mr Carter. They slashed benefits and superannuation. They put night charges for beds on to hospitals. They sold 13500 State houses. They sold State assets. They brought in the Employment Contracts Act. They intend to have the 90-day employment probation period back in a flash; the bill is already written. They had double figure unemployment with 161000 people unemployed. They are slipping and sliding all over the place ranting and jumping from cloud to cloud. They do not have a plan they do not have an idea they do not have a policy and they are frankly trying to disguise that with wittering speeches that go on and on repetitively while members read one another’s notes. 
In John Key they have a leader who says as he backtracks on his own tax cut plans that it is not just about the dollars or about an issue of money even though he formerly said—and here is another flip-flop—that high-end taxpayers save a lot of what they get as a tax cut. So apparently that means it is OK to give tax cuts to one’s rich mates because Mr Key says that high taxpayers do not put cuts into the inflation pool. That apparently justifies tax cuts to the rich mates and that is one of the policies we know that National has up its sleeve now just as it has always had. 
In this debate that lot on the other side—that National Party that Tory crowd—have had the chance to put their money where their mouths were and to give us some policy some idea some plan and some vision. They have utterly and completely failed. In conclusion I tell the House that the choice is fairly stark: dither with Key deliver with Clark. There is no choice really. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 We always know that we have a dying Government in front of us when listening to Budget speech after Budget speech the Government members sound more like an Opposition than a Government. I can tell because I was here. I was here in 1999 when this started to happen to the National Government of the time. We used to get up one after the other to try to defend the indefensible to try to win back the votes that were already lost and to try to get the phone which was already off the hook back on the hook. It did not work then and it will not work now. 
I support the motion put forward by my leader John Key that “this House has no confidence in the Government led by Helen Clark because New Zealanders have had to wait far too long to see any changes to personal tax thresholds or any lowering of personal tax rates and over nine Budgets this Government has presided over a decline in New Zealand’s standard of living compared to the rest of the world.” One cannot state it any clearer than that. That is absolutely what has happened—New Zealand is 22 on the list of OECD countries down from 20 when this Government came to power. There were those famous prime ministerial words that the Government would lift New Zealand back up into the top half of the OECD. Obviously Government members do not want to hear those and the list goes on. 
It is incredible that Kiwis have had to wait 9 long years for Dr Cullen to admit that he was wrong in his first Budget when he said that tax cuts would not deliver. If he was wrong then and he has been wrong in eight subsequent Budgets since then why is he right now? What has changed? The economy is actually on the way down yet tax cuts are affordable. Three thousand long days in power before a tax cut and the poor hard-working Kiwi out there gets $16. I know that the Kiwis out there have seen right through that. No Minister of Finance in the history of this country has had the golden weather for as long as this one and has had the opportunities to grow the economy and to really make a mark as this Minister and what have we had? We have had 9 long years with no tax cuts. Let me tell those members because they want to hear from National that we believe in tax cuts we believe in them. We have seen what they have done to the Australian economy and we will make them a top priority. We believe in them. We do not give bland speeches like the honourable doctor who obviously has been dragged kicking and screaming right to the last moment to give a measly $16. We believe in tax cuts. We will bring them in. We will make this a wealthier more prosperous country. 
We know absolutely that a Government has perfected the art of political spin when one can stand in the middle of a beautiful green field in Taranaki and as far as one can look on either side there are beautiful green fields with tree-lined streams a beautiful vista of Mount Taranaki in the background and the sea on the other side yet apparently according to political spin the amount of environmental impact that is going on in that environment is worse and more devastating than what is going on in Queen Street. That is what we have been led to believe; one can stand in a beautiful green field with ankle-deep grass look around as far as one can see and according to political spin that is absolute environmental devastation yet Queen Street or Lambton Quay is the perfect natural environment. “Yeah right!” is what I say to that. How wrong is that? What we need to do is to apply a new idea—an absolutely unheard-of idea in the eyes of the Labour members—and test that theory with science. We need to find out what the environmental impact is with sound science not with political spin and introduce an emissions trading scheme that reflects the sound science that backs up the argument—not the shonky proposal before us which was announced in this Budget. 
I will also touch on another area I am passionate about and I know that you Madam Assistant Speaker have a fair interest in this. That is the area of biosecurity. When we go to the Budget what do we see? We see yet another cut not an increase. Given that we have had 254 new incursions in the last 5 years one would expect the Government to say that this is a serious threat and that we need to do something about this. This is an area of priority in an economy that is dependent on its land-based primary industries. We must do something about this. But oh no there is not a jot not diddly-squat in the Budget. Members should look at the recent importation of cocoa peat from Sri Lanka for potting mix. One would think that it would ring alarm bells. One would think that the member from West Coast - Tasman would wonder why we are importing cocoa peat from Sri Lanka. Maybe there is a good reason. Maybe somebody wants to so perhaps that is a good idea. But that product was not subject to an import health standard. 
In 2002 a review said that the importation looked a bit risqué and could potentially be a breach of biosecurity. What was done? Not one thing nothing not one jot of a thing. What happens? We import 28 new species of plants inadvertently accidentally and release them to all of our nurseries in New Zealand. I ask a simple question. Given that this is going to cost a lot of money to get on top of what would one expect from a Budget immediately after an event like that? One would expect a bit of attention to that issue. What have we got? Nothing—not a single thing. So what would we do about something like that? Well we would look at what is now being proposed and members can guess what it is—an import health standard. Yet in 2002 nothing was done when it was brought to the Minister’s attention. Let me say that the legacy of this Minister for Biosecurity the Hon Jim Anderton is that he will be the “Minister of New Incursions” the “Minister for Biosecurity Failure” and overwhelmingly he will be known as the Minister who potentially put the New Zealand economy at risk—second only to Dr Cullen. 
The Budget has done nothing to address the very serious issues facing the people of the low socio-economic areas of Taranaki - King Country such as Kawhia Benneydale and Te Kuiti which have high Maori populations. But let me say that help is on its way. This Government has missed the greatest opportunity that this country has probably had in three decades to fix a lot of the infrastructural problems that these areas face. Broadband has been mentioned in this debate. Well members should try to get a broadband connection in Taranaki. Why do we not go even a little bit further than that and try to get a cellphone that works there? That would be a breakthrough. If I drive from the north of my electorate to the south I have 3 hours of driving with about 10 minutes of cellphone coverage. How is that? I have 3 hours of driving and 10 minutes of cellphone coverage. One has to know where the cellphone coverage is and stop there otherwise one drives out of the coverage area and one’s cellphone drops out before finishing the conversation. Sometimes that is good. If a member has made a comment to the media and the leader of the party is after that person—he or she will not be found when driving through the electorate. The Criminal Investigation Bureau would not be able to track down that person unless it had a homing device. Let me tell members now that they cannot get cellphone coverage there. National will roll out fibre-optic cables across those areas. We will have this economy transformed in the way that the knowledge wave proposals suggested it could be. 
New Zealand is a beautiful country. We do have a lot of opportunity. Hold your horses: National is on its way and it will transform the economy. People are sick of the way that this Government has missed those opportunities and I can tell members that the Budget definitely did not bring a cheesy grin to my constituents. 
Hon DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 It is a delight to rise and make a contribution to the Budget debate. I begin by thanking the previous speaker Mr Ardern who is one of the many National members I will be thanking this evening. In respect of that last little story about Telecom I cannot imagine a better demonstration of why the National Party has kangaroos loose in the top paddock. 
If Mr Ardern cannot get Telecom reception in his own area—and I would be really pleased if he did not drive off a cliff on his old “Fergie” tractor or anything else—one would have to ask why he does not know about National’s policy. I assume he has been left out of the loop because he is not one of the four key policy developers whom we have heard all about today. I notice that none of those policy developers is in the House today including Mr Finlayson who is pleased to tell me that he is one of the key policy developers. Because Mr Ardern is out of the loop he clearly does not know that there is a National policy that will increase subsidies to Telecom so that it can stuff it up further. That is a fairly good example of one of the problems we have. 
I watched the debate about the Budget with interest both in the House and on television. A number of Labour’s preceding speakers have illustrated the substance of the Budget which sits in very large piles in all our offices and in many of our electorate offices by now. It is also on the Table of the House in compendious documents that will keep many students of politics and many economists busy for a very long time. All of that documentation is required by law and many people—not Mr Ardern of course because he cannot get it on broadband as a result of his support for Telecom; in fact he does not know which way to put the DVD in—have that documentation available to them. 
The amazing omission that many of my colleagues have spoken about—and I have had feedback about this from my community—is that the simple old seemingly logical tradition of expecting the Opposition to present an alternative Budget has gone by the board. Not only does it have no alternative Budget but it does not appear to have an alternative policy on anything except when it slips out because of the good offices of one or two people who think they know what the policy of the National Party might be. I will come back to that. 
One of the funny things about this House is that we operate at all sorts of different levels. I am pleased to say that I am the member of two select committees. One of them is the Law and Order Committee. I have had some dealings in recent times with the two doyens of the day Kate Wilkinson and Chester Borrows. I am very pleased to say that I have found both of them to be people of integrity. They are straight-up. I would not go as far as to say I like them. They are nice people but their policies stink. 
On this side of the House we believe in supporting people. [ 
Interruption 
] Is it not wonderful! That is the standard response of the National Party in Opposition. If anyone says anything that National members do not like or are uncomfortable about—any policy stuff or any areas where they do not want to have their difficulties highlighted—we get the screaming. One cannot expect four or five males to scream too much but we had a wonderful example earlier. 
Here I am explaining why I think Chester Borrows and Kate Wilkinson are almost nice. I do not like their policies—their policies stink—but in terms of normal human interaction I found them to be courteous and upfront in the select committee. I cannot talk about the select committee dealings from today of course but we will certainly be reporting to the House some time quite soon some unanimous decisions about all sorts of important things that are significant for this country. I think that those members make a significant contribution. However they have problems with their own policies and we will talk about that later. 
I will doubtless be in terrible trouble with some of my colleagues for being even half nice to such Tories. But what I want to say about the vagaries of the last day and a half is really interesting. The thing that surprised me most—and disappointed me the most actually—about the way Kate Wilkinson has been treated by her party is that she was immediately labelled by her colleagues—senior and associate—and the media as an anonymous back-bencher someone who was invisible and someone of whom the TV channels had no file footage. Really! Well is that hard to get in this place? What is more damning is that she was treated as someone who had no involvement in the policy decisions we are talking about. Well Kate Wilkinson is the National Party’s spokesperson on industrial relations for God’s sake and the suggestion that someone with that portfolio responsibility should not be in the loop about the things she was asked about is frankly just ludicrous. 
I think it is quite important to highlight some of the media material that has come out about that issue just today. There was a fascinating Scoop article which I will read this evening and I will seek leave to table it later. It reads as follows: “National leader John Key has been left to clean up the mess after an embarrassing gaffe by the party’s industrial relations spokeswoman.” At least this media person recognises that she has that role but “gaffe” it sure ain’t. 
On Newstalk ZB Mr Soper spoke about this issue. Now we all know Mr Soper. It would be hard to imagine that he would be bought by anyone or indeed threatened by anyone but I will come to that and I will ask to table this document as well. He said this about the issue: “What I found interesting was the way it was handled. I was the only person”—presumably media person—“this time yesterday at this particular breakfast and it was a question from the floor. Kate Wilkinson quite clearly said that employer contributions to KiwiSaver was not going to be compulsory. Now I had a call from the chief spin doctor from the National Party (Kevin Taylor)”—that apolitical person—“saying ‘I understand you are going to run the story you are wrong.’ And I thought hang on I was there I heard it and so did everybody else … And he repeated ‘you are wrong you will not run this’—and he emphasised that—‘you are wrong’. Well we ran it and by two o’clock yesterday afternoon John Key was saying ‘it was Kate Wilkinson that was wrong’.” Today in the House at question time—and the  
Hansard 
 is clear for everyone to read—we had exactly the same story from our Minister Mr Mallard who was also there. 
I do not mind what the National Party policy is on this or on any other matter. I am sure that many members of the National party do not mind what it is either but would it not be nice to know? I think that that is the telling part of the slipperiness we are now seeing because in the other document I alluded to earlier the National Party leader said that the party’s KiwiSaver programme was not yet finalised but that there would be compulsory employer contributions. He would not say whether they would involve tax credits for employers and he would not say how much employers would be asked to contribute. That is the question that the many hundreds of thousands of people who have signed up to the wonderful KiwiSaver initiative should ask themselves. What is the rate? Is it today’s rate of 1 percent or is Mr Key committed to the percentage—which will grow to 4 percent—that is part of Government policy? 
I have some more advice and suggestions for National. When it was last in Government it made a tidy $1.072 billion by selling some State houses. It sold only 13157 State houses but now there are more because we have been building them. The total number of State houses is now up to 67134. The average sale price for those State houses across the country was $80000 so there is a huge amount of money to be made out of selling every State house. That party can help plug the hole it has now dug itself in respect of the things it has committed to—such as KiwiSaver even at 1 percent—by selling the rest of those State houses. When National does that—and that will clearly be one of its many new policies; if and when it ever releases them maybe 3 hours before voting day—it will be able on past values to make another $5.5 billion available just like that by flicking all those State house tenants out on to the street where the National Party would rather see them. 
This is an astonishing Budget. This Budget has delivered $10.6 billion in tax cuts alone. The nonsense we hear about $16 is just that—nonsense—and it is time that the National Party and the community fronted up to the challenges ahead of them. 
CHESTER BORROWS (National—Whanganui) 
: 
 It was interesting to listen to the member David Benson-Pope’s contribution—if we can call it that. 
I will speak about law and order. Last Friday night I was down in Christchurch travelling around with the police. It was a freezing cold night down there but it was a good night to be out and about. The police are doing an excellent job right around the country and especially in Christchurch. For the first 3 hours or so we were looking at boy racers in their flash cars as they were cruising around and around the streets. Then for the second half we were looking at disorder within the central business district in Christchurch. 
We can look back at the Government’s record on law and order and policing specifically and that is where I want to focus some attention tonight. You see when this Government came to power in 1999 there was the pledge card which everyone remembers. And on that pledge card which we all paid for there were huge promises around dealing to youth crime and to burglaries. But what happened then? Shortly afterwards there was a little blip as far as the number of burglaries went. The number pretty well flat-lined and in some cases went down slightly and the Government crowed about it. But then of course we found out through the complainants anecdotally and through the newspapers that the reason burglaries were not being reported to the police was that people could not get anyone to take their complaints. It ended up that they would make telephone calls and report burglaries or report that young people had been seen breaking into their houses but the police would say things like “Oh well you know—there’s not much we can do about those young guys.” and they would not bother to turn up. People could not get a uniformed policeman to come along and appear because the police were busy enough with other stuff that was going on and they were short on resources. 
But then the Government changed the language. It started to talk about reported crime and in relation to young people coming before the courts it talked about “youth apprehensions”. Well it is very difficult for the police to apprehend youth if they do not look for them. It is very difficult for the police to apprehend youth if they are tied up doing other stuff that is right in front of their faces and the disincentive for dealing with youth is the protracted paperwork that has to be gone through in actually attending to them and attending to that job. But we know that in the last year the violent crime rate has gone up 4.4 percent—that is in just 12 months. The rate of grievous assaults is up 10 percent and that of serious assaults is up 4.8 percent. Since 1990 the rate of violent crime is up 32 percent which equates to about 13000 violent offences. The Government’s answer to that is to say that it has initiated a programme— 
Bob Clarkson 
: Can you count Mallard’s two swings? 
CHESTER BORROWS 
: Ha ha! Yes that was reported; that will be in that 13000 there somewhere I tell Mr Clarkson just to put his mind at rest. 
There have been about 13000 extra offences but the Government’s response to that rise is that it is much easier to report that crime now and also that the television advertising campaign has actually lifted the rate of reporting. But counter to that is the fact that the number of domestic non-violence or protection orders is down about 30 percent. We have to wonder just where these offences are coming from and how they are being reported. We know that the rate of youth violent crime is up 47 percent so it is up by nearly half as much again since 1999. Well what are we going to do about that? We have heard what the Government will do about that and what it says it will do pretty much mirrors exactly what National says it will do. 
On 29 January the Leader of the Opposition John Key announced a policy around youth justice issues. He said that National believes that all young people under the age of 18 should be in work in education or in training. Helen Clark was delivering a speech the next day—the next day—and she said that Labour would keep young people in school until they were 18. But the whole of the education sector said: “Like hell you are! Who is going to be looking after those little 18-year-olds? It is going to be us.” So she changed the policy; she said that if young people were under 18 they should be in work in education or in training. What do you know! So who came up with that policy? It was National Party policy and Labour adopted it straightaway—just as it has in so many other areas. 
We moved on and released a number of other youth justice initiatives. We talked about extending the jurisdiction of the Youth Court and lowering to 12 the age at which a young person can be prosecuted for crimes punishable by more than 5 years’ imprisonment—that is for serious offences. Then Labour came out with its amendment to the Children Young Persons and Their Families Act which will reduce to 14 the age at which young people can be sent to the Youth Court for sentencing. That was not where National was going—Labour did that in response. 
Then we had new orders for the Youth Court. The problem we have within the Youth Court was clearly outlined on a trip to the Rolleston youth justice facility recently. We spoke to about 10 kids in the course of that day; about eight of those kids were on their fourth or fifth return trip to the youth justice facility. They were doing their fourth or fifth stint of 3 months for totally new offences on each occasion. That is a ridiculous situation. National’s response to that is to say that we have to be able to put these kids on programmes for longer. Sometimes that will mean that they stay incarcerated for longer but sometimes it will mean that they will attend a supervision-with-activity course for longer. We think that is a really good idea and Labour members said they did too. That measure is now in the legislation as well. I say “Good on them!”. 
But Labour is also saying that we should treat 18-year-olds as youths as well. Why would we do that? When we left school and when our parents left school we were treated like adults. Kids are not adults but when it comes to serious offenders serious assailants and serial burglars and thieves they need to be dealt with in a way that reflects society’s abhorrence. Just because we do that does not mean to say we do not understand the problem. National is very much in tune with the problem and very much in tune with where New Zealanders stand on this and now every other party wants to put up its hand to and say it is too. 
People will remember that before the last election the National Party campaigned on increasing police numbers significantly. We did not put a number on it but we said that it would be somewhere around 1000 extra police officers. Labour said that it was rubbish—absolute rubbish. In fact the Prime Minister said that anyone who talked about increasing police numbers in those sorts of figures was not on the same planet. New Zealand First said that it would do it too—in fact New Zealand First said that it would double police numbers. What happened? What do you know just before the election—it was not announced at Budget time but just before the election—the Government said that it would provide 250 extra community constables. We then had an election which Labour won. What happened next? Labour needed a coalition partner so it said to New Zealand First that it would give us 1000 new cops. We asked whether that was on top of the 250 community cops. New Zealand First said yes it was; Labour said: “Ah dunno.” Now Labour has decided that it is not. So there we have a complete flip-flop on its programme heading into that election. 
The next point we made around the youth justice sector was about parenting orders. In other countries—for instance the United Kingdom—the parents of young people who get into trouble need a hand. When people talk to those parents they say they are pulling out their hair and need a hand. They are instructed to attend a parenting course and 90 percent of parents who attend those courses say that they would recommend a course to their friends because it has been the biggest help that they could get. Labour said that it quite liked that idea too. 
Then we move on to National’s police policy. National announced its police policy in November last year and that policy was around four issues. One of them was the introduction of Tasers. John Key announced at the Police Association conference that given a positive report Tasers would be issued. Labour then said that it would do that. Then John Key announced that DNA samples would be taken mandatorily on arrest for an imprisonable offence—so if people are arrested for an offence punishable by 3 months or more in prison they get their photograph their fingerprint and their DNA sample taken. Labour said that it would do that. Then John Key announced that the police would issue on-the-spot protection orders in family violence situations where for instance a woman was being beaten up. The police would issue a protection order on the spot which would give her the opportunity to go to a court and through legal aid obtain a protection order through the court. Annette King’s response was that Labour would do that too. 
The last pillar of the National Party police policy at that stage was that we would unwind the Bail Act provisions that last October put up the risk threshold for offenders to be remanded in custody. This was the Government’s initiative—not to deal with offenders not to keep the public safe but to keep people out of jail. So National came out and said that it would unwind that because the police were telling us that it did not work and the judges would tell us behind their hands that it did not work either. Guess what? The Government did not say that it would do that. It did not say it would do that because it would look silly. At the moment it is crowing about having 1600 fewer people in prison beds which is generally due to the remand process and the fact that violent offenders are still out on the street. 
There is the policy around youth justice and there is the policy around the police. Members can rest assured of one thing—that is if it were not Budget day then there is no way in hell that this Government would have released its economic policy for the next election. It just happens that they had to do it. 
DARIEN FENTON (Labour) 
: 
 Every time a Budget is presented I run a ruler across it in terms of fairness to the least well-off in our economy and particularly to the lowest-paid workers. Since Labour has been in power I have never been disappointed and this Budget more than meets that test. I am proud to be part of a Government that has delivered another Budget that first and foremost is about fairness and social justice for families modest-income earners and seniors. But we cannot consider the fairness of this Budget in isolation because this Government has continued to deliver year upon year. We have reduced the cost of seeing a doctor and getting a prescription. Do members remember what it used to cost? It used to cost $15 to get a prescription. Well it is not that any more. 
Sue Moroney 
: $15 per prescription. 
DARIEN FENTON 
: It cost $15 per prescription. We have expanded access to health services screening and immunisation. We have provided 20 hours’ free early childhood education. We have also helped 600000 Kiwis start saving for the future through KiwiSaver—I will get back to KiwiSaver as members will imagine. 
Hon Trevor Mallard 
: You’re not going to talk about Kate are you? 
DARIEN FENTON 
: Well I will get there. We built thousands of new State houses while restoring income-related rents. One thousand new jobs have been created every week since this Government came to power. That is remarkable—1000 jobs a week. Everyone on this side of the House acknowledges that after 8 years of unprecedented economic growth low unemployment and growing household incomes life is becoming a little bit more pressured for New Zealanders. That is because of this period of global uncertainty. It has created a triple whammy of food petrol and mortgage rate increases which is decreasing disposable income for many families. So although householders are wealthier in real terms than they were 8 years ago they will be finding it harder to make ends meet and some will have reason to feel poorer than they did this time last year. But because this Labour-led Government has managed the public books responsibly we have real choices as we work to confront these challenges. 
Despite the criticism and nagging about tax cuts from the members on the other side we have saved for a rainy day and because we did that we can deliver relief where it is needed without destabilising our economy. That has left National in a real pickle. Actually all that those members can do is to talk about cheese; now we have cheese and pickle. Oh my God I think that the National Party is going crackers! 
The people who will benefit from this Budget are those who are on below-average incomes on average incomes and on a little bit above that and they will benefit from the lift in tax thresholds. We make no apologies for giving families with children additional assistance. The increase in the family income thresholds will ensure that all 371000 families who qualify for Working for Families will receive a boost in income come 1 October. 
Some of my colleagues have talked in this debate about two low-paid workers Lisa and Paul. Lisa is a hospital cleaner and she earns $29640 a year and Paul works as a labourer earning the minimum wage of $24960 a year. This Budget delivers to Lisa and Paul an extra $1828 per year as a result of the 1 October changes to the tax thresholds and the Working for Families indexing but for this couple and their child there is so much more. When Labour became the Government Lisa’s wages were $9.50 an hour but today Lisa earns another $160 a week. Why is that? It is because this Government has delivered an extra $4 an hour into Lisa’s pocket and to all public hospital cleaners through specific funding in last year’s Budget and we have also made sure that pay rate can be tied down through collective bargaining through her union through fair employment laws. But the news is even better than that. Paul is on the minimum wage. I ask members how much that has gone up by since Labour became the Government. 
Hon Darren Hughes 
: Five bucks. 
DARIEN FENTON 
: Five bucks an hour—it is $5 an hour more under Labour. 
Hon Trevor Mallard 
: And what about if it’s a 16-year-old? 
DARIEN FENTON 
: Well that is right. 
Hon Trevor Mallard 
: It’s over $7. 
DARIEN FENTON 
: That is right. Paul is not 17 but his children will benefit from that as they grow up. It is $5 more an hour than the miserly $7 an hour it was when National was last the Government. That is another $200 a week that Paul is getting under a Labour-led Government. Even before the tax relief under this Budget 2008 this couple are $360 a week better off because of this Government. Thousands of low-paid workers know that. They are glad there is a Labour-Progressive Government in power and they will fight to keep it that way. They know which party is on their side and it ain’t the National Party. 
It is really hard to say much about the National Party in this debate. Its members seem to be in a parallel universe. They certainly do not seem to be in touch with the people whom members on this side of the House have been talking to. They do not even talk to each other. Poor old Kate Wilkinson; poor straight-up Kate. 
Hon Trevor Mallard 
: She’s the one who told the truth. 
DARIEN FENTON 
: That is right. She got herself into a bit of trouble by pre-announcing National’s policy to scrap the employer contributions to KiwiSaver. What a bungle! Actually John Key wasted no time in dropping her in it on national TV. We will watch out for her rapid demotion. But we believe Kate do we not? She told the truth. One minute National members believe in compulsory employer contributions to KiwiSaver and then the next minute they do not believe in them. This is just typical of the National Party. It shows that its members cannot be trusted. 
All through this Budget debate I have been hoping to hear National members come up with just one policy. How hard is that? But they have gone all sulky on us because their one idea of tax cuts is now looking rather feeble and lonely. Everything they come up with Labour is already doing. It just goes to show that Labour is the party of change in this country. It is Labour that takes the country forward and leaves National scrambling to catch up. But that is the way of the National Party. Its members do not tell the public what National stands for—perhaps they do not know themselves—or what it will do if they ever get the chance to become the Government. They do not tell voters anything because they think voters are stupid. I have been hearing that they are already writing legislation for the first 100 days in Government. One can only guess what the purpose would be. Should workers start counting the 90 days before they get the sack? It is such arrogance when they continue to keep their policies secret—except of course tax cuts which now look pretty sick. 
The other thing that has offended me in this debate is the right old go they have been having at workers in the Public Service. If I were a civil servant I would be extremely offended by the denigration of civil servants’ work by John Key who described it as paper-shuffling form-filling and navel gazing. Actually I think that is a really good description of National Party members. If the cap fits wear it. Civil servants should be extremely worried because if National ever gets the chance it will be taking the knife to their jobs. It will be the night of the long knives again. How many public servants’ jobs will they cut? Is it 100 is it 500 is it 1000? Well 1000 jobs will not be enough because all that will do is deliver 70c a week in a tax cut. It is not enough. We are back into cutting the number of nurses doctors teachers police border control officers and social workers and back into that parlous state that the National Party left the Public Service in in 1999. It is well known that the reason that counting the votes in the 1999 general election took so long—remember we were up all night waiting for the results—is that National had run down the State so much that there were no trained workers to do the job and there was no infrastructure. 
While I have the chance I want to applaud the new investment in Budget 2008 of $168 million over 4 years to implement the New Zealand Skills Strategy and the work currently being undertaken by the Government the Council of Trade Unions Business New Zealand and the Industry Training Federation. The strategy moves the focus on to the skills of those already in work. Eighty percent of the workforce of the next 20 years is already working so this investment is a critical element in ensuring the skill development of the existing workforce and the future of our economy. I am not really sure having listened to National Party members that they understand how a skills strategy like this contributes to productivity. It is a bit too sophisticated for them. There are workshops going on around the country so perhaps those members could go along to one. They might learn something. I am not even clear who the spokesperson is on skills in that party. 
Sue Moroney 
: It could be Kate. 
DARIEN FENTON 
: Is it Kate? Maybe it is Colin King or Lindsay Tisch. Who knows? 
Hon Darren Hughes 
: He retired years ago. 
DARIEN FENTON 
: Oh did he? This is indeed the rainy day Budget that Dr Cullen has very astutely provided for. It can be delivered because past surpluses were not frittered away on rewarding a few. It has been delivered fairly to strengthen our communities and rebuild the critical infrastructure deficits from when National was last in power. Budget 2008 addresses both the pressures of the day and the needs of tomorrow. I congratulate Dr Cullen on once again delivering a true red Labour Budget. 
Mr DEPUTY SPEAKER 
: We come to speaker No. 60 on the list. 
ERIC ROY (National—Invercargill) 
: 
 Mr Deputy Speaker I think it is good of you to note that I am the 60th speaker. I say to those listening on the airwaves that this is a long debate where most members get an opportunity to participate on issues around the Budget that are of interest or concern to them. 
I want to be a little bit thematic in what I say. I listened with great interest to the Budget speech last Thursday in order to hear exactly what its flavour would be. I wrote two words on the copy of the Budget speech that I received. Those words were “desperate” and “valedictory”. I will explain why I have chosen to label the Budget speech in such a way. My memory of Budgets goes back many decades to when my father used to get quite anxious in the 1950s. In those days Budgets consisted of a series of line items. There were limitations on how far one could cart things on a truck and we found out what the subsidy would be on fertiliser and all that sort of thing. This was of great interest. In recent years the Budget has changed and I think that is good. I do not think that Governments should be prescriptive in that way. We really want to have a blueprint that does something. That is what a Budget should do. It should be a blueprint that drives the direction of the country. 
Nine Budgets have been presented by this Labour Government. In the previous eight Budgets we have had new-wave economies sustainability a carbon-neutral direction and a goal to get New Zealand into the top half of the OECD. But in this Budget we did not have a theme. The themes were “desperation” and “survival”. Labour said: “We must give some tax cuts. We have kind of resisted it all the way along and now that we cannot afford it we are going to do it.” That is the same for many of the things that have occurred in this Budget. 
This Budget does not have a theme or a direction that I can identify other than that it is one that is supposed to get Labour over the hurdle of the next election by handing out some lollies at a time when that can be least afforded. I am not saying that National is against the tax cuts. We voted in favour of them. But I am saying that there should have been a planned progressive reduction of government in people’s lives. The amount of money that the Government has taken off the good hard-working citizens of New Zealand—because it thinks it knows how to spend the money better than the individuals do—should also have been reduced. These citizens should have been getting their own money. 
I am ambitious for New Zealand. There are some things I want to see happening in New Zealand and I was looking for these things in the Budget. I want our young people to choose New Zealand as the place to live not Bondi Surfers Paradise Perth or somewhere else. I want them to engage in the New Zealand society. I want a growing economy. 
Hon Darren Hughes 
: Give us some policy then. 
ERIC ROY 
: I tell the member to keep calm because our policy will knock his socks off when we announce it. Let us talk about themes; I made it quite clear that this would be a thematic speech. I want to see a growing economy so that we can pay for the critical services that we need. We need a realistic environmental policy. We need to break the cycle of dependency. We want New Zealanders taking the initiative and responsibility for themselves. So those are the sorts of things that I looked for in this Budget. I could find no key drivers that this Government is really focusing on. 
We are an export-led economy. We live and die by the effectiveness of how we perform internationally. 
Hon Darren Hughes 
: Fast Forward. 
ERIC ROY 
: That is a good point. Why after 9 years when the key driver in our economy in terms of the export industry has been agriculture and when we have had billions of dollars worth of surplus have we suddenly come out with Fast Forward? Why has there been a delay if the scheme is so good and so cunning? 
Hon Darren Hughes 
: Why are you against it? 
ERIC ROY 
: Because I support investment in research. 
Hon Darren Hughes 
: But John Key doesn’t. 
ERIC ROY 
: Yes we do but we have a different process for delivering it and a more generous one. 
Hon Darren Hughes 
: What is it? 
ERIC ROY 
: Mr Hughes will just have to wait and see. We are going to invest in research—make no mistake about that. The agricultural economy gets a mention in only one line of the Budget in connection with Fast Forward. There is nothing else. 
Hon Darren Hughes 
: A billion dollars! 
ERIC ROY 
: It is spread over a few decades. It is very very easy to put a figure like a billion dollars in a Budget when it is bulked up over several years. It is quite misleading to say that a billion dollars has been put into the Budget because a Budget applies only to 1 year. 
Hon Darren Hughes 
: No it doesn’t. 
ERIC ROY 
: Yes it does because Labour will not be here. 
Hon Darren Hughes 
: Yes we will. 
ERIC ROY 
: It is quite quite arrogant for Mr Hughes to say Labour will be here. 
I want to take up with this Government another matter of arrogance in relation to this Budget. This Labour-led Government has been quite immodest about claiming its success. It has presided over the most prosperous period we have had in the last half-century. When all was going hunky-dory sailing along and going well and when the economy was growing and the unemployment rate was going down we were told that it was all due to the policies of this Labour Government. How immodest it was about that! But now that the economy has started to go pear-shaped and belly up we see that the third line of the Budget states: “A very large part of this challenge is generated by international forces which are well outside of our control.” During the times when the economy was sailing along and things were going very very well there was no admission that the prosperity had anything to do with international forces yet when things become a bit grim the Government has said that it is not its fault but the fault of international forces. A severe credibility gap arises from that kind of approach. 
I will dwell for a few moments on some of the things I expected to see in this Budget that would have had a direct impact on the economy of Invercargill and Southland. I mention agriculture briefly. The worst thing affecting the meat and wool sector at the moment is the cost of money—the high interest rate and high exchange rate. That is why this sector is largely uneconomic at the moment. If a fiscal policy delivers a very high interest rate and we do not do anything about it then we do quite significant damage to the meat and wool sector. It is very easy just to give some numbers about the effect of high interest rates. High interest rates give us a high dollar. Every 1 percent increase in the exchange rate reduces our income from the land by a dollar. Every 1 percent increase in the interest rate reduces prices from the land by $1 in terms of the time it takes to process and sell things. 
Sloppy ineffective Government spending is one of the things that causes the dollar to go up and it creates inflation. In the last 9 years the Government spend has gone from $36 billion to $62 billion. The Government believes in growing the economy but if it had worked in tandem with the general operation of the economy all New Zealanders would have had a similar proportional increase in their own net wealth and turnover. We would have expected New Zealanders to earn 90 percent more in that period but that has not happened because most of that 90 percent is in the Government coffers and being spent very very poorly. 
This Budget clearly does not have a theme other than survival. I say again quite clearly that I am ambitious for New Zealand. I want New Zealand to be a place where our young people want to settle down raise a family engage in the economy and not head overseas. In many respects this Government has produced a Budget that falls well short of the expectations of all New Zealanders. 
RUSSELL FAIRBROTHER (Labour) 
: 
 I am somewhat pleased to follow the previous speaker Eric Roy because he referred to the fact that he has listened to lots of Budgets. Looking at his waistline we can certainly see that. I too have listened to lots of Budgets—as I am a Grey Power member that is self-explanatory. [ 
Interruption 
] Members will have to speak up. I do not have my new hearing aid yet so members will have to speak louder. 
The point Mr Roy really made was that when Budgets came out in the days of old the people in the street would wait with great anxiety for the Budget. Do members remember the queues at petrol stations the night before Budget night? Do they remember the queues at dairies before the Budget was read out in case the excise tax on cigarettes went up? Nowadays people do not queue at petrol stations to buy petrol; these days people know that petrol tax is spent on roads. They know that there is stability in the economy. They know that the taxes imposed are stable. These days the public look with some anticipation at what they will get out of a Budget not at what a Budget will take out of their pockets. 
That is the signal change in the Budget environment in this country over the last 9 years: the mums and dads out there know that the economy is stable. They know that we have been setting up the economy to go through a time of wet weather which is no doubt approaching and they know that the cautious approach taken by the Government and Dr Cullen is preparing us for times of adverse circumstances—and there certainly will be adverse circumstances. If we look at the exchange rate against the US dollar food prices petrol prices and the international credit crisis we see that they are just a few of the challenges we face at this particular time. What does this Government do in the face of those challenges? Does it hunker down and do nothing? No; it comes up with more innovative policies for the future that will build a fair economy. It comes up with policies that will build on the strong economy that has been developed over the last 9 years. 
What have we heard from the Opposition since Budget day? What have those members come up with to combat any one of the policies that have been carried through in the current Budget? What have the debates in this House been about in the last week? Have Opposition members been engaging with Dr Cullen on the merits of the Budget? No there has been absolute silence. Have they come up with one policy except for the one that was wrenched out of them? No. And when they do come up with one policy—that is to retain KiwiSaver—does John Key explain the change from his position of a year ago when he said that he would keep KiwiSaver mark I but he now says that it is no good or the other way around? Does he explain that flip-flop on policy on KiwiSaver? No he does not. National members have adopted KiwiSaver like it was their brainchild. We have seen the same thing happen with Working for Families and with our Budget on education health and welfare. 
The significant fact is that the tax cuts delivered in this Budget are estimated to cost about $2.7 billion per annum over the next 4 years. If National is to offer tax cuts in the range it has promised which is larger than what is in this Budget then it will have to go against the advice of the BNZ economist who said that the tax cuts in the Budget were about what the country could afford and it will also have to find another $2.7 billion per annum over the next 4 years. Where will those members get that money from? Will they get it from the taxpayer? No because they will give tax cuts. So where will they take it from? 
I will give an example of where the money will come from. National will cut the corners of the most obscure provisions that are building our communities. I refer members to page 27 of Vote Justice. If I were not so old I would be able to read it without my glasses but I had better put my glasses on. We in Grey Power need glasses to help us from time to time. 
Hon Darren Hughes 
: It’s in Braille. 
RUSSELL FAIRBROTHER 
: They do not print the Budget in Braille yet I say to Mr Hughes but maybe that day will come. On page 27 we see the departmental output trends and there is a pie chart on page 26. That pie chart shows the crime prevention and community safety allocation. The Budget shows that as being 3 percent of the departmental output expenses—off the top of my head I would say that that is probably about $2 million or perhaps $1.8 million. That is the area that will be cut because few people would notice it. 
If funding in that area is cut then what will we have? That great Tory mayor in Hastings Mr Lawrence Yule came to a select committee at Parliament this morning and I will read part of his evidence. His evidence is significant because National would take away the very thing that that Tory mayor Mr Lawrence Yule was advocating was a success within the community. He said: “In January 2007 a project called CARV Cutting Alcohol Related Violence … CARV is one of three demonstration projects undertaken in Napier Hastings Rotorua and Queenstown. Funded by the Ministry of Justice it brings together local authorities police and community agencies to further develop collaborative and effective approaches to alcohol-related violence. It aims to foster reduction initiatives and services in the three selected communities through coordination liaison or networking and research leading to the implementation of evidence-based practice and action plans.” 
Mr Lawrence Yule who some say will be a list candidate for the National Party at this election went on to say that the rationale for the project was given after statistics and anecdotal evidence showed that alcohol-related violence continued to remain stubbornly high in New Zealand. He said that the three project areas were selected by the over-representation of alcohol-related violence in each locality and by the acceptance of the project and working relationships required by local police district health boards and territorial authorities. 
Mr Yule said: “A needs analysis carried out in Hawke’s Bay on alcohol-related violence involved significant consultation with the local agencies and the community. This consultation showed that the Napier and Hastings community were concerned with accepted drinking culture youth access to alcohol enforcement and licensing disorder by-products of alcohol. From the needs analysis conducted a number of issues and resulting actions were identified. The focus on decreasing violent crime where alcohol is a factor was a main consideration for the CARV project. Enforcement collaboration education and access to services were all identified as key priorities in addressing alcohol-related violence.” 
Mr Yule was at the select committee to talk about young people’s alcohol-related violence in the top-order town of Havelock North. The wealthy live in Havelock North. Project CARV represents 3 percent of Vote Justice and that is where National will draw its money from—from small budgets such as that; from budgets that operate under the radar. Not many people in Napier know of Project CARV. Not many people know about what goes on on the streets and the work that the police and the Ministry of Justice are doing to curb alcohol-related crimes so not many will miss the budget for Project CARV when it is withdrawn by National to pay for tax cuts. 
Not one National member at the select committee this morning criticised Mr Yule for emphasising that project; nor did one give him an assurance if he had bothered to ask for it that if National ever brought in a Budget that project would be preserved. So we have the irony of a staunch National Party man from Hawke’s Bay singing the praises of one of those below-the-radar policies that are having such a profound effect among our young people and in our community. It is those profound effects that this Government is building through having a sound infrastructure which this Budget is a hallmark of. 
In this Budget we have achieved tax cuts that put money into the pockets of our senior citizens. From 1 October a married couple will get an extra $48 per fortnight. 
Hon Parekura Horomia 
: How much? 
RUSSELL FAIRBROTHER 
: An extra $48 per fortnight. 
This Budget has put money in the pockets of business. On 1 April business tax rates went down to 30c. Who voted against that? The National Party did. Would those members lift that rate again to pay for tax cuts? They have not said but they voted against those rates. How will they tell their friends in the business community that they would lift business tax cuts to pay for private tax cuts larger than those in this Budget? 
The truth is that National members are in a tizz and a difficulty because the Budget we are debating tonight has been endorsed by many in the commercial community as providing the right level of tax cuts without affecting the social services justice and health budgets. Not only does it not affect those votes but also as we know part of the Budget—and it is much welcomed in Hawke’s Bay—is the increase in spending on health and on operational grants for schools. 
I am the chair of a secondary school board of trustees and the 5 percent increase effective from 1 July in the operational grant for that school is hugely welcomed. It is a large sum of money. It will make a difference to our kids. These are the figures that National should be addressing—the funding for Project CARV the 5 percent increase in the operational grant for schools and additional money for our district health boards. What we want to hear in this debate is whether National will continue with those sorts of increases in our vital infrastructure. 
This is a Budget to provide a secure future. This is a Budget for a strong economy that reflects 9 years of hard work and cautious management. It is a good Budget. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 It has been a real honour to sit in on Russell Fairbrother’s valedictory speech. Let us reflect on the Labour Party’s dire position in Hawke’s Bay. It had an opportunity to look to the future and select a bright new candidate who would lead the party to greater things but what did it do? It went back to Mr Fairbrother. 
I think there are some real parallels between that situation and this Labour Budget. This Budget was an opportunity for Labour to paint a picture as to how it would grow the New Zealand economy and look to the future. But what has it done? Labour has just looked at the cake and worked out how to cut it up; it has not looked at how it can make the cake bigger. In this country we have a growth problem. I know that you read the  
New Zealand Herald 
 Mr Deputy Speaker; even some Labour members might read it. There is a very fine cartoon in it today on page A14 by my constituent Mr Emmerson. It pretty much sums up the economic growth problem under Labour. In the cartoon Mr Emmerson says “What NASA did with $438m …”. What did the National Aeronautics and Space Administration do? It put a space probe on Mars—something that will add to the growth of the body of human knowledge. What did the Labour Government do with $690 million—soon to be $1 billion? It went back to the past and bought an outdated train set. This cartoon asks whether if one were trying to grow the economy to increase the prospects of the nation and to take New Zealand forward into the 21st century one would buy a train set for $690 million. Would that be a sensible way to encourage growth in this country? 
Darren Hughes looks a bit sour because he knows that this sort of thing will absolutely sting him in the Otaki electorate. He may be one of the few Labour members who read the  
National Business Review 
. Two weeks ago the editorial in the  
National Business Review 
 said that we have a growth problem in New Zealand. The IMD business school’s growth and competitiveness rankings which were published a couple of weeks ago show that New Zealand is at the bottom of the OECD. Only two countries are below us. We have improved one place since last year but that is only because Iceland has slipped below us. I ask members what in this Budget will increase New Zealand’s competitiveness and grow the size of the economic cake. There is absolutely nothing. All we heard from the last speaker Russell Fairbrother was a whole lot of tangential stuff that had nothing to do with the economy. 
The Budget document outlines “Main Spending and Revenue Decisions in Budget 2008”. The Government has made three points under the “Economic Transformation” section. One of the pillars of economic transformation for the Labour mob is a “$690 million capital investment in 2007/08 for the purchase of Toll New Zealand’s rail business.” Is that not an indictment? The platform for economic growth is buying back the railways. I would like the next Labour speaker to tell us how much that will add to the New Zealand economy over the next 10 years. I do not think there will be any takers. If we look at this Budget we see that there is nothing in it to indicate that this mob will be able to increase the competitiveness of the New Zealand economy. 
Over the last 9 years we have heard a lot of plans from Labour members but the one consistent thing is that there has never been a consistent economic plan for the future and Darren Hughes knows that. We had the knowledge wave. What did that produce? We never hear about it any more. There were no gains from it. We heard about programmes like closing the gaps. What happened to that? It disappeared. Those guys over there are not even allowed to talk about it any more. We heard about our getting in the top half of the OECD. What happened about that? Nothing at all happened. Last year the theme was sustainability. What happened to that? They do not talk about sustainability any more. Now they are even backing off on the emissions trading scheme—[ 
Interruption 
] Yes they are. These guys brought it to Parliament but they do not have the guts to put it out there and stick to it. 
The interesting thing about this Budget is the big emphasis on tax cuts. Suddenly tax cuts are OK. If we read through the Budget speech we can hear Michael Cullen justifying them. As Eric Roy said it is all to do with external circumstances. We very much get the feeling that Michael Cullen has been forced into a position he cannot get out of and is finally grudgingly giving tax cuts. We know that because Michael Cullen is on the record as saying: “My view is that tax cuts are largely offered as a political bribe not because of beneficial economic or social effects.” It is pretty hard to be credible on tax when one is on the record as saying that. 
Hon Trevor Mallard 
: This is a very poor speech. 
Dr JONATHAN COLEMAN 
: Mr Mallard does not believe in tax cuts but he knows that his only hope of getting back on the Treasury benches is for Labour to throw everything it can into this Budget. 
These guys do not believe in tax cuts but they knew that was the only thing they could do. What did Helen Clark have to say on tax cuts in 2000? She said: “Tax cuts are a path to inequality … They are the promises of vision-less and intellectually bankrupt people.”—visionless and intellectually bankrupt. The lack of planning for growth in this Budget pretty much sums it up. There is no vision and those members are intellectually bankrupt. They are grasping at power. They are trying to survive. Here is another quote from Michael Cullen: “We just don’t believe in tax cuts—it’s against our fundamental philosophy—after all we are socialists and proud of it.” How would members like to have that on the record then try to roll out a $10 billion tax cut plan? Well I can tell them what happens when one does that. I get out and talk to the people in Northcote every weekend—every time I am back in the electorate. They tell me that they have voted for Labour in the past but that they will not make that mistake again because these guys pretend they are for working people but they have let the working people of New Zealand down. A lot of people on those benches opposite are completely ashamed of that fact. 
People are queuing in the accident and emergency department at North Shore Hospital. They cannot get the operations they need and nothing in this Budget will change the situation one little bit. The extra spending in this Budget will cover only health inflation. Labour has given up. Its members said that extra spending would be the answer in health. They said extra spending would deliver more operations and would actually improve the situation. Now they are not even putting in the spending—they have no health plan at all. They do not know what they are going to do in health. It has run away from them and more important they have completely lost the trust of the electorate. 
I also want to speak about Mr Mallard’s issue—broadcasting. Mr Mallard does not spend a lot of time on the broadcasting portfolio because it is his demotion portfolio. Frankly he resents being there. He does not like being in that portfolio. What has been really interesting is that since he came into that portfolio he has been busy cleaning up the absolute mess that the Hon Steve Maharey left behind him when he decided it was time to get off the sinking ship and step off to Massey University to become the vice-chancellor. When Mr Mallard got there he was absolutely horrified to find that Television New Zealand (TVNZ) was being given $15 million of direct charter funding every year and it did not have to account for it—it did not have to account for it at all. It has had that funding for the last 5 years. Mr Mallard and Helen Clark said that that funding would deliver great public broadcasting but now the truth has come out. Mr Maharey never kept an eye on how that money was spent. It was being used as a slush fund to fund all sorts of commercially viable projects that would have been done anyway. So what has Mr Mallard done this week? He has taken that $15 million off TVNZ and has given it to New Zealand on Air to look after. That really is the ultimate indictment of this Government’s broadcasting policy. 
Hon Trevor Mallard 
: “Indiked-ment”? What does “indiked-ment” mean? 
Dr JONATHAN COLEMAN 
: “Indiked-ment”? I do not know. I-n-d-i-c-t-m-e-n-t. The member should look it up. There may well be a dictionary out in the foyer. This guy can try as many versions as he likes but he knows he is presiding over a mess in broadcasting. Frankly he cannot wait to get out of that portfolio. 
There are some very uncomfortable people over there because being in Government is getting way too hot for them to handle. They have had to completely compromise their principles to give these last-gasp tax cuts. They do not believe in tax cuts but they know that tax cuts are the only way they will survive. They are on the record all over the place as saying that they do not believe in tax cuts at all—that they are things visionless and intellectually bankrupt people support. Yet here they are doing just that. 
The Budget speech was a valedictory speech for Michael Cullen. This is a valedictory Budget. He will not be here again—it was his last Budget. Sadly for the Labour members half of them will not be back here again either. Mr Gallagher will probably not be back here. I am not sure where he will be sent but he certainly will not be coming back to this House. There may be one or two survivors over there but that will be it. This Budget has no plan for the growth that New Zealand needs. These guys know it but they have sold out; they have given the tax cuts they know they need to give in order to survive. That is the end of the story. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 Well well well— 
Eric Roy 
: Well well well—the story of the three wells. 
Hon PAREKURA HOROMIA 
: That member for Invercargill Mr Roy pontificated about how bad the economy was and how rural productivity had fallen. Well he is up the pole because he knows as well as I do that this is the seventh consecutive year that the economy has been in a position stronger than it had been for many a year prior to Labour coming in. When we came in everything was in disarray. There was high unemployment and double-digit interest rates. There had been the selling of all the State houses in the Wairarapa and all of those issues. Those members opposite were doing that dastardly stuff. They were trying to get their paws on State-owned enterprises to unload them on to everybody else—to outside interests and to all of their mates. And Mr Roy knows who brought in the Low Deposit Rural Lending Scheme. National was always about subsidising its friendly rich Tory mates. 
What has this Government done? With the careful management of Dr Cullen and my colleague Trevor Mallard it has brought in surety in the sense of understanding the basic nuances and fundamentals of what is done with money to keep the nation safe. That is what this Budget has been about. It has been about carefully putting the money there and investing it to ensure that the sustainability for all sectors in this country is maintained. Certainly one could not say that the creation of 377000 more jobs is bad budgeting. 
This Budget is about giving more families a stake in our economy. Unemployment fell by more than a half. Under National one in every four Maori families was unemployed and now three in every four are working. That is great and in fact 140000 fewer people are relying on a working-age benefit. What is so bad about that? We have lifted thousands of children out of poverty. That is a surety; that is making sure they do not paddle through life in the murk and muck the National Party left them in. The inequalities in health outcomes have finally started to narrow. 
These challenges are significant for New Zealand; they have been significant. But all of the prissiness opposite is about National members not being sure what their policy is. Can they tell us what their tax rate is? They have no policy. First of all John Key started off at the level of 50c then he went to 52c and somebody opposite said: “Taihoa John. Hang on; it might be too much.” Then he came down to 40c. 
Hon Darren Hughes 
: “WiremuPakeha”. 
Hon PAREKURA HOROMIA 
: Then John Key said it was not too much. Yes that was “WiremuPakeha” that other fellow from Invercargill. He said that 40c might be too much. But this Budget certainly brings tax relief for individuals and families who are trying to manage cost of living pressures. 
I heard Mr Roy say that both externalities in the overseas market and what is happening in the financial area and with levels of productivity—which have been a bit bumpy—do not have an impact on this country. 
Dr Jonathan Coleman 
: A bit bumpy? 
Hon PAREKURA HOROMIA 
: I say to Mr Coleman that that is why National members cannot come out with their tax policy—or do not want to but will just flip-flop about it. They are scared and worried about it. But they need to take a lesson from Michael Cullen because he has not only taken the canned fruit out of the larder but pulled the larder down and left National with no space to dictate dominate or bring out a Budget that would serve the people in this nation. National has nothing and those members know it. 
The Budget enhances public investment in education and health—things that our people need. In fact they are things that all people need. 
Dr Jonathan Coleman 
: You don’t believe the stats— 
Hon PAREKURA HOROMIA 
: I do believe that because I know it is the truth. The Minister of Statistics will end up being the best Minister of Statistics this country has ever had. He knows how to count; he knows that one and one make two. 
People out there are repeating what John Campbell said about John Key—that he was “as slippery as a snake in wet grass.” Well I say that the grass does not need to be wet for a lot of those members opposite to be slippery. It does not have to be—certainly at the end of the day. 
What have our major investments included? I will read out some of them to the House. The first is the roll-out of a world-class broadband network. Maurice Williamson when in Government had the operation so narrow that all it was doing was tying the copper wires together. That is how sophisticated the communication was and he was giving his mates some money for doing it. 
We have the largest-ever public investment in science and research I tell Dr Coleman. Where was that member? He knows the speech he gave and he should give a donation to charity for its quality. This will be the biggest public investment in science and research. Why is that? It is because the issues our Budget is based on are evidence-based and they are certainly about an experienced financial team. 
The interesting thing about sustainable homes and communities is that National voted against nine of the principal things that the average Kiwi family needs in this country. That is a disgrace. I tell members opposite that they should not talk about valedictory speeches to my colleague Russell Fairbrother one of the most learned lawyers in this country because at the end of the day— 
Dr Jonathan Coleman 
: Why do you guys want to kick him out of your party? Why have you treated him so badly? Why? 
Hon PAREKURA HOROMIA 
: He is a top bloke. He was citing the mayor of Hastings for being a Tory list member; that is news to me. Of course we injected many millions into the theatre there. 
Hon Member 
: What about Paul Quinn? 
Hon PAREKURA HOROMIA 
: And National members are trying to get my ex-mate Paul Quinn who could not even push the scrum straight to pack down for them. He has told me he does not really want to be there. He did not want to run against Mr Mallard. He just did not but National promised him that he would be No. 5 on its list. That is disgraceful. 
Budget 2008 covers the pressures of today and certainly covers the needs of future years. There have been fundamental practices by Dr Cullen. He has stored money in the economy and set it up so that the pressure is spread. Beneficiaries in this country have benefited and at the end of the day KiwiSaver and Working for Families are about the surety that in its own sense covers tax cuts that have been consistent. Tax cuts to businesses have been consistent for the last 4 years. I listened to the price-taker one of the biggest in this country who has made a living out of building up asset bases getting in and crunching the needy and the weak taking them out and then stashing up the putea and his own coffers like “WiremuPakeha”. 
Hon Trevor Mallard 
: Cut the pension. 
Hon PAREKURA HOROMIA 
: It is amazing that National wants to cut the pension. Superannuitants now have a surety; they are comforted by this Budget and so are working-class people. That is what Labour is about and businesses are applauding that they have had a Labour Government. 
I say to Mr Roy that I notice—although I do not read the  
National Business Review 
 
because half of it is you know what—68c has been added to the butterfat payment this week. The member cannot tell me that that is not because of the Government. I say to Mr Roy that farmers are proud of this Government and he should join them in that. Farmers are proud of this Government and so am I. I am proud of the efforts the Government has put in to make sure that prices are maintained. 
Eric Roy 
: Just explain how the price of lamb is maintained by the Labour Government. 
Hon PAREKURA HOROMIA 
: The price of lamb is being maintained quite clearly I say to Mr Roy and it has set aside those extreme climatic changes we have had. In Southland the price has gone up; it is up about $1.40 a carcass more than it is in the North Island. At the end of the day the kill might have gone but we cannot replace capital stock if it ain’t there. That is not because of the Government; that is because of the drought. That member knows that as well as I do. There are so many sprawling dairy farmers down there who are paying so many millions— 
Eric Roy 
: I think you’ve lost the plot. 
Hon PAREKURA HOROMIA 
: I have not lost the plot. In closing I want to read what Colin Espiner said: “Key and English are at sixes and sevens at the moment over exactly what to say about Labour’s tax cut package”. He said to Key: “I also think you are as slippery as a snake in wet grass.” That is what he said. At the end of the day this is a great Labour Budget it has been produced by one of the greatest financiers this country has ever had and I feel very sorry for that departing Opposition over there. 
COLIN KING (National—Kaikoura) 
: 
 For the benefit of those members of the public who are listening I note that that was the Minister of Maori Affairs Parekura Horomia. I remember the first time I listened to that man speak in this House. He said he had shorn 500 sheep in a day. The truth I suggest is more likely to be that he had shorn 500 sheep in a week. 
We are talking about the Budget here. I had a very interesting experience when I sat in on the Foreign Affairs Defence and Trade Committee when it was looking at submissions on the free-trade deal with China. It was wonderful to see the members from the Federation of Maori Authorities coming forward to say that Maori have learnt that poverty does not pay. But when we look at the Minister of Maori Affairs we see that he has not kept up with the pace of Maori—who own 10 percent of the New Zealand farming investment and are doing remarkably well. 
Maori are looking to a National Government to take them forward so that they can create wealth for their people and empower them. It is accurate and true that this Labour Government believes in keeping people under control. There is an old adage that if we give a fish to a family they will feed themselves for a day but if we teach that family how to fish they will feed themselves for a lifetime. 
For the next few moments I would like to address literacy and numeracy trades in schools productivity failure by the Labour Government and getting people aged 15 to 19 into education employment or adequate and quality training. Then I want to talk about the disastrous results brought about by this Labour Government. 
One of the very sobering aspects of this Labour Government which must really irk members like Trevor Mallard and Steve Maharey is that within our workforce we have 900000 people with literacy and numeracy problems and challenges that would prevent them from partaking in any economic gain that this country might get. Labour might think it has solved the problem but we have a huge problem in that 43 percent of our workforce is unable to contribute to our economic gain. 
In actual fact if we look at Labour’s website we see that a certain Trevor Mallard—who is at present leaving the House and I should not talk about that—said that by 2004 this Labour Government would have it all sorted and we would be on our way onward and upward. But it has not happened. Sadly the most vulnerable of this country—the 900000 who are unable to read write and do maths to a standard that would take us into a high-skill high-wage economy—are in our system. That is pretty severe because 80 percent of the people who will be in our workforce by 2010 are already there and 60 percent of the people who will be in it in 2020 are already there. The failure has been—[ 
Interruption 
] Let me spell it out for the Labour members who are on the Government benches for the short time that remains. The failure has been that schools under Labour have been expending 100 percent of their energies getting 20 percent of their students through to university. What about the other cohort—that major part of the New Zealand education system? Well I am sorry to say to the Labour members on the other side of the House that those people have been ignored. That is an indictment. That is something one does not hear about in Dr Cullen’s Budget. 
Now let us talk about trades in schools because that is one of the answers—one of the most positive answers. It is a policy that the National Party articulated at the Employers and Manufacturers Association meeting in Auckland in June 2007 when John Key talked about putting hands-on skills back into schools. That again brings to mind a situation when the Minister of Education at the time—again Trevor Mallard—humiliated and demoted technology teachers with trade-skills backgrounds. That is a shocking state of affairs. It is an incredibly vindictive and humiliating situation and it still exists today. But after John Key had so articulately explained his policy around trades and skills in 2007 Labour the “me too” Government said in January 2008: “We’re going to do it as well.” What is it doing? It has a pilot going whereby 20 schools are doing Youth Apprenticeships. 
Now when one drills down into what Labour’s youth apprenticeships are we realise that all they are is a façade. They are no different from an extension of the Gateway programme. This Labour Government has no vision and no substance and there is no investment in the education of our future generations. When one stops and thinks about it it is humiliating for those members on the other side of the House to consider that 50 percent of Maori boys leave secondary school with no qualification—without a National Certificate of Educational Achievement level 1. In actual fact 25 percent of young Pakeha lads leave school with nothing as well. 
Hon Darren Hughes 
: That’s why we’ve got Schools Plus. 
COLIN KING 
: That is interesting. I would like to deviate from my notes for a wee moment and talk about Schools Plus but I see that time is getting away on me. There is so much with which to lambaste this Government in terms of its failures. 
The state of the nation speech by the Leader of the Opposition John Key the future Prime Minister of New Zealand dealt with a youth guarantee policy and also youth justice. It articulated some solutions to the many problems we are facing inside education and those solutions will be some of the pillars of the new National Government in 2008. John Key articulated some very very positive solutions going forward. What was the Prime Minister’s response? It was a quick make-over of her speech and she talked about Schools Plus. 
People who are listening to the radio or watching television will be quite interested to learn that Schools Plus is nothing more than a shell—a framework—with no substance. This is exactly what the Labour Government is turning into. Schools Plus will not come into force until 2011 yet the Government is carting it around the country talking and having hui. The Government is having a talkfest and the feedback I am getting is that it is policy on the hoof from Labour as it tries to appear to be an enthusiastic aspirational Government. Well I am sorry but it is failing miserably. 
This Budget talked about addressing productivity and as we look across again at the Government benches and talk about productivity we know we are 30 percent behind Australia. That is an appalling situation. Labour members may be interested in some other statistics that have been generated under their watch. Forty-three thousand of our finest have left this country and are seeking opportunities in Australia and 79000 New Zealanders have left in total. As I have said 43 percent of our workforce is unable to contribute to the economic wealth of this country. In actual fact 25 percent of all our tertiary-educated tax-funded students have left this country. 
Members can compare that figure by way of a benchmark with a country nearby where only 2.5 percent of tertiary-educated students have left to go overseas. That comparison illustrates just how abysmal this Labour Government has become in its custodial responsibility of empowering future generations. We will be left with the legacy of educational failure by the Labour Government. 
Mr DEPUTY SPEAKER 
: The following call will be split with 5 minutes for each speaker. There will be a bell at the 4-minute mark. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 In a few moments I will deal with the comments of the previous speaker Colin King. In the context of the Budget debate and as chair of the Foreign Affairs Defence and Trade Committee which has a scrutiny function with regard to defence and also as someone with a very keen interest in veterans’ affairs issues I take a quick opportunity to acknowledge the wonderful moment this afternoon when all of the parties in the House came together and honoured our Viet Nam veterans. 
Like many New Zealanders I also had family members who served in that theatre of war. I acknowledge my first cousin of whom I am very proud Rion Gallagher. He was one of the 3000 or more personnel who served there. I visited Viet Nam back in 2002. One thing that struck me was the deep respect that the Viet Namese people hold our soldiers in notwithstanding the fact that we were at the time technically on the losing side. I acknowledge that this weekend will have the wonderful moment of Tribute 08 for New Zealanders to pause and reflect on those young men and a number of women as well who went at that time to serve our country. 
I reflect on the following point with huge sadness. The previous speaker Colin King represents quite a vibrant region. I do not know whether he has been there recently. I think he must live just in Wellington. I do not think he has got on the ferry or the plane. I want to give him an atlas and tell him to go back to his constituency look at the vibrancy of his region and make some connections in relation to sustained economic growth. I also want to make an interesting observation. I say to the previous speaker that instead of taking a half-empty glass approach he should say what his policy is. He should give us a policy. He should stop taking the people of this country for being suckers. 
Eric Roy 
: Growth! 
MARTIN GALLAGHER 
: “Growth!” he says. 
In the time I have left I will quote from the  
Sunday Star-Times 
. It is hardly a newspaper that is overarching in its affection for this current Labour-led Government. What it stated last Sunday says it all: “Key’s explanations of where the money would come from are thin and sometimes plain silly. Cancelling an embassy in Sweden will make no fiscal difference. Nor would wholesale sackings of bureaucrats: even huge cuts in this area would save at most some hundreds of millions when Key will need billions. Key promises that he won’t cut social services and it is difficult to know whether to believe this or not. National’s record from the early to the mid-1990s in this area is utterly disgraceful a record of ludicrous structural revolution and deep cuts.” That comes from the  
Sunday Star-Times 
 which is hardly a wonderful friend of this Labour-led Government. 
Even the  
New Zealand Herald  
talks about Mr Key claiming that National will direct spending away from low-quality programmes that push up inflation and towards front-line services like doctors nurses teachers and police— 
Mr DEPUTY SPEAKER 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Debate interrupted.