Volume 691 Week 46 - Wednesday 26 June 2013Text is incorporated into the Bound VolumeVolume 691 Week 46 - Wednesday 26 June 2013[Sitting date: 26 June 2013. Volume:691;Page:11265. Text is incorporated into the Bound Volume.]Wednesday 26 June 2013Mr Speaker took the Chair at 2 p.m.Prayers.Questions to MinistersPrime Minister—Government Communications Security Bureau Legislation and Auckland City Rail Link1.DAVID SHEARER (Leader of the Opposition)to thePrime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister):Yes. I particularly stand by my statement that was what a ripper of a front page theNew Zealand Herald had this morning.David Shearer: Does he stand by his statement: “They might have to ask themselves if one day there was an equivalent of the Boston bombings in New Zealand would they be the very same members who would stand up and say they prevented New Zealanders from being kept as safe as they otherwise could be.”?Rt Hon JOHN KEY: Yes and I think I can recall also the Rt Hon Winston Peters making very similar comments on television last night.David Shearer: Has he seen evidence or intelligence that New Zealanders have been at risk of physical or terrorist attack over the last 12 months; if so what action has he taken?Rt Hon JOHN KEY: It is not in the public interest for me to outline—[Interruption ] It is not in the public interest for me to outline all the threats that New Zealand might face or the intelligence that we gather but I think I can say at a broad level as the Minister responsible and as Prime Minister that the agencies do collectively actively collect information to protect New Zealand. I think New Zealanders would expect that. That is why when Helen Clark was Prime Minister she did exactly what this law is proposing to do.David Shearer: In quoting the Boston bombings is he talking about a real or urgent threat based on evidence or is he merely scaremongering to get his legislation across the line?Rt Hon JOHN KEY: The legislation that is being proposed under the Government Communications Security Bureau as the member knows is for the bureau to be able to continue to provide agency support with better supervision to our other agencies like the police the SIS and the Defence Force. It does so because from time to time it has concerns about individuals or groups who might pose a threat to New Zealand. If that member seriously wants to get up in this House and try to make himself feel better for taking the position that Grant Robertson has forced down his throat—Mr SPEAKER: Order! [Interruption ] Order! That is a sufficient answer to that question.David Shearer: At least the polling is not going down as fast as—Mr SPEAKER: Order! [Interruption ] Order! Would the Hon Tau Henare cease from displaying that particular piece of paper. [Interruption ] Order! I say to the Hon Tau Henare that if this continues I will ask him to leave the Chamber.David Shearer: Given his citing of the Boston bombings and the perceived possible threat to the physical well-being of New Zealanders why did he not therefore move as soon as he could last year to bring in urgent legislation to keep New Zealanders safe?Rt Hon JOHN KEY: As the member knows we did act as quickly as we could to have a thorough review of the Government Communications Security Bureau so that we could understand completely all of the issues and could propose legislation that wouldfully reflect what was required. We have now actually determined what is required and actually the member is looking for a way to get out of his position. I would just say one thing to him and it is this—and this is rather spooky: Mighty River Power is up 5.5 percent today and that is the same number that Labour has lost in the polls.David Shearer: Why is he performing such a spectacular U-turn on the Auckland City Rail Link when he has previously said that “the advice that we’ve had is that it doesn’t stack up.”?Rt Hon JOHN KEY: What the Government is going to be announcing on Friday is that it will be supporting the construction of the central business district rail loop and on a slower start date than the one proposed by the council. That will be 2020. The Government will make a contribution and that is because as a Government we will also be announcing integrated projects that support the infrastructure of Auckland and again maybe that is why we are polling 49 percent and Labour is polling 30 percent. We are thinking about what is important to New Zealand and Labour is constantly in the gutter with nothing decent to talk about.David Shearer: Is he therefore confirming that he and his Government have changed their position on the Auckland City Rail Link in line with Labour Party long-held policy?Rt Hon JOHN KEY: Well it is not for me to understand Labour’s policies although I showed in the last campaign that I understood them better than Phil Goff did but putting that all to one side no I do not think it is on the same time frame. We are suggesting a start date of 2020. I do not think that is what Labour is proposing.Economy—Debt Levels2.PAUL GOLDSMITH (National)to theMinister of Finance: What progress is the Government making to ensure future generations of New Zealanders are not saddled with excessive debt?Hon STEVEN JOYCE (Acting Minister of Finance):The Government is making significant progress in getting debt under control. It is important to remember the situation inherited by the National-led Government in 2008. Back then Treasury was forecasting never-ending fiscal deficits and Government debt rising roughly for ever and at the time the current account deficit was above 8.8 percent of GDP. That situation was clearly unsustainable. The Government has taken decisive action over five Budgets to get its own books back to surplus by 2014-15 to start repaying debt and to help bring the current account deficit down from those previously high levels.Paul Goldsmith: As part of its wider programme what progress is the Government making in getting its own books in order?Hon STEVEN JOYCE: Budget forecasts show net core Crown debt peaking at 28.7 percent of GDP in 2014-15 before declining. Longer-term projections show net debt dropping to 17.6 percent of GDP by 2020-21. Projections in 2009 indicated that if the Government had maintained the spending track it inherited net debt would likely exceed 60 percent of GDP by the early 2020s. Government decisions since then mean that net Government debt will be around 40 percent of GDP lower than projected. That is a difference of more than $80 billion—Dr David Clark: I raise a point of order Mr Speaker. I am concerned about the member opposite who continues to undermine your ruling by displaying the card with his IQ on it across the House there.Mr SPEAKER: I was unaware that the member was continuing to use that but if it is raised again Hon Tau Henare you will leave the Chamber.Hon Tau Henare: I seek leave to table—Mr SPEAKER: No.Hon Tau Henare: —the No. 30.Mr SPEAKER: Order! The member will please leave the Chamber for the balance of question time.Hon Tau Henare withdrew from the Chamber.Mr SPEAKER: Have we got a supplementary question?Rt Hon Winston Peters: Can I ask the Minister—Mr SPEAKER: Order! I am sorry; I have a point of order from Gerry Brownlee.Hon Gerry Brownlee: I raise a point of order Mr Speaker. I fully accept the ruling that you have just made but I would ask that when all sorts of signage and other such is displayed on a future occasion by the Opposition a similar approach will be taken because it is equally offensive at various times.Mr SPEAKER: Order! No there is no need for any further comment. Mr Henare was asked to not show that any further and he continued to do so. That is defying the Speaker.Paul Goldsmith: What reports—Rt Hon Winston Peters: I raise a point of order Mr Speaker. Before that last point of order you had indicated that it was going to be my question.Mr SPEAKER: No. I determine when I take supplementary questions and from where I take them. I did at one stage think the member was raising a point of order. The member tends to stand to his feet and not announce to me whether it is a supplementary question he is seeking or a point of order which does not make it helpful.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I am happy to look at the Parliamentary record but with respect that is balderdash. I get to my feet and I ask a supplementary question or I make a point of order and that sort of criticism will not do.Mr SPEAKER: And I have accepted a supplementary question from Paul Goldsmith. I will come to the member in due time.Paul Goldsmith: What reports has he received on New Zealand’s wider national debt position particularly with respect to the current account and the net international investment position?Hon STEVEN JOYCE: Statistics New Zealand last week reported the March quarter data on both the current account and New Zealand’s net international investment position. This showed that the current account deficit narrowed slightly to 4.8 percent of GDP as at 31 March down from 5 percent as at 31 December. New Zealand has run current account deficits for around 40 years but the situation became extremely serious in 2006 2007 and 2008 when the deficit was consistently higher than 8 percent of GDP. The net international debt position also improved a little in the March quarter: it fell to 69.3 percent of GDP down from 71.4 percent in December. Although that is still high it compares favourably with the net international debt position of 85 percent of GDP in early 2009.Rt Hon Winston Peters: How does the Minister reconcile that last answer and the one before that with a current account deficit of $10 billion heading towards $17 billion—every dollar of which is debt—and the worst borrowing record in over 70 years?Hon STEVEN JOYCE: I cannot agree with the member’s statements and I think the first issue is that he is looking at amounts rather than at percentages of GDP. Of course if you have a larger GDP then you can actually have a larger amount of debt—which may be relevant to the member in future. But in terms of the current account the actual percentage of GDP has actually declined which is the key point from 8.5 percent or more of GDP in 2008 down to around 4.8 percent now. That is good progress.Paul Goldsmith: What contributions are manufacturers making in helping New Zealand build economic growth?Hon STEVEN JOYCE: A very good question. Manufacturers are making a significant contribution. Since the beginning of 2009 the manufacturing sector has grown by 9.2 percent. That is a very significant turn-round from 2008 when manufacturing shrank by 12 percent in just 1 year. Since 2009—Dr David Clark: How much of that’s non-primary sector?Hon STEVEN JOYCE: —wait and it will come “Mr Parrot”—non-food manufacturing sales have grown by 6.3 percent. In 2008 they fell by 7.2 percent. Since 2009 non-food manufacturing volumes have grown by 1.3 percent. In 2008 they fell by nearly 15 percent and non-food manufacturing export volumes have grown by nearly 15 percent since 2009. Finally of course the manufacturing BNZ-Business New Zealand Performance of Manufacturing Index is currently at 59.2 compared to 35.8 in 2008.Hon David Parker: Given the Minister did not know the answer to that question yesterday can he now confirm that manufacturing exports outside the primary sector are down in real terms by 17 percent since 2008 and by 6 percent in the last full year for which there are records?Hon STEVEN JOYCE: I have checked and no I cannot because the figures I have just quoted—the non-food manufacturing—is the closest information. I appreciate the member may have constructed his own series in terms of reducing it. The other thing is that Mr Parker seems to be trying to use the CPI to deflate the export figures hence his use of what he calls real terms. Of course that is simply wrong as domestic CPI is not the way to deflate export prices and volumes. So I am sorry but Mr Parker is just being a wee bit too tricky with these numbers.Hon David Parker: Is it correct that according to the Reserve Bank the level of borrowing for residential housing is at an all-time high of $181 billion; if so how much additional debt does he expect New Zealanders will take on to buy houses over the next year with house price inflation in Auckland currently running at 15 percent?Hon Member: At half what it was under Labour.Hon STEVEN JOYCE: Well exactly. I think that record is significantly better than under the Labour Government. I think the issue—Hon David Parker: I raise a point of order Mr Speaker. My question was whether the figure that I gave is correct. It was not what the Minister—Mr SPEAKER: Order! I heard the question and if we could give the Minister an opportunity to answer then I will decide whether it has been addressed.Hon STEVEN JOYCE: Well I do not have the exact numbers and given I have just been deconstructing the member’s previous question I am rather leery as to his numbers.Hon David Parker: I raise a point of order Mr Speaker. He says he does not know the answer to that question so I am happy with that answer.Mr SPEAKER: I heard that but that is not a legitimate point of order. We are going to have difficulty—Hon David Parker: I raise a point of order Mr Speaker. If the purpose of question time is for the Minister to address the question and the Minister says: “I don’t have that information.” it is not within his ambit to address another question that was not asked.Mr SPEAKER: Order! I would—[Interruption ] Order! No I do not need any assistance. The difficulty I want to see cease is a situation where any member asks a question then decides they are either unhappy with the answer or completely satisfied with the answer and then raises a point of order that stops a Minister from finishing the answer to the Minister’s satisfaction. If that continues to happen the best way forwardfor me is to then move to the next question because I will assume on that basis that the person who has asked the question is completely satisfied with the answer. Therefore I see the opportunity for the forfeiture of supplementary questions. I do not want to do that. There will be the odd occasion when it is legitimate for a member to say the question has gone on—[Interruption ] Order! I am trying to help the House particularly after yesterday. But we are going to get into difficulty if whenever a member thinks he or she has heard enough he or she raises a point of order to say: “That’s sufficient let’s move on.”Grant Robertson: I raise a point of order Mr Speaker. In the previous Speaker’s term we got into the rhythm in this House that if a straight question was asked a straight answer would come back. The issue that we on this side of the House have is that when we ask a question that is a straightforward question the Minister says: “I don’t have that information.” and then proceeds to go into either a political attack or some other thing. That is where the difficulty lies for us. We would like to see that ruling continue to be in force and then we will not have the problems that you are suggesting.Mr SPEAKER: I will—Hon STEVEN JOYCE: Speaking to the—Mr SPEAKER: Oh we will hear from the Hon Steven Joyce.Hon STEVEN JOYCE: As I recall the question in this particular instance it asked about a piece of information and then went on to ask some other things so the question then becomes whether the Minister is entitled to make a response to the broader elements of the question if he or she does not have that particular detail in front of him or her. I think that to suggest that is not possible is perhaps making it quite hard for Ministers to determine how exactly to respond to a question.Mr SPEAKER: I appreciate—[Interruption ] I do not need to hear any more. I appreciate the comments that have come from both sides of the House. With regard to Grant Robertson’s point the previous Speaker did establish a very good habit of ensuring that where a clear question is asked it deserves a concise and clear answer. If that answer is that the Minister doesn’t have the facts I still think that on occasions there will be the opportunity and there should be the opportunity for the Minister to explain why he might not have those facts. So I accept the points that have been raised by all members particularly Grant Robertson and I will endeavour to see that we get sharp answers to sharp questions.Hon Clayton Cosgrove: I raise a point of order Mr Speaker.Mr SPEAKER: If it is a fresh point of order I will hear it for certain.Hon Clayton Cosgrove: Yes it is. I thank you for your ruling. The only other point I would raise—Mr SPEAKER: Order! This is a point of order and it will be heard in silence.Hon Clayton Cosgrove: —and on which I would seek your guidance—because I think you may have inadvertently made reference to the exchange between the Minister and me yesterday and that is fair enough. But you have ruled and I think it was quite a new ruling and you have ruled on a number of occasions over subsequent months that if a member gets a direct yes or no answer or whatever and is satisfied with that ruling—and you have stuck up for our right to do so—we can rise and say we are satisfied with that and move on. You did that with me yesterday for instance here.Mr SPEAKER: That is exactly the point I am raising so it is hardly a fresh point of order. I am saying to the member particularly in light of my reviewing theHansard yesterday that if he takes the opportunity of doing that it is not strictly a point of order and the risk for any member who does that will be for me to immediately move to the next question.Hon David Parker: Then is it correct that according to the Reserve Bank the level of borrowing for residential housing has increased by around $10 billion over the past year; if so how much additional debt does he expect New Zealanders will take on to buy houses over the next year with house price inflation in Auckland currently running at 15 percent?Hon STEVEN JOYCE: Again I can say that I do not have those specific numbers in front of me in light of the primary question but the point that I can—Hon David Parker: Which was about debt—excessive debt.Hon STEVEN JOYCE: Well it was actually about—yes but not about elements of it. But the point I would make is that in terms of the increase in residential debt that is coming off a period post - global financial crisis that was significantly lower but nevertheless the Government is concerned about increasing levels of residential debt which is why we are very very focused on making sure that we increase the supply of houses in Auckland to ensure that there are opportunities for people to purchase houses at lower levels of debt than they have been able to do in the past.Hon David Parker: I seek leave to table the Reserve Bank data series to show that the debt figures and increases are as I have said.Mr SPEAKER: It is available to all members I think is it not?Hon David Parker: Point of order Mr Speaker—Mr SPEAKER: Perhaps if the member could tell us the source of the document.Hon David Parker: It is Table C6 from the Reserve Bank of New Zealand but—Mr SPEAKER: Which is available I presume on their website. [Interruption ] No. Order!Skycity Convention Centre—Transparency of Process3.Dr RUSSEL NORMAN (Co-Leader—Green)to thePrime Minister: Does he stand by his statement that “In 2009 New Zealand was rated first on the Transparency International’s ‘Corruption Perception Index’. Out of 180 countries New Zealand was rated as having the lowest perceived public sector corruption. As a nation that ranking is something of which we can be very proud”?Rt Hon JOHN KEY (Prime Minister):Yes and I note that the 2010 2011 and 2012 indexes all show New Zealand maintaining its position as first or first equal in the rankings.Dr Russel Norman: Is he concerned that Transparency International whose Corruption Perceptions Index he rightly holds in such high regard has highlighted his own convention-centre-for-pokies deal as raising concerns from both a fiscal transparency accountability and a regulatory perspective; if not why not?Rt Hon JOHN KEY: No and the reason for that is that this deal will be in full view for the public. We campaigned on the issue prior to the election. The agreement will be in the public domain when it is fully signed by both parties. The legislation supporting it will go through a select committee process and the Auditor-General had a thorough look at the process and for the most part was happy.Dr Russel Norman: So is the Prime Minister saying that Transparency International is wrong?Rt Hon JOHN KEY: Yes and the Government has been very transparent about its dealings with Skycity. Unlike some political parties we do not do our negotiations in a box on a Saturday night at the All Blacks game. We do it—Mr SPEAKER: Order! The question has been answered. [Interruption ] Order!Dr Russel Norman: Does he agree—[Interruption ]Mr SPEAKER: Order! The level of interjections coming now from both sides of the House is unacceptable for Dr Norman to ask his supplementary question.Dr Russel Norman: Does he agree with Transparency International that the public procurement process in the Skycity project was severely compromised?Rt Hon JOHN KEY: No and neither does the Auditor-General.Dr Russel Norman: Does he disagree then with the Auditor-General when she found that the evaluation process for the convention centre bids was neither transparent nor even-handed?Rt Hon JOHN KEY: I do not agree with the Auditor-General on that basic point. I think it is worth remembering if we go through the process one more time that this is a deal that we campaigned on this is a deal where the full agreement of all the terms and conditions will be in the public domain for everybody to see this is a deal that will be supported by legislation that will go through a full select committee process and this is a deal where the Auditor-General actually found broadly speaking she was happy. The point that the Auditor-General did not like was the point that we have traversed in this House many times before. She believed that the officials should have stopped the process at a point where it was clear that Skycity was the likely preferred candidate and in fact the Government’s view was we needed to get more information.Dr Russel Norman: Is it then the Prime Minister’s position that Transparency International is wrong when it said the Skycity project procurement process was severely compromised and is it his position that the Auditor-General is wrong when the Auditor-General found that the evaluation process was neither transparent nor even-handed—the Prime Minister is always right; and Transparency International and the Auditor-General they are just wrong?Rt Hon JOHN KEY: I could not put it better myself. Yes they are wrong.Dr Russel Norman: Does he intend to ignore all of the different legal and academic voices such as the Law Society Transparency International and the Auditor-General who have all raised concerns about the way this Government treats the rule of law and the proper procurement process and is he concerned that he will corrode the good reputation that the New Zealand Government had when he came into office?Rt Hon JOHN KEY: The Government is always going to be active across a wide range of fronts. We are a busy Government and there will always be people who offer views and sometimes we will not agree with them. But I point out to the member again that New Zealand ranked No. 1 in its own right or first equal in the years 2010 2011 and 2012. They happen to be all the years I was Prime Minister of New Zealand. I am not the one who sneaks off to Skycity’s box and has a little—Mr SPEAKER: Order! The question has been adequately addressed.Dr Russel Norman: I raise a point of order Mr Speaker. I wish to raise the issue that you yourself spoke of previously.Mr SPEAKER: Order! This is a point of order and it will be heard in silence.Dr Russel Norman: The point that we have been referring to is Standing Order 383 “Content of replies” which states: “The reply to any question must be concise and confined to the subject-matter of the question asked”. The Prime Minister repeatedly during the course of these questions breached that Standing Order. I would ask you what is your remedy to deal with the fact that the Prime Minister consistently breaches Standing Order 383?Rt Hon JOHN KEY: The member asked me questions about transparency and openness in relation to Skycity. I made the Government’s position very clear. I also contrasted it with the behaviour I saw from other political parties. That is quite legitimate public answering.Rt Hon Winston Peters: Supplementary question.Mr SPEAKER: No I have just got to rule on a point of order that has been raised by Dr Russel Norman. I ask Dr Russel Norman to have a close look at the content of hisquestion in line with Standing Order 377. If he can get his questions concise he can expect a concise answer.Rt Hon Winston Peters: Did Skycity donate money to the National Party in 2011; if so how much?Rt Hon JOHN KEY: I have no responsibility for that.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I did not ask the Prime Minister about his responsibilities. I asked him a simple question: how much did Skycity give you in 2011?Mr SPEAKER: Order! Well Skycity certainly did not give me anything but the Prime Minister stood up and said he does not have any responsibility. That was his answer to the question.Dr Russel Norman: I raise a point of order Mr Speaker. It is a well-established tradition that if in the answers that the Prime Minister gives he introduces subject matter then that becomes legitimate for the Opposition to ask questions about. Mr Peters has followed up on Mr Key’s own introduction of political parties’ behaviour with Skycity. Mr Peters simply asked a follow-up question on it.Mr SPEAKER: That is absolutely correct. I did not rule the question out of order. The question was in order and the Prime Minister answered it as he saw fit.Rt Hon Winston Peters: I raise a point of order Mr Speaker. You are correct. You did not rule out the question. But what you did was you disagreed with the point of order that sought to make him answer it by saying it was not his responsibility. He made it his responsibility when he talked about the Labour Party. Now he says it is not. That is the inconsistency that you are required to address.Mr SPEAKER: The Prime Minister stood to his feet and answered the question and said he had no responsibility for any donations that were made by any company to a political party. He is entitled to give that answer if he so chooses.Rt Hon Winston Peters: I raise a point of order Mr Speaker. This is not about whether the Prime Minister has or has not that responsibility since he put that issue with his reference to Labour not once but three times. The question is whether he does or does not know the answer. He can answer that question but he refuses to answer on the basis that it is not his responsibility. That is what questions in the House are for.Mr SPEAKER: It is not the way that the Prime Minister chose to answer the question and that is a matter for the Prime Minister to decide. I have ruled on the matter. We are moving forward to question No. 4 from Phil Twyford.Public Transport Auckland—City Rail Link4.PHIL TWYFORD (Labour—Te Atatū)to theMinister of Transport: Has he had any reports of an imminent Government U-turn on Auckland’s City Rail Link?Hon GERRY BROWNLEE (Minister of Transport):No.Phil Twyford: How much does it stick in his craw to support Labour’s policy on the City Rail Link so capably promoted by the popular Labour Mayor of Auckland Len Brown?Hon GERRY BROWNLEE: Not at all. In January of this year I met with Mr Brown and made it clear that our position would be determined by the analysis that we did on that proposal.Phil Twyford: Doe he now agree with Aucklanders that building the City Rail Link is a no-brainer and does he now disagree with himself that the City Rail Link is not viable until 2030; if so how did he convince himself that he was so wrong?Hon GERRY BROWNLEE: The member misrepresents what I have said in the past. In black and white it says there that the project becomes more viable towards 2020. But we have looked at the likely demographic of Auckland and decided that wedo need to futureproof the city and therefore we do support the rail loop being built in 2020.Phil Twyford: When did he tell Steven Joyce that his trenchant opposition to the City Rail Link was being overridden and how did Mr Joyce react to being made a complete fool by his own Government?Hon GERRY BROWNLEE: We are seeing here a clear reason why the National Government is so popular and the Labour Opposition is so bereft of ideas. The reality is that Mr—[Interruption ] No—Hon Member: You stole our ideas.Hon GERRY BROWNLEE: Not at all—Mr SPEAKER: Order! I am rather keen to hear the answer.Hon GERRY BROWNLEE: The fact is that Mr Joyce did agree with the Auckland Council that it should go ahead and protect the route and that is occurring as we speak. When I inherited that ministry I carried on the position that had previously been taken. That was that we wished to have a closer look at the viability of the project. We have done that very responsibly and Friday’s announcement will be well-received by the people of Auckland.Phil Twyford: Does he stand by his recent statements that the City Rail Link is “a short little loop” that is neither useful nor popular?Hon GERRY BROWNLEE: Well it is a short little loop and in many circles it is not popular. The reality is that by 2020 the demographic of Auckland will have changed and it would be irresponsible for any Government not to futureproof against that. That is what we are doing.Schools Secondary—Student Retention5.Dr CAM CALDER (National)to theMinister of Education: What recent reports has she received on improvements in the retention of students in secondary school?Hon HEKIA PARATA (Minister of Education):Tēnā koe Mr Speaker. Speaking of front pages the front page of theDominion Post this morning was not bad either. I am delighted to report that I have seen information from the Ministry of Education showing that the number of young people dropping out of school before the age of 16 is at an all-time low. Early leaving exemptions for students under 16 have declined significantly under this Government from a peak of over 4000 applications in 2005 to just over 300 last year. That is a decrease of 93 percent. Overall retention has increased under this Government for students staying on until at least their 17th birthday. Provisional data for last year shows an increase in retention rates from 79.3 percent in 2009 to 81.4 percent in 2012. We have more work to do in this area but I congratulate those schools that are making progress in engaging students and keeping our young people on track for a brighter future.Dr Cam Calder: What initiatives has the Government implemented to keep secondary school students in learning for longer?Hon HEKIA PARATA: This Government’s Youth Guarantee provides for a number of great initiatives with more than 10000 students involved last year across the country remaining engaged in education and gaining valuable skills. Initiatives such as trades academies and service academies have proved successful for 2340 students last year alone. I also agree with the Secondary Principals’ Association President Tom Parsons who said: “We’ve gotten smarter as educators and we’re more effective in looking towards [at-risk] learners.” Schools have been able to use an increasing number of supports available to them including the vocational pathways words of Andreas Schleicher—Mr SPEAKER: Order!Hon HEKIA PARATA: —from the OECD whom I am looking forward to welcoming to New Zealand—Mr SPEAKER: Order! It is now becoming a very long answer.Hon HEKIA PARATA: Oh—Mr SPEAKER: Order! Any further supplementaries?Dr Cam Calder: Is the Minister aware of any specific examples of innovative approaches by schools to keep their students engaged?Hon HEKIA PARATA: Yes I have seen a number at a number of schools. At Papakura High School for instance they have developed vocational pathways in primary industries construction and infrastructure and creativity. It has piloted a health and sports science academy—Hon Trevor Mallard: Oh that’s new!Hon HEKIA PARATA: —it is new as a matter of fact—and is bringing together curriculum and learning. Results to date show that students have significantly increased participation compared with their cohort previously. The Tāmaki College Trades Academy—Hon Trevor Mallard: Who wrote that?Hon HEKIA PARATA: Well I think these schools and their parents are very proud of their students making progress. Certainly this Government is. Attendance rates have increased for the students in the academy to an average of 85 percent and achievement rates have doubled and the overall school result has 90 percent achieving in the academy. I think that is great news.Health Services—Affordability and FundingHon ANNETTE KING (Labour—Rongotai):My question is to the Minister of Health—Maggie Barry: Worst Minister of Health in 50 years.Hon ANNETTE KING: The best Minister of Health in 50 years. That is wonderful. Thank you Maggie Barry. I appreciate that.Mr SPEAKER: Order! That shows you the lack of benefit—[Interruption ] Order! That shows you the lack of benefit from an interjection from this side of the House. Would the member now ask her question.6.Hon ANNETTE KING (Labour—Rongotai)to theMinister of Health: What recent reports has he received on affordability of health care for New Zealanders?Hon TONY RYALL (Minister of Health):I have received a range of reports including one from the OECD the world’s leading economic research and advisory organisation which advises that New Zealand had the world’s third-largest increase in public health spending. The facts show that we have increased Vote Health operational funding under this Government by an average of $500 million per year and despite tight times we are investing more in the changing needs of our population thanks to strong financial management.Hon Annette King: What reports did he read before he decided to increase the cost of prescriptions from $3 to $5 per item and did his reading include the recent Treasury report entitledHealth Projections and Policy Options for the 2013 Long-term Fiscal Statement  which states there can be unintended consequences from increasing co-payments?Hon TONY RYALL: A range of reports were considered in making those decisions in respect of the increase in the pharmaceutical charge and included in that was advice from Treasury. What we do know is that no family need pay more than an additional $40 a year and they can get a pharmacy subsidy card. Also if they are having troublemaking ends meet in respect of those prescription charges they can talk to Work and Income.Hon Annette King: In light of that answer was it an intended consequence that a growing number of sick older New Zealanders are now unable to receive part or all of their prescriptions because of—Hon Dr Nick Smith: It’s $2.Hon Annette King: It is only $2 to Nick Smith but it is a lot of money to pensioners in New Zealand like the pensioner from Flaxmere who had to pay an extra $39 just to pick up the prescription which was the difference between being able to buy her groceries that week or not.Hon TONY RYALL: Clearly I have to look at the facts behind that because if the prescription charge has gone from $3 to $5 it is hard to rationalise how it would be $39 more when no person need pay more than $40 a year by getting a prescription subsidy card.Hon Annette King: Why after all his announcements and reports about increased funding and more doctors have three medical centres providing services to high-need patients and rural New Zealand been forced to close in the past few weeks stating their reasons as a lack of funding and a shortage of doctors—they include the Pētone health centre Te Atiawa Medical Centre and SouthCare Medical Centre?Hon TONY RYALL: SouthCare Medical Centre may have closed but the doctors have opened up next door but the member does not want to tell people about that. This Government has invested an additional $130 million in primary care and we have also been the first Government to make after-hours care free for under-sixes.Rt Hon Winston Peters: That’s rubbish.Hon Annette King: It is rubbish. Is he aware that the increased funding that a small low-cost health centre providing services to the poorest sickest patients got out of his Budget was around $15000 in total and how many more medical centres will be forced to close through a lack of funding and a lack of doctors when he has been telling this House that there are 1000 more of them—and where are they all?Hon TONY RYALL: Those 1000 extra doctors are with the 2000 extra nurses working in our public hospitals today. They are delivering record elective surgery and more specialist appointments and that just goes to show—when that member was the Minister of Health she doubled the health budget and fewer people got operations.Hon Annette King: Where are the extra doctors for primary health care—because in his answer he mentioned more specialists and more hospital doctors but where are the extra doctors he promised for primary health care? We are seeing practices around New Zealand that are unable to carry out their work because of the shortage something he said—Mr SPEAKER: Order! We are now getting a very long question being delivered to the Minister.Hon TONY RYALL: I think the member will find that there are actually more general practitioners registered than there were when she was the Minister of Health. We have put additional money into primary care. We are providing more funding. We are getting a very very good service for New Zealanders and in fact we have put in extra money to have free after-hours visits for under-sixes. When that member was the Minister of Health she never provided free after-hours general practitioner visits to children under 6.Brendan Horan: Would the Minister agree that New Zealanders with diabetes deserve accurate and reliable medical devices to measure blood glucose levels as afforded in previous health budgets?Hon TONY RYALL: Yes. That is the reason why Pharmac has undertaken quite an extensive and clinically-led process in respect of the new meters that it has brought in.Housing Affordable—Government Work Programme7.SIMON O’CONNOR (National—Tāmaki)to theMinister of Housing: What initiatives is the Government taking to address housing supply in pressured markets like Auckland and Christchurch?Hon Dr NICK SMITH (Minister of Housing):We have got initiatives under way that have the Government directly building more houses than any Government in over 20 years. That includes projects like Hobsonville the McLennan Park development in Papakura “infill 500” in Auckland and the 700 New Builds and Rangers Park development in Christchurch. We also have initiatives involving council and community partnerships. This includes the major Tāmaki redevelopment involving intensification and thousands more homes in this part of Auckland and initiatives with the Social Housing Fund which will see the biggest ever growth in the community social housing sector next year. We also have important regulatory changes under way in both Auckland and Christchurch that will streamline the planning process and facilitate thousands more homes being built in the private sector.Simon O’Connor: What parallel measures will be required to support the Government’s aim of an additional 39000 homes in Auckland and initiatives like Tāmaki and Hobsonville?Hon Dr NICK SMITH: Firstly the Government recognises that developing Auckland’s infrastructure in parallel along with housing developments is critical. We also recognise that redevelopments like Tāmaki are challenging for communities and work best with a strong level of community engagement. That is why the Tāmaki redevelopment is a partnership with the Auckland Council and why last week I along with Mayor Len Brown released for public consultation a draft blueprint for the regeneration of Tāmaki of Glen Innes of Point England and of Panmure.Simon O’Connor: Is the Government taking any initiative in other housing markets under pressure to support more affordable housing?Hon Dr NICK SMITH: Yes we are. Today I have announced a $1 million grant to the Queenstown Lakes Community Housing Trust to build 10 affordable housing units in Arrowtown. I was appalled to read that some residents were using council processes to oppose this housing saying they did not want low-income people living in that town. We need to stare down this sort of nimbyism if we are to tackle this issue. The Productivity Commission rightly identified a real problem with our regulatory system that incentivises building homes only for the top quartile as occurred under the previous Government.Te Ururoa Flavell: Tēnā koe Mr Speaker. Kia ora tātou. Has the Minister seen the proposal by the Ikaroa-Rāwhiti Māori Party candidate Nā Raihānia that the Government should sell surplus State houses in low-demand areas to low-income families to improve Māori homeownership in places like Gisborne Hastings and Wairoa; if so is he prepared to consider the idea?Hon Dr NICK SMITH: I appreciate the idea that the Māori Party has put forward and the strong advocacy that the Māori Party has given to homeownership. The Associate Minister of Housing Tariana Turia has exciting initiatives under way to expand the role of iwi in social housing provision and better integrate it with the Whānau Ora services that she is providing. The idea of selling surplus State houses in low-demand areas to low-income earners is an idea—Rt Hon Winston Peters: I raise a point of order Mr Speaker. With the greatest respect you must have heard what he said there. In the Māori world they would beshocked to hear what he said there. But I would like him to have the chance to correct what he said. I am sure he meant not “Whanei Ora” but “Whānau Ora”. Perhaps he could pronounce it properly.Mr SPEAKER: And the member is abusing the point of order system to interrupt a legitimate answer by the Minister. I will not put up with that sort of behaviour from the right honourable member for much longer.Brendan Horan: As—[Interruption ]Mr SPEAKER: Order! I have called Brendan Horan for a supplementary question.Brendan Horan: Thank you. As approximately 3400 housing resource consents are processed per year in Auckland and given that town planners there are already working to 100 percent capacity what training and recruiting for new town planners in Auckland is the Minister aware of to cater for the additional 39000 consents promised over the next 3 years?Hon Dr NICK SMITH: My ministry is working closely with the Auckland Council on ensuring that those targets in the Auckland Housing Accord for 39000 houses are able to be advanced at pace. If the Auckland Council indicates that a shortage of planners is part of its issues I would be happy to consider what support the Government might be able to provide in a similar way to the way in which the Government is providing support to the Christchurch City Council to help it address both its resource and its building consent challenges.Brendan Horan: I raise a point of order Mr Speaker. Is the Minister saying that he is unaware of any town planners—Mr SPEAKER: Order! The member is now using the point of order system to effectively try to raise another supplementary question.Disability Care Legislation—Right to Judicial Review8.JAN LOGIE (Green)to theMinister of Health: Does he agree with the Attorney-General’s advice that the New Zealand Public Health and Disability Amendment Bill (No 2) unjustifiably limits the right to judicial review; if not why not?Hon TONY RYALL (Minister of Health):The Attorney-General gives advice to the House as a law officer in order to inform debate. I am advised that reports under section 7 of the New Zealand Bill of Rights Act by the Attorney-General that legislation appears to be inconsistent with the New Zealand Bill of Rights Act have been issued about 60 times since 1990 under all Governments. Although the Government noted the Attorney-General’s advice the Government was satisfied that the limitation of any right to judicial review was appropriate in this case having regard to the need to manage the balance between family and taxpayer responsibilities and to support an effective and fair policy for payment of family caregivers.Jan Logie: Taking that as a no on what basis does his view on the rule of law hold more weight than that of the Attorney-General the Law Society and many legal luminaries such as Professor Andrew Geddis?Hon TONY RYALL: The Government’s view carries weight because it enjoyed the majority of Parliament behind it and it was because this Government had to deal with the issues raised by theAtkinson case. Those issues about making decisions about the use of public money are rightfully decisions that should be made by Parliament and not by the courts.Jan Logie: Is the Minister aware that by removing the right of judicial review gutting all domestic appeal provisions family carers can now go straight to the United Nations Human Rights Council to have a discrimination case heard on the international stage?Hon TONY RYALL: The legislation of New Zealand has a myriad of examples where there is discrimination. New Zealand superannuation discriminates on the basis of age. The jobseeker support allowance discriminates on employment status. In respect of the matter with the family caregivers the Government had to take action in this way because we need to be able to start paying the carers of family members as quickly as possible without delay by the courts.Jan Logie: I raise a point of order Mr Speaker. That did not answer my question at all.Mr SPEAKER: I think that is a fair comment on this occasion. Would the member please for the benefit of the Minister repeat the question.Jan Logie: Is he aware that by removing the right of judicial review effectively gutting domestic appeal provisions family carers now can go straight to the United Nations Human Rights Council to have a discrimination case heard on the international stage?Hon TONY RYALL: Yes they can apply. I hope those family caregiver case people might actually observe that New Zealand is one of only three countries in the world that will pay wages to family members to care for other family members. Behind the Netherlands and Sweden New Zealand is one of only three countries in the world taking this action. We are investing $92 million over the next 4 years to support an estimated 1600 family caregivers to care for their family members.Jan Logie: Considering that discrimination was proven at the New Zealand Human Rights Review Tribunal the High Court and the Court of Appeal will he admit that as well as entrenching discrimination against some of the most vulnerable New Zealanders he has also exposed his Government to legal risk and international shame due to the removal of all domestic appeal provisions?Hon TONY RYALL: I do not agree with that. I think that internationally New Zealand is viewed as one of only three countries in the world that are going to pay wages to family caregivers—$92 million over 4 years. And remember that a party in Government that that member supported expressly decided in 2008 not to pay family caregivers. This Government has.Canterbury Recovery—Mental Health Services9.NICKY WAGNER (National—Christchurch Central)to theAssociate Minister of Health: What is being done to address the mental health needs of people in Canterbury?Hon TODD McCLAY (Associate Minister of Health):This Government has taken a number of actions particularly in relation to young people. The Ministry of Health is working closely with the Canterbury Earthquake Recovery Authority and other Government agencies in this area. Although the majority of people who need mental health support following the earthquakes can receive that care from support services such as relationship support the Government has ensured that additional services are available for those who need them. A range of primary mental health services are available from Canterbury primary health organisations and this includes screening and brief interventions for alcohol issues other drug issues and other mental health issues. The Canterbury District Health Board now also provides specialist support teams for people who require more specialist interventions.Nicky Wagner: Are there still concerns about people’s mental health?Hon TODD McCLAY: Yes. Most people recover well from distress caused by the earthquakes. However international experience tells us that psychosocial recovery generally lags behind immediate physical recovery. Some people depending upon their individual circumstances can be expected to take longer to recover from the impact ofthe earthquakes and services are prepared to provide that support over the longer term. This Government has recognised this and continues to monitor and address any mental health and resilience issues in Canterbury on an ongoing basis.Nicky Wagner: There has been some community concern regarding the impact of the earthquakes on young people. Can the Minister tell the House what he is doing to address those concerns?Hon TODD McCLAY: Yes I am aware of this concern. In April of this year because of concerns about an increase in the number of young people being referred to mental health services the Government directed that a youth mental health action plan be implemented in the region. That plan is being implemented by the Canterbury District Health Board the Ministry of Education and the Ministry of Social Development and it includes an oversight group to ensure that the agencies work together. School-based mental health services support the involvement of guidance councillors which is an extension of the Canterbury All Right campaign with a particular emphasis on youth. Actions being taken as part of the Prime Minister’s Youth Mental Health Project will also increase resilience and assist in responding to concerns about the mental health needs of children and young people in Canterbury.Government Communications Security Bureau—Interception Powers and Proposed Legislation10.CLARE CURRAN (Labour—Dunedin South)to thePrime Minister: Does he stand by his statement of 11 June 2013 that “I can assure the House that we do not use our partners to circumvent New Zealand laws”?Rt Hon JOHN KEY (Prime Minister):Yes.Clare Curran: How can he justify his statement this week that his new laws will not expand the Government Communications Security Bureau’s powers when three telecommunications network companies an international service provider and the New Zealand Law Society all told a select committee today that these powers will be expanded and that they do not support this?Rt Hon JOHN KEY: Because it is correct.Clare Curran: How can he continue to deny the expansion of the Government Communications Security Bureau’s powers through his new legislation when the major New Zealand - based telecommunications companies which invest millions of dollars into our local economy told the select committee today that this will have a chilling effect on their investment and development in new networks?Rt Hon JOHN KEY: I think the member is showing her ignorance by confusing the Telecommunications (Interception Capability and Security) Bill with the Government Communications Security Bureau and Related Legislation Amendment Bill.Clare Curran: Are there comparable protections in his new legislation for the privacy and rights of New Zealand citizens and businesses alongside the expansion of the bureau’s powers to become a domestic spy agency?Rt Hon JOHN KEY: I reject the member’s premise.Clare Curran: Given the revelations last week that the Government Communications Headquarters—the British equivalent of the bureau—is attaching intercept probes on to transatlantic fibre-optic cables where they land on British shores does the bureau intercept the Southern Cross cable or any other transoceanic system that connects New Zealand’s internet to the rest of the world?Rt Hon JOHN KEY: I do not believe it is in the national interest to talk about those matters.Clare Curran: Is he aware of the concern raised in Google’s submission to the select committee that requiring global internet companies based outside New Zealand to undertake interception may put them in conflict with statutory privacy andconfidentiality obligations in other countries—in other words enforcing his law might force companies such as Google to break other laws?Rt Hon JOHN KEY: The member should direct her question to the Minister responsible. She is getting terribly confused between the Telecommunications (Interception Capability and Security) Bill and the Government Communications Security Bureau and Related Legislation Amendment Bill.Civil Defence Emergency Management System—Response to June 2013 Extreme Weather Event11.PAUL FOSTER-BELL (National)to theMinister of Civil Defence: What reports has she received on how civil defence managed last week’s extreme weather events across New Zealand?Hon NIKKI KAYE (Minister of Civil Defence):Despite the severity of the storm that hit most of New Zealand communities have responded very well. Forecasts have been timely and accurate and people have listened to those forecasts and prepared appropriately. Communities have been very well served by their emergency services and community-based civil defence organisations. Many of these organisations had planned for the impact of this event and were able to maintain essential services while responding to calls for assistance. Emergency services civil defence staff and council crews have all worked extremely hard in difficult and dangerous conditions sometimes with real risks to themselves. I want to acknowledge them and thank them for their service.Paul Foster-Bell: What lessons does the Minister believe can be taken away from this most recent storm?Hon NIKKI KAYE: As with all scenarios involving extreme weather people should pay close attention to advice from local authorities and civil defence emergency management groups. It is also important for people to reach out to neighbours and people in communities who may be vulnerable during these times. The recent response to extreme weather has demonstrated the effectiveness of community-based civil defence organisations and reinforces that our civil defence structure is working well. Local knowledge is vital for effectively responding to local events. I would again commend the emergency services civil defence staff and council crews who have all worked so hard over the last week to minimise the impact of the storm.Prostitution Reform Act 2003—Bylaw-making Powers and Potential Legislative Changes12.Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First)to thePrime Minister: Does he still stand by his reported statement that the Prostitution Law Reform Act 2003 “hasn’t actually worked”?Rt Hon JOHN KEY (Prime Minister):Yes. One of the key purposes of the Prostitution Reform Act was to prohibit prostitution for under-18-year-olds. I do not believe it has been effective in doing that.Le’aufa’amulia Asenati Lole-Taylor: What progress if any has his Government made in addressing street prostitution since he stated in December of last year in regard to street prostitution that “the Government is looking to through the Local Government Act make other changes that would support local government.”?Rt Hon JOHN KEY: Well I think that the member—because she has an interest in this issue and I accept that—is aware that the matter is before the select committee. I think also that the Government’s view has been consistent in this matter and it is that the Local Government Act on the advice that we have had does empower the territorial authorities to make by-laws for the issues that have been mentioned. The Government’s view therefore is that not only do the councils have the capacity to do that through theLocal Government Act but also if there was to be a change to give the local councils even greater powers then I think the Government’s view would be that that should be spread across all councils around New Zealand not something specific to Manukau.Le’aufa’amulia Asenati Lole-Taylor: Given that answer does he then agree with his National Party colleagues that in regard to the issue of street prostitution “Government has continued to pass responsibility to local councils and as a result is causing ratepayer costs and consequential rate increases.”?Rt Hon JOHN KEY: Firstly I think it would be useful if the member were to reference that quote to the member who made it because otherwise I cannot be sure of its authenticity. But what I can say is that it has been a longstanding practice that in these areas the matters are handled and rightfully so by local government. That is why the Local Government Act actually empowers councils to make by-laws to prohibit street prostitution.Le’aufa’amulia Asenati Lole-Taylor: Given that sad response—[Interruption ]Mr SPEAKER: Order! Would the member please ask the supplementary question.Le’aufa’amulia Asenati Lole-Taylor: I am getting there. Is the Prime Minister aware of a legal opinion made available to the Auckland Council that advises that enforceable by-laws cannot be made to restrict trading hours or areas for street prostitution because any such by-law will both contravene the Prostitution Reform Act and potentially run foul of other Acts of Government and what does he have to say to residents and ratepayers of Hunters Corner Papatoetoe and numerous other communities in South Auckland and across the country who have to deal day after day with the numerous health and safety issues that street prostitution causes in their communities?Rt Hon JOHN KEY: No I have not seen that legal opinion. I am aware of Crown Law’s view which is that the Local Government Act does support territorial authorities to make by-laws. In fact I would point out to the member that the Auckland Council when it put out its report in May 2012 calledThe street prostitution industry in the southern communities of Auckland  at page 12 actually set out quite clearly how the Local Government Act does support authorities in terms of making those by-laws. I think the point the member is making is that maybe those by-laws need to be widened. That may or may not be a fair point. The point I would simply make to the member is that if that law were to be progressed further in my view it should be expanded beyond just the streets of Manukau and if that were the case we may well look at it.General DebateHon CHRISTOPHER FINLAYSON (Attorney-General):I moveThat the House take note of miscellaneous business . I woke up at 5.30 this morning and as is my wont the first thing I did was lunge for my BlackBerry so I could read theNew Zealand Herald . The first thing I saw was theHerald -DigiPoll and I thought to myself: “I like history especially the history of the Labour Party. I wonder whether Gerry would let me give one of my history lessons to the House.” I asked him and he said yes so here goes.One of the great questions of New Zealand history is: “Why is the Labour Party so disloyal to its leaders?”. Right through history treachery has been the name of the game. Let us look at Arnold Nordmeyer who provided sterling service to the Labour Party through the first and second Labour Governments. He was the MP for Ōāmaru then the MP for Brooklyn and then the MP for Island Bay. He was knifed by Norman Kirk. The rumblings against “Big Norm” started in the second year of his premiership but he died before the conspirators could knife him.Then there was my favourite Labour leader Bill Rowling a good and a decent man who as Mr Mallard knows used to live in Lohia Street Khandallah. He was undermined by a less talented but more ruthless deputy. How often history doth repeat itself. David Lange was undermined by Mr Goff and his then ideological buddy Roger Douglas. Geoffrey Palmer was certainly an interesting person. He certainly was undermined by Helen Clark and by Mike Moore but I have to admit that much of the undermining was done by Geoffrey just being Geoffrey.Mike Moore was undermined by Helen Clark who knifed him straight after the 1993 election when Mike had gained an additional 16 seats for his party—that is loyalty for you. Helen Clark knew her history. She kept her enemies at bay and I am not referring to just the Green Party. She saw off Annette King and Phil Goff in 1996 when they tried to knife her and she went in 2008 before the daggers went in. Then from 2008 to 2011 we had that very angry Phil Goff undermined from the very start by Mr Cunliffe—no wonder he is so foul-mouthed and cannot control his tongue.I recognise that many of the names I have referred to—and I see Mr Robertson looking confused and bewildered—will be unknown to people like Mr Robertson who have no knowledge of their party’s history and so are doomed to relive it. It is like some kind of macabre Byzantine dance of killers. People cooperate to get rid of one leader so that they can turn on the next one.Then we have David Shearer who I think is a very nice guy a good and a decent man a person who has done a lot of good overseas. But none of his dealings with central African dictatorships or Balkan civil wars could have prepared him for the leadership of the Labour Party. Poor David Shearer. He has run out of options. He has nowhere to turn. He cannot rely on his deputy and he cannot turn to his allies. I bet this morning he was reading theNew Zealand Herald  looking longingly at seat 17A from Moscow to Havana.Mr Shearer has been quoted as saying that he was surprised by today’s results but the trouble for Mr Shearer is he is simply too trusting. He is too trusting and too quick to trust people like Mr Robertson to recruit his staff to look after him. He is too quick to trust parties that are out to steal his vote. I imagine that Mr Shearer was delighted when Mr Peters shone that trademark smile and offered to work with Labour to attack the Government. I imagine he was delighted when Dr Russel Norman said: “Let me work with you to design a Stalinist energy policy and maybe it would be a good idea if we both had a podium in the legislative chamber when we announce the speech because it would give you more gravitas.” And now Mr Shearer is surprised that Mr Peters and Mr Norman are laughing all the way to the polling booth. In fact he is so trusting that I have to say I really worry that the hundreds of thousands of dollars in his New York bank account are ripe for picking if a Nigerian scammer ever sends him an email. He would probably be really surprised and delighted to receive it. So what is the moral of the story? There is always a moral. I say this to the Labour Party with the greatest of respect and affection: loyalty is what binds a party together. If you can’t trust your leader you’re done.PHIL TWYFORD (Labour—Te Atatū):Well that was a very entertaining history lesson from Chris Finlayson but he had nothing to say about the Government’s policies and that is not surprising because they get all of their best ones from the Labour Party. Despite the hilarity from Mr Finlayson these Government members are kidding themselves that they can govern on their own after 2014. They are desperately casting around for coalition partners. They do not have one—the mad the bad and the sad are on the way out. There are no coalition partners left. They are desperately casting around and what better thing to do than to steal one of the Labour Party’s most popular policies. Mr Brownlee—yes I am talking about you.This is the background to what today is one of the most stunning policy U-turns that we have seen for a very long time. John Key is the first Prime Minister ever to do a U-turn in a train. It is the first time it has been done. This is a huge about-face. Mr Brownlee only days ago was describing the City Rail Link the policy that he supports today as a short little loop. I wondered in fact whether he was talking about Mr Finlayson but no he was talking about the City Rail Link. He also said that he doubted whether the City Rail Link was indeed either popular or useful. That flew in the face of popular opinion in Auckland. We know that 63 percent of Aucklanders in the last independent poll—Hon David Parker: Agreed with Labour.PHIL TWYFORD: —agreed with Labour that the City Rail Link was a no-brainer. Well Labour welcomes this U-turn—we do. We welcome it. It was our policy. The Government has adopted it. That is great. It is a win for Len Brown it is a win for Labour and it is a win for Auckland.Unlike the Government’s flagship policy projects—the so-called “motorways of madness”—the City Rail Link will actually double the capacity of an existing transport asset. The Minister of Transport’s motorway projects are all gold-plated duplicate projects and he is spending $1 billion every year on them. Well the City Rail Link will double the capacity of the Auckland rail network. It will allow trains to run every 5 minutes—every 5 minutes—on the western and southern lines. If you are travelling from New Lynn to the central business district into the city it will cut 28 minutes—28 minutes—off your commute. That is three times as much time cut off travel as that member’s Pūhoi to Wellsford “Holiday Highway” would do.So what this U-turn says is that the credibility of the Government’s transport policy is in tatters. What are we supposed to believe? Was Steven Joyce wrong when he said only a few weeks ago that the City Rail Link did not add up? Was Gerry Brownlee serious when he compared the City Rail Link to the failed North Haverbrook monorail inThe Simpsons ? And for what new transport policies will Gerry Brownlee be getting inspiration fromThe Simpsons ? What new thing will we see? I hope the Minister is going to take a call and tell us.What has changed Minister? The numbers have not changed. The plan for the City Rail Link has not changed. The number of Aucklanders who support this project has not changed. What has changed? You see the big losers today are Steven Joyce and Gerry Brownlee. They have been made to look like total idiots by their own Government but as I said Labour welcomes this U-turn. I think the question we have to ask is: “Why did it take so long Gerry?”. Why did it take so long? I am going to answer that question for you because there are two reasons that it has taken so long. The first is that National members have a completely messed up tortured relationship with Auckland. Anything that Len Brown supports these guys oppose—no matter how sensible no matter how popular—because their man John Banks did not win the Auckland mayoralty in 2010. They have never got over it and they have spent the last 5 years bagging the City Rail Link and leading Aucklanders on a wild goose chase that has finally ended today with the Government adopting one of Labour’s most popular policies.The other point I want to make is that the City Rail Link symbolises the urban modern vision that Labour has for Auckland. Steven Joyce Gerry Brownlee and Nick Smith simply do not understand it. They do not get it. They are out of step with Auckland and that is why it has taken them 5 years to adopt what is an incredibly popular policy. This is a win for Labour it is a win for Mayor Len Brown and it is a win for Auckland.Hon GERRY BROWNLEE (Minister of Transport):I think it is no surprise that Phil Twyford comes into the House this afternoon and mounts a sterling case for the jobof stationmaster at Britomart after the next election. Anybody who saw the front page of theNew Zealand Herald this morning will know that five members sitting on that side of the House are gone at the next election. The question has to be asked about why the Opposition is so bad. Why is it not getting traction with the New Zealand public? David Shearer comes out this morning and says that Opposition members have spent the last 5 weeks talking about the things that New Zealanders want to talk about. That would be the opposition to the casino the Government Communications Security Bureau matters the Peter Dunne issues the increased taxes on the properties that New Zealanders might own and then the Opposition’s manufacturing inquiry which basically concluded that if you took out all of the growing parts of the manufacturing sector the rest of it was failing. It is that sort of misconnection with the people of New Zealand that is leading to the result that we saw in theNew Zealand Heraldpoll this morning. No one gets too excited about that on this side of the House. Our pledge is to continue with the job of governing and getting on with making sure that the growth engine of the New Zealand economy is fuelled by our policies.The Labour Party members may well want to gloat that somehow our decision to put a time line and some conditions around our support for the rail link in Auckland is a win for them. The reality is that we have always maintained that we would be looking at a wholly integrated transport network for New Zealand’s largest and fastest-growing city. New Zealand is littered with examples of how there has been a failure to futureproof and so we think that 2020 for that loop and the construction of the extension of Britomart would be the right thing to do. That will come with some conditions which will be announced by the Prime Minister on Friday.But also we have the extensive roll-out of broadband across New Zealand. We are seeing all sorts of innovations in our economy taking advantage of that and anticipating the advantage that will come from that. We are also seeing across the legislative programme the Business Growth Agenda simplifying the activity of doing business in New Zealand meaning that there is a greater opportunity for job creation and for higher wages and salaries for New Zealanders. We have seen the Hon Chris Finlayson engaged in one of the most rapid settlements of Treaty issues ever undertaken by any Minister and that is good for a large section of our population and we fully support it. We are also very committed to the rebuild in Christchurch.Those are the things that New Zealanders do talk about. They are the things that they look to a Government to be doing. They are the things that they look at and expect the Government to be providing. We have another big announcement tomorrow around Christchurch where we are talking about the conclusion of the cost-sharing agreement between the Christchurch City Council and the Government. That will mark a significant point for stepping up the rebuild of that city. I look forward to joining the Prime Minister when those announcements are made at about midday tomorrow.On Friday the Prime Minister will address a number of issues that are in the Auckland Plan and will outline the Government’s response to those things. Transport is part of that and the rail loop is just a small part of that. There are going to be some very interesting announcements made in that speech which will be well received by Aucklanders that demonstrate this Government’s commitment to New Zealand’s biggest city a day after we have made a big commitment to New Zealand’s second-biggest city.Throughout the country there are transport programmes that will oil the wheels of economic growth. Then if you look at social services the work that is going on in the education sector the extraordinary work of Tony Ryall in the health sector and so many other areas where the Government is simply getting on with the job it is not hard to understand why New Zealanders are not connecting with a party that is focusedentirely on the office boy issues of the beltway the Government Communications Security Bureau Mr Dunne the so-called inquiry into manufacturing and opposition to everything that is about growth. My final comment for Mr Twyford is that I thought he of all people would by now have realised that every loop has a U-turn in it.TE URUROA FLAVELL (Māori Party—Waiariki):Tēnā koe Mr Speaker. Kia ora tātou e te Whare. I do not intend to try to even follow up on the speech given by the Hon Chris Finlayson but I do want to address in the 5 minutes I have an issue that has come that is a little bit more human. I want to do it by way of a story. It comes from my electorate and it is fairly recent.At the dawn of 15 October 2007 in a Whakatāne home a man and a woman and a 17-year-old girl were asleep in bed blissfully unaware that at 6 a.m. sharp that morning 14 officers of the Special Tactics Group and the armed offenders squad would cordon off the address shouting for the occupants to leave the address with their hands on their heads. The man was arrested forced to lie on the floor and was handcuffed. The two women were separated from each other and searched. The older woman was in a nightgown and the younger woman in a thin singlet and shorts. She remembered later feeling ashamed and embarrassed and bursting out crying. After being detained the two women were taken to the police station separated again and statements were obtained. They were still in their nightwear. They were cold. The older woman who was a diabetic required her insulin and her testing kit.Nearly 6 years after that event Judge Carruthers the Chair of the Independent Police Conduct Authority wrote to them and I want to just draw the attention of the House to the letter where it refers to the impact of fear and anxiety experienced by those three people. The judge said this: “being woken in the early morning by armed offenders shouting for them to come out of their house with their hands on their heads having guns trained on them a dog barking throughout being barefoot and only dressed in nightwear and scared about what was happening to them ... these actions ... personally searching them in an intrusive manner and taking them to the police station were contrary to law.” The letter concludes that “The arbitrary detention was contrary to law unjustified and unreasonable.”If these words sound pretty familiar it is because these same words were repeated consistently throughout the report of the Independent Police Conduct Authority into Operation Eight. The key thing here is that over a month has passed has gone by us since the police were said to have acted unlawfully in establishing roadblocks and detaining and searching people during Operation Eight. But what has happened to those people affected? What has happened to those who were traumatised and suffered the consequences of the unlawful actions by our key agents of the law? Nothing—nothing. No acknowledgment to the people who were hurt. No apology. No attempt to meet kanohi ki te kanohi face to face or even to ask any question. What now? Nothing. I bring that story to this House.We came here as a Māori Party to protect the interests of Māori people and advance our potential into the future. We came here on the back of the Labour Government’s decision to confiscate the foreshore and seabed area of our country. So when this second invasion of rights occurred in the raids upon the Tūhoe people and the whānau of the Rūatoki Valley the Māori Party has again challenged the Government the Labour Government about its unlawful practice. Indeed it is a contempt for the very notion of due process under law.I want to tell this House and the New Zealand public that this issue the unlawful treatment of a family in Whakatāne and the many other families who were subjected to the abuses meted out under the name of Operation Eight will not be left to linger. It will not be left to linger. The Māori Party and I as the MP are determined to ensure thatthose whānau who were affected know that they are not alone. So I want to advise this House that the Māori Party will be taking this up with some vigour. As recently as this morning I placed a tono in front of the Māori Affairs Committee to tell it that we will be presenting terms of reference for an inquiry about the impact of Operation Eight on affected people and that will come in front of this House at some point in time in the future. Tēnā koutou. Kia ora tātou.IAIN LEES-GALLOWAY (Labour—Palmerston North):Today is a fantastic day for the Labour Party and it is a very very bad day—it is a very very bad day—for Gerry Brownlee and a very very bad day for Steven Joyce. Poor Gerry Brownlee during question time had to stand there and take the questions from Phil Twyford and Gerry Brownlee—you could see it in his face. He wanted the Earth to open up and swallow him whole but unfortunately for Gerry even the planet does not have that kind of appetite. Even the planet could not swallow Gerry Brownlee whole. He had to stand there and take it today as he realised that his Government had done another U-turn another backflip which has become the trademark of this National Government.Sitting next to him was Steven Joyce. I have never seen Steven Joyce squirm as much as he did during question time today. Normally he looks like he is plotting. Normally he looks like he is scheming—the Machiavellian machine of the National Party trying to figure out how he is going to see off Judith Collins after the next election when John Key has to stand down—but he did not look happy today. He was not plotting and scheming today. He was squirming because National has been found out. It has finally had to sign up to the Auckland City Rail Link which is so popular with Aucklanders.It makes economic sense and it is something that the Labour Party has been calling for for years. It was in our election manifesto at the last election. That is how committed the Labour Party has been to the Auckland City Rail Link. That is how committed we are to sensible investment in transport infrastructure for Auckland.Steven Joyce and Gerry Brownlee would like you to think that this is just a slight change—that this is just a time frame that they are adding to their lukewarm commitment to the Auckland City Rail Link. But this is what Steven Joyce had to say about it. When Steven Joyce was asked whether there was anybody who was less enthusiastic about the Auckland City Rail Link he said: “Hmm well possibly the finance Minister.” Steven Joyce was happy and proud to say that he was the person who was least enthusiastic about the Auckland City Rail Link. That is what he thought about it. Gerry Brownlee said that he thought that it was neither useful nor popular.National’s position on rail has been absolutely clear for years but National members of course like typical conservatives are always the last ones to the party. They are always the last ones to figure out what is the right thing to do. Labour has been talking about this for years Mayor Len Brown has been talking about this for years and Mayor Len Brown has got a consensus around this issue: the business groups the community groups the unions—everybody in Auckland wants this. The only people who did not want it were in the National Government. They have finally decided that they have to come round. They do not agree with it they do not like it but they realise that they are wrong and we are right and it is as simple as that.But of course National does not believe in rail and it is still allowing its obsession with the roads of national significance to dictate all investment in transport infrastructure.Hon David Parker: They’re delaying the rail tunnel.IAIN LEES-GALLOWAY: It is delaying the rail link and it is delaying anything to do with rail so when will this be built? Well it might get started in 2020 if we are lucky. Why is that? Because there is nothing left. The cupboard is bare. All the moneyhas been spent on uneconomic monster motorways up and down the country. The Pūhoi to Wellsford “Holiday Highway” is still more important to the National Government than the Auckland City Rail Link. That is why it cannot afford to build it now. That is why Aucklanders have to wait until 2020. Roads and highways are still the trump card in the National Government’s transport policy.National does not believe in having a sensible transport strategy. It does not believe in having an integrated transport system. It believes only in having highways. That is all that it believes in. There is no sense to it. It is just the National Government’s fixation and of course it is the fixation with roads of the supporters of National the people who fund the National Party. It is their fixation with roads that is dominating the National Government’s policy. That is why that Government over there will never invest in an integrated transport network and that is why it has been so slow to catch up with everybody else who has been calling for the Auckland City Rail Link for years.Thank goodness National has finally seen sense and it has finally decided to implement a wonderful Labour policy. It is a great day for Labour. We look forward to National implementing more and more Labour policy because it is the only place that the good ideas come from.NICKY WAGNER (National—Christchurch Central):It is not surprising that the public often have a low opinion of politicians especially if they have been listening to the Opposition speakers this afternoon because they so often focus on the small the niggly the irrelevant the unimportant and even the self-serving. But people vote for a Government that focuses on the things that matter to them. Things that focus on the safety of the nation: security in their homes; better sooner more convenient healthcare; quality education for their kids; and a public safety net for when things go pear-shaped—pear-shaped for individuals pear-shaped for communities. Certainly the people of Canterbury are appreciative of this Government standing up and backing them emotionally and financially as we manage our way through the recovery. John Key and the National-led Government are absolutely committed to getting right the things that matter most to Kiwis and in the face of an ongoing international meltdown we are making good progress. Our economy is growing faster than that of most countries. We have a lower unemployment rate than most countries. And our mortgage rates something that affects every single New Zealander are the lowest for over 45 years.And that is the problem for Opposition politicians. That is why we hear only tired old rhetoric—because they cannot talk about the things that matter because those are good-news stories. They have to focus on the small the niggly and the irrelevant or you could conjure up a false crisis like the manufacturing crisis. They spent months talking up the manufacturing crisis months dumping on manufacturers who are actually working very hard to manage and produce in very difficult times. Luckily they announced their crisis findings about the same time as independent data confirmed that New Zealand manufacturing was growing at the fastest rate since 2004 and one of the highest rates across the world. I say “luckily” because now the public know the facts and can decide for themselves.Opposition politicians talk the talk of activity of positivity. They say they want more jobs they say they want better incomes but they do not walk the walk. They say no to everything that might help create jobs or lift incomes and they talk of embracing change and innovation but vote against anything that would improve our chances of a better future. And they do it so consistently that I fear they are deliberately undermining the well-being of Kiwis simply because they cannot stand the fact and the reality that New Zealanders are doing well under this National Government.Well our Government the National Government celebrates success. We are working hard to deliver real jobs real growth and real progress for Kiwi families. Weare delighted that after-tax wages have increased by 22 percent since 2008 and that the cost of living rises are the lowest since 1999 and we will be continuing to work hard to improve these statistics. We thank the police and community organisations for the lowest crime rate for 30 years and we thank everyone in health who has worked so hard to deliver more elective operations and faster emergency treatment so that every cancer patient can be treated right here in New Zealand in the world gold standard of 4 weeks. Finally we congratulate the education sector on continuing to deliver world-class education for our young people. We know that but it has just been confirmed by the OECD’s latest report—well done.So in conclusion in the toughest of times New Zealand and New Zealanders are working hard and doing well and that is something to celebrate. So I say to the Opposition: try to do something that matters for our country. Do not knock New Zealanders.JAN LOGIE (Green):It is a bleak time in the history of this country a time when our constitution and the rule of law are being flippantly—albeit sometimes elegantly—undermined. We are being spun the lie that it is for our own good that there was no other choice that the people who are dissenting on this issue are just wrong and that the Government is always right. Yet the rule of law human rights and our constitution are fundamental to our society. They guarantee that everyone should get their day in court that people should be equal before the law that the courts and the Government should be blind to the size of our wallets and to any of our many other differences and that there should be an even playing field on which that contest of ideas should take place.As a country we have long signed up to these understandings. These agreements are at the very foundation of our democracy and I think that most New Zealanders are very proud of that and understand that we are lucky to have that at the foundation of our country. In a speech earlier this month though Russel Norman signalled that something seemed a bit rotten in the Beehive and he noted: “Our democracy is being eaten away by a Government that persistently undermines our basic democratic rights and institutions …”. There was a strong reaction to that speech and a lot of disagreement yet his view was vindicated last week I believe by the New Zealand Law Society.Last week the New Zealand Law Society a body created by statute with the role of providing submissions on legislation on behalf of the law fraternity reported to the UN periodic review of human rights that 14 separate pieces of legislation 11 in the last 2 years have undermined the rule of law and our fundamental human rights. Of these five laws remove the court’s constitutional role of judicial review three laws give unjustifiable power to the executive five laws breach the New Zealand Bill of Rights Act four laws were passed amidst very serious human rights concerns and this Government and this House are currently considering another three bills with further serious human rights concerns. Six of these bills removed rights from New Zealanders in what I would kind of characterise as an effort to appeal to the “get tough on crime’ crowd in New Zealand—in the face of all the evidence that that approach does not work. It seems symbolic of this Government’s view that actually we cannot do things to create safety in our society without removing somebody’s fundamental rights and the role of the courts.The Government has also introduced two laws to this House in a similar vein—the Government Communications Security Bureau and Related Legislation Amendment Bill and the Telecommunications (Interception Capability and Security) Bill which remove rights while increasing surveillance—all under the sense of creating threat the idea that we need to be protecting New Zealanders from some unnamed and unsubstantiated danger that this Government will not disclose. Other bills have removeddemocracy from Christchurch and removed environmental protections as well as democracy from the wider Canterbury area.The Government has entrenched discrimination against women on the DPB. It has removed the rights of judicial review and it has entrenched discrimination against some of the most vulnerable people in New Zealand—people with disabilities who want to be cared for by family members. It has removed rights and entrenched discrimination against some of the world’s most vulnerable people—asylum seekers who need to seek asylum in this country.Also there are numerous examples of the Government favouring its mates. It has introduced what we call the Anadarko law to make protests on the sea illegal. It has been indulging in dodgy Skycity deals. What it is all about when it comes down to it is a misuse of power and this country deserves more.Peseta SAM LOTU-IIGA (National—Maungakiekie):It is a pleasure to take a call in the general debate this afternoon. It is a pleasure because in this House we debate social economic and political issues of the day. Whether we are talking about partnership schools or we are talking about the social services that are delivered across this nation or we are talking about the businesses that provide jobs and opportunities for New Zealanders the one common denominator is leadership. When I read this morning’s latestHerald -DigiPoll party vote figures they clearly show where the leadership is found in this country—48.8 percent support National on a party vote basis and Labour is down five and a half points to 30.9 percent. It is about leadership.Mr Key is the most preferred Prime Minister at 65 percent—65 percent of New Zealanders want the John Key - led Government to continue the fine work that we have been doing as a Government in the last 4½ years. It is 12 percent for Mr Shearer. Has someone told Grant Robertson about Mr Shearer being at 12 percent? We have even got Miss Clark from New York at 3 percent. Can you believe it? Can you believe it? A former leader of the Labour Party is at 3 percent. But what this poll shows is that New Zealanders fundamentally do not want what Labour is selling. They do not want the profanity-laced mutterings in select committees from old MPs like Mr Goff and Mr Mallard they do not want the fondue dinners in Wellington Central that are going to lead to a leadership spill in the coming months and they do not want the backroom deals of the faceless men in our union offices across this country determining the future of this country. So Labour take heed. Take heed of the Rudd-Gillard dispute because it is coming to New Zealand in the form of Robertson versus Cunliffe—Robertson versus Cunliffe—and you heard it right here.But the good thing is that New Zealanders want leadership and they want vision. The reason why National is polling 48.8 percent is that New Zealanders know that this party focuses on the issues that matter to them. They know that National cares about all New Zealanders. The last Budget is a demonstration of that caring and of that efficient way that National goes about bringing about the issues that matter to New Zealanders. What are those issues? Well we know that 50000 jobs have been created in the last 2 years. When I go across my electorate in Maungakiekie when I go and talk to the constituents with whom I had clinics last week and when I talk to the businesses they say that the No. 1 priority of this Government should be creating jobs and that is what we are doing.Household incomes are up 20 percent since 2008. Household incomes are up—Dr David Clark: Median incomes are down.Peseta SAM LOTU-IIGA: —and the mortgage rates Mr Clark are at their lowest in 50 years. Mortgage interest rates are at their lowest in 50 years. They reached 8 percent under the Clark Government—not David Clark but the Helen Clark Government—and they were at their highest peak for a very very long time.When I held those clinics in Mount Wellington and Onehunga last week what constituents said to me is that they want jobs but they also want safety so they are really happy that there are more front-line policemen across this nation than there ever have been in our history. They wanted health care that was caring but they also wanted health care that looked after their elderly and looked after their kids. There are 1000 extra doctors and 2500 extra nurses working today than there were under the Labour Government in 2008. [Interruption ] We know—and Mr Mallard knows this—that there are more patients getting elective operations and seeing specialists sooner in our hospitals today than there ever were under the Labour Government.I went to the Tāmaki opening last week and this was symbolic of what is going on in this country. One hundred people were inside Ruapōtaka Marae celebrating what National is bringing to my local community in Tāmaki. What were they celebrating? They were celebrating warmer drier homes. What were they celebrating? They were celebrating ultra-fast broadband coming to their schools. What were they celebrating? They were celebrating the Auckland-Manukau Eastern Transport Initiative which brings transport links into and around Auckland in order to speed up travel not just for residents but for businesses as well.This is a Government that is doing things progressing this country and delivering on the promises that we made in the 2011 election. Thank you very much.Hon ANNETTE KING (Labour—Rongotai):I have to ask the question: why is that member not in Cabinet? Why is Peseta Sam Lotu-Iiga not a member of the Cabinet when it put in other members who do not have the gravitas and the intellect of the member who has just spoken? No wonder he is an unhappy member of that caucus. He is looking at a party that saw a drop of 6 percent in one poll very recently and he knows that it has a party leader who has lost 30 percentage points in his own popularity in 1 year alone and that the track has been downward every month regardless of the crowing that National members are doing today. I say to the members opposite: do not be too smug. Some of us have been around here long enough to see the crowing rooster become a feather duster and that is exactly what we will see from the National Party.Five wasted years: 5 long years of delay of political posturing and 5 years of weasel words. Worse still 5 years of inaction over the Auckland City Rail Link. You know National members had it all. It was given to them and all they had to do was to pick it up and run. But what did they do? They decided any policy any good Labour policy could not continue so they turned round and repealed the very mechanism that would have given them the money to pay for public transport including rail in Auckland. It was a whim. It was a Steven Joyce decision. If it was Labour it equalled bad. So after 5 wasted years 5 years of inaction today they have been forced by the Labour Party to accept our policy—to accept a policy that we put in place and started back in the 2000s.In 2006 we set up the very working party that decided the future decisions around rail infrastructure and funding. It included double-tracking of the western commuter rail line the redevelopment of the Newmarket station the improved linking of Manukau City to the network and the electrification of rail and it was around $1 billion that could be spent. We gave them the mechanism to pay for the Auckland City Rail Link. We knew how to pay for it: a regional fuel tax. It was a mere 10c and the former mayor of the North Shore saw immediately that this was a good deal for Auckland—as did all the other mayors—and signed up to the deal. They signed up and they all agreed. Do you know that that 10c regional fuel tax paid by the people of Auckland for their public transport would have supported $1.5 billion in funding that could help pay for the Auckland rail link?One of the first things that National did was to repeal the regional fuel tax—it repealed the regional fuel tax. But what has happened? It put 9c alone in this last Budgeton regional fuel. Nine cents alone and to do what? None of it has gone—not just for Auckland no.Hon David Parker: No Dunedin too.Hon ANNETTE KING: In Dunedin in Christchurch in Wellington—Andrew Williams: Chatham Islands.Hon ANNETTE KING: The Chatham Islands—quite right. It has gone everywhere and it is doing nothing in terms of public transport. Let me tell you this: National has not invested in a single public transport infrastructure in Auckland since the election. There have been 5 wasted years.Phil Twyford: What? Not one?Hon ANNETTE KING: Not one not a single one. You know it is very much of the 1990s. National spent nothing on public transport in the 1990s and then it said: “What is Labour doing about it?”. Well we did plenty about it.Now we are told that National members have always been thinking about it. I have to tell you that they have been thinking about it in the smallest room in the House. That is where they have been thinking about it. We have got the biggest U-turn in transport in living memory. We have gone from no go to get-go. Now they want to invest in it because they were forced into it by the people of Auckland and by the Labour Party. And we have the Minister of Transport with the biggest egg on his face you have ever seen. It has taken a whole dozen eggs—scrambled—and there is still not enough egg.I have to say where is Nikki Kaye on this the member for Auckland Central? Why was she not allowed to speak on a serious issue? They put up all their clowns to speak today to crack jokes about polls but no one got up to say: “We are sorry Auckland. We made a mistake. We have wasted 5 years and we could have been putting in place public transport.” It was our policy.KANWALJIT SINGH BAKSHI (National):Thank you Mr Speaker for the opportunity to speak in this general debate. There are a lot of positives that the National Government has achieved. Heaps of rubbish is being dumped by the Labour Opposition which is totally opposite to the facts. I tell you that the ethnic community does not believe in Labour Party policies any more.The New Zealand economy is in better shape because of the National Government’s strong sensible economic management. Our Government’s economic plan is to deliver a faster-growing economy more jobs and a return to surplus which remains on track despite ongoing uncertainty in many parts of the world. The National Government has a growth-enhancing tax system with public service and support for science innovation and trade. We recognise that our future economic performance depends on creating more new ideas and competing with our global competitors.For this the funding has risen by 28 percent in the past 4 years. We have made investment into infrastructure. I am very much aware being an Aucklander how important it is to improve the general infrastructure in this area in order to expand the local market. Our Prime Minister the Rt Hon John Key is promoting New Zealand as an outstanding tourist destination. The number of visitors from overseas visiting all destinations in New Zealand has increased. There has been $158 million invested to boost tourism. Not only are tourists bringing their tourist dollars but the National Government is selling to the world more of what our country is producing. We therefore create more job opportunities for New Zealand businesses to grow hire more staff and invest in the future.Moreover more than one-third of the people living in Auckland were born overseas. The legislation to improve housing affordability will also be very welcome as this will speed up the supply of affordable houses to many migrants within the South Auckland area. Here I would like to say that we have been fortunate to have Ministers who havebeen listening. First of all I would like to give the example of the Hon Jonathan Coleman who brought in the policy for religious ministers which was one of the main issues of ethnic communities. Now the Hon Michael Woodhouse has brought in a policy for combating the exploitation of migrant workers which is also very welcome to the migrant community.Here I would like to share the story of many of the migrants who have been coming to New Zealand to run their own businesses. While they are competing with others some of them are not paying the full minimum wage. Others are in bad shape and they cannot compete with people who are not law-abiding business people. So this policy is a very good step towards curtailing their unfair advantage over the law-abiding competitors.I would also like to share some of the indicators that show that the economy is growing. While I was talking to many taxi drivers during early 2008 and 2009 they were complaining that they did not have enough business. If we talk to them now they say that they are much better off than they were in 2008. For example to buy a share in Auckland Co-op Taxis used to cost about $50000 a few years ago. Today the price of that share is more than $100000. It shows that the business of the taxi industry is growing which is an indicator that overall the economy is growing.Another thing that I would like to share with you is that car sales are the highest they have been in the last 5 years. If we look at people’s spending on different things it shows that the economy is growing and they have got money to—Hon Trevor Mallard: It just shows that the dollar’s too high.KANWALJIT SINGH BAKSHI: It is not that the dollar is too high; they have got money to spend Mr Mallard. It is important that people have got money in their pocket and they want to spend. Thank you.The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Claudette Hauiti. Tēnā koe. Kei te pehea koe?CLAUDETTE HAUITI (National):Tēnā koe Mr Assistant Speaker.Kei te pai ahau. Kia ora.He Kai Kei Aku Ringa is enabling New Zealanders to build their brighter future. I want to talk about the kāinga. I want to talk about healthy homes—warmer drier healthier homes—215000 of them over 4½ years and 46000 more to come.I want to talk about the Tū Whare Oranga Trust in Tokoroa and I want to talk about Greenstar Insulation inŌtāhuhu in South Auckland. These two organisations are helping our whānau into warmer healthier insulated homes. In fact Greenstar Insulation is one of the companies helping 46000 low-income households. Iwi have partnered with the Government—for example Tūwharetoa—to insulate the homes of their iwi constituents. There are 1500 Māori whānau in warmer healthier homes. There is a 100 percent subsidy to heat and insulate 2000 low-income Māori homes and that is something to be celebrated. There is $2.7 million to repair and upgrade the beautiful township of Rātana. That is something to be celebrated.I turn to lifting achievement for children to national standards and to students at or above the standard in years 1 to 8. For Māori reading is up. For Pasifika reading is up. For Māori maths is up. For Pasifika writing is up. Rangatahi are engaged in education via trade training academies—for example Massey High SchoolTe Aho o Te Kura Pounamu Manurewa High School Tikipunga High School and Southern Cross Campus. [Interruption ] It is not nice when you hear about Māori achievements and Māori doing well is it? There has been an increase in Ngā Whanaketanga Rumaki Māori achievement from years 1 to 6 and an accelerated increase in year 8 inte reo matatini.It is wonderful to hear of Māori achievement. We are building a strong productive competitive economy with an increase in the Māori employment rate and the Māoriunemployment rate has fallen from 15 percent to 13 percent. That is a strong New Zealand for our whānau. That is what we have to celebrate: positive results from positive achievements. Kia ora.Hon Dr JONATHAN COLEMAN (Minister of Defence):That was a great speech from a new member. I think that shows the depth that the National Party is bringing into this Parliament and I want to congratulate Claudette Hauiti on pointing out some of the realities of what this National Government has achieved for Māori. I can tell you what: that is why the Labour Party is going to get its backside kicked in the by-election in Ikaroa-Rāwhiti come this Saturday. That side of the House has not delivered for Māori. One of the big reasons for that is that when you pick up the front page of theNew Zealand Herald today and you see this picture of David Shearer banging his head against the wall that is not something that inspires confidence.Hon Trevor Mallard: I raise a point of order Mr Speaker. I was not present in the House earlier—are you allowed to refer to your own absence? I think you are. I was away a little earlier but I thought that the Speaker—it appeared on the radio at least—was ruling against the continual use of a device by Mr Henare and had indicated to Mr Henare that if he held it up again he would be required to leave the House. He has held it up again.The ASSISTANT SPEAKER (H V Ross Robertson): Well all I can say is that—[Interruption ] Order! Order! All I can do is refer members to Standing Order 109(2) which is to do with visual aids. It says that they should be displayed only when a member is speaking and must be removed at the conclusion of the speech. The member is not speaking. He cannot display a visual aid. He should know that. I was here when he was sent out before.Hon Tau Henare: I haven’t.The ASSISTANT SPEAKER (H V Ross Robertson): All members are honourable and I accept the member’s word. [Interruption ] Order! Order!Hon Trevor Mallard: I raise a point of order Mr Speaker. The member most certainly held up a placard with a figure on it. I did not see what he was holding up earlier. [Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! This is a point of order.Hon Trevor Mallard: He held it up in here. I assume that it was the thing that he was requested not to hold up on warning that he would be kicked out of the House. A repeat offender—I think that is a naming offence.The ASSISTANT SPEAKER (H V Ross Robertson): Order! All I can say is that the member has given me his word that he did not do it. All members are honourable. [Interruption ] Order! If it is otherwise then there is the possibility of a breach of privilege. I call the Hon Jonathan Coleman.Hon Dr JONATHAN COLEMAN: Well I think that just shows that when Trevor Mallard—[Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Sorry Mr Coleman. You can start again. I know that the members on both sides of the House love each other but courtesy is contagious so let us try to work together.Hon Dr JONATHAN COLEMAN: I raise a point of order Mr Speaker. I am about 45 seconds into a 5-minute speech and I would request that you reset my time to zero—The ASSISTANT SPEAKER (H V Ross Robertson): Order! [Interruption ] Order! The member will be seated. If the member had listened I actually said that. I call the Hon Jonathan Coleman.Hon Dr JONATHAN COLEMAN: Excellent! So this—Hon Trevor Mallard: I raise a point of order Mr Speaker. Since when when a member on his own side misbehaves does a member get an extra three-quarters of a minute? That is an outrageous ruling.The ASSISTANT SPEAKER (H V Ross Robertson): Order! There have been enough interjections and enough points of order. I have heard enough. What I want is what everyone in this world wants and that is order. I call the honourable member Jonathan Coleman.Hon Dr JONATHAN COLEMAN: For 5 minutes I presume. This is a very bad day for the Labour Party. You cannot ignore a poll rating like you have seen on the front page of theNew Zealand Heraldtoday. And what is Labour at? It is at 30 percent. I do not know whether you saw TV3 this morning but David Shearer was asked what he is going to do differently and he said: “Absolutely nothing. We are going to do everything exactly the same. We are not going to change anything.”There is only one guy who I reckon will be the beneficiary of this—and he has been very slyly smiling away quite undisturbed through all this—and that is Grant Robertson. He has been putting political arsenic in David Shearer’s tea for the last 18 months and it is starting to pay off because David Shearer the poor man is just about dead on his feet. I tell you David Shearer is actually a very good bloke. I like the guy. He used to be one of my constituents. He voted for me. He used to engage very well in conversation. He is a very decent man. But he would be saying: “How can I get out of this? How can I get back to the Middle East or the jungles of Rwanda? Because this is not going well and I just want to get out of here with some dignity.”But when you look at the options they are not great. I think we have got a few of them here—six people here and correct me if I am wrong but I think five of them have not got a day’s business experience between them. David Parker I will make an exception for. But you have got Grant Robertson there. Is this man unelectable or not? This is a guy you can take around the cafes and the nightclubs of central Wellington but I can tell you take him to the Glenfield Mall or the Northcote Tavern where I am from and it just ain’t going to work.Annette King is a very nice lady but a total retread. Next time will be her third time round. Darien Fenton marks me in Northcote and I encourage her to do more doorknocking in my electorate. It is something we should have more of. Trevor Mallard—well we have seen today that when Trevor is in the House Mr Mallard things go wrong. I actually had quite a high opinion of David Clark until that incident 10 days ago when he yelled an insult knew he was in the wrong and went running out the door—running away. And then he realised that it did not look good to run out of the House so he came back under Trevor Mallard’s tutelage and he apologised. So he is definitely not up to it because he cannot face up in the House and take his medicine. So that is a real shame because he was a young man with some promise. And of course Trevor Mallard—need we say more? In fact I wish Trevor Mallard would come and do some doorknocking in my electorate. That would be the ultimate. That would really get the party vote going.But what I want to say is that group over there is focusing on the things that do not matter to New Zealand. They focus on the parliamentary bickering. They focus on the points of order. They focus on the backbiting in the select committees. You know what? Actually the general public do not watch any of that stuff. But what the public knows is that under the National Government when their kid is sick the under-sixes get a free doctor’s visit; when they need to get cancer treatment for their mother-in-law their grandparent within 4 weeks they are getting that treatment in Australia. When AnnetteKing was health Minister it took weeks and weeks and weeks and people died on waiting lists. Their answer in the end was to kick everyone off the waiting list.What you can see today in the OECD report on education is that New Zealand is doing excellently. The work that my colleague Anne Tolley did around national standards—these guys said it would never work but it does work because we are connecting with parents and parents know it is the right thing to do. If you look at law and order there are 600 more cops on the streets. The cops love the Minister of Police. They are glad to be rid of that tawdry lot who were in Government before who had no regard for the police and who still show that when Trevor Mallard gets up in a select committee and abuses a public servant—abuses Mike Bush the Deputy Commissioner of Police which is totally unfair because Mike Bush cannot talk back. That is not the mark of people whom you would ever want in Government. Those people over there are a disgrace.But meanwhile who have you got who can unite the Labour Party? There is one man. It is David Cunliffe. They are united in their hatred of him. It is the one thing they all agree on. They do not want David Cunliffe as leader or Prime Minister. So when you look at it it is pretty bad news over there. But we are focused on rebuilding Christchurch—billions of dollars going into there and 50000 new jobs in the last 4 years. We are very focused on getting the Public Service actually getting something happening. It is all good news.The debate having concluded the motion lapsed.Imprest Supply (First for 2013/14) BillFirst ReadingHon STEVEN JOYCE (Acting Minister of Finance): I moveThat the Imprest Supply (First for 2013/14) Bill be now read a first time.A party vote was called for on the question that the Imprest Supply (First for 2013/14) Bill be now read a first time.Hon DAVID PARKER (Labour):I raise a point of order Mr Speaker. [Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! The member is on his feet.Hon DAVID PARKER: Are you finding that a member of the Government voted in favour of that motion because—The ASSISTANT SPEAKER (H V Ross Robertson): I had not quite finished putting the vote and I heard Mr Henare say yes. [Interruption ] Order! Is there a vote called for? There is a vote called for.GRANT ROBERTSON (Deputy Leader—Labour):I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (H V Ross Robertson): We are right in the middle of a vote.GRANT ROBERTSON: The Hon Tau Henare was warned both by you and by a previous Speaker about showing the bit of paper with a number on it. He was ejected from the House earlier. He has just done it again in defiance of your ruling.Hon TAU HENARE (National):I picked up my stuff I went like that I am out of here. Thank you very much. I mean how—[Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order! The member will be seated please. As I have said—[Interruption ] Order! As I have said to themember before all members are honourable and they are taken at their word. So I am going to ask the member now whether he showed the placard and if so then he will leave the House.Hon TAU HENARE (National):As I have said—[Interruption ]The ASSISTANT SPEAKER (H V Ross Robertson): Order! Please continue.Hon TAU HENARE: As I picked my material up I went like that. If the cameras were on me they will show what I did.The ASSISTANT SPEAKER (H V Ross Robertson): All right—[Interruption ] Order! I take the member at his word. If it is otherwise then the member knows the repercussions of that.Hon TREVOR MALLARD (Labour—Hutt South):I raise a point of order Mr Speaker. I think you have got at least three members on this side who will indicate to you that what Mr Henare just told the House is not true. There is a limit to how often you can take a member’s word. We took it last time because I was the only person who saw it. At least three members on this side saw Mr Henare—not once but twice—not point the sign towards him as he indicated to you but outwardly to the House. It is vital that we take members’ words in this House. It is the basis on which we work. Tau Henare has given an undertaking that was absolutely incorrect and he has misled the House I think deliberately. I think there is probably a last chance for him to accept what he has done to take the immediate punishment and to apologise both for what he did and for misleading the House otherwise this matter is going to get pretty rough.TIM MACINDOE (Junior Whip—National):Mr Mallard’s latter point is right. It is vital that we take members at their word. His previous point was quite wrong. There is no limit to which we accept that all members are honourable. Your ruling was correct and I invite you to uphold it and to move on.The ASSISTANT SPEAKER (H V Ross Robertson): Well all I can say is this: that a member’s word is taken as it is. That is the right that we have here as freedom of speech. If it is proved otherwise—if the member is proved otherwise and there are cameras here—then there are repercussions for the member.Hon TAU HENARE (National):I raise a point of order Mr Speaker. To reiterate what I said to Mr Mallard I picked my stuff up from my chair I went like that—that is right absolutely—and then I put that on my material the way it is now. If that is a crime in this House then I think we have sunk pretty low.The ASSISTANT SPEAKER (H V Ross Robertson): Order! Can I just suggest—Hon TREVOR MALLARD (Labour—Hutt South):You will note that when Mr Henare explained what he did the first time he held the number towards him. When he explained what he did the second time he did indicate—only briefly compared with what he actually did—what he did do. He has changed his story between the two points of order and he effectively pleaded guilty in the second one.The ASSISTANT SPEAKER (H V Ross Robertson): Can I invite the member to withdraw and apologise and leave the Chamber.Hon TAU HENARE (National):Am I being kicked out of the Chamber? For?The ASSISTANT SPEAKER (H V Ross Robertson): I am asking the member to withdraw and apologise and leave the Chamber.Hon TAU HENARE (National):I withdraw and apologise.Hon Tau Henare withdrew from the Chamber.A party vote was called for on the questionThat the Imprest Supply (First for 2013/14) Bill be now read a first time.Ayes64New Zealand National 59; Māori Party 3; ACT New Zealand 1; Independent: Dunne.Noes53New Zealand Labour 33; Green Party 11; New Zealand First 7; Mana 1; Independent: Horan.Bill read a first time.Supplementary EstimatesImprest SupplyDebateHon STEVEN JOYCE (Acting Minister of Finance): I moveThat the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill be now read a second time . These bills continue the Government’s economic and fiscal strategy and provide the funding for the Government to operate until the 2013 Budget is passed. Budget 2013 is about responsible management of the Government’s finances and I am proud to report to the House that we are on track to return to surplus and begin to reduce debt by 2014-15. Budget 2013 is also about building a competitive economy for New Zealand businesses to succeed and grow. We are investing in a package of growth and innovation measures we are speeding up the provision of new housing and we are reducing ACC levies. Through the Future Investment Fund we are making several key investments in New Zealand’s infrastructure. Budget 2013 is about delivering Better Public Services. Ten priority targets have been set for the Public Service where there are opportunities to make a substantial difference. Investment is being carefully targeted to support these Better Public Services targets.Importantly Budget 2013 is about rebuilding Christchurch. The Budget has provided an extra $2.1 billion for the Christchurch rebuild taking the Crown’s total contribution to around $15.2 billion. Since 2008 New Zealand has been impacted by the global financial crisis and an international recession. Around the world many countries continue to grapple with low growth high unemployment and soaring Government debt. Directly or indirectly this has affected every New Zealand household and business. On top of that New Zealand has had its own additional challenge which is of course dealing with the earthquakes in Christchurch and the economic cost of the city’s rebuilding. Of necessity we have had to take on extra debt to protect the vulnerable through this period to maintain living standards and of course to support Christchurch’s renewal.However unlike many other countries our economic recovery is gathering momentum. Our debt remains very manageable and we are on track to return to surplus by 2014-15. There are 50000 more jobs in the New Zealand economy than 2 years ago and household disposable income has risen by 20 percent over the past 4 years. Now that the economy is recovering we need to bring down the Government’s debt bring the books back into balance and start to pay down debt. This is crucial for New Zealand’s long-term prosperity. You only have to look at the drama still being played out in Europe on a daily basis to know how excessive borrowing and debt ends and the ultimate economic and social cost that it creates. That is why we have also set out a clear strategy and path to bring the Government’s books back into balance. We set out a plan we have stuck to that plan and that plan is working for New Zealand. We are not engaging in the harsh Budget cuts that we are seeing in other countries notably insouthern Europe. To the contrary we are spending more in areas where a difference can be made and we are also spending much more effectively.The 2013 Budget provided new operating spending of $5.1 billion in the current year and over the next 4 years. This includes significant new spending that will benefit Kiwi families in areas such as early childhood education aged care welfare reform tertiary education and healthy homes. We have also allocated $1.5 billion of capital spending through the Future Investment Fund including $426 million for the redevelopment of Christchurch and Burwood hospitals. Looking forward we also allocate $1 billion to investment in 21st century schools and new classrooms and a further $1 billion to priority health investments.With the Business Growth Agenda we have set the specific goal of lifting our exports to 40 percent of GDP by 2025. Through initiatives in building export markets building innovation building skills providing safe workplaces building public infrastructure building natural resources and building capital markets the Business Growth Agenda is a comprehensive plan of work which is working to achieve a better platform for New Zealand businesses to compete on the world stage. Achieving our export goals requires New Zealand to develop stronger linkages with international markets and be a stronger player in research and development. It is particularly important to develop these linkages with emerging markets as relative consumer power moves swiftly from west to east. We need to further develop our relationships in China India South-east Asia Latin America and the Middle East. To achieve those goals the Government in Budget 2013 announced a $400 million internationally focused growth package. This includes investing an additional $50 million a year in science and innovation across business research and development commercialisation and core science research. Forty million dollars a year is going into New Zealand’s tourism and events industry to attract and increase earnings from high-value international visitors. Ten million dollars a year will go towards marketing our international education sector to raise the profile of New Zealand’s quality education system overseas and there is $2 million this year for the development and launch of the New Zealand Story.The Government has a very balanced programme involving sound financial management carefully targeted spending and investment and improved public services for all New Zealanders. If I can make a brief comment about today’s events before I conclude I say that there are many confused people around wondering why it is that the Government is polling so well when for various reasons they think that the Government should not be polling so well. Well I think that more than anything else New Zealanders New Zealand families recognise that this Government has a very strong and focused economic and fiscal strategy for New Zealand. It is notable to say that since Bill English went through his Budget in May of this year the Government’s fortunes with New Zealanders have continued to improve and increase. The New Zealand public is endorsing this programme of the New Zealand Government. The Government will continue to require careful and sometimes difficult policy choices to ensure growth prosperity and jobs. The New Zealand public know that we will face up to those decisions and we will take those decisions well and that is what they are supporting through this Budget and through the economic and fiscal decisions that this Government is making.Hon DAVID PARKER (Labour):What we did not hear from the Acting Minister of Finance Steven Joyce in his contribution was how the Government is going in respect of its promises at the last election. One of the Government’s promises was 170000 more jobs. It has fallen off that target. It is already clear that it is not going to make that promise that it made at the last election happen or anything like it and as a consequence the Minister did not address it. We have not heard anything of thatpromise. One of the shiny promises National used at the election was “Wave Goodbye to Higher Taxes. Not Your Loved Ones.” Since then 200000 New Zealanders have left permanently for Australia—200000. That is much more than the combined population of Dunedin and Invercargill much more than the population of Hamilton and much more than the entire population of Napier and Hastings combined. We did not hear anything of that.We did hear reference to growth rates. He made reference to the growth rate. He ignored the fact that our two largest trading partners Australia and China have had a higher growth rate than New Zealand. He ignored the fact that the latest OECD report made for salutary reading. The OECD survey records that New Zealand’s imbalances remain high. It lists some of them in the report and the Budget that the Minister has just referred to does not fix them. For a start it said that New Zealand has high levels of external liabilities and it records—it does not put it in these terms—that the imbalances in the New Zealand economy where we do not meet the cost of our imports and interest from the value of our exports are already bad. It shows up in New Zealand’s net international liabilities which are just about all on the private ledger and are amongst the highest in the developed world. Every year to the end of the forecast period whether it is the OECD or the IMF recording them they remain amongst the highest if not the highest in the developed world. The IMF says our external deficit is the highest in the developed world. The OECD says it is the second-highest after Turkey.The OECD also says that the consequences of the underperformance of the New Zealand economy in our two-speed economy are not visited upon New Zealand evenly. It records that we have become an unequal country and that under this Government that has got worse. We should not be surprised by that because 40 percent of the income tax cuts that the National Government brought forward after coming into office went to the top 10 percent of the population. The OECD report that I have got in front of me which is a June report—it is this very month’s—isOECD Economic Surveys: New Zealand 2013 . It records that New Zealand’s tax system is in the lower half of tax systems in terms of its redistributive effect so it is less redistributive than other tax systems overall. The report says that in particular in respect of capital income—and it is income in an economic sense but in terms of a tax definition it is capital income—it is one of the least redistributive tax systems in the world or in the OECD certainly.I am going to repeat something it says here. It says tax changes meriting consideration are those that are more conducive to both growth and equity and then it lists some. I quote from page 31 of the report: “New Zealand belongs to a group of five OECD countries with particularly high pre-tax capital-income inequality ... As much of this income especially at the top levels takes the form of capital gains the lack of a capital gains tax in New Zealand exacerbates inequality (by reducing the redistributive power of taxation). It also reinforces a bias toward speculative housing investments and undermines housing affordability”. So the OECD is saying we are unequal we are becoming more unequal in respect of this gaping hole in our tax system we are amongst the most unequal in all of the developed OECD countries and we have this strange tax system that does not tax economic income. It taxes a subset of it which is taxable income for the purposes of the Income Tax Act and it excludes capital income. The OECD is saying that not only would New Zealand be a fairer place but our economy would be stronger if we removed that imbalance.Why would that be the case? Well if we remove that imbalance we then get New Zealanders investing their precious investment capital on the basis of the productivity of the investment or the profitability of the business that is being invested into rather than on the basis of the tax bias that currently favours speculative housing. The ANZ in the last week has said in respect of the latest data that New Zealand has externalimbalances which are worrisome and are not fixed. It is effectively saying—again it does not use these words but it is effectively saying—that another promise of the incoming National Government which was to rebalance the economy towards exports and export-related jobs has not happened because its policies will not achieve it and that as a consequence it should be getting a fail on that.The second recommendation of the OECD was that we should have a tax system that uses environmental taxes to “help enhance the quality of growth”. That phrase “help enhance the quality of growth” is a quote from the OECD. It states that such taxes could include congestion charges or a tax on polluting activities or the removal of free permit allocation under the emissions trading scheme which it goes on to discuss. So it makes two very helpful suggestions. It says that if we want to have a stronger economy then we should be doing things that this Budget is not doing. Those are that we should be moving not to increase taxes overall but to change the mix of tax so that we remove some of the distortions in the economy. We would as a consequence if that happened be a wealthier nation with more jobs for our people and lower debt and we would be a wealthier country over time.The Labour Party says that we should have a capital gains tax excluding the family home. That would improve the economy it would improve the equity of society and it would take some of the heat out of Auckland house prices. The Reserve Bank data that the Acting Minister of Finance Mr Joyce today did not know about—and he admitted in question time that he did not know about it—shows that we have increased by billions of dollars the additional household debt that is owed by New Zealanders secured over their homes.The Acting Minister of Finance had a question on notice to him put down today that said: “What progress is the Government making to ensure future generations of New Zealanders are not saddled with excessive debt?”. So we in the Opposition party as is our right at question time asked him a supplementary question to that. We asked the Minister what the situation was in respect of the extra debt that was being taken on by the household sector in their mortgages because this was a question about New Zealanders being saddled with excessive debt. The Minister said that he did not know. He said that he did not know despite the fact that the Reserve Bank carries a data series that the Minister should have known about. I find it hard to believe that he did not know that it shows that with Auckland house prices increasing at the rate of 15 percent per annum at the moment we have got rampant house price inflation in this two-speed economy. The data series shows that already we have got over $180 billion of mortgage debt in New Zealand and that it is increasing at a very fast rate. The Acting Minister of Finance Mr Joyce denied knowing that today in the House.We have just heard a speech here in respect of this Budget and again he does not address this terrible misallocation of resource in New Zealand where we have got rising house prices and we have got an export performance outside of the primary produce sector that is woeful. The Minister again likes to dice his statistics and put ever more reliance on primary production and the related manufacturing and to deny the reality that we have had huge numbers—thousands—of job losses in manufacturing outside of the primary sector. We have had decreasing export receipts in real terms by 17 percent outside of that primary sector. The Government’s Budget will not do anything to fix that problem.Dr RUSSEL NORMAN (Co-Leader—Green):I rise today to speak in general terms about the Government’s economic and fiscal strategy as related to the bills in front of us the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill.I think that perhaps the short version of the Government’s economic strategy at the moment is for the country to borrow like crazy in order to maintain some level of economic activity until the next election. If you look at what is happening with the current account deficit a $10 billion a year current account deficit essentially we are either borrowing from offshore or selling our existing assets. Either way you look at it we are degrading our capital base. The Government hopes that running very large current account deficits between now and the next election will keep the economy ticking over and that people will feel like things are going OK. At a superficial level if you look at GDP numbers there is some truth in that. But of course anyone can borrow their way to a bit of economic activity. It is not that hard to do. Even Steven Joyce can borrow his way to a bit of economic activity.Hon David Parker: MediaWorks have done that too. What’s happened to them?Dr RUSSEL NORMAN: That is right. MediaWorks recently demonstrated the particular problem with this strategy of borrowing one’s way to economic prosperity.The strategy of the Government for the New Zealand economy is to borrow more every year. If you look at the projections that are in the Government’s own Budget—that is the projections for the New Zealand economy—they are for the current account deficit to increase through to 2017 until it is $17 billion a year. So the strategy of the Government is that in 2017 New Zealand will borrow or sell assets worth $17 billion. That is how we will fund economic activity in New Zealand. That is what these very large and growing current account deficits mean and they are in the Government’s own numbers.I think what people need to realise is that the Government is trying to pull a swiftie. The swiftie is this—and Mr Key has done this on numerous occasions. Mr Key says: “Oh the Government is going into surplus possibly in the next few years therefore the economy is going well.” This is what he says. He says that the Government is going into surplus therefore the New Zealand economy is going well. He hopes that New Zealanders will not follow what he is saying but will just think: “Oh yeah things seem all right.” He is hoping that New Zealanders will not notice that the Government’s economic plan is to borrow $10 billion this year and increase it every year through to the end of the projected period.It is not just that the borrowing the current account deficit is increasing every year in nominal terms as Mr Joyce pointed out today in question time; it is actually increasing as a proportion of economic activity increasing as a proportion of GDP. Under the Government’s own projections the current account deficit is 5 percent currently and rises through to 6.5 percent of GDP in 2017. So the Government’s strategy is that they think: “Well we’ll just say the Government’s surplus is fine and people won’t notice that in fact the economy as a whole the country as a whole is in a deep deficit.” and it is a deficit that under the Government’s own projections is getting worse every year. So every year in order to finance economic activity in New Zealand we have to sell off some of our assets—maybe some of our large corporations or maybe some land some kind of capital assets—or we have to borrow from overseas about $10 billion this year and every year going ahead. It increases to $17 billion a year by 2017 according to the Government’s own projections.That is the sleight of hand that is happening right now in terms of economic management by this Government and that is the lie that it is hoping the people of New Zealand will not wake up to before the next election. It is hoping that the people of New Zealand will not realise that a Government surplus—a wafer-thin Government surplus—is not the same thing as a national surplus. In fact the Government’s strategy is for a massive national deficit. National’s plan for the New Zealand economy is toborrow like crazy and borrow more every year. That is what the current account deficit is.In this Parliament we have been questioning for some time various finance Ministers and associate finance Ministers about current account deficits. At the beginning of the questioning Bill English did not really know what a current account deficit was. We questioned him about it at some length and he did not know what it was. However by 2010 he had woken up to it to give him his due. In the 2010 Budget he recognised the problem and he said: “We need to rebalance the New Zealand economy.” He was very clear about that. He said it many times on average twice a week in this House.What he meant by that was that we had to deal with the current account deficit because that is the No. 1 metric of the imbalances in the New Zealand economy. He set himself the goal of making the tradable sector improve its performance and the non-tradable sector stop growing so quickly so that we could get the two back together again and the tradable sector could help us get out of the hole. The tradable sector is the part of the economy that exports offshore or competes with imports—it is that part of the economy. The non-tradable sector is the rest. We need the tradable sector to be competing with imports or selling exports in order to pay for all the things we want from the rest of the world. Bill English said repeatedly that the single-biggest vulnerability facing the New Zealand economy is the net external liabilities. This is what he said in 2010.According to the Government’s own projections New Zealand’s net international investment position our net debt to the rest of the world is currently about $150 billion. Under National’s economic plan in its own Budget the net debt increases to $208 billion by 2017 according to the Government’s own figures. Judged by Bill English’s own criterion—the external imbalances the current account deficit the biggest vulnerability facing our economy as he described it—there is no way to describe the Government’s plan other than as a failure. There is no other way to describe it based on the Government’s own numbers based on its own criterion for judging its economic performance.Bill English even said back in 2010: “You’ve got to look at the country’s position as a whole; not just the Government books. You’ve got to look at the nation’s books.” That is what he said. He said: “You can’t just look just at the Government books”—that is an important part of it and we agreed with him—“You’ve actually got to look at the nation’s books.” When you look at the nation’s books as a whole we are borrowing or selling assets worth about $10 billion a year and under National’s plan that increases to $17 billion a year.I hope when people go through the next 12 months or so running up to the election—and I do not know whether we are going to be successful at this because the Government has the best spin doctors in the game; there is no question about it—the people of New Zealand wake up to the fact that a Government surplus is not the same thing as a national surplus. It is not the same thing as the country being in surplus. In fact under National’s plan there might well be a very small Government surplus but there will be a massive nationwide deficit.We do not know whether we are going to be able to communicate that basic fact through because it is a bit complicated truth be told. The current account deficit is not the kind of thing that most people spend their time talking about amongst their friends or thinking about or arguing about. But in fact it is the most important number that people need to know about the New Zealand economy and how it is going in terms of paying our way with the rest of the world.When I asked the Reserve Bank Governor about this when he appeared in front of the Finance and Expenditure Committee he said that sooner or later there will be acorrection and the correction will be either one that we impose upon ourselves by actually helping our tradable sector and getting out of the enormous hole of debt we have got ourselves in or one that is imposed on us by our creditors. Our creditors will say either: “We’re not going to lend you any more money.” or “Well we’ll keep lending you money but it’s going to cost you a hell of a lot more.” That kind of correction will happen in due course.There were those financial traders the Prime Minister amongst them prior to the global financial crisis who said that debt does not matter—right? They said that debt does not matter. The fact that there are these huge imbalances in the American economy is irrelevant. They said: “What does it matter? Debt doesn’t matter.” Well it turns out that debt really really really does matter. That is what the global financial crisis proved. The market does not always accurately price true risk around debt and eventually there is a radical correction. That is what the global financial crisis was.New Zealand is in the same position. We are building up massive stocks of external debt. At the moment it is pretty cheap so we are borrowing more hand over fist. The Government’s strategy is to borrow more and more and more for the country as a whole but sooner or later there will be a correction and when that correction comes it will have very significant consequences for New Zealand. It is much better that we manage ourselves out of this hole rather than have someone else impose their particular bailout formula on us. That is why it is so critical that we get on top of the external imbalances that Bill English himself identified.The green economy I would argue is part of that solution but it is only part of it. What we are seeing most of all from this Government is a failure to deal with the single very important problem that Bill English himself identified. If he does not deal with it it is going to create a major problem for the next Government—that we are going to have to deal with this incoming huge debt burden of a current account deficit.RICHARD PROSSER (NZ First):I am pleased to rise on behalf of New Zealand First to take a call on the Appropriation (2012/13 Supplementary Estimates) Bill. I want to talk about—actually I do not want to talk about it but I am compelled to talk about it again—this Government’s incomprehensible irresponsibility when it comes to biosecurity. Three-quarters of New Zealand’s economy is based on agriculture. Directly or indirectly somewhere north of 75 percent of this country’s income its export earnings is generated by the things that we fish from the sea or grow in the ground: the forestry the vineyards the orchards the market gardens and the arable crops. From the green dairy pastures of the Waikato and “the Naki” to the even greener farms of Southland from the great granary that is Canterbury to the vineyards that are Marlborough the bulk of New Zealand’s wealth comes from down on the farm.Then there are the animals which provide a great part of that wealth. So I want to talk about foot-and-mouth disease. I think it is important that we address the subject of foot-and-mouth disease because this Government’s approach to biosecurity its irresponsible “Look mum no hands.” approach to biosecurity means that the prospect of this country succumbing to foot-and-mouth disease from which we have until now remained free is a matter not of if but of when.Some time in the dim distant past the continent of Zealandia broke off from Gondwanaland drifted off and sank. Then about 23 million years ago or thereabouts according to those learned types who profess to know about such things it began to rise again. The New Zealand of today these islands that we call home is the bits of that continent that now protrude above the waves. Those waves have served us well as a biosecurity moat.Until the advent of man the only creatures that were able to inhabit these islands were those that could fly or swim or had the good fortune to be blown here on thewind—birds and bats and insects—but no mammals other than marine mammals and perhaps the elusive and possibly mythical waitōreke the native otter. In the absence of predators birds lost the ability to fly as we know.This was a genuine paradise free of pests and diseases and in fact anything nasty. The wheels began to fall off that of course with the arrival of the first waka and the rats that came ashore as part of the uninvited cargo that our first-nation people brought with them. Shortly thereafter in geological terms more waka began to arrive—different waka; the big ones with the tall masts and the square white things on top and the pale-faced occupants. They brought other creatures with them—the four-legged cloven-hoofed ones which today are the basis of our agricultural sector in our economy. They too in the early days lived and evolved in splendid isolation free from many of the diseases that subsequently ravaged the stock from which they had come back in the old countries of Britain and Europe.The pigs and the goats that were released on our outlying islands by Captain Cook almost 250 years ago are even today a source of clean genetic material for our breeding and medicinal industries despite the best efforts of the Department of Conservation to have them wiped out for the crime of being non-indigenous. Well maybe they were not always indigenous but I would contend that they are now just like the pine trees the grapevines the wheat the kiwifruit the spuds and all the other things that form the basis for our way of life and our way of earning a living and I might add just like people.Humans are no more indigenous to these islands than any other johnny-come-lately organism that has flown or drifted or blown in on the wind during the past 23 million years. We are all interlopers and until recently we have been protected by the moat which is the ocean that surrounds us—no longer however. In this day and age there are other ways for people and things to reach these shores. There are great steel waka and mighty aluminium birds and they carry people and goods and creatures and organisms from the far reaches of the Earth.One of the things that they have not carried yet but which one day one of them will is foot-and-mouth disease. When that horrible virus arrives—and it is a case of when not if—the results will be terrible for this country for the entire agricultural sector and for the entire economy. The Ministry for Primary Industries’ own website carries the following blunt warning: “If FMD reached New Zealand virtually all exports of meat animal by-products and dairy products would stop. They would not resume until at least three months after the slaughter of the last infected animal. The country’s trade reputation would be damaged unemployment would rise (up about 20000 jobs) and the Gross Domestic Product (GDP) would lose $10 billion over a two year period.”The website also says: “Foot and Mouth (FMD) is a highly contagious viral disease which affects cloven-hoofed animals such as sheep cattle pigs goats llamas and deer. It can be spread by saliva mucous milk and faeces and can be carried on wool hair grass footwear clothing livestock equipment and vehicle tyres. It can also spread quickly over long distances by wind. The virus likes damp cool conditions and is easily spread when animals are penned up. It does not like warmth and humidity but in the right conditions it has been shown capable of surviving several weeks in the soil or on grass sheep wool or cattle hair. Clinical signs of the disease vary between species but blisters on the nose mouth and feet are consistent. Animals stop eating become depressed and lame and salivate a lot. There is no cure.”The only protection we have as a nation against the arrival of foot-and-mouth is the ability to be vigilant at the border to be prepared for the arrival of the virus to detect it before it makes landfall and to stop it before it gets in. In the face of this reality this Government is cutting the biosecurity budget. The report of the Primary ProductionCommittee on the 2012-13 estimates for Vote Primary Industries states: “The Minister stated that biosecurity is one of his top priorities. We note that close to 60 biosecurity jobs in the ministry were disestablished and the number of dogs working at the border has been reduced; at the time of the hearing there were no dogs at Wellington Airport.The Minister was asked the reason for the decision to cut the biosecurity budget and front-line services while many risk items continue to cross New Zealand’s border. The ministry has indicated an intention to hire 40 new staff and the Minister explained that the budget was restructured to reflect demand more accurately. The dog shortage resulted from dog handlers resigning and the ministry is looking for replacements. The Minister acknowledged that New Zealand is always at risk of incursion and he believes that the ministry’s biosecurity system is very effective.We asked whether disestablishing Biosecurity New Zealand would adversely affect the ministry’s ability to respond effectively to biosecurity incursions. “The ministry believes on the contrary that the disestablishment of Biosecurity New Zealand has been beneficial; it has allowed the ministry to group teams by expertise within the ministry’s structure.” And yet the Government has cut $6 million from Vote Biosecurity.The report continues: “Furthermore we heard that the size of the ministry allows it to respond to situations comprehensively. Some of us are concerned nevertheless that reduced border security will increase New Zealand’s risk of biosecurity incursion.” Members are indeed concerned. There are some exceptionally fine people on that select committee by whose leave I sit on a regular basis as an observer.Fine members from all parties are well aware of the danger inherent in dropping the nation’s guard in this incomprehensively irresponsible manner. Yet I quote again: “The ministry believes on the contrary that the disestablishment of Biosecurity New Zealand has been beneficial; it has allowed the ministry to group teams by expertise within the ministry’s structure.” Incredible.All we have to do is make the smoke thicker and the mirror shinier and the foot-and-mouth virus will not notice the fact that we have cut $6 million from the budget or that there are no sniffer dogs or that anyone with the right passport can waltz across the border with their person and their luggage completely uninspected and it will not be able to get in. That is truly incredible or perhaps it is completely insane.Just last week we heard about a shipment of palm kernel from somewhere in Asia which was found to have a goat’s leg in it—a goat’s leg. How disgusting. That is like finding a finger in your mince pie only a whole lot worse and a whole lot more serious. At any rate we think it was a goat’s leg. We are not sure whether it was from a goat and we are not sure which country it came from and we would not have known it was here at all if the farmer had not reported it. All we know for sure is that it was from a cloven-hoofed animal and it came from a country in Asia where foot-and-mouth is endemic.We import rubbish like palm kernel from countries that do not care about health or hygiene or quality control and at the same time we cut the biosecurity budget and leave the door wide open and we will get foot-and-mouth because of it—not if but when. Six million bucks is all we are saving in the name of demonstrating that foolish ideas like SmartGate are the wrong way to go and in the process we are throwing away our entire livestock in dairy industries and costing the country $10 billion and 20000 jobs. It is a disgrace and it is probably criminally negligent.This Government has failed to adequately resource biosecurity. It has failed the agricultural sector it has failed the entire economy and it will deliver us foot-and-mouth. The Government has failed completely. It is a disgrace and it should resign. Thank you.PAUL GOLDSMITH (National):It is my pleasure to speak on this Appropriation (2012/13 Supplementary Estimates) Bill and I would be keen to bring the debate back to the matter before us which is the Budget that was delivered by Bill English. The fifth Budget that he has delivered confirms that New Zealand is on the right track. We have forecasts of economic growth more jobs rising wages and a return to surplus by 2014-15.In talking to business people up and down the street there is no doubt that this is still not an easy time to be in business particularly if you are in retail. We have had 5 years now of the global financial crisis and difficult times—headwinds—that many business people and families throughout New Zealand have struggled with and struggled against combined with the devastating Christchurch earthquakes which have made for a particular challenge for New Zealand. But although these challenges remain the economic recovery here in New Zealand is gaining momentum driven by low interest rates investment and strong export prices.Economic growth at 2.4 percent for the year to March 2013 is almost the same as Australia’s. If we cast our eyes at the traditional countries that we compare ourselves with we are looking at 2.5 percent in Australia so that is just a fraction above in Australia. There is 1.8 percent GDP growth in the United States 1.4 percent in Canada 0.2 percent in Japan 0.6 percent in the United Kingdom and minus 1.1 percent in Europe. So when you compare New Zealand’s progress with those countries you have to say that all in all this Government’s financial management has been very effective and it has done well.In the meantime wages are growing the cost of living increases have been modest and interest rates are at 50-year lows. Household income has risen 20 percent in the past 4 years and it is expected to rise by almost 20 percent more in the next 4 years. With regard to the fiscal outlook as we have heard many times and as we have indeed heard people on the other side of the House commenting on we are on track to be back in surplus by 2014-15. People might say that that is all very well and good. I have heard in the past Labour members saying: “Oh yes we would have done that as well if we were in Government.” Well Labour’s track record certainly does not indicate that. Yes it is true that the Labour Party ran surpluses while it was in Government but it was bequeathed a very well-organised Government by the 1990s National Government and it continued in a reasonably fiscally prudent manner in its first 6 years. Labour should be congratulated on that but the problem was not what it did during the first 6 years; it was what it did in the last 3 years in particular bringing in a number of decisions and new spending areas which meant that although Labour managed to maintain surpluses while it was in Government when it left the projections for the next 10 years were of continued deficits. The projection was that this country was going to have 60 percent of its GDP in debt by 2020 if we had carried on in the way the Labour Government was going. No right-minded Government or country would want to be putting itself in that position.So we did have to make substantial changes. To go from a position where we were running a deficit of $18 billion only 2 or 3 years ago because of a combination of wanting to maintain a level of support for the most vulnerable in our society dealing with the Christchurch earthquakes and having a massive deficit to a position now where next year we will be back in surplus is I think an achievement that everybody in this Government can be proud of.Chris Auchinvole: Hear hear—laudable.PAUL GOLDSMITH: Thank you. That is not to say that we have solved all the issues facing New Zealand. Government spending is still large. Total Government spending is equivalent to about 43 percent of GDP and that is too large in my opinion.I might add that we hear a lot about the Opposition saying that we should be worried about the current account deficit and somehow we need to increase savings in New Zealand. I agree that both of those things are an issue although I am intrigued to know what precisely Russel Norman is suggesting we do about it because ultimately although the Government is getting itself back into surplus individual New Zealanders in their homes or in their businesses make decisions about whether they want to borrow money invest offshore or bring in fresh capital. That effectively underlies the current account deficit. It is people making free decisions. I do not know what Russel Norman is suggesting—whether he is suggesting that somehow we should stop people making free decisions. What precisely he is proposing to do to stop or to change the current account deficit issue which has been around for 40 years I do not know.It seems to me that the only way you can really solve the issue over the long term is to grow the economy substantially—and everything that the Greens suggest is generally against growing the economy—and to increase savings. That is why I am always left puzzled when I am told that we should increase savings but the two overwhelming themes of Labour and Green Party policy tend to be to bring in a capital gains tax. Well if you are trying to encourage people to save why would you then increase taxes on the result of saving which is capital? If you save all your life and you put your money into your house or your business they are now saying that they will introduce a capital gains tax in order to—Chris Auchinvole: Take it off you.PAUL GOLDSMITH: —take it off you and somehow that is going to encourage saving. I have never quite understood that logic. It is interesting. It is a bit like the Greens always understanding the logic of needing to increase taxes on cigarettes in order to stop people from smoking but they refuse to accept the same logic when it comes to the point that you do not increase the taxes on working and income because that may discourage work. The logic seems to depart from their understanding at that point. Then when it comes to saving if you are trying to encourage people to save why you would increase taxes on saving through a capital gains tax is beyond me.The other theme of their policy always seems to be about saying that just a little bit more inflation would be a good thing as well so we always have to push away the Reserve Bank of New Zealand Act and somehow soften our line there focus less on inflation maybe print some money—no they are not quite sure whether they want to do that any more. Again that does not fit very well with the idea of increasing savings because when inflation robs the savings of the thrifty and when money can no longer be relied upon as a store of value particularly if you are into quantitative easing then savings and investment are undermined. So if you are talking about increasing savings while at the same time you are undermining the value of money then you are going backwards and forwards at the same time which is in essence what they seem to be talking about.Just to carry on—where I see the challenges for this country is still in what is forecast as relatively modest growth for New Zealand. I think we have done very well through difficult times but we could be doing better still. How do you increase growth? Well there seem to be two areas really. You increase your use of resources and the Government is working very hard in the oil and gas area on trying to encourage us to make a living in this country and that is important. I am glad to see that one or two people on the other side agree with that. The other area is about increasing productivity innovation and entrepreneurship in our businesses and our communities. That is what the Business Growth Agenda is all about. Some features of this Budget that I could mention briefly are the $100 million a year being put into an internationally focused growth package providing extra research and development assistance to businessesadditional funding for tourism and more resources for marketing New Zealand to international students. Those are the sorts of things that I think will make a difference in terms of encouraging innovation in those important sectors.Let me look at the package for science and innovation funding which has increased by $50 million. We are investing millions and millions of dollars into research and development in this country. That is designed to help New Zealand businesses grow and create genuine jobs that will build the savings and ultimately will solve some of the issues that the other side are talking about. I also want to mention the ACC levy cuts which will see another $300 million being freed up by reducing ACC. That is a result of effective management of that system. The reality is that the New Zealand economy is built by a host of small businesses and those small businesses struggle very hard with ACC levies. You feel like you have got on top of things. I remember it well. You feel like you have got on top of your business that you are doing well and the next thing you know a huge invoice comes from ACC. I think the best thing we can do to encourage businesses around this country is to reduce those levies. I am very proud of this Budget on account of that basis. Thank you very much.Hon SHANE JONES (Labour):That was the sacrificial lamb to John Banks otherwise known as Mr Goldsmith who I think is now the chair of our Finance and Expenditure Committee. If that speech is reflective of how that committee is run I can see why Winston found it far more interesting to talk about Peter Dunne. We need a far greater and more spirited delivery from the putative Minister if he wants to follow the track of other former very important formidable personalities who have chaired that committee.Hon Craig Foss: That’s correct—yes.Hon SHANE JONES: Yes but I have to ask myself why was the senior whip of the National Party not promoted recently? Rather than going for the sitting member from Rotorua I think that that party needs to address why it continually passed over talent such as the member from the Taupō area who was unfortunately as we say in Māori put to the side—not quite to pasture; that is for the pompadour down there on that side of the House.Let me come back to this Budget. Firstly if there is an area where the Budget fails miserably it is on jobs. That failure is shared evenly on that side of the House although the Minister of Māori Affairs—and we had him at the select committee today—I think is particularly responsible for failing to advocate and influence the actual thinking and prioritisation amongst that side of the House because if there is an area where unemployment stinks it is amongst the young Pasifika and Māori. It is so bad that the recent OECD report—not that I am often taken to reading such dry narratives about the New Zealand economy but where I find it agrees with my thinking of course it deserves to be amplified—goes on to say that the transition from school to work notably amongst ethnic minorities is woeful and it is actually hindering the development of the country’s human capital. Why is the Government going to go and bring 30000 Filipinos into New Zealand and leave thousands of young Pasifika and Māori decaying on the unemployment scrap heap? The Minister of Māori Affairs boasts that as a consequence of a $2 million initiative he is going to address that wasted talent amongst the tangata whenua yet this Government is preparing to manipulate immigration laws and bring in swathes of overseas workers at a time when our own people need to be incentivised—and I say in my area of the north forced—to go into training and take up those jobs. But no it is so much easier to import labour with all those challenges and watch our home-grown talent get lost.There is nothing in the Budget that deals with these intractable issues but what is in the Budget—and on this side of the House I join my colleague Mr Parker in sayingthis—is that there is definitely a case for being very judicious about maintaining current levels of expenditure and ensuring that until such time as our export markets flourish to our benefit we need to be very judicious about tracking expenditure going forward. So there is no inordinate disagreement there about what the Government is seeking to do to ensure that our creditors continue to see us as a safe bet. Where this Government has failed in that regard is that it has all of its priorities wrong—totally wrong. There is far too much energy far too many trophies being hunted from a selected narrow caste of economic Titans—not the least of whom are those in Auckland in the casino industry. That has been traversed and we accept that the contract is probably going to be put in place. Legislation as I understand it is probably going to wend its way through the House but that is not going to change the fact that it has caused a great deal of stink and I hope that comes to rest on the people responsible for that—not the least of whom are Mr Joyce and Mr John Key.Today we witnessed an extraordinary event: Labour policy yet again being pinched by the current Government as it moves forward. I would like to see whether it takes the money out of the Mighty River Power sale proceeds to fund the rail loop. I should imagine that that is the only place it is going to get the capital. So what it is going to do is cause New Zealanders—in a diminishing number I might say because the majority of them will drift overseas—to buy the State-owned enterprises and then it will use that dough to fund Labour Party policy. Labour Party policy I say as the former transport spokesperson who actually had a considerable bit to do with the construction of that part of the manifesto which was very pithy and lucid and clearly identified the way to unlock productivity—[Interruption ]; modesty modesty—is to unclog the roads and ensure that we have a modern efficient futureproofed transportation system in Auckland.It is not for me to congratulate anyone but it is for me to acknowledge from this side of the House and amongst our confreres politically speaking up there in Auckland that it has been a long and arduous task which we have followed up. So I am only disappointed that that level of sophistication has not been brought to the Wairoa to Gisborne railway. No if you are in the regions you starve under this Government. If you are in the regions it does not care about taking a strong facilitative approach for the forestry sector. If you are in the north tourism is withering as a consequence of a very niggardly approach being taken to meeting the costs of boosting tourism. I have been told by tourism operators up there in the north that they receive in that part of the country a miserly sum of money. It is given where the National Party believes that it has its stronger friends.Not only do we have a situation where rail has been starved but we have got this half-baked notion that somehow the South Island’s productivity is going to grow by building a new port and destroying Picton and Blenheim in the process. I have yet to hear how Gerry Brownlee hopes in the context of a broader Budget debate to fund this new port—a port that will be inordinately expensive and a huge resource management process—and why he would want to devastate two very pleasant communities Picton and Blenheim in the process. I can only imagine that he imagines he is going to attract international capital to underwrite the costs—if that is the case then fess up about it—or he is going to further raid the transport fund for another pet project.Earlier we heard from Mr Goldsmith that in theory saving was fine but in actual fact it would never happen because Labour proposes to pursue a capital gains tax which will deflate the value of housing. No for the average household with one house seeking to create a home for mum for the kids and for the whānau this policy which he fears is not designed to cause those people to find themselves in “Strugglers’ Gully”. This policy is designed to hit the speculators and those who as a consequence of nocapital gains tax as a consequence of a loosening of financial lending from our major banks for residential purposes have driven the cost of housing beyond the pale. It is our proposal that nothing in this Budget is actually going to influence the cost of housing in Auckland. All it is going to do is simplify the process for a narrow range of landowners who have had the gift as a consequence of no capital gains tax of holding land in certain areas of Auckland and the value of that property will explode. The benefits associated with the provision of this housing will not be shared equally; they will once again fall to a narrow caste. Good on them for being investors but do not imagine perpetually that you are going to be able to get away without having to meet your obligation through paying a proportion of your wealth by dint of capital back to the State.We heard today that the Government has yet to finalise a deal not to do with rail loops etc. but to do with housing in Auckland. I have got absolute confidence that that is going to end in tears. There is nothing that this Budget proposes that is going to simplify the process for your average Kiwi to get themselves into a home because there is nothing happening in the regions that would cause investment to move out of our largest city which is turning into a form of Buenos Aires and actually support the Whangareis support the New Plymouths support the Gisbornes and the Rotoruas which is why as our policies roll out in that particular area more of them will come home to the whare Ropū Reipa. Kia ora tātou katoa.Mr DEPUTY SPEAKER: We come to some 5-minute calls.TE URUROA FLAVELL (Māori Party—Waiariki):One of the headlines in Budget 2013 that has not received a lot of focus in the appropriations debate was this one on the Radio New Zealand website which said: “Whanau Ora gets financial boost”. So in my time I want to bring some attention or balance at least to the debate by celebrating some of the transformation that is taking place under the radar in the name of Whānau Ora.I have come across a clever analysis made by Dr Fiona Cram of the difference described as Māori 3.0. If you will Māori 1.0 was the bad old days when the Governments hoped Māori “might ‘pass into’ and assimilate” into non-Māori life. The task of the Pākehā was to “smooth the pillow of a dying race”. Those were the days of integration.This was followed by Māori 2.0 which Dr Cram describes as: “… half an understanding of what Māori wanted. In other words it was based on looking at how Māori differed from non-Māori with a gaze still hazy with deficit-based interpretations.” In essence Māori were defined by how they were not achieving. They were defined by disparities in health in income in housing in justice and even in accuracy of data. There is merit in Māori 2.0 in equality of citizenship rights—article 3 rights. This cannot be said to be a thing of the past when we are still suffering 8 years’ difference in life expectancy and when Māori leave school earlier and with fewer qualifications than their counterparts and access fewer health outcomes.So the Māori Party is working hard to make a difference there whether it be by this Budget with this Budget having $100 million for home insulation $21 million to reduce rheumatic fever low or no interest loans to people who cannot access credit by other means and $47 million for apprenticeships and cadetships. But as I said earlier fixing up the gaps is only half the issue here and this is where I suppose we get to Māori 3.0.Māori 3.0 is the story of Māori aspirations and dreams according to Fiona Cram. It is about whānau working out ways to improve their own lives and to take up fresh opportunities and gains—to be more self-managing. Our people are tired of others telling them what to do whether it be the Big Brother of the State or its various organswhether they be the Government departments or the agencies that appear to run too many families. The Māori Party has always said that our voice is the voice of the people. It is not what we will do to them; it is about what the people actually will do for themselves. In essence that is Whānau Ora and the possibility of a plan that drives change for people’s own lives.One of the key findings that has come out in research is that whānau planning is a change tool for whānau. Common goals identified include financial planning and stability building on cultural knowledge healthy lifestyles greater confidence in parenting engaging in community life and coping with grief and loss. There is a fantastic comment in Fiona Cram’s article which I do want to share with the House that emphasises the wider potential of Whānau Ora as the key instrument of Māori 3.0. She said: “Unless there is some serious contemplation of and action for structural change within government agencies and services then Māori 3.0 if it lives on will continue only as a contained back room affair rather than the outrageous portent of Māori wellness and prosperity that it has the potential to be. But then wasn’t it Moana Jackson who asked a question along the lines of ‘What has the government got to fear from a healthy articulate and dynamic Māori population?’ ”.At the end of the day Whānau Ora is an example of what distinguishes the Māori Party from pretty much every other party in this House which might be best described as dominated I suppose by class ideology. An environment focus maybe? Left or right? Māori is not left or right. We are kaupapa-driven.Is Māori 3.0 worth the investment that Fiona Cram talked about? I say yes it is. Professor Mason Durie said: “Whānau potential is high and ready to be unleashed; Whānau Ora provider networks are extensive committed innovative and ready to learn from each other; and Whānau Ora is already anchored on solid foundations that will bring fresh opportunities and gains for whānau in the decade ahead.” That is what Whānau Ora is all about.BRENDAN HORAN (Independent):In debating the Appropriation (2012/13 Supplementary Estimates) Bill I would like to start with Vote Health. The supplementary estimates increase ministerial servicing and policy advice by around $74000. I am concerned that the Minister of Health Tony Ryall is being badly serviced and badly advised about the needs of people with diabetes and also about the CareSens blood glucose meters. Today Minister Ryall said that he did agree that people with diabetes in New Zealand deserved reliable blood glucose - level meters and I am heartened by that.I am also pleased to report that Pharmac has been in touch with me and has asked me to pass on information from people with diabetes who have been having problems with these CareSens meters. I have sent Pharmac over 18000 words of communication. One of those communications was from a young mother who just contracted diabetes less than 3 months ago during her pregnancy. This young mother is having problems with her CareSens meter. This young mother is a health professional. She is a haematologist. Her mother and older sister have type 1 diabetes. Her father is a doctor. So it concerns me that someone with this degree of awareness about diabetes would write to me about problems with the CareSens meter. If this person writes to me then we know there is a problem.I would say that all MPs here can join me—there is room—to really push and help New Zealanders who have diabetes. They have diabetes through no fault of their own. They measure their day by the measure on their blood glucose meters. Their very next step is dependent on it and they deserve to be healthy and they deserve to be safe. It is a real concern that the Minister’s claims of $10 million in savings will be at the expense of these Kiwis with diabetes as many people have real problems with the new meters.My heart goes out to the young people and young parents especially and the elderly who have diabetes. They are having such terrible trouble with these CareSens meters.Looking at Vote Housing there would have to be real concerns regarding the multilayered bureaucracy here including the bumbling and inept Plumbers Gasfitters and Drainlayers Board. The board has taken a highly inappropriate and heavy-handed approach to an industry of very good tradespeople. Had the Minister for Building and Construction put into the supplementary appropriations the tiny sum of $600000 to fund discipline and enforcement—and that $6000000 is less than what Ministers pay themselves for a Wellington housing allowance I might add—then much of the problem the Government has made for itself here would be resolved. But no Maurice Williamson ignores the Ombudsman’s report and backs a board that lacks integrity and also lacks the support of the bulk of plumbers gasfitters and drainlayers in New Zealand.Coming to Vote Social Development there are changes to over 50 line items but what I do not see is a change to focus on the real needs of children. We need to provide an environment where children can be safe and can grow to be great adults and where families can be safe.In the supplementary estimates for Vote Transport KiwiRail gets an equity injection of $322 million yet it is not able to maintain the track and run the business safely and properly. Less than 12 months ago KiwiRail solemnly promised that permanent workers would be the ones to do the core maintenance work. Those promises are shattered this month as the company is bringing in contractors to perform essential maintenance. It did not just happen somewhere out on an isolated track; it happened in the main depot at Tauranga just rubbing salt into the wounds of people who were employed by KiwiRail and took it in good faith.What are we also seeing? Just last week we saw the Wellington transport shambles as the trains are out of action after a small storm left the seawall breached ballast scoured by seawater and tracks hanging in mid-air. That is no way to run a train service. I would say that in Europe and in other parts of the world they get snow all the time. They get wind and rain but the thing is they look after their lines so they do not have the continual interruptions that we have not only to our transport system but also to power supply water supply and other essential services. It is just not good enough. You know we need to pull New Zealand into the 21st century. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North):The Labour Party is always keen to grab an extra call when we get the opportunity and to talk about the Budget and the Government’s appropriations and frankly about what this Government is not prepared to do. What it is not prepared to do is follow the good advice from the OECD that says that New Zealand has the greatest level of inequality than at any point in its history that it has greater levels of inequality than most OECD nations and that it is failing to implement the policies that would not only grow our economy—get our economy out of the two-speed situation that it is in at the moment—but also reduce the inequalities between the very rich and the very poor that we are seeing growing day by day under this National Government.The kinds of things that this Government is refusing to do are exactly the things that the OECD thinks we should do. We should have a capital gains tax to achieve two different things—firstly to ensure that investment in New Zealand is placed into the productive economy and that we do not have incentives in our tax system for investors to chase the speculative dollar in the rental property market. At the moment we have far too much money invested in the rental property market which drives up prices keeps young New Zealanders out of the housing market and is making houses more and more unaffordable across the country but particularly in Auckland. It means that theinvestment money that is going into those rental properties is not going into the productive job-creating sector.That is what we should be encouraging investments in in New Zealand. But the Government refuses to because it knows that its vested interests already have their money tied up in rental properties and they want to make their tax-free profits off the New Zealanders who have to rent their properties who cannot afford to buy a home of their own and who are stuck in the rental trap. Who is making money off that? It is the National Party’s mates who are getting away with it tax-free and scot-free.We in the Labour Party agree with the OECD when it says that we should be implementing a capital gains tax. But we should be doing more and that Government should be doing more to grow jobs in New Zealand. This is where Labour has a plan and the National Party clearly does not have a plan. What Labour would do is it would reduce structural costs in the economy like the cost of electricity. We want to bring down the cost of electricity redistribute those super-profits that the electricity companies have been making for years and give those profits back not only to New Zealand households—because it is important that New Zealand households get a break and get a bit more money in their back pockets—but to New Zealand businesses as well particularly New Zealand’s small businesses and start-up businesses that need to reduce their costs as much as possible so that they can get on their feet and become viable profitable and long-lasting and so that they can become job creators as well.Labour wants to return about $450 million a year back into the New Zealand economy. It is money that is being taken out of the economy by unjustified profits for the electricity generators. That has been independently assessed to be able to create about 5000 jobs in the economy. National talks a lot about creating jobs but it never delivers—it never delivers. The Labour Party has policies that will deliver jobs for New Zealand. We want to get the price of houses down by implementing a housebuilding programme in Auckland and in other parts of the country that not only makes things easier for New Zealand households for hard-working Kiwis who are trying to get on the property ladder but also it creates a demand for skilled tradespeople by creating jobs for them.That is what we need in this country and that is what this Budget should have delivered—a hands-on approach to real job creation not magic numbers that the Government cannot deliver on. The Government keeps telling us that it can deliver 170000 jobs but we have never seen them. Every year it keeps predicting that these jobs are going to come but it never shows us a policy that is actually going to deliver them. We think that a Labour-led New Zealand Government should follow the orthodox practices that are being implemented by countries around the world including a capital gains tax and a greater emphasis on the exchange rate so that we can again make business costs more predictable for our small businesses and start-up businesses. That is what the Government should be doing and that is what Labour will deliver when it is elected at the next election.JONATHAN YOUNG (National—New Plymouth):What rubbish! What rubbish we hear about Labour’s energy policies. In the last 4 years of that Government over there power went up 27.9 percent and in our first 4 years it was 13.6 percent and we did a multibillion-dollar infrastructure upgrade in that period of time. When I asked the previous speaker Iain Lees-Galloway where the 5000 jobs are going to come from he had nothing to say. I think New Zealanders need to hear those sorts of speeches and the emptiness of them and hear these people across the way who say that they can do so much. Yet when you look at it when you look under the cover there is nothing there to show.This Budget is a Budget that will continue to take New Zealand forward. We know that—we know that. We know that this Government is very proactive. We are seeing economic activity increase. We are seeing jobs increase. We are seeing that New Zealanders have the best cost of living situation in years and years and years—the lowest interest rates in decades. All Opposition members can do is hue and cry about what they are going to do and we know that this is just puffery. It is empty. There is nothing that they can say that is going to make substantial improvements.I want to talk just very briefly about communications. We know that this Government is prioritising the ultra-fast broadband build and we know that we are going to see some significant improvements in our economy because of it. The World Bank analysis published in 2009 “suggests that investment in Broadband infrastructure has a higher flow-through to nationwide productivity than ...” any other area of electronic communication. What it says is: “Across a range of countries this analysis shows a 10-percentage point increase in telecommunications ... via Broadband would be expected to increase economic growth by between 1.2 and 1.4 percent.” So we know that we are living in an age—[Interruption ] Oh listen to them. Come on come on come on Trevor. Listen to them. We know that we live in this age where electronic communication via ultra-fast broadband is going to make the difference that we have New Zealand companies that can transact business across the globe and we can see the ingenuity and innovation of this place having a great effect for our companies.I have to say that New Plymouth was one of the first places—and the Hon Harry Duynhoven who is sitting up there will acknowledge; good to see you sir—where ultra-fast broadband was rolled out so that is fantastic. It is fantastic to see a Government supporting our city.We know that we are seeing some great advances in this in education and in health. I am glad Opposition members have woken up. It is going to be dinner time soon. They can have their dinner then go back to sleep. We are going to see a fantastic increase in the ability of people in the health sector to access specialist care via ultra-fast broadband. We know that those places that are way away from some of—Hon Member: What a rambling mess—we’re talking about the member.JONATHAN YOUNG: Ha! Those opportunities are going to be enhanced in a major way. It is great to see. I think that just in closing in September last year we had the Australian broadband committee come and visit. The Commerce Committee which I chair hosted it. The committee came to look at what we were doing and members commented that they felt that we had a really good way of putting it together which was a public-private partnership. We know from all of that that we are seeing that New Zealand is ahead of the game compared with our Australian compatriots.Their original cost was estimated to be around about $33 billion. Some analysts are now projecting that it is going to cost around $94 billion where we have capped our Government roll-out costs at $1.35 billion. We are ahead in so many ways. We are going to see some tremendous advances. We are beginning to see it already as schools hospitals businesses and private homes are connected to this ultra-fast broadband. It is making the difference in so many different ways and this Government is doing it.Mr DEPUTY SPEAKER: We return to 10-minute calls. Darien Fenton.DARIEN FENTON (Labour):Well I must say that I feel sorry for the National backbenchers. I know that they have to stand up and spout the party line and the lines written for them by the research centre but they are getting a little bit boring can I say. Can I also give the National backbenchers and in fact the front bench a bit of a warning. They are sounding more arrogant by the day and arrogance is the first sign of a Government that is going to lose. The fact is that this Government has turned its back on the unemployed on the underemployed and on New Zealand families and that iswhat happens when politicians talk only to themselves. That is what the National members do. They talk to themselves they talk to their research unit they get the lines and out they come.The fact about this Budget is that the biggest con job that has been imposed on Kiwis is the promise around creating more jobs.Andrew Little: What a joke.DARIEN FENTON: What a joke. John Key promised New Zealanders 170000 jobs not once not twice—Iain Lees-Galloway: How many times?DARIEN FENTON: Three times—three times: once in the election in 2010 once in Budget 2011 and once in the election campaign. And look there have been mass redundancies. We are not seeing jobs created. In the last year there have been mass redundancies at Dynamic Controls Rakon Solid Energy Norske Skog Tīwai Point Axiam Metals—[Interruption ] Yes I am getting there—and mass redundancies at Nuplex Industries and Aquaheat. Look I could go on and on. But today in the saddest announcement we heard that job losses at New Zealand Post will result in the loss of 130 jobs in the Waikato 160 in Wellington 75 in Dunedin and 125 in the heartland and satellite sites. So today we have got a lot of New Zealand Post workers feeling very fearful for their future job prospects. They know that it is not a good time to be looking for another job with secure hours and good rates of pay. Have we had any sympathy or any mention of that from any of the National Party speakers? Have we? Any sympathy? No. Silence just silence. The tragedy is that these are good jobs decent jobs well-paid jobs where workers can earn a living and support their families. We cannot afford to lose jobs like these but we are.This is a time when inequality is growing and Kiwis are struggling. And what is the Government’s answer?Sue Moroney: They haven’t got one.DARIEN FENTON: Well no it does actually. It does have an answer: cut wages. Let us cut wages of course. Let us cut the wages of Kiwi workers by taking the axe to Kiwi workers’ rights and wage negotiations. I have been wondering whether the National Party thinks that the wage gap of 30 percent with Australia is not big enough. Perhaps it wants to make it bigger.Sue Moroney: Bill English said it wasn’t big enough.DARIEN FENTON: Well he did—that is right. And actually John Key said: “We would love to see wages drop.” We have not forgotten that.If National thinks that the gap is big enough already why on earth would it be proposing changes to employment law that will have a knock-on effect on jobs and wages right across this country? This Budget is meaningless until the National Party starts to understand that. Why on earth would the Government be proposing laws that mean that employers can refuse to negotiate collective agreements? They can walk away from them. But even worse why would the Government be proposing to cut the rights of Kiwi workers to meal breaks and tea breaks with a miserable provision? We all know that John Key and John Banks enjoyed a cup of tea.Iain Lees-Galloway: They like a cup of tea.DARIEN FENTON: They had a cup of tea. They had a cup of tea. They got their heads together to plan to cut the wages and the tea breaks of New Zealand workers.Hon Clayton Cosgrove: All day.DARIEN FENTON: All day that is right.Today Statistics New Zealand released its Survey of Working Life for the December quarter and it makes very interesting reading. There are two things about the headline results. First of all Kiwi workers are positive about working despite the NationalParty’s insistence and the picture it tries to paint of Kiwi workers as being lazy ungrateful and unmotivated employees who have to be forced out to work by Paula Bennett and her police people in Work and Income. But buried in the statistics are some other things that tell us a lot more about the issues that are facing Kiwi workers. The first thing is that one in every 10 jobs is temporary. That means that those jobs are casual or they are fixed term or they are jobs working for a temporary hire agency or they are jobs for seasonal workers. These are really hard jobs. These are the hard jobs where families cannot get ahead.I want to share an email I had recently from someone I am going to meet. I think he sent an email to most politicians and it said: “To whom it may concern or help or desperately searching for someone who gives a toss. After more than 3 years of working as an independent contractor with my own courier business I am at my wits’ end and stress is killing me. I work a 60-hour week and haven’t had a day off other than weekends and unpaid statutory holidays in more than 3 years. I earn $8 an hour.” This is John Key’s New Zealand people. This is John Key’s New Zealand—$8 an hour. That is just absolutely and utterly shameful. He is a contractor—Nicky Wagner is looking puzzled over there. He is a contractor.Hon Clayton Cosgrove: She always does.DARIEN FENTON: Yes that is right.The second thing that was interesting about the survey was that 18 percent—or nearly two out of 10 workers—feel more stressed at work. Ten percent have experienced discrimination bullying or harassment and nearly a quarter are working between 41 and 59 hours a week. In fact 6 percent are working more than 60 hours a week. Two in every 10 workers thought the chance of losing their jobs in the next 12 months was high or almost certain. So there is real insecurity and real issues out there.But the fact is that the National Party never talks to real workers. I heard Nick Smith say today that it was “only $2” when he was talking about prescription charges. That was a great “let them eat cake” statement. Go back to McGehan Close Mr Key and tell them that. And we have now a Minister of Labour who has never had to face an employer trying to cut his pay. And to make it even worse he does not even understand his own law. Here is a beauty. A couple of weeks ago Simon Bridges told bFM: “at the moment you must belong to the union for the first 30 days [of employment]. We’re saying no actually the employee has a choice.”Sue Moroney: What? That’s not true.Iain Lees-Galloway: That’s not true.DARIEN FENTON: Of course it is not true. Fact check Mr Bridges. You are the Minister of Labour. Get your facts right. No one is forced to join a union in this country in their first 30 days or otherwise. In your new job your employer cannot pay you less than a union agreement rate whether you are in the union or not. But of course Simon Bridges wants to take that provision away.And then of course there is Jami-Lee Ross’s bill the Employment Relations (Continuity of Labour) Amendment Bill. Jami-Lee Ross has been given the job of running up the more extreme agenda of the National Party when it comes to workers’ rights. Simon Bridges and John Key like to pretend that they have got this moderate approach this—what do they call it—moderate law. But Jami-Lee Ross has been given the job by the National Party to run up this extreme bill which shows the worst of the National Party. It shows that in the beating heart of the National Party it still hates workers hates unions and wants to punish them by making it impossible for workers to strike and by giving employers the right to lock workers out replace them with temporary workers and starve them into submission. That is absolutely Orwellian. It is—what is the word?Iain Lees-Galloway: Dickensian.DARIEN FENTON: Dickensian and Orwellian.So despite this Budget we are heading for a very divisive phase in New Zealand. The constant grinding down of families and workers is not going to help build our country and that will continue under this Government. You would think that after 5 long years of this Government we would have got to a point in this Budget where it would provide assistance for people who lose their jobs and to help build higher-value higher-wage industries. We are just seeing the destruction of that. We are seeing the Government completely ignore what the manufacturers are saying.Andrew Little: They don’t care about them.DARIEN FENTON: It does not care about them. That is right. Because it knows best.So I go back to what I said at the beginning: watch out for arrogance. It is creeping into your speeches and it is creeping into your Prime Minister. People are noticing it. They do not like it. They do not like being told that their issues do not matter that they should not be listened to that the National Party knows best and that people who oppose its views should be ignored or in some cases even punished. Unfortunately this is a Government that talks big hangs out with its mates in the boardrooms and ignores those who work hard to make a living but just cannot get ahead—just cannot get ahead. Thank you.NICKY WAGNER (National—Christchurch Central):Contrary to what the members on the other side of the House say this Budget confirms that New Zealand is on the right financial track. It has forecast economic growth more jobs rising wages and a return to surplus by 2014-15. New Zealand households and businesses have faced some pretty tough times over the last 5 years but the economic recovery is gaining momentum. It is driven by low interest rates driven by investment and driven by strong export prices. The National Government is managing our finances extremely well. We are on track to meeting our two fiscal targets. We are on track to meeting our two fiscal responsibility targets: to reach surplus by 2014-15 and to bring our net core debt back down to no higher than 20 percent of GDP by 2020.The Government is focused on building a competitive and productive economy because actually that is the only way we are going to earn our way out of this and make a living in the world. This Budget creates a $100-million-a-year internationally focused growth package to support increased trade and investment which in turn will create jobs and opportunities for New Zealanders.We are also delivering Better Public Services particularly for low-income families. We are insulating more houses and providing more social housing more rent subsidies funding for children for treatment of rheumatic fever and budgeting services. But actually it is paid employment that is the best way to lift vulnerable families out of poverty. The Government is investing almost $200 million to help New Zealanders into work.And of course of most interest to me the Government is totally committed to supporting the recovery and the rebuild of Christchurch and Canterbury. That rebuild is gaining momentum. Every day people are moving into new houses or moving into their newly repaired homes. Local shopping centres are opening up. Two hundred and fifty groups of workers are working on our streets and on our infrastructure and they are getting great results. New commercial buildings are opening all across the city. The people of Christchurch although still struggling with what we have lost are becoming increasingly inspired and excited by the opportunities for our city. The Government in this Budget has increased its share of the rebuild package to $15 billion. With other investments and insurance payments that means that Christchurch and Canterbury willget a $30 billion - plus spend over the next decade or so. That will be a real boost for our region and beyond.So in conclusion this Government sees a brighter future for New Zealand. This Government particularly sees it in trading with our Asian neighbours the people who live in our part of the world whose economies are growing. Our challenge is to make sure that our economy is both fiscally sound and very competitive. This Government and this Budget ensure that New Zealand is well on the way. Thank you.SUE MORONEY (Labour):I think anyone listening to this debate must be appalled that a speaker from the Government there to promote her Government’s own Budget could not even get halfway through a 10-minute call before she resumed her seat. There is so little for Nicky Wagner to say that is glowing about her own Government’s Budget that she could not even get to the 2-minute bell before she sat down. I think that that probably just about says it all.But the OECD had a lot more to say today about that Government’s poor performance with the economy because the OECD report actually tells it like it is. It tells us that this is a Government that actually does not have a brighter future at stake for New Zealanders. It tells us that this is a Government that is deliberately putting in policies through its Budget that actually grow inequality in this country. That is not the path to a brighter future. But before I talk too much more about what the OECD had to say I think that we can already see from what is happening in New Zealand that the Government got it wrong. It has got it wrong. We do not have to be academics to know this. We do not have to read great long OECD reports to know this. We can just pick up the newspaper or look on the internet and see that this very day we had 500 job losses announced from New Zealand Post. One hundred and thirty of those jobs were from my city of Hamilton—130 jobs going today in Hamilton alone. Not only does that have severe implications for those 130 workers and their families—so we are talking probably 400 or 500 people who are going to be directly affected by that announcement in Hamilton alone today—but also it has a significant impact on the local Hamilton economy because when those reasonably well-paid decent jobs go the wages of those jobs go from our economy as well. Those 130 workers will no longer have the wages to spend locally. Those wages will disappear from our economy and the very next thing that will happen is that other small businesses will have to make further redundancies in their companies because the economy is in a downward spiral. That is the impact of the lack of a plan from that Government.The previous speaker for the Government made much of the fact that it would be reaching surplus in 2014 or 2015. We agree with that in Labour. We think that it is an important goal. But I think that when National actually gave that commitment to New Zealanders at the last election most New Zealanders expected that the Government would reach that goal by growing the economy—that that is the way the Government would get to surplus by 2014. Well it is not so and the Budget documents expose it. The Government is not going to reach surplus by growing the economy and improving economic growth in New Zealand. The way that it is getting to surplus is actually by keeping ACC levies higher than they need to be. So what the Government has done is reach into the pocket of every worker in New Zealand and every employer in New Zealand and kept their ACC levies—some call it a tax—and kept that tax higher than the ACC wanted it to be. The other day during a select committee hearing we found out how much the Government is taking out of workers’ pockets: $400 million at least is being taken out of workers’ pockets through ACC levies in order to create the illusion of a Budget surplus for that Government in 2014-15 and $150 million is being taken out of the pockets of employers in this country for exactly the same purpose.If that Government understood how to grow the economy it would not have to do that. It would not have to resort to keeping a higher tax on ACC than is necessary. If that Government understood what drives economic growth it would much prefer to see that $500 million to $600 million this year back in the pockets of workers and businesses so that they could spend that money in the economy and actually get the economy moving. But no no no this Government chooses instead to take that out of their pockets and put it in the Government’s accounts to create the illusion of a surplus.One of the main things that the OECD report said today was that the Government’s policy settings are growing inequality in New Zealand. I want to talk about inequality because this week a very important case has gone before the Employment Court. I want to congratulate both the Service and Food Workers Union and a very courageous woman by the name of Kristine Bartlett on her standing up for New Zealand women. She is taking a case to the court around equal pay. She is asking the court to rule on whether it is OK for her to be paid $14.32 an hour as a caregiver in a rest home with 20 years’ service. That is the sort of inequality we see. She has been working for 20 years as a caregiver in a rest home and she is on a little bit above the minimum wage. She is going to court to ask whether that is fair. That woman on her $14.32 an hour has much more courage than the Minister of Women’s Affairs who is the person who is paid hundreds of thousands of dollars a year to stand up for New Zealand women. Where is she on this issue? Well what Jo Goodhew the Minister of Women’s Affairs has to say to Kristine Bartlett is that if she wants decent pay she should go and do a man’s job. If you want a decent rate of pay Kristine Bartlett according to the Minister of Women’s Affairs go and train to be an electrician go and train to be a plumber but do not do that very important work of caring for people in rest homes.Well I was there from this side of the House and from Labour to congratulate Kristine on her courage because I know the courage and the commitment that it takes to actually be the person who stands up and says that it is not good enough. It is not OK to have the gender pay gap that we have in this country and it is not OK for someone to have worked for 20 years in a field that actually requires a lot of intellectual capability is a very physical job is a very emotional job and is a very very skilled job and here she is on $14.32 an hour.Sitting suspended from 6 p.m. to 7.30 p.m.SUE MORONEY: Prior to the dinner break I was talking about what a sham the idea is that the Government is going to get to surplus by the financial year 2014-15. It is a sham because the New Zealand voting public thought they were being promised that the National Government was going to do that by lifting economic performance and by economic growth. Now they have found out that they have been duped because in fact the National Government is putting its hands into workers’ pockets and employers’ pockets and getting that surplus through having higher ACC levies than ACC itself said it needed to be able to pay for the cost of injuries and rehabilitation in this country. So it is a sham from the outset.Then I moved on to talk about the fact that the OECD today raised concerns about the Government’s policies that are creating more inequality in this country and that are actually moving resources from the people who need resources to those who do not. We saw that with the Government’s tax cuts. It was the wealthy people who did the best out of them and it was the poorest people who struggle on a day-to-day basis to get by. As a result of that we find that a sole rest home worker with her union is having to go to court to try to contest equal pay to try to contest whether the Equal Pay Act means that she should be getting paid more than $14.32 an hour after 20 years of service at a rest home doing some of the most skilled work and some of the most valuable work in thissociety looking after older people—and yes Mr Hayes that is difficult work. It is physically challenging it is emotionally challenging it is intellectually challenging and it ought to be paid more than just a scrape above the minimum wage.Meanwhile the Minister of Women’s Affairs has no plan to actually value low-paid work. In fact the Minister of Finance has said that he thinks that it is a good thing that we have low wages in New Zealand. Bill English said that he likes the idea of having a 30 percent wage gap between Australia and New Zealand. He thinks that that gives us an economic advantage. That is the sort of flawed thinking that has got this country into the mess we are in today.JOHN HAYES (National—Wairarapa):Could I say to the previous speaker from across the House Sue Moroney that if getting to surplus in 2014-15 is such a sham I am prepared to wager one dozen bottles of Ata Rangi pinot noir—Ata Rangi won first prize late last week at the Gold Awards; first prize for the whole Greater Wellington area—if we are not in surplus in 2014-15. If you are not prepared to take that wager on we can see that it is you who are offering the sham—The ASSISTANT SPEAKER (Lindsay Tisch): Order!JOHN HAYES: —it is Labour that is offering the sham not this side of the House. These bills the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill continue the Government’s economic and fiscal strategy and provide funding for the Government to operate until the 2013 Budget is passed. There is no sham in that. That is why we are here tonight Ms Moroney. The bills are about responsible management of the Government’s finances. I have to say Ms Moroney that we are on track to return to surplus and to begin to reduce debt by 2014-15. I am prepared to put up my own money against your lie because that is what it is. That is the sham.I would draw attention to an article in theDominion Post earlier this week. In fact I think it was either yesterday or the day before. It was written by Lew Evans Professor of Economics at Victoria University. You see as we discovered at the Finance and Expenditure Committee this morning not only do Mr Cunliffe and the Labour Party want to introduce a capital gains tax on every business and farm force households to pay an extra $500 a year under an emissions trading scheme and spend and borrow more money but in their rush to appeal to the political left and scratch every political itch they ignore the economic impacts of their ideas. The plan on electricity outlined in this article under review is playing politics with the value of New Zealand’s economic assets and they do not care Ms Moroney whom it affects.Let me quote from this article: “The model proposed by the Greens and Labour of a single electricity buyer with price discrimination has been likened to Pharmac. The only feature the two have in common is that both face some trouble in getting supplies and investment in New Zealand. In the case of Pharmac there are benefits to be balanced against these effects. Pharmac funds pharmacological drugs on a list it approves for New Zealand. Drugs not on the list that have health and safety approval can still be used but they are not funded …”. The article goes on to say: “In contrast a single buyer in electricity will be a monopoly buyer in an industry where supply is sensitive to price. A single buyer may also have to be given regulatory powers to make operational decisions for suppliers. For example there may be alternative uses for water that are more profitable than producing electricity at the single-buyer price meaning regulation would be needed to require generating firms to use water for power generation.” Have you thought about that Ms Moroney? No I do not think you have thought about that.It continues: “A second reason is that the wholesale market for electricity is operating relatively effectively yet it is to be restructured with no definable purpose. The proposal entails reducing the price paid for electricity from particular sources ofgeneration and lowering the price of electricity to households. The reduced price reduces returns to private owners. The government which owns power companies will lose dividend revenue and receive less tax revenue from the privately held electricity firms because their dividends are lower. Assuming the lost Crown revenue is to be replaced by increased taxation …”. That is what the Labour and Green Opposition in this country is offering our community. “In targeting the ‘market’ in ‘electricity market’ the proposal would produce an unstable commercial environment.”—an unstable commercial environment—says Lewis Evans Professor of Economics at Victoria University in this week’sDominion Post .He goes on to say: “It is tempting to draw comparisons with health and education where the state does buy services. However in these labour rather than capital determines cost. Capital and date of establishment are less of a factor in costs and profitability and so there would be an opportunity for the price manipulation of the proposal … The investment and price effects of the single buyer for electricity suggest that a better comparison would be the New Zealand Electricity Department of the 1960s and 1970s.” That is where the Opposition wants to take us back to—the 1960s and 1970s. He goes on: “In that era taxpayers paid and politicians made pricing investment and operational choices in the electricity sector.” That is why David Shearer is so low in the polls—because our community knows that “The associated planning and control of electricity produced some poor investment decisions and meant that the price of electricity was not its cost.”That is why it is important that we pass this legislation tonight and it is why it is important that our country does not let us go into any form of Labour-Green Party - run Government. The best option for the community is to stick with the National-led Government which is building a stronger more stable economy that can weather global storms and deliver opportunities higher incomes and more jobs for New Zealanders. Budget 2013 continues to do that. I can tell you from the experience of my electorate that households in the Wairarapa and businesses there have faced some pretty challenging times in the past 5 years—for example because of the global financial crisis the Christchurch earthquakes and with continuing global uncertainty especially in Europe. And in some parts of the Wairarapa especially in retailing businesses are still facing quite difficult circumstances and difficult challenges. Although these challenges remain the economic recovery is gaining momentum and it is being driven in that direction by low interest rates by investment and by strong export prices. What I see happening right across the Wairarapa electorate is jobs being created. I have just done some checking on my computer this evening and discovered that there are more than 50000 more jobs in this economy today than we had 2 years ago. The fiscal outlook has improved markedly because of the National-led Government’s sound management and that is why you guys—The ASSISTANT SPEAKER (Lindsay Tisch): Order!JOHN HAYES: —that is why the Labour Opposition is at 30 percent in the polls because the community can see through things like the capital gains tax which they do not wish to have.I remember that when we came into office in 2008 we inherited a set of Government books that had debt running at 60 percent of GDP by 2020 and no prospect of a Government Budget surplus ever again. This Government is on track to meet two key fiscal targets—first of all to get back into surplus in 2014-15. Ms Moroney I am waiting for you to pick up my wager. Or are you the sham?The ASSISTANT SPEAKER (Lindsay Tisch): Order!JOHN HAYES: I meant is Ms Moroney the sham not you Mr Assistant Speaker; I was not thinking about you at all. And we will have a surplus in 2014-15—Sue Moroney: Dame Moroney to you.JOHN HAYES: Lady Moroney if you like—Lady Moroney. We are going to have a surplus of $75 million in 2014-15. I am really proud to be part of a Government that is taking this country in that direction.Furthermore we must follow the work of the Ministerial Committee on Poverty. Budget 2013 confirms important initiatives to support low-income families because it is important in places like Masterton and Dannevirke that we do that. I am really pleased that this Government is spending $100 million over the next 3 years to insulate 46000 more homes which is very important at this time of the year more than $21 million over the next 4 years to reduce rheumatic fever in children and an extra $1.5 million for budgeting services. Some of that will go to the budget service in Dannevirke and some will go into the budget service in Waipukurau and I support that. Furthermore we are supporting a whiteware programme to help beneficiaries buy new appliances. This is excellent legislation which I support fully.JULIE ANNE GENTER (Green):I rise on behalf of the Green Party to speak generally on the Government’s economic strategy as it relates to the bills before us—the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill. As we heard earlier today from my colleague Dr Russel Norman the Government strategy effectively boils down to borrowing more money enough to prop up economic activity mostly in the non-tradable sector—the Christchurch rebuild is going to add some to that—so that it can scrape together an ostensible surplus in the Government books and make GDP look a little bit better by the next election.The problem with this strategy is quite obvious. It is completely unsustainable in every sense of the word and it does not reflect true progress economic or otherwise. The Government’s own forecasts show that its strategy is going to lead to our current account deficit growing to $17 billion by 2017. That means that in 4 years we will be spending even more money than we do now and even more than we are going to be earning as we make our way in the world. This is completely unsustainable. This imbalance in our economy is going to result in the quality of life of New Zealanders being worse because there will eventually be a correction. The sooner we face up to the true fundamental structural issues in our economy the better off we are going to be.The Green Party stands for a clean green economy that works for all New Zealanders not just the few not just the Government’s mates and not just those who are already doing very well under the current circumstances. The Green Party has been setting the agenda and leading the debate on policies that will deliver a smart green economy for all New Zealanders. A perfect example of that is the initiative that the previous speaker John Hayes referred to which was the home insulation scheme. The Green Party worked very hard to negotiate the home insulation scheme with the previous Labour-led Government and worked very hard again to ensure that it continued to exist under the National-led Government when it came into office in 2008. The National Government scaled back quite significantly the proposal that the Green Party had put forward. It was about one-third of what the Green Party was proposing but we were able to convince National that it was a good idea to invest in insulation and that it was a great way to create jobs in the wake of the financial crisis in the building sector and it has been proved to have enormous benefits not only economically in terms of energy efficiency but also—and even more so—in health benefits.So those are the kinds of smart green ideas that the Green Party has been putting forward and that are being taken up by both of the big parties. Thank goodness the Green Party has been in Parliament to talk some sense into both of the big parties. Unfortunately the National Government is not taking up our smart green ideas onclimate change. Today in the United States President Obama gave a historic speech calling for urgent action on the most serious issue of our time. He admitted that we cannot continue to drill mine and extract fossil fuels and also meet the challenge of climate change and provide a healthy stable climate for our children and grandchildren. Our children and grandchildren deserve to inherit a world where they can live be healthy and do well without having to worry about increasing frequency and severity of storms resulting from human-induced climate change.The issue is so clear and stark. The choices we have in front of us are so clear. In the future we will look back at this time in 2013 and ask ourselves: “What was the National Party thinking? Why didn’t they take this opportunity to help us futureproof New Zealand’s economy so that we could do our part?”. I know that New Zealanders care about our future. I know they care about our planet. I know they care about their children their grandchildren and their grandchildren’s children who are yet to be born. I know they are willing to do their part. What is unfair is that this National Government is not taking the steps. It is denying New Zealanders the choice to transition to a clean green economy that would work for all New Zealanders not just the few and not just the National Government’s rich mates.The National Government has its head in the sand on this issue. We have asked Government Ministers time and time again whether they recognise the challenge of human-induced climate change. Do they recognise that it is real as President Obama of the United States has said? The US is a large trading partner that the National Government is trying to court for a free-trade deal. President Obama has said he has no patience for climate change deniers and yet our Minister of Finance has made statements in this House to the effect that climate change may well not be real. So it is clear that the National Government has its head in the sand. All the Government has done on the issue is weaken an already very weak emissions trading scheme. Essentially it has become a meaningless and complicated charade that gives big subsidies to polluters.Let us come to the issue of affordable housing as the Green Party has also been leading the debate on affordable housing. The Green Party has been speaking about the merits of a capital gains tax since the early 2000s.Phil Twyford: Is there anything that you didn’t invent?JULIE ANNE GENTER: Well it was not me but it was our former co-leader Rod Donald who was begging the Labour-led Government in 2002 to institute a capital gains tax. The Labour Party is capable of learning and it has come on board with many policies such as a capital gains tax. I think Labour members advocate very well for it now and I do give credit where it is due but it was Rod Donald who was begging the Labour Party to institute a capital gains tax back in 2002. It would have contributed quite a lot of revenue to the Government’s books and it would have potentially dampened the housing price bubble that we are continuing to see in Auckland.The National Government is supposedly going to achieve affordable housing through its Housing Accords and Special Housing Areas Bill—which has been introduced; it is still before the House—by enabling developers to set up in special zones where they will be completely free from the Resource Management Act completely free from agreed unitary plan or district plan rules and under orders of this particular bill if it passes into law to provide areas that are mainly housing. We have seen in other countries that rural subdivisions or fringe subdivisions that are mainly housing have been incredibly harmful for the economy. In fact it was those car-dependent housing-only suburbs where house prices collapsed first because people were too far away from services and jobs and they could not afford to keep driving to those services and jobs.As their transport costs increased the value of their houses collapsed and they found themselves owing more money than their houses were worth.The National Government is a lot of talk and no action on housing it is a lot of talk and no action on climate change and as we have seen today it is a lot of talk and no action on transport. We have seen the Government finally admit that rail is the best option to address congestion to ensure that Auckland is able to grow in a sustainable way and to ensure that business and economic interests are met by our transport.Phil Twyford: Thank you for supporting Labour policy.JULIE ANNE GENTER: Of course the Green Party has been an advocate of rail in Auckland and elsewhere in New Zealand for quite a long time. We have led the debate actually.Phil Twyford: You’re a very good supporter.JULIE ANNE GENTER: The Green Party was begging the Labour-led Government in 2006 and 2007 to electrify the rail line. I know that the member Phil Twyford was not here at that time in 2006 and 2007 so it was not his fault but Michael Cullen did not want to electrify Auckland’s rail line. It was the Green Party that managed to force the Clark-Cullen Government to contribute the money for electrification to ensure that Auckland’s rail development could go forward. Now we have the National-led Government trying to claim credit for what was essentially a Green Party initiative committed under the Labour-led Government in 2007. Now the Government is trying to claim credit for the City Rail Link and for future rail development to which it will not commit funding.When the National Government says 2020 will see the start of construction of the City Rail Link that means that John Key will be long gone and New Zealand will be stuck paying back the heavy debt that was incurred by this Government on these crazy motorways that have no economic case. Unfortunately the National-led Government although it has finally admitted that rail is the future for Auckland is still delaying the solutions that Auckland really needs. The Green Party will continue to argue for the economic solutions that will help New Zealand.MAGGIE BARRY (National—North Shore):I rise to speak to the second reading of the Appropriation (2012/13 Supplementary Estimates) Bill. The performance of the economy and the measures outlined in the Budget—the fifth presented by Bill English—are very bad news for our political opponents and very good news in fact great news for New Zealanders. Let us do just a quick recap on the roll-call summary of the successes resulting from this Government’s management of our economy. Economic growth is at 2.4 percent. It is about the same as Australia’s growth and certainly higher than that of almost every other developed country. Our economy is forecast to grow between 2 percent and 3 percent a year over the next 4 years. Wages are growing cost of living increases have been modest and interest rates are at 50-year lows.Scott Simpson: Wow! How much?MAGGIE BARRY: At 50-year lows. It is incredible. There are 50000 more jobs than there were 2 years ago and the unemployment rate has fallen to 6.2 percent which is still high and we are working very hard on improving that too. It is tracking in the right direction though. Currently it is at its lowest level in 3 years. Household income has risen by 20 percent in the past 4 years and is expected to rise by almost 20 percent in the next 4 years.Earlier this afternoon we heard an accurate excellent insightful and entertaining history of the Labour Party from the Hon Chris Finlayson.Hon Christopher Finlayson: Too short.MAGGIE BARRY: It was too short. In fact it could have gone on for many hours. Usually what we see of Labour is sad and getting sadder by the day especially if you goby its tragic showing in today’s polls. TheHerald -DigiPoll revealed that its support has slumped by 5.5 percent to—where is that sign—just 30 percent. The question is: can David Shearer survive the drumming in the weekend’s Ikaroa-Rāwhiti by-election? I do not know. Or will it be the other devious David—the Cunliffe who would be king—who has often been spurned even by his own? In fact as the Hon Jonathan Coleman said a little bit earlier this afternoon the only thing that actually unites Labour members is their loathing for David Cunliffe. But will the devious David do a Kevin Rudd and try to white-ant his way into the leadership by constantly undermining and plotting?Scott Simpson: Possibly.MAGGIE BARRY: Possibly—who knows? Mr Shearer is perhaps far too trusting as again the Hon Chris Finlayson so eloquently pointed out earlier this afternoon. Those qualities of trust and loyalty which are fundamental to the National Party and are core values of the tight team that is this caucus are very rare and endangered qualities indeed in “Camp Labour” and unknown in the Greens.Remember that when we came into office—just a little history lesson of my own—we inherited a set of Government books that had debts running to more than 60 percent of GDP with no prospect of Government Budget surpluses ever again or at least in a generation. The fiscal outlook has improved markedly as a result of National’s sound management. We are now on track to surplus in 2014-15 which is when we can start to reduce the core Crown debt back down to no higher than 20 percent of GDP by 2020. That is an aim that is a target and that is a goal. We are going to get there because we are a united team with a plan and we stick to it unlike the bozos on the Opposition benches.We are achieving all of that while still spending $5 billion on new initiatives this year and over the next 4 years. These are funded in part not by borrowing not by doing what we really cannot afford to do but by reprioritising existing spending. It is a remarkable turn-round in our Government’s books I think you will agree colleagues—yes indeed. That reversal of fortune is all about the same sort of consistent common sense that most of us would apply to running our own homes. On this side of the House and for all sensible New Zealanders we do not allow ourselves to get into deep debt and just keep borrowing until no one will lend to us any more—and then of course you can print some more if you are the Greens. But oh no—wait wait—they have rescinded on that. The Greens have changed their minds. Last week they sold out on their cornerstone financial policy—Simon O’Connor: Flip-flop.MAGGIE BARRY: They flip-flopped over it—exactly right—because they are so desperate for power. They are so desperate for power and their prospective Labour cronies did not much like Russel Norman’s favourite solution of quantitative easing. Labour members of course are well able to recognise policies that would consign them even closer to political oblivion because let us face it they have had a heck of a lot of practice. So they backed away from it and the Greens then quickly gave it away. So much for principles. So much for the Greens sticking to their guns. That is exactly what you call consistency Green Party - style.Scott Simpson: Unprincipled.MAGGIE BARRY: Unprincipled opposed to everything—they even oppose their own once-beloved flaky policies eventually.A feature of this year’s Budget that was presented is a $100-million-a-year internationally focused growth package that provides extra research and development assistance to businesses extra funding for tourism and then more resources for marketing New Zealand to international students which is an excellent way of improving our education here as well. It has many benefits. This will result in anincrease in trade and investment which in turn will create jobs and opportunities for New Zealanders—something the Greens will never get and Labour struggles with. Within the package that was announced in the Budget science and innovation funding is increased by $50 million a year. This takes the Government’s annual investment in research and development to—how much—$1.36 billion.Scott Simpson: How much?MAGGIE BARRY: It is $1.36 billion. That is a lot and it is the highest-ever amount to be spent in this area. In my electorate of the North Shore we are at the cutting edge of many science and technology industries. New funding over the next 4 years will include around $75 million for business research and development grants. That is an area where North Shore business AFT Pharmaceuticals has really benefited already. It had last year a research and development grant of $3.8 million which it told me will make a really significant difference to the company’s growth and help it to increase its sales from $50 million annually to its projected $150 million growth within the next 4 years. I would have to say that that is within reach and it is a target that the company is going to achieve because we were there to help. We gave it research and development money at a time it needed it so with some assistance from us it was able to build on its own business and really grow.ACC levy cuts are going to give another $300 million to the economy. That is good for businesses and good for households next year and it is going to be increasing after that to around $1 billion. There is no doubt at all that businesses on the North Shore and beyond throughout New Zealand—Scott Simpson: The Coromandel.MAGGIE BARRY: —will benefit. Even to the Coromandel Tāmaki and Botany—it is all go. They will benefit from these significant ACC levy reductions. This is a Budget that has made a difference to New Zealanders’ lives where it matters most. Let me give you some key examples of that. I know that Labour and the Greens do not pay attention to these things so perhaps if we give them the examples and go through them slowly they might learn something. Following work by the Ministerial Committee on Poverty we have introduced several important initiatives to support low-income families and this includes $100 million over 3 years to insulate 46000 more homes for low-income families and more than $21 million over the next 4 years to reduce rheumatic fever in children.There are also increases in budgeting services so that people will be able to learn to manage their own finances. One of my favourites is a whiteware procurement programme which the Hon Paula Bennett came up with. It is a good one because it is practical it is down to earth it will make a difference to people’s lives and it will enable beneficiaries to buy new appliances under warranty using Ministry of Social Development repayable grants. As Paula pointed out often what was happening was that beneficiaries were buying cheaper whiteware and cheaper equipment and it was breaking down there was no warranty and it was a disaster. So I think that is the kind of practical imaginative solution that really will help people. Again it is an unknown to the brayers and naysayers on the other side of the Chamber who will remain in political oblivion for a long time to come given the lack of talent in their line-up.The Minister of Housing Dr Nick Smith is to be commended too. I think that he is an excellent Minister. The trial on Housing New Zealand Corporation properties of a warrant of fitness scheme is again another common-sense approach in respect of the rental housing stock and we may be able to take that further. Over 4 years our social housing policy is going to include an extra $46.8 million for extra income-related rent subsidies. That is all part of this Government’s wider support for high-needs tenants. So we do look after people.Health was a very big winner in this year’s Budget and the focus has been to provide better front-line facilities. I know from my 30-odd years in the media that health stories are often in the news for all the wrong reasons particularly under the tenure of the lamentable lack of leadership shown by the former health Minister Annette King who did a woeful job. As I said earlier today she is the worst health Minister in 50 years—or even longer probably. In my own electorate the North Shore the North Shore Hospital was in the news for all the wrong reasons and it was down to Annette King’s mismanagement and incompetence. It seemed that everybody had a story to tell about it—long waits in the corridors having to go to Australia for treatment all of those kinds of things. But those things have now been turned round under the competent and visionary leadership of the Hon Tony Ryall and the rest of the team in Cabinet who supported by a united and very talented caucus will take this Government where this country needs to go. So I commend the Appropriation (2012/13 Supplementary Estimates) Bill to the House. Thank you.Hon JOHN BANKS (Leader—ACT):Let us do an audit. What have we got across the other side of the House tonight? This is Her Majesty’s loyal Opposition. We have got a Labour leader whom no one wants. In Christchurch they are getting a Clayton’s hat that was not wanted in “Waimak”. The people of Māngere have a member they do not know. And then there is Raymond Huo—Raymond Huo whom no one knows because who is Huo? It is Raymond Huo. That is the opposition to these bills the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill in Parliament tonight.Hon Clayton Cosgrove: I raise a point of order Mr Speaker. With respect members are entitled to be addressed by their correct name. Even if Mr Banks is imbibed tonight he should actually treat members with respect.The ASSISTANT SPEAKER (Lindsay Tisch): No that is not necessary but I ask the member to refer to a member of this House by their correct name.Hon JOHN BANKS: It is a bit rich to ask members to refer to other members by their name when the insults come across but I am intimidated by the .22 fuse on the other side of the House.The ACT Party and the people of Epsom support this legislation. The ACT Party and the people of Epsom do not want those people on this side of the House. The ACT Party and the people of Epsom stand for sound money not money printing. The ACT Party and the people of Epsom stand for keeping the lid on spending growth not shaking down taxpayers for more when they are hard-pressed. The people of Epsom are absolutely delighted that this member who represents the people of Epsom has kept those people opposite where they belong—eternally in Opposition. Those people opposite are divided like I have never seen before: they are leaderless they are rudderless and they have no policy at all no sense of direction and no understanding of the economy. It is a rabble over there and people watching television tonight and listening on their crystal sets would be aghast if they saw those turkeys on the other side of the House.Lower taxes so New Zealanders can create jobs is what we stand for—economic growth and employment opportunities not new taxes or tax increases or capital gains taxes. We stand for no tax increases no capital gains taxes no unnecessary borrowing no unnecessary debt no unnecessary taxes less government lower taxes more opportunity more entrepreneurialism more taxes paid to the Government through honest endeavour and a decent tax system that works for everyone.If we want world-class infrastructure in Auckland we need to put the avgas into the Auckland economy and this Government is putting the avgas into the Auckland economy. I am glad that the project I have been campaigning for since 2001—the inner-city rail loop—is going to get away in 2020 when I think the timing is about right. Of course we need to have a look at the structure of the debt of course the Auckland Council is borrowing $1 billion a year—a frightening rate—and of course the Auckland Council will have to sell assets to help fund its share of this rail loop. It makes sense. If we are going to have 12 to 15 trains going into the tunnel every hour now we can have 30 trains going through the tunnel every hour in the future. It is part of an integrated transport system. Roads completing the motorway network and providing better infrastructure in Auckland is what this Government is all about.But this Government still needs to tighten the belt. These Opposition members of Parliament when on this side of the House ran debt to 36 percent of GDP—36 percent of GDP—which is one of the highest in the OECD. The present Minister of Finance and others have got it down to 33 percent and we believe that it should be 25 percent of GDP. If expenditure was 25 percent of GDP we could have tax cuts and tax rates at 25c in the dollar and that would make sense.This Government on this side of the House is taking this economy out through the global recession with a lot of responsibility. The people listening tonight will be very very pleased that those “goosesters” on the other side of the House are not on this side of the House because what they will be doing is they will be supporting the Green Party and the printing—oh no! That is right. They are just going to borrow more money; they are not going to print any more money. As of last week Dr Graham has told us he is not going to print any more money. He said it was a silly idea the people say it is a silly idea and the Green Party has at last woken up to the fact that if a silly idea looks like a silly idea it is a silly idea and should be stopped. We are here because they are over there and long may they stay there.DAVID BENNETT (National—Hamilton East):Following on from that speech from the member from Epsom John Banks I just want to congratulate the Green Party. I think the central rail loop is something that the Green Party has long advocated for before the Labour Party actually did and it is something that the Green Party should take great pride in—that their advocation for that issue led to fulfilment in National coming to the party unlike the Labour Party over there. That is the party that tried to take credit from the Green Party in this House just at this very last moment and it tried to indicate that that was an issue that the Labour Party had determined many years ago when it was in fact a Green Party issue.It is such a shame that the Labour Party has to try to take things off the Green Party at this stage of the political sphere. It does not accept that the Green Party is the true leader of the left that the Green Party represents new ideas and new vision for the left or that the Green Party is the party of Opposition. It is sad for the party of the Labour Party because that is a party that had a great history in this Parliament. It had a great history in the history of New Zealand in fact. Many great Labour leaders have come through this Parliament. It is a shame that we are seeing the end of the Labour Party. We are seeing the end of the leadership of the Labour Party which it has been so proud of and it is being taken over by the Green Party.That is a very big shame for the Labour Party but it is great news for the New Zealand public. It is great news for the New Zealand public because the New Zealand public will never support the Green Party. The New Zealand public will never support it beyond the fringe elements that will vote for it. The New Zealand public knows that it needs a centrist party that looks after the interests of our economy that looks after the interests of our people that delivers the right social services in education and health and that protects our people through law and order. That is what people want from the Government. That is what they get from a centrist National Party Government. That is what you do not get from a far-left Labour-Greens Government or a far-left Greens-Labour Government as you would see under the Green Party taking the mantle of the left wing.I think the last speaker John Banks touched on that in his speech. He spoke about the good people of Epsom. Well the good people of Epsom are very similar to the good people of Hamilton East. We understand the importance of—Hon Clayton Cosgrove: What they’ve both got a criminal as an MP?DAVID BENNETT: What was that over there?Hon Clayton Cosgrove: They’ve both got an MP with a conviction? I thought Mr Banks was the only one with a conviction. Have you got one as well?DAVID BENNETT: This is the list member from somewhere near Christchurch who could not retain his seat and who is now standing in a nomination that he is going to lose I betcha. Look at this. Next month this will be the time line for Clayton Cosgrove. At the moment Clayton Cosgrove will be standing around. He will be prancing around this Parliament trying to get some media coverage trying to say some things so that he is seen by the people of Christchurch. He will be prancing around for media coverage but then—you wait. In 2 weeks’ time Clayton Cosgrove will go to ground. He will go to ground because he will have had the word by then that the Labour Party hierarchy does not want him to stand for that seat.Hon Member: They don’t want him in Christchurch.DAVID BENNETT: They do not want him there. They know he would not win it. They will go for fresh blood into that seat will they not Clayton Cosgrove? Clayton Cosgrove will come back to this Parliament in a month’s time and he will say “It was never about me. It was never about me. It was not about me. It was just about the party.” This man who always stood for the party—I remember the days when he used to go on the list for the Labour Party. This time he will not be. He is seeking a nomination but he is not going to get it. He knows he is not going to get it and it is a shame for Clayton. I do respect that man. I think he has got a lot of potential in this House. It is a shame for him that he is going to miss out on the nomination for the seat.Hon Clayton Cosgrove: Chris Finlayson wouldn’t even say that.DAVID BENNETT: But going back to this Budget and the mention of Chris Finlayson. Yes Chris Finlayson gave us an excellent exhibition of the history of the Labour Party—how the Labour Party has shafted leader after leader. When we think of the Labour Party at the moment we think of that great political and economic genius in the Labour Party who is stuck in the back row Mr David Cunliffe. He cannot progress from being beside that door. He represents the real Labour Party. He represents the true beliefs of the Labour Party. It is unfortunate that the Labour Party has lost its way. Those true beliefs are very much in line with the Green Party. They are very left-wing politics.But we are looking at a Government that delivers a good balanced Budget for New Zealanders. Let us remember that. New Zealanders out there have some of the lowest interest rates they have had for many many years. New Zealanders out there have a growing economy. Contrary to what the Opposition may say we have a growing economy in this country. New Zealanders out there understand that our Government is rebuilding our second-biggest city. New Zealanders understand that this Government is investing in health and education. New Zealanders understand that they are getting a balanced Budget from a balanced Government that is looking after all their interests. This is a Government that considers the issues looks at what the solutions may be and comes up with proactive sensible solutions that work.This is not a Government that seeks to just take advantage of the winds that may be blowing at that time. This is a Government that looks at the issues and dictates what is needed and infrastructure is a big part of that. When I started this speech Icongratulated the Green Party on its work in that infrastructure field. I think it is very important for Auckland that we see this infrastructure go ahead and it is very important for Hamilton as well because a strong Auckland means a strong Hamilton. It is that simple. Our biggest asset in Hamilton is Auckland and our connection with Auckland is so important. When that rail link goes ahead that is good for Hamilton it is good for New Zealand and it is good for Auckland so it is in the best interests of this country going forward.That is the kind of thing that you see from this Government. We look at what the issues are we look at what the options are and we give the best result. You are seeing a Government that responsibly manages its books. On the left you see an Opposition that wants to have a capital gains tax—not a real capital gains tax that is on every property but an exempted capital gains tax that is discriminatory and against certain groups in the community. That is what they want to do over there. We are building a more productive and competitive economy. The investment—Darien Fenton: Cutting wages.DAVID BENNETT: Cutting wages—it is a load of rubbish from the Labour Party over there. Darien Fenton would not know about wages. She comes into this House and makes comments like that about cutting wages. That is simply not the case. It is not the case. We are building a stronger economy that delivers stronger job opportunities and wages for New Zealanders going forward.We are delivering better public services. Last Friday we had the opening of the new rehabilitation centre for older people at the Waikato District Health Board’s hospital in Hamilton. There has been $400 million spent at that hospital base.Hon John Banks: How much?DAVID BENNETT: There has been $400 million spent on the Waikato District Health Board’s building of the new health base for the Waikato and Bay of Plenty regions. My good friend Todd McClay was there to cut the ribbon and open the building.Hon Todd McClay: Fantastic.DAVID BENNETT: Was it not a fantastic building? As Associate Minister of Health I think he enjoyed the opportunity to come and do his first formal opening—Hon Todd McClay: I met hard-working local MPs.DAVID BENNETT: He met hard-working local MPs but he actually met hard-working local doctors and nurses who have worked so hard to make that institution so effective.The fourth thing the Government has been doing is rebuilding Christchurch. We had the Minister for Canterbury Earthquake Recovery Gerry Brownlee at the select committee this morning talking about that.Hon Clayton Cosgrove: Where is the big fella?DAVID BENNETT: This is Clayton Cosgrove the member who wants to be a member for Christchurch but will never be the member in Christchurch. Unfortunately he cannot get that seat but it is good to have you here Clayton in your list capacity adding value for the members of Christchurch. I am sure they value it immensely. But that is a big rebuild. It is something that this country needs to do. We cannot leave our second-biggest city alone. The Green Party does not think we need to rebuild that city. The Green Party thinks that if it degenerates into bush that will be great for New Zealand. The Green Party does not want to see any roads or infrastructure in that city. The Green Party does not want to have a rebuilt Christchurch. Well that is fine. That is the Green Party mentality where we are all going to go back to five-acre blocks and raise one cow and one sheep each—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.Hon CLAYTON COSGROVE (Labour):I have got to say that after that speech—well I will not even dwell on that speech. The speech I want to dwell on is that of John Archibald Banks the Hon John Archibald Banks. He is the man who already has one conviction to his name from some years ago and now he is up for a second crack. He supported the three-strikes legislation and he is on his way to No. 2 and there will be a No. 3.This man used the word “shakedown”. I have got to say that if anybody knows about a shakedown it is John Archibald Banks. This guy is like a Chicago gangster. The only thing that is missing is the trench coat the felt hat and the violin case. But he has got the brown bag of course and it was full of cash. For that man to stand up inept as he is and talk about a shakedown is incredible. I have got to say this guy has got a chin a glass jaw but he has got a chin a mile long and he leads with it. If anybody would know about a shakedown having already experienced the long arm of the law with a conviction it would be John Archibald Banks. What a cracker—old “Brown Bag” himself. If anybody would know about putting his hand out dipping it in the honey jar—Hon John Banks: I raise a point of order Mr Speaker. I heard you loud and clear recently saying to another member that members must be referred to as honourable members and no name-calling by the “goosesters” opposite.The ASSISTANT SPEAKER (Lindsay Tisch): No well that is just—Hon CLAYTON COSGROVE: Speaking to the point of order—The ASSISTANT SPEAKER (Lindsay Tisch): No no. Sit down. That does not help. You brought up a point of order that was one that had some merit and then you added on to it and defused the whole argument.Hon CLAYTON COSGROVE: I raise a point of order Mr Speaker. I just say that as far as I am aware Mr Banks is the honourable—The ASSISTANT SPEAKER (Lindsay Tisch): No no. I am inviting you to carry on with your speech.Hon CLAYTON COSGROVE: OK. Well I will use his correct title the Hon John Archibald Banks because that was the name I think that the police hung around his neck when they photographed him and booked him before he was convicted. The Hon John Archibald Banks—booked charged and convicted. He loves the court system. He was the police Minister at one point was he not? I think he was. He used to keep certain photographs on his desk I am told and talk to his mate Emmet Sharkey over the radio transmitter as he drove in in the ministerial limousine. I remember. It was: “Breaker breaker 91. I am in the artillery vehicle. Come in. Are you there?” He loves the court system so much that he is going back for another crack. You know the revolving door. Well I say to Mr Banks: think about your words very carefully. If anybody would know about a shakedown that boy certainly would.But I want to say this as we address the legislation before us. I am also mindful of another contribution that was made tonight by the Hon Chris Finlayson. He interjected on Mr Twyford a couple of times as the Greens played “one lollipop for you and two lollipops for us” in terms of who led the charge on transport and housing. I just say to the Greens: here is the go. We collectively managed to change the minds of these geniuses over there and the big engine that could not Gerry Brownlee is now the big engine that could. He was decoupled and is now recoupled to the Auckland City Rail Link. So rather than playing competitive silly childish politics let us actually celebrate that we actually managed to change the minds of these geniuses over there. But Chris Finlayson summed it up. He interjected on Mr Twyford by saying: “It’s our ideanow.”—“It’s our idea now.” I have got to say Mr Finlayson good on you for telling the truth because they opposed it they railed against it—excuse the pun—and Gerry Brownlee went out there utterly utterly opposed to it.You ask some of the manufacturers and some of the business associations up there and they wonder who Gerry Brownlee is as Minister of Transport. They say they have never seen him—which I find reasonably hard to believe but anyway—he is elsewhere. There is no transport strategy. So they have dipped into their big pockets and suddenly a road to Damascus experience has occurred and this side of the House has managed to talk some sense into them and they have changed their minds. So I agree Mr Finlayson it is your idea now or the National Party’s idea now as its members go around Auckland and try to explain why they have had the biggest U-turn—from the biggest member—in our history and actually backed Auckland City. But I say that this legislation and these appropriations are very interesting.Hon John Banks: Oh now we’re on to it.Hon CLAYTON COSGROVE: Well again Mr Banks would know about appropriations. He appropriates a lot to himself. He just cannot remember whether he signs the cheque or not or who gave it to him. So I say to Mr Banks cool your heels.Maggie Barry got up and talked about what National inherited as a Government. Well I have got to say that there are porkies porkies and then there is what Maggie Barry talks about. That is a different level of porkies. Here is the deal—here is the deal from the noxious weed. When that Government came into power it inherited 9 years of surpluses—9 years of surpluses from this Government and zero Crown debt zero Crown debt. Maggie Barry might have been a bit too close to the compost heap or the Roundup I do not know or the fertiliser whatever it is but her memory of history—Hon Trevor Mallard: 1080.Hon CLAYTON COSGROVE: —or 1080. Her memory of history has left her and is bereft because the truth is the facts are that there were 9 years of surpluses under a Labour Government and zero Crown debt. That is not spin that is not public relations—Hon John Banks: Yes it is.Hon CLAYTON COSGROVE: No old “Shakedown” over there. That is actually historic fact. It was Bill English I think who actually conceded that on coming to Government. If we look at this economy there has been a lot of talk about how great this economy is—Hon John Banks: Because it is.Hon CLAYTON COSGROVE: Well as for the good people of Epsom I do not know whether they are coming up with any brown bags of cheques Mr Banks. I do not know. You might be able to remember their name.Here is the problem with this economy: it is a two-speed economy. You go into the regions and they are withering. You go to any region in this country and they are doing it hard. The people are doing it hard and the unemployment is up. We have 90000 young people not in education and not in training.I say this as a Cantabrian: the biggest opportunity to build something out of the tragedy that was and is the earthquake was the ability to train those young people get them off the dole and use the dole as we proposed as a help to the boss and the employer to take them on and train them as apprentices. Mr Brownlee got up here 3 years ago and said we were going to need 30000 or 40000 people to rebuild Christchurch. Fact? True. The opportunity was—because an apprenticeship takes around 3 years—that we could have had 40000 young people unemployed young people off the dole paying tax earning a wage swinging a hammer and having a superb qualification and contributing to the rebuild had Mr Brownlee and Mr Banks that rotten pile that holds the house of National up actually said they would do that andback those young people rather than provide the gateways pathways caves roads to nowhere and cycleways that have generated very few jobs.They could have done that—a practical thing. They say we could not afford it. We said: “Use the dole. Use the unemployment benefit. Give that to the boss the building firm. Let him use that as a bit of help to get that person off the dole to train them and to give them a bit of help because the cost of training a young person in year 1 when you have got to supervise and before they can add value is quite substantial. It does not cost the taxpayer any more than the cost of allowing 90000 young people to languish on the dole. But these geniuses over here did nothing. So now what are we doing? We are importing our Irish Filipino and other friends and brothers and sisters from overseas to fill those jobs because the businesses that are going to reconstruct the houses and the plumbers the carpenters and the sparkies cannot wait 3 years nor can the earthquake victims to have their lives and their houses restored.It is a two-speed economy when you look at it age-wise. Younger New Zealanders are locked out of first home ownership. Again these geniuses after substantial policy about housing was produced by this side suddenly realised—Crosby/Textor got a poll up—there is a housing problem. That is except Mr Brownlee in Christchurch because there is no manufacturing crisis in New Zealand no housing crisis in Canterbury; it does not exist. But 5 years into their term they decide they are going to do something about it.Then we had the other economic speeds of course where exporters and manufacturers struggle while the speculators flourish. I asked these geniuses in the debate last session whether they think it is equitable that the top 10 percent in this land got 40 percent of the tax cuts. I give them the opportunity again to say yes that is equitable. Oh no. The old “Tumbleweed” at the back does not say anything. No silence because they know that there is no credibility in trying to say that the top 10 percent getting 40 percent of the tax cuts is equitable while manufacturers and young people and others and the unemployed and those on fixed incomes and benefits get nothing very little and struggle away as prices go up. It is a two-speed economy.Take Auckland. Growth is rampant in house prices but not in production and not in jobs of course. If you want to sell a house you are on the upside. If you want to buy a house especially if you are young and you cannot get the deposit you are locked out. You are—they are locked out Mr Assistant Speaker. No you are never locked out; you are always in.It is two-speed of course in regard to fairness. We talked about the tax cuts. We talked about the tax cuts. What do the elderly people say when they get their first or second winter power bill at the moment? John Key says of course that they are not paying too much for power. They should be grateful Mr Key says. The people should be grateful. Simon Bridges says the same thing. They say the people are not paying too much for power. But if you ask them at what point people will be paying too much they cannot answer. I say these people over here have a lot to answer for but they will not answer this question. They will not answer the question as to whether their policies are equitable fair and whether they are helping—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry the member’s time has expired.SCOTT SIMPSON (National—Coromandel):It is interesting to be following that member Clayton Cosgrove in this debate. Earlier in the afternoon we were given a very good and fulsome history lesson by the Hon Chris Finlayson—a history of that once-proud Labour Party and its various leaders and their leadership problems. It is interesting that one aspect the Attorney-General did not allude to during his very very good history lesson was the history relating to one Mike Moore a former leader whowas at one stage the member for Eden. He was the youngest MP in the House at that stage. In 1975 he was soundly thrashed by Aussie Malcolm and then he spent 3 years in the wilderness. Mike Moore came out of his 3 years in the wilderness as a carpetbagger in Christchurch.Why is all this relevant? It is because it is very well known that Clayton Cosgrove who is not actually famous for very much treats Mike Moore as a trusted and learned mentor. So now we are told that “mini-Mike” is likely to become the carpetbagger—Hon Trevor Mallard: I raise a point of order Mr Speaker.The ASSISTANT SPEAKER (Lindsay Tisch): Look I have said this on a couple of occasions tonight. One must refer to people by their correct names.SCOTT SIMPSON: I understand that Mr Cosgrove will become the Clayton’s carpetbagger candidate for Christchurch East and that is I guess following the history and the pattern of his mentor and long-time friend the Rt Hon Mike Moore.But we are here this evening to discuss and debate the Appropriation (2012/13 Supplementary Estimates) Bill and of course the Imprest Supply (First for 2013/14) Bill as well. These bills continue the Government’s very good economic record and its fiscal strategy of careful prudent studied stewardship of our finances and the country’s books. These bills are about responsible management and a return to surplus being back in surplus in 2014-15. So these are good bills. They are about building a competitive economy. They are about delivering Better Public Services and more important they are also—for Mr Cosgrove’s edification—about rebuilding Christchurch.New Zealand households have had a very tough time over the last few years as have New Zealand businesses. We have faced as a nation some very challenging times during very challenging global economic circumstances and of course the Christchurch earthquake has been devastating. But although those challenges remain economic recovery is beginning to occur and all the indicators now are heading in the absolute right direction—economic growth at 2.4 percent almost the same as in Australia and higher than in almost every other developed nation. Wages are growing the cost of living increases have been modest and interest rates are at a 50-year low. Household income has risen 20 percent in the past 4 years and is expected to rise by almost 20 percent in the next 4 years.So these are good indicators. They are good indicators for the country and they are good indicators for the people of Coromandel because the next decade will be one of enormous great opportunity for New Zealand as we see strong growth out of Asia. The real challenge for us as New Zealanders is to make sure that our economy is both financially sound and very competitive. The good people of Coromandel this evening will be listening in and they will be conscious that as they sit down tonight and listen to this debate in the most beautiful electorate in the country—what is commonly known as the Queenstown of the North Island—they are happy. They are happy with the direction that this John Key - led National Government is taking New Zealand. Coromandel people know that the careful steady prudent fiscal management by Bill English and John Key is taking New Zealand in the right direction and that we are on the right track. The fiscal outlook has improved markedly as a result of our sound management and we are on track for surplus in 2014-15 when of course the Government will be able to start reducing debt.Remember that when John Key and National came into office we inherited a set of Government books that had debts running to more than 60 percent of GDP by 2020 and absolutely no prospect of returning to surpluses again in the foreseeable future. But now forecasts show a surplus of $75 million in the 2014-15 year and we are achieving this while still spending $5.1 billion on new initiatives in Budget 2013. So that is an outstanding result. In fact it is a remarkable turn-round for the Government’s booksand I am very proud to be part of the National Party team bringing about this turn-round for New Zealand.Last week I had the privilege of hosting a visit to the Coromandel electorate by the Hon Nathan Guy Minister for Primary Industries and on the Thursday of last week we visited the Ngātea school which is the Hauraki Plains College. There they have an agricultural farm the Hayward Farm where the school pupils at Hauraki Plains College can learn practical agricultural skills and the Minister was delighted to see them doing fencing chainsaw repairs quad bike riding and all the sorts of good things that young aspirant agricultural farmers want to do. So this new generation of young farmers were learning the skills they need—hard-working farming families helping to produce the very high-value protein products for a hungry world which we will be exporting and will be continuing to export over the next foreseeable future.All the indicators are looking good and over the next decade or so New Zealanders will be presented with what could possibly be the most beneficial superb and favourable trading conditions that we have had in several generations. These young students on the Hauraki Plains understand the bright future that is ahead of them. They are keen to get into farming they are keen to get into agriculture because they understand how important agriculture has been in our history and will be going forward into the future.But it is not just farming that will be confronted with a bright future. It is also good to understand that our aquacultural sector will be booming as well. I also took the opportunity to take Minister Guy up to the Coromandel Harbour and as I said we went out on the worst day of the week in terms of the challenging weather. We went out to see Greenshell New Zealand’s mussel farms at Wilson Bay where the Government has doubled the size of water space available for the growth of Coromandel mussels. I was very pleased to be with Peter Vitasovich and his team from Greenshell New Zealand. Interestingly enough that company won the New Zealand Food and Beverage Exporter of the Year award just the other night and that was a great-news story for it.In Katikati which is part of the Coromandel electorate there is a company called Puma Darts where they are exporting their high-quality game darts the sorts of darts that you throw at a board in a pub or a club somewhere around the world and they are—[Interruption ] Yes indeed they could do that for a leadership dart. They could throw a dart in there in Katikati and the Puma Darts people could probably find a target for the Leader of the Opposition. But there they are export-led they are doing great things on behalf of the New Zealand economy and doing very well. Also in Katikati is a terrific business called Triodent where they are exporting over $50 million a year of their specialised dental products to the world—$50 million a year in export dollars coming out of Katikati.Budget 2013 continues the message of building momentum. The Budget confirms that New Zealand is on the right track that the Government is on the right track that the party that is in power is on the right track and that people are liking that. Opinion polls in theNew Zealand Heraldproduced this morning show that New Zealanders are liking that and they are not liking the prospect of the alternatives that they are confronted with. They do not like that at all.Maggie Barry: Who could blame them?SCOTT SIMPSON: Who could blame them indeed? So responsible management of the Government’s books and careful prudent stewardship of the finances is what this Government is all about—nothing weird nothing wacky nothing strange nothing unusual no printing of money no borrowing unnecessarily nothing weird or unusual at all. It is just steady as she goes good stable Government from a good stable set of hands on the Treasury benches and that is something that the New Zealand public areenjoying and are warming to. They like it. They like the bright future that is available to us. These are good measures. I commend them to the House.JAMI-LEE ROSS (National—Botany):As we near the end of this debate on the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill—and we have had to listen to Labour members whinging and whining because they do not like hearing the truth and they have had to listen to the truth for the last 2½ hours—I would like to tell the Labour Party that failure is an option because at 30 percent in the opinion polls the Labour Party has chosen failure. We know that the Labour Party has chosen failure because it keeps David Shearer on. It sees its polling ratings going down the drain and it has no hope of getting back into office at the next election because New Zealanders appreciate the economic plan that this Government is following. New Zealanders appreciate the growth rates that we are seeing in this economy. They appreciate the extra jobs that are being created in New Zealand and they do not appreciate what the Labour Party stands for.Hon David Cunliffe: The Tony Soprano of the National Party.JAMI-LEE ROSS: I hear David Cunliffe has just woken up and I know why he has woken up. He has woken up because tomorrow the Labor Party leader is getting rolled. The only thing that Mr Cunliffe needs to worry about is that it is not happening here in New Zealand—it is probably happening in Australia—but Mr Cunliffe is excited because he is inspired at the moment. He is inspired by the low opinion poll rates. He is inspired by what Kevin Rudd is doing across the Ditch and he is hoping that some day Labour Party members will be circulating a petition on his behalf. The reason why they are going to have to start circulating those petitions is that New Zealanders know that we are succeeding as a country on the back of economic growth in Budgets that this party has been passing.Let me give the other side some numbers because it is important that we drum this home. It is important that we remind those members how well we are actually doing as a country. At the moment after-tax wages are up 22 percent. That is huge considering the global financial crisis that New Zealand has been through. Our economic growth rates are currently sitting at 2.4 percent.Hon Ruth Dyson: Just make it up.JAMI-LEE ROSS: That is better than most developed countries in the world. Ruth Dyson does not like to hear it. She thinks it is made up. But actually Ruth Dyson let me tell the Labour Party and the other side of the House that we are growing faster than the US we are growing faster than Canada faster than the UK and the eurozone—Hon David Cunliffe: Get a real job.JAMI-LEE ROSS: David Cunliffe would never have achieved this because Phil Goff and David Cunliffe did not even know their figures at the last election. They would never have achieved this. We are growing faster than the UK growing faster than the US and growing faster than the eurozone and off the back of a global financial crisis—a global financial crisis and a Labour Party leadership that saw the economy starting to tank in 2008 when Labour was in office. We know that these are good growth rates.Unemployment is actually doing quite well at the moment too at 6.2 percent. At 6.2 percent that is better than most developed countries at the moment. We have got a lower unemployment rate than Canada the US the UK—lower than the OECD total—lower than France Italy Ireland Portugal Greece and Spain. It is those two at the end that we have to think carefully about—Greece and Spain. If the other side ever got into Government we know that we would have a similar story to that of Greece and Spain because the Labour Party is the anti-growth party. The Labour Party is the anti-growth party that does not support New Zealanders. It is the anti-growth party with its mates inthe Green Party that would be taxing New Zealanders a huge amount. Those parties would be spending huge amounts more than otherwise is necessary. They would be putting in more red tape on New Zealand businesses. They would be putting more red tape on New Zealanders as they are just trying to get ahead and that would be anti-growth.Those parties like to tell the country that they care about manufacturing. They like to tell the country that it is in a crisis and that they are going to have the solutions for it. The only crisis when it comes to manufacturing is the leadership the examples and the story we are getting from the Labour Party because since 2008 the manufacturing sector as a whole has grown by 9.2 percent—Su’a William Sio: What’s the unemployment rate?JAMI-LEE ROSS: —as measured by GDP by industry. When Labour was in office in 2008 the manufacturing sector actually shrunk by 12 percent. I heard William Sio wake up. Let me tell you about William Sio. I spent 3 years on the Manukau City Council with William Sio. Every time there was a policy and an option to increase rates and increase spending William Sio was always there. He was always there to spend more money. He was always there to tax the good people of Manukau more. He never cared about trying to cut costs or trying to get rates down. He never cared about sensibly balancing the council’s books. He was always wanting to spend more money. If William Sio and his mates on the other side ever occupied this side of the House we would see those types of policies. We would see a whole lot more spending. We would see a whole lot more debt. We would see a whole lot more anti-growth policies from Labour.Let me give those members a couple of numbers—60 and 20. Those numbers are worth remembering because under the economic plan left by the Labour Party in 2020 we would have seen debt reaching 60 percent of GDP. Under our plan debt in 2020 will be at 20 percent of GDP. If the other side does not think that that is significant I can tell you that New Zealanders out there who care about debt and who care about the economic situation that this country is in know that 60 percent of GDP sitting there on the debt books is bad. They know that Labour would have pushed hard for that. They know that Labour would have succeeded in that area raising the debt up to 60 percent of GDP. That would have been very destructive for New Zealanders. That is why the anti-growth and anti - New Zealand Labour Party should be kept out of the Government benches and should not be allowed near them.We know that the Green Party has now artificially said that it will be abandoning the printing of money but do we actually believe that? Do we actually believe that the Green Party will not be printing money? Because about the only way that the Labour-Green Opposition could ever pay for its policies is to print more money and that would be disastrous for New Zealanders.I want to talk a little bit about New Zealand’s housing situation because I am pretty excited about what this Government is doing in housing. In Auckland right now we have a huge housing problem which we need to address quite quickly. I would have hoped that the Labour Party would get on board with our housing plan because the Auckland Housing Accord and the special housing area policy that have been put in place as part of this Government’s economic plan are going to see housing really take off around the country especially in Auckland where we need a lot more housing where we need a lot more growth and where we need a Government that will be there assisting New Zealanders. That is exactly what we are doing—that is exactly what we are doing. In New Zealand under the special housing area policy that is part of our economic plan that Nick Smith is pushing forward we are going to see 39000 houses built in the next 3 years—39000 houses built in the next 3 years. That is almost aquadrupling of the housing that has been built in the past few years. That will have huge impacts for New Zealanders.In the health area we have got a fantastic story because Tony Ryall is really a health Minister that any future health Minister should be modelling themselves on not Annette King. Maggie Barry was absolutely right today when she said that Annette King was one of the worst health Ministers we have seen in 50 years. Tony Ryall is the model. Tony Ryall is the model. In health we have had 35000 more elective operations in this year compared with in 2008—8000 extra operations every year.Hon Trevor Mallard: Another one of Slater’s failures.JAMI-LEE ROSS: I am a bit concerned about Trevor Mallard. We know he likes to attack police officers. We know he likes to threaten their jobs. He is probably wishing he could do that to me right now but I am not part of the police Trevor Mallard. Trevor Mallard you should stick to what you are good at threatening police officers because that is about all he is good for.In health and education we are seeing huge improvements in policies. We know that New Zealand is growing. We know that jobs are being created in the economy. We know that the unemployment rate is on the way down. We know that New Zealanders are supporting what we are doing. We know that New Zealanders appreciate the growth that is happening in the country. They appreciate the National-led Government. Let us hope the anti-growth and pro - money printing parties on that side of the House never get into Government.Hon DAVID CUNLIFFE (Labour—New Lynn):Three short minutes to take apart what that member thinks is economic policy—Jami-Lee Matenga “Soprano” Ross who complains that New Zealand is worse than Greece and Spain. By next year we are going to have a worse current account deficit than Greece on National’s watch. National the party that has never run a surplus in 15 years and Labour which has never run a fiscal deficit. Who do you trust: Labour which has never run a deficit or National which cannot run a surplus? Those members say we are the anti-growth party. Take 30 years of data. It shows that New Zealand’s economic growth rates are higher under Labour than under National.This is the wind-up of the supplementary estimates debate. I want to say two things about revenue. The first is that it is great to have a body as august as the OECD validate Labour’s tax policies because in its survey of New Zealand it has said two hugely important things. The first is—duh—that New Zealand needs a capital gains tax. We are one of only three countries in the developed world that does not have one and not having one makes our property roller coaster worse. But those cynical National Party people are banking that their political success is all about the propertied middle class not getting too worried before the election. Let us hope that their balloon is burst.The OECD warned us that the New Zealand tax system is contributing to one of the worst levels of inequality in the Western World. That is the fault of this Government which gave huge tax breaks to the rich and put up GST for everybody else. The top 10 percent got 40 percent of the winnings and the poor paid more tax and that is wrong. That is like Robin Hood in reverse.I have got only a minute left. I just want to point to a couple of icebergs that are coming right at the revenue portfolioTitanic that the august Todd McClay the glossy chap down the back has just picked up. The first one is the billion-dollar bungle that is about to happen—the billion-dollar rebuild of the Inland Revenue Department computer which is going to make Novopay look like a walk in the park. The word is that the Government has already got Steven Joyce to do that bit of Todd McClay’s portfolio because it can see that it is a disaster waiting to happen.The second one is the Government’s sweet deals for its mates like MediaWorks which under theAlescocase I understand—I am advised—agreed that it would pay a $22 million tax debt. But under its restructuring that has somehow been forgotten except that the Prime Minister thinks that that is OK because it is powerful. Well that is the sort of behaviour that undermines the integrity of the New Zealand tax system and I expect the Minister of Revenue to take a call and tell us in the very next call why that is wrong. If he has got any integrity he will stare down his boss and say that he will not intervene in the MediaWorks tax dispute.Hon Todd McClay: No I can’t.Hon DAVID CUNLIFFE: He is saying he will not. That is good. Tell it to John Key—you might be the shortest-lived Minister in the history of the Government—because he has just said that a wet bus ticket will be just fine.The other iceberg coming down the track is the tax-finance interface. The OECD said three things really clearly. It said we need to get a strong savings rate because we have got a savings deficit and it is growing; to make superannuation sustainable; and to have a realistic exchange rate so that we can grow manufacturing. All of that is in Labour’s policy.Labour is the better economic manager. History proves it. Do not believe the spin from the intoxicated National Party. Labour is the party of growth jobs and fairness—long may it be.A party vote was called for on the questionThat the Appropriation (2012/13 Supplementary Estimates) Bill and the Imprest Supply (First for 2013/14) Bill be now read a second time.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes52New Zealand Labour 33; Green Party 10; New Zealand First 7; Mana 1; Independent: Horan.Bills read asecond time.Appropriation (2012/13 Supplementary Estimates) BillThird ReadingHon TODD McCLAY (Minister of Revenue)on behalf of theMinister of Finance: I moveThat the Appropriation (2012/13 Supplementary Estimates) Bill be now read a third time .A party vote was called for on the questionThat the Appropriation (2012/13 Supplementary Estimates) Bill be now read a third time.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes52New Zealand Labour 33; Green Party 10; New Zealand First 7; Mana 1; Independent: Horan.Bill read a thirdtime.Imprest Supply (First for 2013/14) BillThird ReadingHon TODD McCLAY (Minister of Revenue)on behalf of theMinister of Finance: I moveThat the Imprest Supply (First for 2013/14) Bill be now read a third time .A party vote was called for on the questionThat the Imprest Supply (First for 2013/14) Bill be now read a third time.Ayes63New Zealand National 59; Māori Party 2; ACT New Zealand 1; Independent: Dunne.Noes52New Zealand Labour 33; Green Party 10; New Zealand First 7; Mana 1; Independent: Horan.Bill read athird time.Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) BillSecond ReadingHon TODD McCLAY (Minister of Revenue):I moveThat the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill be now read a second time . It is the ongoing focus of the Government that all taxpayers pay their fair share of tax thereby reducing the national debt burden. However this must be tempered by the need to ensure that tax rules are not unduly onerous.Since this bill was introduced two items of note have been introduced into the bill by Supplementary Order Paper 167 and these were subject to submissions during the select committee process. The first was the proposal to treat lease inducement payments and lease surrender payments as taxable income for the recipient and as tax-deductible expenditure for the payer. The objective of this proposal is to remove a distorting factor that currently means that business decisions can be influenced not by prudent investment factors but by tax consequences. The Government is focused on supporting businesses to help grow our economy and by removing distortions in the tax system we help investment to flow into more productive areas. This proposed change to the tax treatment of lease inducement payments and lease surrender payments will also make the tax system fairer.The second addition to the bill addresses salary trade-offs and aims to achieve greater fairness between those employees who receive a non-cash benefit as part of their remuneration and those who receive cash-only remuneration. One part of this reform would have changed the way some employer-paid car-parks in central Auckland and Wellington were treated for tax purposes but this was withdrawn following consideration of compliance costs.Another key factor of this bill relates to livestock valuations. Members may recall that in Budget 2012 a change was made to the livestock valuation scheme that made elections to use the herd scheme generally irrevocable. This was a question of fairness as some farmers were simply electing in and out of the herd scheme in order to gain a tax advantage. The bill contains detailed supporting rules to buttress the general proposal of irrevocability and to provide appropriate exceptions and other compliance-driven charges.I began my speech by saying that tax rules must strive not to be unduly onerous. Included in this bill is the proposed change to the tax treatment of assets used both privately and for earning income. Concern has been raised about the complexity of these rules. It is worth noting that this perceived complexity will not affect the majority of taxpayers. Complexity arises only where taxpayers have placed assets into complex ownership structures. Where assets are held in simple structures the rules are relatively straightforward. The rules are only as complex as they need to be to ensure that the issue of how to tax these assets is addressed fairly and equitably. It is in the Government’s interest to keep tax rules simple as that ensures a greater rate of compliance and every effort is made to keep the rules simple.I would like to thank the Finance and Expenditure Committee for its work on this bill. I do know that there was significant interest in many of the provisions contained in the draft legislation and I believe that the committee and in part the chairman have done an outstanding job on our behalf. It is therefore with pleasure that I commend the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill to the House. Thank you.The ASSISTANT SPEAKER (H V Ross Robertson): I recognise the honourable member David Cunliffe.Hon DAVID CUNLIFFE (Labour—New Lynn):Well Mr Assistant Speaker I am pleased that you do. We have worked together for about 15 years and I am glad you still can.I rise to take a short call to support this Taxation (Livestock Validation Assets Expenditure and Remedial Matters) Bill. In doing so I wish to offer a sincere apology to my Labour colleagues gathered here on the benches because I am afraid colleagues I am going to have to say something nice about National members. Firstly I would like to acknowledge the work of the then chairman of the Finance and Expenditure Committee now the Minister of Revenue who has just resumed his seat the Hon Todd McClay who did a pretty decent job of steering this bill through the select committee and earned Labour’s support for it.Secondly I would like to compliment David Bennett. I do not know that I have ever done this on camera in my entire parliamentary career but I actually have to say David Bennett did a good thing with this bill because David Bennett actually knew enough about the accounting of farm accounts because he is an accountant who specialises in fiddling farm accounts and he knew from past experience some of the lurks and perks. He was able to generously share that with the Finance and Expenditure Committee and ironed out some of the kinks that I have a sneaking suspicion his clients might have benefited from once twice or two or three hundred times in the past.I also want to compliment Paul Goldsmith the new chair of the Finance and Expenditure Committee who inherits the large shoes left by Todd McClay. We wish the new chair well. And here endeth the lesson because that is all the being nice I have got time for tonight—on with the business.What is fascinating to New Zealanders about this bill is not so much what is in it but what is not in it. What is not in it is the thing that was able to unite the Council of Trade Unions and well-known right-wing blogger—no not Simon Lusk not Cameron Slater; the next best thing—Matthew Hooton. So as Todd McClay once so rightly said: “Anything Matthew Hooton and the Council of Trade Unions can agree on I’ll be sure to rubber-stamp.”—true. Matthew Hooton said enough is enough and I agree with him on this. Any tax that has compliance costs double the value of the revenue that it raises has got to be a nonsense.Sue Moroney: It was a dog.Hon DAVID CUNLIFFE: It was a dog and it barked. What is most interesting is not that the Government finally under pressure from the good old Labour Party stripped the car-park tax out of this bill it is that it took the Government months and months to see the obvious. It may have been that the Hon Peter Dunne—God rest his soul—the former Minister of Revenue may have been just a little bit preoccupied with various spooky things to notice that this car-park tax was an absolute dog but it got past the goalie. It got into the public domain and the Minister was backing it. It caused such a furore that in the end with its tail between its legs the Government had to come crawling to select committee members and beg its removal which of course being generous and good-hearted people we were only too happy to assent to on behalf of New Zealanders.I lay that before you because this is fascinating. This is a bill that we all agree on now that the Government has stripped the worst stupidity out of it and now that it has incorporated some of David Bennett’s learnings from a past life as he has turned from poacher to sort of gamekeeper—gamekeeper within the context of the National Party the poachers’ party but hey!This is a very interesting bill because the car-park tax is actually not a stand-alone tax. It is one of the fab four—the fab four stupid taxes that the National Government has been working on this year. The second one is the so-called iPad tax. It is going to put—or it was before we got on to it—fringe benefit tax on everybody’s private use of their cellphones and their iPads. They would have to go through their phone bills and account for which were their private calls and which were their public or business calls and then pay fringe benefit tax on their private calls. If that were not hard enough imagine trying to do that with your data use. What if you were on an all-you-can-eat bundled-up total-for-the-month data plan? How would you apportion that?Well in comes the Labour Government—the Labour Opposition not quite yet the Government but soon to be. The Labour Opposition just points out these few factoids to Government members. They finally got their heads around the fact that the iPad tax was never going to work and they finally killed it before it got to the select committee so they would not have another car-park tax debacle.Nobody told the National Government—how do you like this? It decided it was going to tax your iPad use but it forgot to tax Apple the people who make the iPads. I do not want to be personal about any particular company and of course its accounts are its own business—I am sure it is all legal anyway he says under privilege—but the truth is that Apple paid a total tax in New Zealand last year of about 1 percent.Hon Michael Woodhouse: 1 percent of what?Hon DAVID CUNLIFFE: About 1 percent of profit—about 2.5 percent of revenue about 1 percent of profit. That company apparently makes almost no money in New Zealand. If the Minister over there has not noticed its stuff is not cheap. How is it that Apple and Google and the like can operate for pure charity in a jurisdiction like New Zealand? The answer is that the Government is too stupid to write rules to make them pay their fair share of tax. It is so obvious that even the OECD has taken up the cudgels and the Government has finally had to admit it is behind the eight ball and it is going to fix it up. But it will probably need Labour’s help with David Parker and others to actually do the detail because it has not got a clue.If that were not bad enough the third of the fab four stupid taxes that the Government has been beavering away on—Minister listen up because we are coming after you on this one—is the clergy tax. This is an abomination because quite literally the Government will probably burn for years over this. It wants to impose fringe benefit tax on clergy housing and in one fell swoop put most of the churches out of business. My old man my dad—God rest his soul—was a wonderful man. He cared about thepoor. They called him the “Red Reverend”—I wonder why. He was an Anglican minister. I tell you I grew up in a family that did not have two bucks spare at the end of the week because—duh—clergy do not get paid much. They do it for love literally. They survive because they get a rent-free or near rent-free house to live in because they do not get paid a full salary. Except that the National Government wants to impute a supposed value on their clergy housing and then make them pay fringe benefit tax on the total amount even though they have never received it.Hon David Parker: What would they do if they heated their houses?Hon DAVID CUNLIFFE: Good God imagine if someone heated their houses. There might be a heating tax as well. I tell National this: I am going to maintain the deal we had with the Hon Peter Dunne—and he is honourable I think—which is if you fix it we will not complain about it. But please do not bring the clergy tax to the select committee because Paul Goldsmith does not need a nightmare like the iPad tax. Ladies and gentlemen if that were not dumb enough wait for the fourth instalment of the fab four stupid taxes the Government has been working on.Sue Moroney: More?Hon Member: Another one?Hon DAVID CUNLIFFE: Yes there is more. You know that the National Government crows that it is rebuilding Christchurch. It is of course the beneficiary of major reinsurance flows that are helping the sagging economic growth rate—strip it out and it is at only about half the normal long-run average growth rate as David Parker pointed out so well. National wants to tax temporary accommodation for Christchurch rebuild workers. It is going to slap fringe benefit tax on temporary accommodation for people like engineers from Auckland who moved down to Christchurch to help the good people of Christchurch get back on their feet. Wham end of the month fringe benefit tax! If you have been staying in a hotel you lucky person you got to have hotel food—fringe benefit tax on you.Where has the National Government been? It is OK for someone like Jami-Lee Matenga “Soprano” Ross because he has never had a real job and we can forgive him. He came straight from kindy to Parliament. But seasoned international diplomats like the current Minister of Revenue should be worldly enough to know that taxing clergy on income they have never earned taxing Christchurch rebuild workers because they have to have a roof over their head in winter in Christchurch taxing iPads but not taxing Apple and taxing car-parks which would cost twice as much to do as the revenue it raised is technically speaking brain-dead. So please National do not make us fix all of that again. Please fix it before it gets to the House.I see that time is up. It is a great shame because there are in fact many many other stupid things that National is doing in the tax portfolio but I shall have to wait for the Committee stage to bring more of those exciting instalments to the New Zealand public. Thank you very much.PAUL GOLDSMITH (National):It was very educational as always to listen to our colleague Mr Cunliffe who is always very full and detailed in his contributions at the Finance and Expenditure Committee and we hear that in the House as well. He is very detailed and thorough.Hon David Cunliffe: Greaser.PAUL GOLDSMITH: Indeed. So we are looking forward to his continued cooperation and guidance in the weeks and months to come. This bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill is just a piece of tax maintenance. Everybody knows that tax is not something that people necessarily want to pay more of than they need to so the ingenuity of individuals and businesses knows no bounds and with every new piece of tax law there is a new attempt to findsome way around it. There is a never-ending exercise of keeping up to speed with what is going on and this bill really follows on in that pattern.The main items that I want to focus on are the livestock valuation changes which will be of great interest and significance to those people living out in the areas beyond the Bombay Hills. The proposals in particular expand on legislation in Budget 2012 that provided that elections to use the herd scheme to value specified livestock are irrevocable unless an election to exit was made before 18 August 2011. There are generally two ways that farmers can value their livestock mainly beef and dairy cattle and sheep but also deer goats and pigs—Hon Member: Rabbits.PAUL GOLDSMITH: —at balance date for tax purposes. I am not sure about rabbits but certainly pigs and goats. The herd scheme treats livestock more as if they were a capital asset using national average market values with changes in values from year on year being a tax-free capital account.Farmers could elect out of the herd scheme with a short advance notice period. There can be legitimate reasons for electing out of the herd scheme and it is particularly the case if there is a change in the farming regime from breeding to fattening for which the cost-based regime is more apt. This bill explicitly recognises this by allowing an election to exit the herd scheme for a type of livestock when there has been a change in the fattening regime. But the proposed rules will require persons who acquire livestock from associated persons to use that associated person’s herd scheme election and base herd numbers if any. This associated person’s rule will apply to matrimonial property settlements and to the tax consequences of death. I think that is important. If that were left unchecked I think there would certainly be a continuation of some avoidance of tax in that way.I also want to speak briefly about assets and expenditure. When we dealt with holiday homes aircraft and boats in particular this was source of considerable discussion during the select committee phase. I think it is fair enough that everybody should pay their fair tax and for schemes where the private use of some assets is very significant and the actual income-earning use is insignificant then we should be more detailed and thorough in our way of taxing that.When we talk about fairness in general we should just remember nevertheless that three-quarters of income earners in New Zealand face a tax rate of less than 17.5 percent. We hear quite often from the other side of the House about tax cuts for the rich and so forth but again we should remind ourselves that every family in this country with two children and earning around $45000 to $50000 effectively pays no income tax in New Zealand.Sue Moroney: Thanks Labour.PAUL GOLDSMITH: We do not need to worry about the origins of it; that is the fact. So there is an enormous amount of redistribution going on in this tax system and continuing to maintain it in such a way that it still yields the dividends that are required is very much what this bill is about. On that basis I commend it to the House.Hon DAVID PARKER (Labour):I was interested to hear the last speaker Paul Goldsmith talking about a change to fattening regimes in respect of the livestock herd scheme and saying that a change to the fattening regime allows a change in the way in which livestock is accounted for for tax purposes. Of course one of the reasons why the scheme had to be changed is that until now the fattening regime was the farmers who were able to fatten their returns by reducing their tax burden by misusing changes between livestock herd schemes.I want to address one other issue—a serious issue I think—that was raised by Mr Goldsmith in his contribution. He gave us a percentage of the number of people who areon the lowest income tax rate. What he did not say is that that includes some of the wealthiest people in New Zealand who earn more economic income than low-income earners. David Cunliffe will be able to tell me the percentage of high-income earners who are not on the highest marginal tax rate.Hon David Cunliffe: About 60 percent of the top 100.Hon DAVID PARKER: Recently we had a report that—John Hayes: You made that up.Hon DAVID PARKER: No he did not actually. I read the same article. Approximately 60 percent of the most wealthy people in New Zealand have not been paying the highest marginal tax rate. National’s answer to that was to drop the highest marginal tax rate but even once we have done that some of the wealthiest people in New Zealand mask their economic income as being capital income on capital account which enables them to not include it as taxable income. So although they might have low taxable income in terms of the statutory definition of income found in our taxation legislation they have a lot of economic income on capital account which is not taxable in New Zealand. I want to point out that this bill does nothing to address that.I further want to emphasise what the OECD one of the agencies that advises the New Zealand Government said in respect of that. It said in its June report on the New Zealand economy that “Income inequality is higher” in New Zealand “than the OECD average.” So already in respect of income inequality in New Zealand has reached the point where income inequality is worse than the average in the OECD. This is the New Zealand that we think of as being an egalitarian country but it has become less egalitarian than the average in the OECD.Then it said that this is partly because “the system of taxes and transfers reduces inequality less than in most OECD countries.” That is another quote from its report. “The system of taxes and transfers reduces inequality less than in most OECD countries.” In other words our tax system is less redistributive than most tax systems in the OECD.Then it goes further and drills down as to what the main causes of that are and none of them—none of them—are addressed by this bill. It said in its report that the biggest problem in New Zealand in terms of both inequality and economic efficiency in terms of the tax system is that we do not tax capital gains. I am going to read out what it says because the position in New Zealand is far from moderate; it is extreme: “New Zealand belongs to a group of five OECD countries with particularly high pre-tax capital-income inequality. … As much of this income especially at the top levels takes the form of capital gains the lack of a capital gains tax in New Zealand exacerbates inequality (by reducing the redistributive power of taxation). It also reinforces a bias towards speculative housing investments and undermines housing affordability as argued in the 2011Survey .”So the Government in 2011 was told that one of the worst things with the New Zealand tax system is the fact that we do not tax capital income unlike most OECD countries and that as a consequence we are a less equal society and our economy is less efficient because people chase speculative land-based capital gains because of the tax bias. The 2011 survey told the Government that. Here we are 2 years later we are looking at another tax bill that could have addressed the issue and it does not.It is absolutely clear that it is one of the reasons that we have rising inequality. We have got rampant house price inflation running in Auckland at the rate of 15 percent per annum where first-home buyers increasingly cannot get a foot in the market where homeownership rates are declining where increasing numbers of houses are owned by the few and where increasing numbers of young New Zealanders especially cannot afford to buy one house and are increasingly reliant on intergenerational wealthtransfers—inheritances—in order to buy a house rather than realistically being able to save in order to buy a house. One of the reasons for that and an important reason that would be easily fixed in New Zealand is that we need to have a capital gains tax.The National Government members jump up and they say: “Oh the only capital gains tax you can have is one that includes everything including the primary home.” Well the Labour Party does not favour taxing the family home. When we hear the National Government using that as an excuse we ask: “Well what do other countries do?”. Virtually every other country that has a capital gains tax or some sort of equivalent to that exempts in one way or another the primary home or gains from the primary home.So not only have we had the idiocy that was in the original taxation bill—the car-park tax and the other mistakes that David Cunliffe has capably addressed tonight—it does not address this fundamental flaw in our tax system. Neither does it fix the fact that under a recent tax bill the Government increased petrol tax beyond that needed to fund roading.Hon David Cunliffe: Wonder why.Hon DAVID PARKER: Yes I wonder why it did that.Hon David Cunliffe: Wafer-thin surplus.Hon DAVID PARKER: I think it might be the wafer-thin surplus too Mr Cunliffe. It did that because it wants to achieve its surplus target. We agree that we should be achieving a surplus target—Hon David Cunliffe: We would have done it.Hon DAVID PARKER: —yes we would have done it—but when you have given 40 percent of your income tax cuts to the top 10 percent and then you increase petrol tax for everyone including the poor in order to achieve that well it just does not seem fair. When you increase GST—which as a proportion of low-income people’s income is a higher tax than it is for wealthier people who do not spend as high a proportion of their income on “GST-able” goods and services—that too is regressive and hurts the lower-income people in society.What else does this bill not address? Well we have heard a lot of talk from the Government that it is spending a lot of money it says—well money—on food in schools. Two and a half million per annum—Jacinda Ardern: 18c per child in poverty per week.Hon DAVID PARKER: —18c per child in poverty per week—not a large amount of money. It is stealing a Labour Party initiative but it wants to do that. It does not have many good policies of its own and good on it for doing something in respect of child poverty. When it gets as bad as it is under this Government even this Government feels that it actually has to deal with some of the symptoms of poverty even if it is not dealing with the causes.But do you know how much it is overcharging us for ACC which it does not fix in this bill? Our ACC levies are over the next 2 years $700 million too much. That is 300 years’ worth of the food in schools amount. It is funding the equivalent of 300 years of its derisory $2.5 million contribution through food in schools to poverty which it has made worse through its tax policy and it is not fixing the ACC side of it. I warrant to say that for the families that those children are coming from the extra that those same families are paying on those ACC levies is probably more than the $2.5 million that the Government is putting in. It is taking with one hand what it pretends to give with the other.This legislation—which we are voting for because it actually in a couple of very minor ways improves the tax system—does nothing to improve these major deficits in our tax system which are both holding back our economy and increasing inequality. Idespair sometimes that we pretend in this country to be an egalitarian country when we know that inequality is rising to the detriment of us all and when some of these things can be so easily fixed in a way that not only makes society fairer and addresses child poverty—because the tax take across society becomes fairer—but also makes the economy go better. I cannot understand why the Government is not willing to do these things that will make us grow better.JULIE ANNE GENTER (Green):I rise to speak on the second reading of the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. Tax policy is an opportunity to get better outcomes and to get smarter outcomes. The Green Party tax and monetary policy is precisely that: to use tax policy to encourage productive behaviours that are sustainable and that are good like work and like certain types of consumption and to discourage those things that are not good for a society and that increase pollution congestion and other ills. This bill was an opportunity to get a reasonably good outcome from tax policy. Most of the proposals in it are pretty minor; they are just tightening up loopholes.During my second reading speech I would really like to focus on one opportunity that has definitely been missed out of this bill. That was the opportunity to extend fringe benefit tax to employer-provided car-parks in the Auckland and Wellington central business districts. Unfortunately we did not get to have a very informed and rational debate on this particular issue. That is what I really regret because there was actually a report to the New Zealand Transport Agency that was published earlier this year February 2013 entitledCompany cars and fringe benefit tax—understanding the impacts on strategic transport targets . This report went through and thoroughly analysed what the different travel trends are. It analysed how many trips are by company car how many are resulting in an employer-provided car-park and the impact that those incentives of employer-provided car-parks have on people’s travel choices—that is the way that it increases congestion the way that it undermines our investments in public transport and the forgone revenue from that.Unfortunately when this bill came to the Finance and Expenditure Committee no one on the select committee nobody speaking to the select committee and not even the officials from the Inland Revenue Department were apparently aware of this report and the research that had gone into it. So it was not possible for us to have a debate using the information that had been collated by researchers on what the impacts of extending fringe benefit tax to employer-provided car-parking in the central business district could be and how that could be done in a way that would achieve the best outcome for businesses for Auckland and Wellington for our transport investment and especially for people living in the Auckland and Wellington central business districts. So that was unfortunate.On top of that we had some submitters from the FBT Action Group who came to the select committee with some quite surprising figures about the compliance cost of extending fringe benefit tax to car-parks. Their calculations about the compliance cost which have been referred to by previous speakers were based on some assumptions—first of all that the fringe benefit tax would apply to 200000 car-parks and that it would require 110 minutes per car-park per year which is pretty unlikely really when you think about it. But the worst part is that there are not 200000 car-parks. We have the numbers on employer-provided car-parks in the Auckland and Wellington central business districts. There are only 24000 employer-provided car-parks in the Auckland central business district. This estimate of compliance cost was done on an assumption of 200000 car-parks and that is 10 times as many. There are even fewer car-parks in the Wellington central business district of course than there are in the Auckland central business district. The vast majority of people travelling to work in the Auckland andWellington central business districts do not travel by car. Seventy percent of the people who work in the Wellington central business district do not travel by car; they come in by public transport walking or cycling. Over half the people who travel into the Auckland central business district at the moment travel by public transport walking or cycling.So the issue with the employer-provided car-parks not being taxed as a benefit is that it is unfair to the majority of people in New Zealand especially those working in the Auckland and Wellington central business districts who do not receive this benefit. They are taxed on their income. They would be taxed on their public transport passes if their employers provided those to them. The very conservative value of a car-park in the Auckland central business district is $2725 a year. The value of an annual public transport pass for all stages on average is $2700. So the subsidy for people to drive alone into the Auckland central business district is greater than the value of offering a public transport pass to people travelling into the Auckland central business district.Let us get back to the fundamentals. The purpose of fringe benefit tax is not primarily to raise revenue; it is to ensure that employers and others are not trying to avoid paying tax by providing benefits that result in distortions. The purpose of extending fringe benefit tax to car-parks was to achieve greater horizontal tax equity but the primary reason would be to get smarter transport outcomes. The best way to get smarter transport outcomes is to remove the unintentional subsidies that exist for people to drive alone to work in the Auckland and Wellington central business districts.There were some allegations that extending fringe benefit tax to car-parks would disadvantage people who worked shifts and could not possibly take public transport and people on low incomes. The reality is that the vast majority of people driving to work in the Auckland and Wellington central business districts are on high incomes so continuing to subsidise car-parks is actually a regressive move. It takes away resources that could otherwise be put to the general public of New Zealand. It takes resources away from them and says that no we are going to let people who are earning over $100000 a year in the Auckland and Wellington central business districts continue to drive alone in their company cars and clog up the roads rather than using our resources in an efficient way and making sure that the prices are direct.Ultimately this bill was a lost opportunity to have a debate. It is true that the way that fringe benefit tax was proposed to be extended to car-parks probably was not the most efficient way of doing that. We in the Green Party would have wanted to see—and we did ask officials for—some investigation on how this could apply fairly to car-parks throughout urban areas wherever their value is high as it does in Australia. Instead of being limited to one geographic region that was arbitrarily chosen it could have applied to car-parks valued above a certain threshold. That would have ensured that there was not the unintended consequence of incentivising development outside of the central business district where it would be harder to provide high-quality public transport.Another important thing that the Green Party would have liked to see were changes to the proposal so that it would not apply to shift workers and people on low incomes—for example cleaners who come into Auckland to clean at Skycity. There is no reason why it should apply to them. Ultimately they were just the minority and we think that those issues could have been dealt with had we had an informed and substantial debate. But we were not able to have that debate in part because we did not have the information available to us at the Finance and Expenditure Committee. The Government and Labour were quite quick to jump on the numbers provided by the FBT Action Group which provided quite erroneous numbers based on 200000 car-parks when there are only 24000 employer-provided car-parks in Auckland’s central business district.Ultimately this is about choice and we want to make sure that the tax system is fair and that it rewards people for making choices that consume fewer resources. That is a key tenet of Green Party tax policy: to make sure that the tax system is fair and that it does not subsidise behaviour that results in greater pollution greater congestion and greater health costs. I am going to read just a short section from this report on the benefits of addressing parking distortions: “Employer-provided parking is a benefit available only to those who drive and it has greater value in areas where parking prices are high. Those who benefit most in dollar value from free parking at work are those who also drive when congestion is worst. In addition the most valuable land used for parking is in the CBD and if primarily used for [employer-provided] parking is an unproductive use of CBD land. While it may not be a direct tax policy to subsidise people to drive and park in the CBD of New Zealand’s four main cities by ignoring the taxable value of employer-provided parking it is a policy by omission.” In other words it is the policy of this Government to subsidise people to drive into the central business district at peak times thereby undermining our investments in public transport and worsening congestion while foregoing revenue from high-income earners. Thank you.MAGGIE BARRY (National—North Shore):I rise to speak to the second reading of the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. As has been pointed out by other speakers—and I am to going to talk about what is in the bill as opposed to what other people wish was in the bill which we have heard quite a bit about from the speaker who just resumed her seat Julie Anne Genter—this is a bill that proposes to broaden the tax base with changes that are going to make the tax system fairer and the economy stronger. That is its bottom line. This bill introduces amendments to several inland revenue Acts and regulations. The sponsor of this bill the Hon Todd McClay outlined those earlier so I am not going to repeat those.It includes supporting provisions to the livestock valuation rules which make elections to use the herd scheme generally irrevocable. This is a fairly complicated area. It is one that I am sure my esteemed colleague an expert in this matter David Bennett will be talking about in due course.This is a bill that does focus on helping businesses. As an example of that our current GST laws can present an obstacle and we need to address this to stay globally competitive. GST as we all know is a tax on consumption. It is not a tax on business. It should therefore be neutral for both resident and non-resident businesses. This bill deals with that aspect.Lease inducement and lease surrender payments are another area that is perhaps a little arcane to many of us. It is something that looks at proposed amendments that will modify the capital revenue boundary for two specific commercial land - related lease payments—namely lease inducement payments and lease surrender payments. That is also going to be tidied up by this piece of legislation.In my electorate of the North Shore people took a bit of an interest in assets expenditure. Some assets such as holiday homes aircraft and boats are often used to earn income for their owners and also used privately. When you are looking at issues of fairness in tax this is an area that requires examination. These sorts of assets are commonly referred to as mixed-use assets. The situation as it stands now is that tax rules allow deductions for expenditure incurred in earning taxable income and disallow deductions for expenditure that relates to the private use of an asset. However these sorts of rules can be difficult to apply to expenditure that does not clearly relate to either the income-earning or private use of an asset. Some examples of that include expenditure while the asset is not being used and expenditure on general repairs and maintenance. They are a couple of examples that many of us have had some experience of. The current practice is that many owners of such mixed assets deduct all theexpenditure that relates to the period within which the asset is not being used leading to excessive tax deductions.So once again looking at issues of fairness and balance this bill proposes new rules that prescribe the amount of deductions that owners of certain assets can claim. Minister McClay the sponsor of this bill stated in the first call on this bill tonight that tax rules must try not to be too onerous. In my opinion this bill succeeds in that very well and I commend it to the House.ANDREW WILLIAMS (NZ First):I take a call on behalf of New Zealand First for the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. I note also that in the commentary of this bill it says that one of the purposes of it is “to improve the fairness of existing tax law and regulations protect the tax base and minimise the burden on businesses.”New Zealand First will be supporting this bill now in particular since the car-park tax has been removed which we all felt at the time was a ridiculous suggestion where something like $17 million in revenue was going to be taken in taxes but it was going to cost businesses something like $30 million in their administration costs to actually provide that tax to the Government. That was going to be a nonsense and it was also a nonsense that it was going to be applied to only the Auckland central business district and the Wellington central business district. Then it would provide some huge anomalies as to where you would actually determine companies were located and who would be paying for car-parks in those areas and who would not be. It would be a crazy situation where literally over the road from one company you could be just slightly outside the boundary and be paying for car-parks while just a short distance away another company would be getting away scot-free. That was going to be a ridiculous situation.New Zealand First will be supporting this bill for a number of reasons. We do agree with improving the taxation system. We do support any measures that help streamline the taxation system and help make it a more efficient system. It is a very meaty document. It is very very technical and detailed so I will not go into a lot of it but I will point out some of the areas that we do now support.We do now support the change to the livestock valuation rules that has come through with this and we see that as now being sensible.We do support the fact that it makes some important GST changes such as removing the inequitable situation of non-resident versus resident businesses in this country.It also provides tax deductibility for expenditure on trees and plantings for erosion shelter and water protection purposes. Again we feel that that is a very fair thing to do where farmers or anyone else are in a situation where they are having to put in trees to try to stop erosion and also to provide important shelter. Particularly in this last week or two we have all been very mindful of the shelter that has been required for animals in the South Island in particular and in parts of the North Island. It is a good thing to provide tax deductibility for the planting of shelter and also in terms of water protection purposes. That is a good means of providing a tax deductibility situation.This bill also gives donee status to three charity organisations that operate internationally. They are very worthy organisations and do therefore warrant being included in that particular status.It also eliminates tax treatment mismatches to certain foreign currency hedges. If there are mismatches in that foreign currency hedge area then that is another good area to be cleaning up and ensuring that there are not inequities there.Overall this bill helps to strengthen the tax system. It makes it easier for taxpayers—both personal and corporate taxpayers. We think it has a lot of merits and as we have always said in Parliament New Zealand First will support good policy. We will supportpolicy that assists this country and assists the Government to operate in the most efficient manner that it can. In this respect New Zealand First will be supporting the bill.JOHN HAYES (National—Wairarapa):It is an interesting night to be here in the House debating this bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill because looking across the Chamber the phones are clicking away frantically as people are realising that there has been a leadership spill across the Tasman in Australia and we now have a new Prime Minister—K-Rudd—in Australia and I wish him the very best for his 100 days in office. You can see these Labour people looking at the polls clicking at what is going on in Australia and you can feel change coming on the other side of the House.Hon Simon Bridges: He reminds me of Cunliffe.JOHN HAYES: That is why Mr Cunliffe got up and spoke tonight and said absolutely nothing in 10 minutes. What he was trying to do—The ASSISTANT SPEAKER (H V Ross Robertson): Order! The tax bill.JOHN HAYES: —was to talk about issues that we discussed at the Finance and Expenditure Committee and that he did not have problems with at that point. It is interesting also to reflect on the comments this evening from Andrew Williams who I do not think attended any of our select committees. It was always his leader Winston Peters who made a very strong contribution to our work and it is very good to see New Zealand First supporting this legislation.This legislation underpins one of the Government’s four priorities for this term which is building a more competitive and productive economy. That is what Julia Gillard did not do. It is only by lifting New Zealand’s economic performance that we can create jobs boost incomes improve living standards and provide the world-class public services that New Zealand families need. The centrepiece of the Budget in 2010 was a major tax package reforming the tax system to make it fairer more sustainable and a better support for economic growth. That is why I really strongly support this bill.I would just like to quickly touch on the fact that this bill continues the Government’s focus on ensuring everybody pays their fair share of tax while at the same time we continue to support the economy. This bill is a bill that focuses on helping businesses. It is important to the Government that New Zealand businesses are supported in becoming more competitive against the rest of the world which is why this economy is heading north and many other economies are heading south. Our current GST laws can present an obstacle and to that end we need to address this—and the bill does it—so that we can stay globally competitive. GST is a tax on consumption not a tax on business and it has got to be neutral for both resident and non-resident businesses. This bill allows non-resident businesses to register for and claim back GST in a broadly similar way to companies operating here in New Zealand.I think that this other issue around GST is the issue affecting global trade which will be resolved in the bill. Where a New Zealand - resident manufacturer charges an overseas customer for the creation or modification of tools required to produce specific export products a new rule is proposed in this legislation that will allow these tooling costs to be zero rated for GST. It also confirms that farmers’ riparian rights to planting are immediately deductible and that will be very helpful to farmers in the Wairarapa. With those few comments I support this bill unreservedly.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman):It is outrageous that the Tories over there can dare mention the words “fair” and “taxation” in the same sentence. This bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill does change some taxation provisions—I accept that. But let us not forget that this Government came into office and changed the taxation regimefirstly to cut taxes lower taxes reduce taxes—call it what you like—for the most wealthy in this country or for the wealthy who pay tax because many do not anyway. The second thing the Government did was increase GST which is the most regressive tax we have. That is the poorer people of this country pay the most GST relative to their incomes. This bill is an attempt the best National Government attempt the best Tory attempt to bring fairness to the taxation system.We have heard about the different technical provisions in the bill. As Labour spokesman on primary industries I guess it is only fair that I talk about the livestock valuation parts of this bill. I accept that the technical amendments there will probably bring some more consistency. There will be some farmers who might be aggrieved. There have been exceptions made on the back of advice from the Finance and Expenditure Committee and I think the bill is an improvement in that way.What I would like to do because it is relevant is raise deadstock issues not livestock issues. This Government has been embroiled with incompetence a lack of oversight and a lack of direction by the Minister on deadstock issues for some time. The first is meat which is the result of deadstock. Most farmers try their best to manage that process—not to have it come around too early—so that they can provide the livestock to become deadstock and then to become meat for export. But the National Government in a blind ideological approach to Government services has thrown the responsibility for farming for forestry for fishing for food safety for biosecurity and for food certification—all of these things—into one incompetent agency the Ministry for Primary Industries which has been shown over the last few weeks to be unable to do the job that it should be doing or that the separate agencies should be doing. I do not blame it. There has been major upheaval. Unlike the Minister over there the Minister for Primary Industries who dumped on his officials I do not blame them. I blame the Government for throwing them all into one agency and then saying: “Carry on as you were.” The deadstock management issues in this country are hopeless both going out—David Bennett: What a load of crap.Hon DAMIEN O’CONNOR: Well the member over there jokes about it. If you want to talk to people in the meat industry Mr Bennett they will tell you that they do not trust the Minister’s explanation as to what happened at the Chinese border. In fact the Minister’s explanation is somewhat contrary and contradictory about when he was informed. When did he first know about this? When was the Ministry for Primary Industries notified about this?David Bennett: What about the bill?Hon DAMIEN O’CONNOR: We will find out. Do not worry Mr Bennett. We will find out the truth of that because it is absolutely important that the response to not only the livestock taxation issues but the deadstock management issues by this Government is appropriate.Can I say there is another issue not about the export of deadstock but about the import of deadstock. On 12 May—that goes back some weeks almost 6 weeks—a farmer in the Bay of Plenty identified a limb in palm kernel expeller. One and a half million tonnes of this comes in. It is a by-product of the palm oil industry and it is brought into this country to help the livestock so they do not become deadstock. The Labour Government originally allowed about 80000 tonnes of this in total during a period of drought in the early 2000s. That trade has now grown to 1.5 million tonnes. There is a dependency on it by the dairy industry and others to keep livestock from becoming deadstock when there are feed shortages and also to boost production. The dependency is somewhat dangerous given the reality that the new Ministry for Primary Industries overseen by an incompetent Minister and an incompetent Government hasbeen unable to provide the security through the biosecurity pathway and we saw a limb of an animal come into this country.It took effectively from 12 May until 17 June for the Ministry for Primary Industries to identify the limb—to take it away and test it and then to announce that it was a cloven-hoofed animal. A cloven-hoofed animal means that it has two bits of hoof like this. I say this for the city slickers you included Mr Assistant Speaker Robertson maybe although I know that you do know these things. Cloven-hoofed animals are the ones that are affected by foot-and-mouth disease. They are the ones that can possibly carry that coming from countries where foot-and-mouth is endemic—Malaysia or Indonesia. But the Ministry for Primary Industries could not tell us where that palm kernel expeller came from. Its systems of oversight for the importation of palm kernel expeller are totally inadequate.Two farmers went to Malaysia off their own bat went on an official tour and then took a side tour. They thought they would take the initiative to really investigate what was going on. They wrote a report and delivered it to the Ministry for Primary Industries last November and the Minister and the Government sent officials over only just in the last month or so to check out the claims in the report. They came back and said no there is low risk and there are very safe systems for the most part. In fact if you read the report carefully it does leave a few gaps there. I will not say that the report was untruthful; I will say that the Minister should have taken his rose-tinted glasses off when he read the report. Clearly in it there were signals that there are major gaps in the system and the discovery of an animal limb in palm kernel expeller on a Bay of Plenty farm is a major concern for primary sectors in this country.Let us go back to the point about the systems that the Ministry for Primary Industries uses to check. On 12 May it got the limb on 17 June it said it was not a sheep or a New Zealand animal and then today—and I find it quite frankly unbelievable and will be following up on it—it said no it was a sheep. Well if it takes that long to work out what a leg of a sheep is in this country how good are the systems that we are relying on?This bill here makes some attempt to make some adjustments to implement a National Government taxation system that is fair they say. It addresses some issues for livestock taxation but what I say in this House tonight is that this Government has ignored deadstock meat industry and biosecurity issues that are of huge significance to our economy. The Minister of Revenue over there might think that we are broadening the scope of the bill. The taxation gathered through these measures goes to pay for core Government services. If this incompetent Government allows foot-and-mouth disease into this country because it has not run a proper biosecurity system we will not have livestock taxation issues.This Government cut funding for biosecurity. It has had warning after warning that we are at risk particularly through palm kernel expeller yet did it in the last Budget increase funding? No it did not. Did it cut funding? Well yes it did. The Minister for Primary Industries says: “Oh there was a carry-over.” I do not believe the Minister that there was a carry-over. I believe there was a cut to front-line funding. When you ask people in the biosecurity system they say they are demoralised they are concerned and they are alarmed with what is going on.I say here in this House: if this incompetent Government allows in such a disease our economy will be on its knees the farming sector will be on its knees and we will not have to worry about livestock valuation issues because we will have hundreds of thousands of deadstock. That is not what we need in this economy and it is about time the National Government got on and focused on the real issues like biosecurity protection for our primary sectors.DAVID BENNETT (National—Hamilton East):I just want to take a brief call. The last bastion of Labour Party policy that it could have put up around agriculture has now totally been destroyed by that member the Hon Damien O’Connor talking for 10 minutes on deadstock when we are talking about a livestock taxation bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. It just shows how out of touch he is and how incorrect his assumptions are. I look forward to the Green Party policy on agriculture because that will be the true left-wing policy on agriculture soon now that the Labour Party has abolished that role for itself.There is a capital gains tax in New Zealand. There are a couple actually. If you buy or sell property within 10 years you get a capital gains tax. There is a capital gains tax in the livestock valuation that farmers have to pay each year. When farmers pay their tax they have a capital gains tax calculation on their profit on the stock. It is not actually money made. It is not income coming into them. It is a capital gains tax and this is a capital gains tax that has been existing in New Zealand’s tax law for a number of years. We are tightening the rules around that so that people cannot take advantage of that by choosing one method of valuation over another. That is the right thing to do because people were abusing the system and that needed to be changed and the Government has stepped in and done that. I thank members of the Finance and Expenditure Committee on both sides for working constructively together to do that.But Labour members have used this debate to say that the capital gains tax that they propose which is exempting first homes will be the solution for New Zealand’s housing problems. It will not. It does not work in Australia in that way. It is another tax grab from the Labour Party. It is not going to change those policies. So for anybody listening having a capital gains tax on property will not change house prices. If you did have an exclusive capital gains tax that is seen as more prudent by international bodies that look at financial management but it does not achieve the purpose that Labour is saying. This is a good bill and we commend it to the House.CAROL BEAUMONT (Labour):As others from Labour have said we are supporting this bill the Taxation (Livestock Valuation Assets Expenditure and Remedial Matters) Bill. The bill seeks to make amendments to several Acts including the Income Tax Act 2007 the Tax Administration Act 1994 the Goods and Services Tax Act 1985 and the Income Tax Act 2004.Debate interrupted.The House adjourned at 10 p.m.