Volume 653 Week 9 - Tuesday 7 April 2009 
Volume 653 Week 9 - Tuesday 7 April 2009 
[Volume:653;Page:2405] 
Tuesday 7 April 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Amended answers to Oral Questions 
Question No. 5 to Minister 2 April 
Hon Dr RICHARD WORTH (Minister of Internal Affairs) 
: 
 Last Thursday I said that the company I was involved with was WSD Global Risks Ltd. I should have said WSD Global Markets Ltd. Everything else I said was correct. 
Questions to Ministers 
Recession—Rebuilding Economy 
1. CHRIS TREMAIN (National—Napier) 
 to the  
Minister of Finance 
: In preparing for the Budget on 28 May what role does he see for State services in rebuilding the economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The State services represent about 30 percent of the New Zealand economy so the sector has a significant influence on New Zealand’s overall performance. When the private sector is tightening its belt it is not sustainable or reasonable for State Service wages and salaries to continue rising at 3 or 4 percent a year as some are doing now. These costs are falling on taxpayers who are unlikely to be getting 3 or 4 percent pay rises this year. 
Chris Tremain 
: What steps has the Minister taken to ensure that State services remuneration practices reflect the difficult economic environment? 
Hon BILL ENGLISH 
: The Government believes that it is important that wage expectations in the State services reflect the wider economy. Therefore I have written to all Ministers reminding them that we have a firm and consistent view on remuneration pressures. I outlined my view that we do not fund any remuneration pressures through the Budget process. We will be looking for State services pay restraint and productivity growth. There may be some groups who believe they have a special case on grounds of fairness or relativity. However our overall expectation is that any remuneration pressures will be self-funded. 
Grant Robertson 
: What does the Minister think that the reaction will be among police officers social workers prison workers and other hard-working public servants to the news that they will be getting a pay freeze but that there will be no cuts to Ministerial Services for the National Government and that under his Government 36 press secretaries are being paid more than $150000 a year which is twice as many as under the previous Labour Government? 
Hon BILL ENGLISH 
: In the first case the member is wrong. The police and social workers are working every day with New Zealanders who are feeling the stress of the recession and in my view they will be much more realistic about State sector pay pressures than the Labour members are. 
Chris Tremain 
: What recent reports has the Minister seen about the private sector labour market? 
Hon BILL ENGLISH 
: Treasury’s monthly economic indicators which were issued yesterday reported that the majority of firms have reduced staff numbers in recent months and expect to make further reductions in the coming year. Private sector wage and salary expectations therefore have fallen significantly in recent months. The previous Government was focused on increasing the Public Service; this Government is focusing on increasing the services provided to the public. 
Grant Robertson 
: Why does the Minister think it is acceptable to give himself an effective pay increase of $2500 per year while telling police officers social workers fire officers prison officers and other hard-working public servants that they have to accept a pay freeze? 
Hon BILL ENGLISH 
: In the first place there is no pay freeze. Chief executives have a clear direction from the Government that they should be looking for pay restraint and productivity gains. Secondly all of the groups that the member has mentioned are benefiting from tax cuts. From 1 April someone on the average wage gets the equivalent of $18.50 per week and that is a significant boost in after-tax income which the person would not have got if he or she had voted for Labour and that is why people did not vote for Labour. 
Dr Russel Norman 
: Can the Minister confirm that according to answers to written questions the State services saved $4.7 million last year through Govt3 sustainability initiatives; if so is he concerned that these initiatives have been axed and even mocked by the Prime Minister as being “hug a polar bear” initiatives when they are actually saving taxpayers many millions of dollars? 
Hon BILL ENGLISH 
: There were some very expensive and somewhat symbolic schemes that the Minister for the Environment has determined quite sensibly were not worth the money. I am quite sure that with the reduction in travel conferences and workshops and the reduction in the production of useless but large strategies over the next 12 months the State services will be emitting less carbon and causing less climate change than they have done over any of the last 9 years under the previous Government. 
Dr Russel Norman 
: What is wrong with a State Service like the Inland Revenue Department saving about $1 million annually by reducing energy minimising waste and engaging in other kinds of “polar bear public displays of affection” when it cost only $700000 to actually make those savings? Is that not a good thing because it saves the taxpayers’ money? 
Hon BILL ENGLISH 
: There is nothing wrong with the Inland Revenue Department saving $1 million except to say that over the next few years that will not be anything like enough. 
Hon Trevor Mallard 
: Can the Minister of Finance give the House an assurance that all agreements currently entered into will be funded by the Government? 
Hon BILL ENGLISH 
: I can give that assurance. Because these are legally binding agreements of course the Government will meet its legal obligations. However that will create something of a problem of fairness. Quite large groups of State servants in this 12-month period will be getting substantial pay increases. About half of the Public Service will get pay increases and a good number of those workers will receive increases of between 3 and 5 percent. I believe that the public will not be tolerant of those groups protesting that they are not getting enough. 
Dr Russel Norman 
: I seek leave to table a document from the Inland Revenue Department dated 25 February this year which shows the savings it is making through its Govt³ sustainability initiatives. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Ministers—Confidence 
2.  
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in all his Ministers? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the  
Prime Minister 
: Yes; they are hard-working and competent Ministers. 
Hon Phil Goff 
: Is he confident that it was a prudent use of thousands of dollars of taxpayer money for his Minister of Education Mrs Tolley to take a helicopter joyride over Auckland on the basis she said that she wanted an overview of the Auckland University of Technology? 
Hon BILL ENGLISH 
: As the member will be aware having formed an overview of the globe in his travels when a trade Minister including an overview of South America just recently where he was an extraordinarily influential figure at the conference that he went to or so he told the media— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. [ 
Interruption 
] I understood that points of order were to be heard in silence. 
Mr SPEAKER 
: That is a very good point well made. We will hear it in silence. I thank the member. 
Hon Phil Goff 
: The question was quite straightforward. It was specific to a particular Minister. We have not yet had the Prime Minister answer that question. I think it is time that he addressed himself to the question. 
Mr SPEAKER 
: I am sure that the Hon Bill English will do that. 
Hon BILL ENGLISH 
: I am absolutely satisfied that the Minister of Education has strong views about her role as a steward of public funds. The fact is that the Crown has substantial investments in tertiary institutions in Auckland. The previous Labour Government made a number of open-ended commitments that it did not fund properly and the Minister of Education has to sort out the mess. 
Hon Phil Goff 
: Can the Prime Minister explain what the benefits were either for education or for the hard-working New Zealanders whose taxpayer money funded this jaunt for the Minister to have this joyride; and how is this expenditure consistent with the Government’s demand for value-for-money expenditure? 
Hon Gerry Brownlee 
: Better than a hug from Joe Biden. 
Hon BILL ENGLISH 
: Yeah I would ask who paid for that. It is quite normal practice for Ministers to take rides in helicopters. It is done all the time because— 
Hon Phil Goff 
: What did she see that she couldn’t have seen by car? 
Hon BILL ENGLISH 
: What did that member see in South America that he could not have seen on CNN news? If the trip was paid for by anyone else and the value of it was over $500 then the Minister will declare it as a gift on the pecuniary interests register just the same as I have done myself. 
Hon Phil Goff 
: How does the Prime Minister reconcile the Minister of Education’s decision to sack 70 staff members at the Tertiary Education Commission in order to save money with this cavalier use of taxpayers’ money which could have been spent on strengthening education? 
Hon BILL ENGLISH 
: It is not a cavalier use of taxpayers’ money; it is perfectly normal practice for Ministers. The redundancies in the Tertiary Education Commission were due to a decision made by the chief executive of the commission. Change in the Tertiary Education Commission was well signalled by National when in Opposition because it was one of the most wasteful and useless expenditures of public money that the previous Labour Government invented. 
Hon Phil Goff 
: Which of the following statements is correct: Dr Worth saying this morning that he was confident that he had done nothing wrong or the Prime Minister saying last week that Dr Worth was stupid and unwise? 
Hon BILL ENGLISH 
: The Prime Minister laid out his expectations very clearly to Dr Worth and he is satisfied that Dr Worth has met those expectations. I am still waiting to hear the apology from Labour for wasting hundreds of millions of dollars on the Tertiary Education Commission when it is now getting up and complaining about a helicopter ride by a National Minister. When are you going to apologise for the enormous waste of public money— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: I have recognised a point of order. There will be silence. 
Hon Trevor Mallard 
: It is quite a long time since you have had responsibility for education matters and asking you to apologise is I think inappropriate. 
Mr SPEAKER 
: The member makes a perfectly fair point but the exchange in question time is important for the moment. 
Hon BILL ENGLISH 
: I would not want there to be any ambiguity. I was asking when Labour is going to apologise. 
Mr SPEAKER 
: I appreciate that. 
Hon Phil Goff 
: Is Dr Worth correct in saying this morning that “I am not on final warning” after his third conversation with the Prime Minister on Saturday night about non-disclosure of interests; if so has “one strike and you’re out” as a high standard of ministerial behaviour become “three strikes and you’re not even on notice”? 
Hon BILL ENGLISH 
: The Prime Minister has made his position absolutely clear. He has set out his expectations of how Cabinet Ministers ought to behave and Dr Worth has the obligation to meet those expectations. 
Hon Phil Goff 
: Is the Prime Minister’s failure to effectively deal with Dr Worth because last year Mr Key himself failed to acknowledge his conflict of interest in holding shares in Tranz Rail? 
Hon BILL ENGLISH 
: It is a bit rich to hear Labour talking about conflict of interest when in Government it had Parliament pass a law to in the first place make legal its illegal and fraudulent expenditure of taxpayers’ money on the pledge card; and secondly to write a set of rules for our electoral system that were explicitly designed to favour it when it was broke. 
Hon Phil Goff 
: Will the Prime Minister act to remove Dr Worth from his portfolios if there are further undisclosed conflicts of interest? 
Hon BILL ENGLISH 
: The Prime Minister has stated many times that he has set out his expectations about how a Minister should behave and it is up to the Minister to meet those expectations. 
Gangs—Criminal Organisations 
3.  
DAVID GARRETT (ACT) 
 to the  
Minister of Justice 
: Does he agree that the Mongrel Mob Black Power Hell’s Angels and the Headhunters are primarily criminal organisations; if not why not? 
Hon SIMON POWER (Minister of Justice) 
: 
 Yes. That is why we have introduced legislation to make it easier to secure convictions against members of a criminal organisation. 
David Garrett 
: How many patched Mongrel Mob and Black Power gang members were invited to the Drivers of Crime summit held last Friday and why were they invited? 
Hon SIMON POWER 
: Two currently patched members attended last Friday but they did not wear any regalia. They were invited by the Minister of Maori Affairs Minister Sharples; I am advised that the Minister had been personally working with one of them to reduce youth violence in South Auckland. 
Rahui Katene 
: Has the Minister read the Parliamentary Library research paper of 3 April 2009 that identifies that “Pakeha street gangs with interests in neo-fascism and white power tendencies grew stronger particularly in Christchurch during the 1990s.” and how are these gangs being addressed within current justice sector policy? 
Hon SIMON POWER 
: I have not read that paper but I am familiar with the type of gang to which the member refers. The Government has swiftly introduced legislation that strengthens the existing law under section 98A of the Crimes Act and that seeks to further criminalise participation in organised criminal groups. 
Finance Minister—Statements 
4.  
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by all the statements he made on TVNZ’s  
Q+A 
 programme on Sunday 5 April 2009? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. 
Hon David Cunliffe 
: Does the Minister stand by his comment that “the national cycleway is not going to happen in a hurry” and that he “won’t be spending $50 million on it this year or next year or the year after.”? Will he now concede that the 4000 jobs the Prime Minister promised the cycleway would create are unrealistic and that as a response to the recession it has already failed? 
Hon BILL ENGLISH 
: Yes and no. 
Hon David Cunliffe 
: Is the reason the Minister will not commit to funding cycleways—cycling from cloud to cloud—that it is too expensive and will he confirm that this silver bullet from the Job Summit has become a “hug a polar bear” initiative: nice to have but a luxury we can no longer afford? 
Hon BILL ENGLISH 
: The Minister is wrong about that; there will be funding— 
Hon Members 
: Oh oh! 
Hon BILL ENGLISH 
: The fortunately former Minister is wrong about that; there will be funding for a national cycleway. 
Peseta Sam Lotu-Iiga 
: How have the Minister’s expectations of economic recovery as discussed in the  
Q+A 
 interview been influenced by earlier predictions about this economic cycle? 
Hon BILL ENGLISH 
: I am surprised that Opposition members believe they have some capacity to pick when recoveries are going to occur. In March last year Helen Clark informed us that the economy was holding up well and that no policy response was being considered. The next day Michael Cullen conceded that New Zealand might be heading for a shallow technical recession. By August 2008 he had revised the outlook to be the most challenging since 1987. The following month he assured New Zealanders that the worst was over—a prediction that was premature at best. 
Hon David Cunliffe 
: Therefore how does the Minister reconcile his statement that “we’re unlikely to aggressively grow out of” the recession with the Prime Minister’s statement that we will “come out of it reasonably aggressively”? How can the public have any confidence whatsoever in the Government’s handling of the economy when even the Prime Minister and his loyal deputy are in such stark disagreement? 
Hon BILL ENGLISH 
: The public have a high level of confidence in the handling of the economy because the National Government is now in charge of it instead of a Labour Government. We are rolling out our plan which is to protect people from the sharp edge of recession in the shorter term and to prepare the economy for growing rapidly as we come out of the recession. That is the only way we will be able to replace the jobs that are currently being lost day by day. I would have thought that Opposition members would take our sharply rising unemployment much more seriously than they do. 
Hon David Cunliffe 
: Does the Minister agree with Treasury’s recent warnings that an additional 60000 people might lose their jobs and that the rise of unemployment could extend the recession and slow recovery? In light of this warning does he stand by his comment regarding the Prime Minister’s optimistic predictions that he “wouldn’t want to say he’s wrong”? 
Hon BILL ENGLISH 
: Treasury is guessing. As I have said to the member before— 
Hon David Cunliffe 
: Oh they’re just guesses? 
Hon BILL ENGLISH 
: Well it is guessing—no one knows quite what is going to happen. As I have said to the member before we do not spend all our time sitting around redoing forecasts; we are getting on with an active and decisive programme that has strong public support. In fact confidence in New Zealand’s economic direction is very high compared with almost any other developed country. 
Economic Stimulus Package—Retrofitting Private Houses 
5.  
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Energy and Resources 
: Does he agree with the Green Party that providing Government assistance to insulate and retrofit private houses to make them warm healthy and energy efficient should be a key component of the economic stimulus package? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Generally yes. Improving the insulation of a house by way of retrofitting has a positive impact on the health of its occupants and can lead to energy efficiency. 
Dr Russel Norman 
: Can the Minister confirm that we now have genuine cross-party agreement on this Green Party initiative to make people’s homes warm dry and healthy? 
Hon GERRY BROWNLEE 
: It would seem that there is a degree of consensus in the House about this matter but I point out that the Labour Party which now makes a huge noise about this issue failed miserably to fund a so-called billion-dollar programme while it was in Government. The Labour Government talked about a billion dollars but that was just an illusion. There was no billion-dollar fund. 
Charles Chauvel 
: Has the Minister read new section 223 of the Climate Change Response (Emissions Trading) Amendment Act which came into force on 26 September 2008; if so could he remind the House of what it provides? 
Hon GERRY BROWNLEE 
: No; and I cannot. 
Kevin Hague 
: Can the Minister confirm that there are around 200000 Kiwi kids with asthma and a further 200000 adults with chronic obstructive pulmonary disease and that a great many of them stand to benefit substantially from the Green Party’s proposals for a Green Homes Fund that would make their homes warm dry and healthy? 
Hon GERRY BROWNLEE 
: There is little doubt that far too many dwellings in New Zealand are under-insulated. The best estimates show that the figure approaches some 900000 residences. It is further estimated that about 200000 of those dwellings are very very poorly insulated and generally are occupied by people who are on lower incomes. There is no doubt that the Energy Efficiency and Conservation Authority programme that exists now is doing a good job in trying to lift the insulation values in those homes. The evidence is overwhelming that when people are in warm homes they are healthier. 
Kevin Hague 
: Is the Minister aware of any proposed project that will create more jobs faster per $1 million invested while at the same time improving health and reducing carbon emissions than the Green Party’s initiative to make homes warm dry and healthy would create? 
Hon GERRY BROWNLEE 
: I am aware that the Prime Minister made it clear after the Job Summit that he was particularly keen to investigate some energy-efficiency projects around home insulation. He has further asked me to instruct officials from the Energy Efficiency and Conservation Authority and the Ministry of Economic Development to provide advice to the Government on how that may be given effect. 
Dr Russel Norman 
: Can the Minister confirm that this kind of Green New Deal investment is exactly what the World Economic Forum is calling for when it says “The international community faces the twin challenges of dealing with the most serious global economic crisis since the 1930s and negotiating an ambitious agreement on climate change. We suggest that the two agendas can and should be designed to be mutually reinforcing.”? 
Hon GERRY BROWNLEE 
: I do know that the Prime Minister has said one of the aspects that is intriguing about the insulation of homes is that “it’s scalable across the country. …. you’ve got a situation where you’ve a workforce that’s ready to do that’’ because “the construction sector’s been slowing down … you do get health and social benefits;”. And there are some energy savings which of course have a flow-on environmental benefit as well. 
Charles Chauvel 
: Which of the following statements is correct: one the previous Labour-led Government legislated via new section 223 of the Climate Change Response (Emissions Trading) Amendment Act to provide for a billion-dollar home insulation fund; two the legislation was enacted by Parliament in September after the time when it could be included in the 2008 Budget and after the deadline for mention in the Pre-election Economic and Fiscal Update; three the Government has misleadingly and consistently claimed that Labour’s programme for insulation retrofits was unbudgeted for and was therefore cut; or four all the above? 
Hon GERRY BROWNLEE 
: There is nothing misleading about the claim that Labour failed to fund its billion-dollar promise to New Zealanders. That is just a fact. What is worse is that we had the then finance Minister and the then energy Minister trying to spend the money twice. Those Ministers said that any windfall profits from State-owned enterprises would go into new renewable generation but everybody else in the previous Labour Government seemed to believe there was going to be a big pot of cash available for insulation. There was no cash and as much as the Labour members might have legislated until there is cash nothing happens. Under Labour nothing happened. 
Charles Chauvel 
: I seek leave to table section 223 of the amendment Act for the Minister’s benefit so he can read it. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Charles Chauvel 
: I seek leave to table a statement reporting comments by Dr Nick Smith that the insulation fund had not been provided for and was therefore cut. 
Mr SPEAKER 
: I would like to seek clarification. Is this a New Zealand press statement? 
Charles Chauvel 
: Yes. It is from the  
Press 
 dated 8 January 2009. 
Mr SPEAKER 
: Can I appeal to members not to waste the House’s time. I put the leave request. Is there any objection to that statement being tabled? There is. 
District Health Boards—Patient Travel Funding 
6.  
Hon RUTH DYSON (Labour—Port Hills) 
 to the  
Minister of Health 
: What expectations does he have for district health boards to fund patient travel costs? 
Hon TONY RYALL (Minister of Health) 
: 
 The Government expects district health boards to fund patient travel costs according to the travel policies that have been in place under the previous Government and which this Government is continuing. 
Hon Ruth Dyson 
: Does he expect to make more inaccurate announcements as he did on 29 March when he said: “The amount that patients can claim under the scheme hasn’t been reviewed for more than 20 years”; or had he forgotten that an additional $36 million was added to that very fund after the last review 4 years ago? 
Hon TONY RYALL 
: It is quite clear that the National Government has enjoyed a considerable amount of positive support from New Zealanders for its announcements on improving the National Travel Assistance Policy. 
Hon Ruth Dyson 
: Will the Minister demand a Health Committee inquiry as he did when the Capital and Coast District Health Board’s paediatric oncology service was last under threat and children and their families had to travel for their treatment; or will he concede that his noise then was nothing about children and their families but purely political? 
Hon TONY RYALL 
: Because the current paediatric oncologists are in place until August there is a period of time for a more durable solution to the ongoing challenge of providing a full range of paediatric oncology services at Wellington Hospital to be found. 
Nicky Wagner 
: What changes if any have been made to the National Travel Assistance Policy under the new Government? 
Hon TONY RYALL 
: The announcement from the Government that there will be increases to the policy has been long-awaited. There will be a 40 percent increase in the mileage contribution which will go from 20c to 28c per kilometre and we are increasing the overnight support up to $100 per night. This is the first increase in a number of years and it brings the rest of the country up to the rate paid in Auckland. 
Hon Ruth Dyson 
: How can the Minister justify his decision to allow the MidCentral District Health Board to cancel the clinical services and mobile bus and how can he justify the now required 100 kilometre journey on a substandard road with no travel assistance to the good people of Dannevirke? What happened to “no cuts in front-line services”? 
Hon TONY RYALL 
: I am advised that the reason why changes have been made to the Dannevirke service is to improve the number of patients who can get a first specialist assessment. We know that despite the population of New Zealand growing by 10 percent in the last 9 years the number of first specialist assessments hardly grew. But I can also say that I have been advised by the chief executive of the MidCentral District Health Board that 30-plus services are still being provided in Dannevirke. 
Nicky Wagner 
: What actions has he taken regarding other vulnerable services in district health boards? 
Hon TONY RYALL 
: There is no doubt when we look at the situation of the paediatric oncology service here in Wellington that the new Government has inherited a large number of vulnerable services mainly because of the health workforce crisis that has been ignored for some years. The new Government has asked district health boards to identify those vulnerable services and work regionally and nationally to ensure that front-line services can be improved. 
Economic Stimulus Package—Housing New Zealand Corporation 
7.  
TODD McCLAY (National—Rotorua) 
 to the  
Minister of Housing 
: Has he received any feedback on the progress Housing New Zealand Corporation is making with the 2008-09 component of the jobs and growth stimulus package announced earlier this year? 
Hon PHIL HEATLEY (Minister of Housing) 
: 
 Yes. I have been advised by officials that the corporation is well on track with this year’s component of the jobs and growth stimulus package. Out of the $10 million of upgrade work injected $1.1 million worth was under way as of early March. So far 285 extra houses have been upgraded that would not have been if we had not injected the money. We are delivering for those families that we found were living in squalor and had been living in squalor for some years. 
Todd McClay 
: I will speak slowly for the benefit of the previous member for Otaki. What changes have occurred since the announcement made earlier this year? 
Hon PHIL HEATLEY 
: Members will be aware that soon after this Government came to office we approved 475 net extra State houses by the end of this financial year. The stimulus package added on 69 extra State houses. Although we had targeted 475 new State houses and we announced a further 69 new State houses I asked Housing New Zealand to sharpen its pencil and now there will be 475 new State houses plus 86 new State houses on top of that. 
Todd McClay 
: I will speak even more slowly for the benefit of the previous member for Otaki. 
Mr SPEAKER 
: The member will just ask his question. 
Todd McClay 
: How is this work being allocated to areas under housing pressure? 
Hon PHIL HEATLEY 
: The Maori Party colleagues who came to me had a particular concern about particular areas of significant need across the country. For example South Auckland was of concern to them. We are adding an extra 94 houses in South Auckland by the end of this financial year and 18 of them are coming from the stimulus package. We are doing up 186 houses by the end of this financial year over and above what we would have done. We were very concerned and the Maori Party members were very concerned about tenants having lived in squalor for many years and now they are to live in decent conditions. 
Rahui Katene 
: What opportunity will there be for iwi to be involved in the jobs and growth stimulus package and what consultations have taken place with iwi to this effect? 
Hon PHIL HEATLEY 
: I have met with the co-leaders of the Maori Party on a number of occasions to discuss the benefits of the stimulus package for State house tenants who are Maori and also for Maori and non-Maori tradespeople. The Maori Party members have local State house areas of concern to them and I have welcomed their bringing to my attention iwi organisations that they believe could be involved in upgrading many of the State houses and building some of the new ones. That is $101.5 million worth next year. I hope to see some Maori businesses involved in that upgrade work. 
Question No. 8 to Minister 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Speaker. I note the absence from the House of the Minister for Tertiary Education. I understand she is in Queenstown presumably in a helicopter. I seek leave for this question to be held over for question time tomorrow. I am seeking leave so that the Minister can return to the Chamber and answer the question. 
Mr SPEAKER 
: I ask the member when making a point of order in future not to make that kind of derogatory comment about a person if he expects the point of order to be taken seriously. Leave is sought for the question to be diverted. Is there any objection to that course of action? There is objection. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. It was made clear earlier by the Deputy Prime Minister—I think when he was acting for the Prime Minister—that it was normal practice for Ministers to take helicopters— 
Mr SPEAKER 
: The member will resume his seat—if the member wants to ask his questions he will resume his seat when I am on my feet. That was not a point of order. 
Tertiary Education—Auckland 
8.  
Hon MARYAN STREET (Labour) 
 to the  
Minister for Tertiary Education 
: Does she believe that she has a good overview of Auckland tertiary education issues? 
Hon Dr WAYNE MAPP (Associate Minister for Tertiary Education) 
 on behalf of the  
Minister for Tertiary Education 
: Yes. I am advised that the Minister has visited the campuses of Auckland University the Auckland University of Technology and the Manukau Institute of Technology. I am also advised that the Auckland University of Technology at its own suggestion took the Minister on a short helicopter ride so she could gain a greater understanding of the population growth in Auckland the distances between tertiary sector institutions and the ways the Auckland University of Technology intends to serve different communities within the Auckland region. 
Hon Maryan Street 
: Can the Minister confirm that the helicopter ride over Auckland was the result of her misunderstanding the expression “A helicopter view of the issues”? 
Hon Dr WAYNE MAPP 
: It will certainly be clear from previous answers that it was actually the Auckland University of Technology that made that suggestion. Of course it should also be clear that the royal commissioners had to do a report on the spread-out nature of Auckland simply because it is so spread out and needs better governance. 
Hon Maryan Street 
: Did the Minister take the helicopter ride over Auckland to avoid meeting with student leaders who had been trying to meet with her for some time and who in desperation had embarked on what they called “The Great Tolley Hunt: the Sounds of Silence”? 
Hon Dr WAYNE MAPP 
: The Minister has been very active in the Auckland region visiting numerous tertiary institutions; the Auckland University of Technology was determined to ensure that she had the clearest possible insight. The Minister is focused on ensuring that students and universities get resources and not the bloated Tertiary Education Commission as was apparently the plan of the previous Government. 
Hon Maryan Street 
: I seek leave to table an article from  
Nexus 
 which I understand to be the Waikato University student newspaper entitled “The Great Tolley Hunt: the Sounds of Silence”. 
Mr SPEAKER 
: Leave is sought to table a statement from a student newspaper. Is there any objection to that? There is objection. 
Hon Clayton Cosgrove 
: I seek leave to table a map of Auckland to assist— 
Mr SPEAKER 
: Order! 
Hon Clayton Cosgrove 
: It is a legitimate point of order. I seek leave to table a map of Auckland. She does not know the distances so we are here to help. 
Mr SPEAKER 
: The member knows that the last comment he made was not in order. Leave has been sought to table a map of Auckland. Is there any objection? There is objection. 
Small and Medium Sized Businesses—Government Assistance 
9.  
MELISSA LEE (National) 
 to the  
Minister for Economic Development 
: What is the Government doing to help small and medium sized enterprises? 
Hon GERRY BROWNLEE (Minister for Economic Development) 
: 
 In early February the Prime Minister announced a range of business support measures which included the business health check website and the BIZ helpline for small to medium sized enterprises. These are difficult times for small to medium sized enterprises and the BIZ helpline is a free service that provides advisers able to answer some of the questions that people have that they perhaps cannot ask of their bank accountant or anyone else for that matter. I can report that 968 phone calls were made to the helpline in February and 980 calls in March—a 68 percent increase. That is a very large increase on the average rate from the previous 7 months. 
Melissa Lee 
: What other measures has the Government undertaken to assist small and medium sized enterprises? 
Hon GERRY BROWNLEE 
: Quite apart from the changes to the tax system the business advisory BIZ helpline is also available to refer businesses that wish to engage with mentors with those appropriate people to assist them. New Zealand Trade and Enterprise is paying the $100 registration fee usually charged. Since this offer was made available in February 209 firms have been referred to Business Mentors New Zealand services and 110 of those firms have contacted a business mentor. We believe that the scheme is of great value to many of those small businesses that are struggling at the present time. 
Melissa Lee 
: Has the Minister received any reports about usage of the business health check website? 
Hon GERRY BROWNLEE 
: Yes approximately 400 firms have completed online business health checks. Since the website was available 60 percent of the business health checks completed online are from firms in the Auckland region. Completing a business health check helps firms identify areas where they may be able to seek further assistance and advice is given on that basis. 
Internal Affairs Minister—Ministerial Requirements 
10.  
Hon PETE HODGSON (Labour—Dunedin North) 
 to the  
Minister of Internal Affairs 
: Can he confirm that as Minister of Internal Affairs he has met all the requirements of a Minister of the Crown as set out under “Conduct public duty and personal interests” in Part 2 of the  
Cabinet Manual 
? 
Hon Dr RICHARD WORTH (Minister of Internal Affairs) 
: 
 Yes. 
Hon Pete Hodgson 
: Why when I asked him last Thursday whether he was aware of issues surrounding WSBC—a company described by the director of the New Zealand Serious Fraud Office as “an associated entity”—did he advise the House: “I know nothing of these matters.” when in fact the publication TGIF Edition had questioned him on those same matters and published the Minister’s remarks in quotes on 13 February—7 weeks ago? 
Hon Dr RICHARD WORTH 
: The member is misquoting what I said. The question to me was: “Is the Minister aware that WSBC a company that the director of the New Zealand Serious Fraud Office described as “an associated entity” was thrown out of the Cook Islands last week and that last Friday the Minister of Finance for the Cook Islands issued a press statement praising the role of the Pacific anti - money-laundering programme; and how does that reflect on his judgment?”. I answered: “I do not know of those matters. That is a different company. The company I was involved with was WSD Global”—I then said “Risks” but meant “Markets”—“Ltd which is a New Zealand company.” There are a number of factual errors in what the member said and in fact I challenge him to repeat those comments outside the House as he has been invited to do by the media. [ 
Interruption 
] 
Mr SPEAKER 
: I ask members to show some courtesy to the Hon Pete Hodgson asking his question.  
Hon Pete Hodgson 
: Did the Minister when he wrote to the Hon Murray McCully on 23 December last year regarding his forthcoming trip to India acknowledge or even allude to his shareholding in New Zealand Aviation or in WSD Global Markets Ltd or in the Indian Overseas Group; if he did not why did he not? 
Hon Dr RICHARD WORTH 
: I did not and there was no need to do so. 
Hon Pete Hodgson 
: Who was the Acting Minister of Internal Affairs when he was away from New Zealand between 24 February and 2 March and why can I not find any public announcement of a portfolio change for that period as is the norm? 
Hon Dr RICHARD WORTH 
: I understand that someone was appointed in my stead. I believe it was the Hon Kate Wilkinson and I do not know why the member cannot find that. 
Question No. 11 to Minister 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 My question is to the Minister of Energy and Resources. Has he received any reports about other recent biofuel developments? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Yes I have. I am advised that last month Mobil Oil New Zealand Ltd started to retail— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. I have a feeling that the member read his first supplementary question not the principal question. It might help the Minister if the member read the principal question because he will not quite be quick enough to have got the answer to the supplementary question. 
Mr SPEAKER 
: I think we should sort this matter out. I ask Chris Auchinvole to actually read the question that is on the Order Paper. 
Biofuels—Production 
11.  
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
 to the  
Minister of Energy and Resources 
: Has he received any reports about bio-diesel production in New Zealand? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Yes I have. I am advised that last month Mobil Oil New Zealand Ltd started to retail a B5 bio-diesel blend at the pump in the Bay of Plenty on a trial basis. The bio-diesel and the B5 blend is produced from tallow that is sourced from the meat-processing industry in New Zealand. The trial provides another chance for the fuel to be part of the choice available to motorists in a world where we are trying to reduce greenhouse gas emissions. 
Chris Auchinvole 
: Has the Minister received any reports about other recent biofuel developments? 
Hon GERRY BROWNLEE 
: Yes I have. I am advised that the Environmental Risk Management Authority has approved an application from the Energy Efficiency and Conservation Authority to allow E85 which is an 85 percent ethanol blend for use in New Zealand cars. The approval paves the way for flexi-fuel cars—which cost little more than an ordinary petrol vehicle—to be more widely used in New Zealand. The approval will eventually allow oil companies to offer at the pump other options for flexi-fuel vehicle owners thereby further reducing greenhouse gas emissions from the transport sector. 
Chris Auchinvole 
: Has the Minister seen any comments about the future of biofuels in New Zealand? 
Hon GERRY BROWNLEE 
: Yes I have. When the Government moved to repeal the biofuels sales obligation last year Pete Hodgson said that it would do enormous economic damage to a burgeoning industry and that it would be the end of a biofuels industry in New Zealand. I am very pleased to announce to members today that the Opposition has been proved wrong—the biofuels industry is growing and thriving in New Zealand today. 
Charles Chauvel 
: What advice if any has the Minister had on how much more biofuels development there would be had his Government not vandalised the biofuels obligation? 
Hon GERRY BROWNLEE 
: The member asking that question seems to be completely without any understanding of the point of having biofuels in New Zealand. The previous Labour Government could not guarantee that biofuels sold under its obligation were produced sustainably. I believe that some 40 million litres—or approaching 40 million litres—of biofuel will be produced in New Zealand this year; that is far more than was projected while the member’s Government was in office. 
“Three Strikes”—Proposed Legislation 
12.  
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Corrections 
: Does she agree that information released under the Official Information Act by the Department of Corrections indicates that not one of the 423 prisoners serving life sentences would have been stopped by the proposed “three strikes” law? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 If when the member says “the proposed ‘three strikes’ law” he actually means the Sentencing and Parole Reform Bill then the answer is yes. 
Hon Clayton Cosgrove 
: Does she agree with her support party colleague David Garrett who said in the first reading of the Sentencing and Parole Reform Bill that the victims of 77 murderers in jail “would be alive today if at the time they were killed this bill had been enforced. That is not arguable; it is simply arithmetic.” a myth that he is continuing to mislead the public with even after he received the same advice from her department that proves it is not true? 
Hon JUDITH COLLINS 
: The bill is currently before the Law and Order Committee. I am sure that the committee of which the member is deputy chair will be able to take into account all those sorts of comments and it may well bring about changes. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I simply asked whether the Minister agreed with her support party colleague. Her answer in no way addressed the question. The question was “Does she agree with her support party colleague …” etc.; the Minister did not address that question. 
Mr SPEAKER 
: It is difficult when members ask for opinions to get an exact answer but I invite the Minister bring her answer a little closer to the question asked. 
Hon JUDITH COLLINS 
: The bill is at the select committee. Who knows what will be in it when it comes out? I think the member should have a more open mind towards the bill and what might be in it when it comes out of the committee than he is showing now. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I reiterate my point of order: where in that answer did the Minister come anywhere close to answering the question as to whether she agrees with her colleague? She ignored your ruling completely. 
Mr SPEAKER 
: It is difficult for me to back the honourable member totally because questions that ask whether Ministers agree are always difficult questions. It is not as if factual information is being sought; an opinion is being sought. The Minister is not going to express an opinion if it is difficult for her as Minister to comment on this matter until the legislation is back from the select committee. It is difficult for me to say that the Minister is not answering the question because where opinions are sought the member will get that kind of answer in response. I am afraid I cannot assist the member further on that. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. [ 
Interruption 
] Are we having points of order in silence? 
Mr SPEAKER 
: Yes they will be heard in silence. 
Hon Clayton Cosgrove 
: Thank you. Without taking issue with your ruling Mr Speaker you made comments to the effect that the question required a complex answer and that the bill was before a select committee and the Minister could give an answer after that—or words to that effect. It is not complex I would have thought to answer a question whether a Minister agrees or does not agree with some proposition. It is very simple; it is probably one of the most simple questions asked in this House. To mince around the edges by talking about a select committee process or what my view may be or what others’ views may be does not answer the simple question of whether the Minister agrees with a statement that has been made in this House on the first reading of a bill by a coalition support party member Mr Garrett. 
Hon Gerry Brownlee 
: I refer you to Speaker’s ruling 157/8 which basically states that a member cannot ask for a yes or no answer nor expect such an answer. That is exactly what Mr Cosgrove is expecting. If he is not then he has had an answer because the Minister expressed an opinion about the question. 
Hon Clayton Cosgrove 
: Speaking to the point of order— 
Mr SPEAKER 
: No I do not need to hear further points on this. The member Gerry Brownlee is absolutely correct. That is the correct Speaker’s ruling. Many Speakers’ rulings point out that a member cannot in that kind of question ask for a yes or no answer. Where I will back members absolutely in seeking information is when they put down a primary question that seeks information; I will endeavour to make sure this House is provided with that information. But where an opinion is sought especially where a Minister is asked whether he or she agrees with someone else ultimately the Minister does not have any responsibility for what another honourable member may say. The Hon Judith Collins has expressed her opinion very clearly in saying that she cannot agree one way or the other until she knows what the legislation will actually do. I do not believe we can take that matter any further and I invite the member to ask a further supplementary question. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. Without challenging your ruling I would like to make it clear that I did not in that question ask for a yes or no answer. I simply asked—as I put it to you—whether the Minister agrees with her colleague. Mr Speaker I assume you are setting a new precedent in the House that Ministers can go wide of the mark whether answering a primary or a supplementary question and avoid simply answering the question of whether they agree with a proposition. But that is your ruling and I will respect it. 
Does the Minister have a responsibility to ensure the public is correctly informed about legislation that is being promoted by her Government? Given that she had information from her department that Mr Garrett’s claims about the “three strikes” provisions within the legislation are incorrect why did she choose to stand by and say nothing and allow the New Zealand public to continue to be misled instead of as she should have done as Minister setting the record straight? 
Hon JUDITH COLLINS 
: If the member had only done his homework then he would know that I am not the Minister in charge of the Sentencing and Parole Reform Bill and that the Hon Simon Power is. If he would like to put down a question for that Minister then I think he should do so. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. The Official Information Act request— 
Mr SPEAKER 
: There is noise on both sides of the Chamber and I want to hear the member clearly. 
Hon Clayton Cosgrove 
: I have a copy of the Official Information Act request. It was sent to the Department of Corrections and the information was released by the Department of Corrections. The Minister as I understand it has ministerial responsibility as the Minister of Corrections for the Department of Corrections and I asked her a question in respect of that Official Information Act request. She has a duty I would have thought to set the record straight and I presume to stand by the information released by her own department. I was asking about the Official Information Act request. 
Mr SPEAKER 
: The issue is a difficult one because where a Minister says he or she does not have responsibility for a specific issue I have to accept that. I cannot adjudicate on that matter as Speaker; I cannot say that that Minister has responsibility. The member’s primary question was indeed focused exactly on information from the Department of Corrections but his final supplementary question became quite a complex question. I believe that it would be unreasonable to expect the Speaker to adjudicate—and in fact the Speaker cannot—when a Minister says he or she is not responsible for the particular matter raised in a question. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I would be grateful for your ruling. You may wish to take some time to consider this point and I will accept that if you do. Are you telling this House that a Minister does not have responsibility for information from in this case her department that has been released under the Official Information Act and that she can therefore avoid making a comment on that information? 
Mr SPEAKER 
: I am not saying that at all. What I am saying is that the Minister has said she is not responsible for the particular matters covered in that question and as Speaker I cannot adjudicate on that. Speakers cannot adjudicate on that matter; that is the simple fact of the matter. 
Hon Clayton Cosgrove 
: Does the Minister now accept that because of the information released under the Official Information Act from her department the legislation before the House—which presumably she supports as a Minister in the Government—is now a cruel hoax on the public and especially on the victims of crime as it would not have saved a single life according to her department’s advice which I assume she stands by and is responsible for? 
Hon JUDITH COLLINS 
: I keep saying to that member that he should wait until the bill comes back from the Law and Order Committee. He is a member of the select committee. Submissions will be made by members of the public. The bill is now before the select committee and he is the deputy chair. He has the opportunity to hear the submissions. I really think that until the bill comes back to the House the issue is a bit hypothetical frankly. 
David Garrett 
: Can she confirm that the difference in effect between ACT’s “three strikes” bill and the Sentencing and Parole Reform Bill is National’s addition of a requirement that an offender must in addition to having been convicted of a listed offence have been sentenced to imprisonment for at least 5 years? 
Hon JUDITH COLLINS 
: There is clearly a difference between the ACT policy and the bill as it was introduced. But after the select committee has finished with the bill I am not sure what it will come back with because that will be a matter for the select committee to determine. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I just simply ask whether you will—and I presume that you will—give a considered ruling in respect of the Official Information Act request issue. 
Mr SPEAKER 
: I do not believe there is a matter that I need to rule on. The honourable member has raised a point of order and I have ruled on it. But I cannot adjudicate when Ministers say that they are not responsible for specific issues. It is for the public to judge whether the public thinks a Minister is evading his or her responsibilities and it is for members of this House to judge that. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. With regard to that point there is an issue here because the Minister on the one hand said she had no responsibility for that bill and it was not her issue and on the other hand in response to Mr Garrett’s question answered specifically about the bill. I ask how she can have it both ways. Either she says she does not have responsibility and hence does not answer Mr Garrett’s question or she does have responsibility. 
Mr SPEAKER 
: I would like members to keep silent while this interesting issue is being dealt with. The member is quite correct in what he says. It would have been interesting if other members had latched on to the Minister’s answer and pursued it further because then members could have made it very clear that they were asking how she could answer a question that appeared to be in the area where she had previously said she had no responsibility. That is the kind of thing that I hope members will do in the future if they find that a Minister seems to be inconsistent in what he or she claims responsibility for once the Minister has given an answer on a matter that he or she has previously claimed to have no responsibility for. I would have thought that it is then in the realm where members could pursue the material that the Minister had provided in that answer. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. As you know the Opposition is given only a certain number of supplementary questions every day so if Ministers stonewall the Opposition becomes unable to take matters further. But picking up the point that you have raised I ask whether you would be prepared to give the Hon Clayton Cosgrove a supplementary question so that he can pursue the exact point that you have just told the House about. You have just advised us—[ 
Interruption 
] 
Mr SPEAKER 
: We are still on a point of order. I think it would be a little unfair if having coached the House on how to perhaps deal with that situation I was then to allocate further supplementary questions. I think the pursuit of this matter is for the future. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. This relates to the issue that has just been discussed. I think the problem could have been solved if you had ruled out the supplementary question from the ACT member because the Minister had already indicated to the House that she did not have responsibility. You accepted the question. If we are doing some coaching then I think it could possibly go both ways. 
Mr SPEAKER 
: That is an interesting point. I want to avoid ruling out questions if I can because it would be unfortunate if I were to develop that practice too far. Members have raised an interesting issue but I would like to see it handled more by members. If members feel that a Minister has been inconsistent in an area where members believe that the Minister has responsibility once he or she has given an answer then that opens up the territory. 
Dr Russel Norman 
: I seek leave to ask an additional question of the Minister along the lines that you have put. 
Mr SPEAKER 
: Leave is sought to ask an additional supplementary question. Is there any objection? There is objection. 
Questions to Members 
Accident Compensation Corporation—2007-08 Financial Review 
1. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: Was he under the impression that John Judge was chair of the ACC board when the committee resolved to invite him to its meeting of 12 March 2009 on the financial review of ACC for the 2007-08 year? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee): 
 Yes. From reports in the public arena at that time it was my impression that Mr Judge was the chairman. 
Hon Trevor Mallard 
: Did he inform the committee that Mr Judge had not been properly appointed at that time before the committee was informed of this by the Accident Compensation Corporation last week? 
DAVID BENNETT 
: It would have been impossible for me to inform the committee because as I have just answered I was under the awareness that Mr Judge was in fact the chairman. 
Accident Compensation Corporation—2007-08 Financial Review 
2. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: Who advised him that John Judge was not available to attend the committee meeting held on 12 March 2009? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee): 
 I did not ask Mr Judge to attend the meeting of 12 March so it is not about whether he was available to attend. It was agreed however that the Minister for ACC would attend the meeting and Mr Judge made quite clear at the select committee last week the reasons for his unavailability. 
Hon Trevor Mallard 
: Was the Minister for ACC speaking on the chairman’s behalf when he advised the media that he—the chairman—had been advised that Mr Judge was unavailable? 
DAVID BENNETT 
: I think the question goes to whether Mr Nick Smith was speaking on my behalf—is that what the member is asking? Well in that case Mr Smith cannot speak on behalf of the committee or the committee chair. 
Accident Compensation Corporation—2007-08 Financial Review 
3. 
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: Did he phone the Minister for ACC on 10 March 2009 and discuss the matter of who should attend the financial review of ACC; if so was it at the request of the Minister or the Minister’s office? 
DAVID BENNETT (Chairperson of the Transport and Industrial Relations Committee): 
 I cannot recall any phone calls made at that time but there were discussions between the Minister and me around that time. 
Hon Trevor Mallard 
: Did he call Dr Nick Smith or not? 
DAVID BENNETT 
: I cannot recall any phone calls being made at that time but we did discuss the issue. 
Financial Review Debate 
In Committee 
The CHAIRPERSON (Eric Roy) 
: I have quite a bit to inform the Committee of. 
The House is in Committee on the Appropriation (2007/08 Financial Review) Bill. The Standing Orders provide for the financial review debate to be the Committee stage of the Appropriation (2007/08 Financial Review) Bill. The debate comprises two distinct elements—it would be helpful if members were able to absorb this as we progress through the debate. The financial review debate commences with a debate on the annual financial statements of the Government as reported by the Finance and Expenditure Committee. Once this debate is disposed of the Committee debates the individual financial reviews of departments and Offices of Parliament and non-departmental appropriations as reported on by select committees. 
Members will note that for the first time this portion of the debate includes debate on non-departmental appropriations. Members will recall that changes adopted last year to the Standing Orders provide for non-departmental appropriations—section 32A reports—to be subject to parliamentary scrutiny. Although the services and outputs covered by non-departmental appropriations are provided by other organisations an administering department as the name suggests has some responsibility for these appropriations and for reporting on them. A list of financial reviews and non-departmental appropriations available for debate is on the Table. 
The debate on the Government’s financial position may be fairly wide ranging but the debates on the individual financial reviews of departments and Offices of Parliament and on non-departmental appropriations should be relevant to their performance in the 2007-08 financial year and to their current operations. A member may have no more than two calls on each financial review. Four hours is allowed for both elements of the financial review debate. At the conclusion of the 4 hours a single question is put on the provisions of the bill. There is no amendment or debate on this question. The Chairperson reports the bill to the House and it is set down for third reading forthwith; there is no debate on the third reading. 
Treasury 
Financial Statements of the Government of New Zealand for the year ended 30 June 2008 
The CHAIRPERSON (Eric Roy) 
: I ask that members turn to the report of the Finance and Expenditure Committee on the annual financial statements of the Government. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the year ended 30 June 2008 be noted. I note that this report also relates to the Finance and Expenditure Committee’s financial review of Treasury so the performance in the 2007-08 financial year and current operations of Treasury may also be debated. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 It is entirely appropriate that you reference those financial statements Mr Chair; I recommend them for people’s reading. 
I begin with a quote: “It is part of the New Zealand way of life that when New Zealanders face economic uncertainty they look to their Government not necessarily to take away that uncertainty but to show a path through it.” What have New Zealanders found out today? They found out today that in the face of growing uncertainty in the world economy and in our own economy this Government has no idea what it is doing. The quote is from Bill English. 
Despite the fact that National inherited a sound economy from the previous Labour Government—with by the Minister’s own admission some of the strongest growth lowest debt and lowest unemployment in the Western World—it is true that we stand in this Chamber today on a day when unemployment is forecast to rise by another 60000 this year. Sixty thousand workers 60000 families—60000-plus New Zealanders—fear for their homes and livelihoods and they are wondering how they will put bread on the table. 
This situation is a serious economic challenge. We have spoken about it many times in this House. The reports today bear upon the truth of the matter. Rather than the world economy growing by 2 percent this year it will shrink by nearly 6 percent. It is an unprecedented falling off the cliff for the global economy. It hurts us in two ways: New Zealand businesses out there in the world cannot borrow like they used to and we cannot export our services. But that is the world as it is. What concerns the Opposition—and I think all New Zealanders—is the Government’s response to that situation. The response has been inadequate on a number of fronts. National’s construction of the stimulus it has put into this economy is misleading and overstated; it largely re-brands work Labour did prior to the election. The programme includes double-counting low-quality investments and smoke and mirrors. 
National’s tax cuts—the centrepiece of its programme—are completely inappropriate. The tax cuts take nearly $1 billion from the poor—those below - average income earners—and give it to the wealthy. One-third of the total tax remission goes to the top 3 percent of earners and 70 percent of New Zealanders with children get nothing at all. People who earn less than $40000 and have children get nothing—nothing at all. The economics of that situation are lunacy. We all know and all the commentators know that the wealthy will save or otherwise dispose of—but not spend—what they get in tax cuts. That is why the multiplier is lower for tax cuts for those on higher incomes than it is for tax cuts for those at the bottom. Not only are National’s tax cuts inequitable but they make no economic sense either. 
The so-called rolling maul of initiatives has been the subject of much debate over the last few days. It was one thing for Bill English to describe his leader as hopping benignly from cloud to cloud. It kind of suited the spin—if anyone still believes it—that somehow “Labour-lite” in drag got elected. Now the truth is clear: what the Minister of Finance and the Prime Minister think are completely different. The Minister said this weekend that there is no way the Government will fund $50 million for a cycleway—not this year he said with a smirk and not next year or the year after. The Prime Minister says that we will come out of the recession aggressively in 2009; the Minister says we certainly will not. They cannot even agree on the nature of the problem so how can we hope they will agree on the solution? They cannot even agree on the problem. 
The term “rolling maul” was convenient when National believed that it could get out initiatives in dribs and drabs and that New Zealanders would somehow be satisfied with that but we come back to the Minister’s own words. New Zealanders do not expect the Government to take away the international recession but they expect a credible game plan upon which to invest and build their businesses and that will protect their families. This Government has no such plan. It has a series of contradictory show pony initiatives like the cycleway to nowhere. In the background the Government is cut cut cutting its way deeper into the recession. 
JOHN BOSCAWEN (ACT) 
: 
 We have just heard from Mr Cunliffe on the issue of the recession the things that are driving the recession and the Government’s response to the recession. I will come back to a theme that I have been speaking about over the last 2 or 3 weeks. Many things have contributed to the recession and I believe that one of the things that have contributed to it has been the collapse of so many finance companies as well as the losses that have been incurred by investors in those finance companies. I have publicly called for an inquiry at the Commerce Committee level and I have had tentative encouraging support from the Labour and National members of the committee. I will discuss a related issue this afternoon the collapse of the Blue Chip group of companies. 
Blue Chip as such was not a finance company but a company that was involved in raising money from the public which actually raises issues of whether it complied with the Securities Act or whether it was required to comply with the Securities Act. Many people have lost money in the Blue Chip collapse. I guess they fall into different categories. In some cases people have invested in apartments developed or built by Blue Chip and have received those apartments. Those apartments may well be worth less today than when they purchased them but nevertheless they have received those apartments. They may have bought those apartments because of misrepresentations but nevertheless they have apartments. Another group of investors have paid deposits for apartments but are yet to receive them and those deposits are being held in trust for those investors pending settlement. A number of legal actions are arising out of that. 
I will focus this afternoon on another group of investors. These investors entered into agreements to buy apartments that were to be built for them. There are three cases where companies associated with the Blue Chip group of companies sold apartments off the plans to investors and some 400 to 500 people purchased these apartments paid deposits on them and entered into agreements to release those funds. 
The CHAIRPERSON (Eric Roy) 
: I am sorry to interrupt the member but I read out the instructions at the start. Although I have some appreciation for what the member is doing Blue Chip is outside the realm of the discussion. If the member is making a comparative point that he wishes to bring back he should do that but the subject matter he is on now is outside the scope of the debate. 
JOHN BOSCAWEN 
: Thank you Mr Chairperson. I did hear your opening comments and guidance as to how the debate should run but Mr Cunliffe picked up the issue of recession. I believe that one of the issues that contribute to the recession is the failure of finance companies. I guess that was the point I was trying to make but rather than feeling your wrath on this issue Mr Chairperson I will continue with those comments I wish to make in the general debate tomorrow afternoon. 
Let us come back to another issue that contributes to the recession. The ACT Party campaigned on getting Government expenditure under control. Over the last 9 years under the previous Labour Government we saw Government expenditure increase by double the rate of inflation. Expenditure by the previous Labour Government increased by 6.5 percent per annum over the last 9 years. That increase was over and above inflation and over and above population growth and it was equivalent to $12000 per year per household or $230 per week per household. I came into this House today and heard Labour members of Parliament quibbling about the cost of a helicopter ride over Auckland by the Minister for Tertiary Education. Well literally billions of dollars were wasted by the previous Labour Government. One of the great challenges that face this country is the raising of our living standards so that citizens of New Zealand can enjoy the same standards of health and education as their friends and families who now live in Australia. The reality is that the standard of living in Australia is 25 percent higher than that of New Zealand. One of the great challenges that face this country and this Government is the raising of our living standards. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Reviewing the 2007-08 financial year in the financial review debate which is the Committee stage of the Appropriation (2007/08 Financial Review) Bill gives us an opportunity to assess just where New Zealand started from in trying to deal with the global recession. The fact is that when the National came into Government in late 2008 the economy had already been in recession for about three quarters—that is three 2008 quarters. The most pervasive problems though that the Government inherited were probably the twin chronic deficits. 
The first of those was a fiscal deficit which occurs when Government expenditure exceeds its revenue. The Pre-election Economic and Fiscal Update issued about 6 weeks before the November election showed even then before the global recession had struck that the previous Government was projecting 10 years of deficits. That was off the back of 6 or 7 years when the economy had been growing strongly. Unfortunately since the 2005 election in Labour’s scandal-ridden misdirected and hopeless last term in Government expenditure got out of control. The Government was already projecting deficits then the global recession came along in the latter part of 2008 leaving the incumbent Government with a significant fiscal problem. But that was not the only deficit. 
The other deficit was the balance of payments deficit. It is interesting that in the light of recent events no doubt many good things that were not said while he was Minister of Finance will now be said about Dr Cullen. One of the things he claimed when he came into office with the Labour Government in 1999 was that the current account deficit was far too big. At that time it was about 4 or 5 percent of GDP. That has demonstrated that New Zealanders were not saving enough. We were reliant on overseas borrowing. Well after 9 years of growth— 
Craig Foss 
: Long years. 
Hon BILL ENGLISH 
:—after 9 long years of what were probably the best economic conditions that we will see perhaps for two generations—I used to say one generation but maybe it is two generations—we ended up with a current account deficit that was twice as large as it was when Labour came into Government. That indicates pretty clearly that the growth we had during the first decade of this century was largely founded on borrowing and largely drove consumption. It is pretty clear now that in the next 10 years growth will have to be founded on savings and will be driven by exports. Those are the twin chronic deficits. The Labour Party ought not to forget that. 
One of Labour’s problems is that it still regards the result of the election as an aberration. Labour members think that one day they will wake up and suddenly they will be back in Government. They still cannot understand that their economic mismanagement was one of the many reasons that the previous Labour Government was voted out of office. I tell members opposite that until they apologise for leaving twin deficits—a fiscal deficit on the Government’s accounts and a current account deficit on the nation’s accounts—no one will listen to them. I ask how they can make any credible contribution to the economic debate when they will not accept that their 10 years of misdirected economic management left this economy much more vulnerable to the global recession than it should have been. 
The review of the accounts through to 2008 that we are doing today is almost irrelevant to the current economic debate because the economy has shifted so far in the 9 months since the end of that financial year. But these accounts do show the state of the economy as the previous Government left it. Members of the previous Government are inclined to say that they left it with record low unemployment. In fact the unemployment rate was rising consistently through 2008. In fact it rose by about 30 percent. I do not remember those members discussing that much during the election campaign. Unemployment was already on the rise that rise has continued and it is putting fiscal pressure on the Government’s accounts because the numbers are going up pretty consistently week by week. 
The game plan that the Government has been outlining for the last 3 or 4 months must focus on those twin deficits. It must get Government expenditure under control because so much money was being wasted. I must say that one thing I can thank members opposite for is that they made it easy for the Government to make savings because so much money was being wasted. 
Hon DAVID PARKER (Labour) 
: 
 We heard the Hon Bill English launch into an attack on the previous Government accusing us of being scandal-ridden. This is from the Government that in the last week has had Dr Worth on the ropes for inappropriate behaviour as a Minister whilst in India in clear breach of the  
Cabinet Manual 
 which the Prime Minister and his Cabinet colleagues including the Hon Bill English are happy to look past. He should not come to us and accuse the Labour Party of being a scandal-ridden Government and then condone that sort of inappropriate behaviour in the National Government. 
I will refer to another comment made by the Minister in the chair Bill English. He said that he had inherited a terrible set of affairs from the outgoing Labour Government. Again there is rote learning going on in the National Government. It tries to pass this disease on to the media but the media are not buying it because they know it is not true. Not only does the media know it is not true but also the IMF has reinforced it just in the last 2 weeks. The IMF says in its macroeconomic outlook for New Zealand in its report dated 23 March 2009 that “New Zealand is in a better position than most advanced countries to face the global storm given its sound macroeconomic policies including a flexible exchange rate low level of public debt flexible labor markets and healthy banking sector.” 
Hon Parekura Horomia 
: Who said that? 
Hon DAVID PARKER 
: That is what the IMF says. It is completely different from what we heard from the Minister of Finance. 
Why would the Minister of Finance try to pull the wool over the eyes of people who are listening to this debate? Why would he be doing that? It is because he knows that he is now overseeing a structural deficit that he has caused that is his responsibility and that will be his legacy to this country. A structural deficit is what Mr English has caused through the National Government’s irresponsible tax cuts. These tax cuts are not only inappropriately directed mostly towards those who are already well off but also so extreme in their amount in out-years that New Zealand has been put into a structural deficit. 
The member says that we are already in deficit. Well a deficit in out-years was projected. It was not nearly as high as the one the member is projecting and that was after contributions are made to the superannuation fund. It is very important that we keep that up to fund superannuation to people in the future. Every time National members are in Government they cut contributions to the superannuation fund. What are they doing? They are cutting the ability of New Zealand Governments to fund superannuation in the future. Let us wait for the Budget; they will be cutting those contributions. They have cut the research and development tax credits so businesses will not grow as much. They have cut the KiwiSaver generosity so there will not be as much saving. As a consequence the economy will not grow as much. 
The worst thing of all is this structural deficit that National members have created. How are they going to mask it? Mark my words they will hide this structural deficit in the Budget in a number of ways. For a start they will stop the contributions to the superannuation fund which we know are necessary to maintain superannuation. They will also drag out money from the State-owned enterprises. We had Gerry Brownlee sounding off that electricity prices were too high. We had Bill English and his colleague Simon Power saying they wanted higher rates of dividend from the energy-related State-owned enterprises. How are they going to get that? They are going to borrow hundreds of millions of dollars if not billions through the energy-related State-owned enterprises which is a one-off payment that they will use to again hide from the public the structural deficit they have created. 
The structural deficit that was left by the National Government of Rob Muldoon had high levels of Government debt. The wise stewardship of Dr Cullen and the previous Labour Government got that debt down to very prudent levels—everyone agrees with that; even Mr English agrees with that. The IMF certainly agrees with it. But the National Government is blowing out a deficit. What does the IMF say? It says that the Government cannot bridge that gap with just decreases in expenditure which is the slash-and-cut policy we see coming. The IMF says that the Government must address the issue of revenue. That is saying in other words that it has to take in more tax. This is proof that National’s tax cuts in out-years are unaffordable. The IMF said in its report dated 23 March that although the focus of the consolidation should include the expenditure side “the size of the required adjustment is large and revenue measures will likely be needed to close the gap.” I say to Mr English that the National Government’s tax cuts are unaffordable. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak on the financial review of the financial statements of the Government of New Zealand for the year ended 30 June last year. I speak after one or two other speakers and I would like to address some of the points they have raised that pertain to the report on the Table here. 
I will pick up the theme of an earlier speaker because once again my suspicions have been confirmed about the tax cut and election-result denying members opposite. I cannot for the life of me believe that on the one hand they say we need more money—and before the election they said their party was the tax cut party and they legislated for that because they did not trust Dr Cullen or themselves to follow through with it—but now post-election the theme of almost every single speech they give is that we should not have tax cuts; they are starting to put forward the old redistribution line. I look forward to hearing other speakers clarify whether Labour members agree with us in relation to the tax cuts put in place on 1 April this year as a result of the National Party victory at the last election. Do they agree with those tax cuts—yes or no? Do they agree with the fact that so many hard-working New Zealanders have missed out over the last few years? Yes we agreed with and signed up for Working for Families; yes we agreed and signed up for indexation of many of the benefits; but do Labour members agree with tax cuts? 
What I am hearing from members opposite right now is that they do not believe that every New Zealander from those on an average wage and higher and probably those on below the average wage should have more of their own funds when there is a surplus and funnily enough they do not believe that a recessionary environment which this Government inherited is an apt time to leave more money in the pockets of those who earned it in the first place. Listening to an earlier speaker David Cunliffe—a gentleman who apparently does not have a site on Twitter—I do not understand how Labour members say that the fiscal stimulus should be bigger and wider yet they argue against tax cuts. I cannot quite work it out and I will be interested to hear other speakers try to clarify the issue and move the clouds away from the policy because members opposite have so much time on their hands post-election. 
Last week I spoke on this issue in another debate and I made the point that the clock starts ticking for this particular Government at the end of this Budget. After the May 2009 Budget the clock will start ticking for this Government because that is what we will be judged on. We will not be judged on what we inherited—Budget 2008 the Pre-election Economic and Fiscal Update or the things that were not in it the half-year update or even the Budget Policy Statement which is an indication for the next year’s Budget. We will start to be judged on the accounts as they are put before this Parliament when the Hon Bill English presents the Budget in 2009. That is when the decade of deficits—and they are looking horrible at this moment—will be revealed. That is when the true state of the accident compensation numbers which a previous speaker started to allude to—or even to deny if I am allowed to say that—and the true state of the New Zealand accounts will be placed before the New Zealand public. Unfortunately they were not placed before us earlier. 
I acknowledge all of the members of the Finance and Expenditure Committee who helped to contribute to the financial review we have in front of us. There was some robust debate and some good issues arose from it. If members read the review they will see that there are some acknowledgments as to the state of play that was inherited by the incoming National Government. In fact many of the matters that were talked about theorised on written about hui-ed for and consulted on by the previous Government were not put in place and that is the key. Actions speak so much louder than words. 
Another member opposite kept talking about the structural deficit. I will be very interested to hear another speaker talk about that. It is obvious now that there has been a structural deficit in New Zealand’s accounts for quite some time. The risks inherent in New Zealand’s accounts have not been portrayed as accurately as they probably could and the accounts have not been portrayed as conservatively as they probably could and we will see the results of that when the May 2009 Budget is released and put on the Table by the Hon Bill English. The previous speaker also talked about the superannuation fund which Dr Cullen was the architect of—we all acknowledge that quite deliberately. 
The CHAIRPERSON (Eric Roy) 
: Just before I call the member who will have the next call I say that interjections are fine. But I ask members to look at Speakers’ ruling 61/5 which covers a running commentary. In respect of interjections the test is whether they are rare and reasonable and during the previous speech we shifted very clearly into a running commentary. I ask members to show a little bit of restraint. Interjections are fine but we will not have running commentaries. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 One of the problems with this debate is that we appear to be living in two worlds. One is the real world and one is a world that appears to be inhabited by the Prime Minister and occasionally by Bill English. To get right to the nub of the issue one has to ask this question: does the Government have a debt problem at the moment or did it inherit a debt problem? It is clear from the international commentary whether it is from the IMF or the World Bank and from the comments made by John Key and Bill English early in the time of holding their current positions that the previous Government did a very very good job during the time under review—and in fact for the 8 years before that—of positioning the Government and the Government’s books in such a way that we could sustain a period of downturn. 
But there is nothing like someone who suddenly becomes as Bill English is a previous position denier. It is a bit like the climate change deniers or the Holocaust deniers. He is now consistently denying the very good position that he inherited. He is someone who now knows that if he had the choice again he would not make the tax cuts that came into force on 1 April. They were wrong. They were wrong in their totality but especially they were wrong in their distribution. Part of the job is to link economic policy with fiscal policy and that is what Bill English did not do in this particular area. Fiscally he probably got it just about right but as a result of the distribution of the tax cuts economically he got it very very wrong indeed. 
I will make a prediction. Sources that are normally very very well informed have told me that on Budget night in May the Minister of Finance will not only announce but will pass through all its stages a bill that will reverse the tax cuts for the out-years. Bill English will get up in this Chamber on Budget day and say that before members are allowed to go home the Government will under urgency undo the tax cuts for the out-years—the tax cuts that we have already legislated for. 
Dr Rajen Prasad 
: He’s not denying it. 
Hon TREVOR MALLARD 
: He is certainly not denying it. He cannot deny it. He is smiling in a knowing way but he cannot deny the fact that he will either before the Budget—because clearly he will come under some pressure to do so—or on Budget night make an announcement that he made a very big mistake in legislating for the out-year tax cuts. Because of the shape of the Government debt to GDP graph he will legislate in order to make his Budget documentation slightly more believable than would otherwise be the case. If he does not do that if he does not make that announcement then it will be very very clear that the next Labour Government in 2½ years’ time will inherit a debt position that will be much much worse than any that has been inherited by any Government since Rob Muldoon handed over power to David Lange in 1984. That is the parallel that Bill English is heading towards. 
I am sure Bill English has finished making his big Budget decisions already but he is facing a very very similar dilemma to the one Muldoon faced in 1984 as Minister of Finance and as Prime Minister. He is finding a Budget that is almost impossible to write. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to take a call on the 2007-08 financial review. I will refer to a few comments from Mr Mallard and Mr Cunliffe who stood and made disparaging remarks about the Government. Mr Cunliffe said that Mr English said New Zealanders should look to the Government to show a pathway through and that is exactly what this Government is doing. It is showing a clear and decisive pathway through this recession. We are here to blunt the edges of this recession and to provide a platform from which this country can grow as world trade conditions improve and as we come out of the economic downturn. 
I want to follow up on a few of the comments made by Mr Cunliffe today. He talked about New Zealand inheriting a strong position. He said that the National Government had inherited high growth. I do not know what dreamland Mr Cunliffe lives in but to say that we came into a position of high growth is absolutely ridiculous. We all know that from 1 January to 31 March 2008 the first quarter of that year New Zealand was in a position of negative growth. I do not know how that translates into a position of high growth. The fact of the matter was that we were already in recession brought on by Labour’s structural expenses. We were already in a position—[ 
Interruption 
] That member knows we were already in recession. We did not inherit high growth; we were already in a position of negative growth. Mr Cunliffe then went on to say we were in a position of low debt. Yes I acknowledge that in New Zealand we did have low debt as a percentage of GDP. 
But let us have a look at the facts. The reality is that over the last 20 years debt to GDP in this country has dropped like a stone. The biggest drop in debt to GDP was through the 1990s where it plummeted; it absolutely plummeted. It is absolute rubbish for Labour members to get up on their high horse and say they paid back debt. What happened is that as the economy grew the debt to GDP ratio dropped. That is what happened. The previous Government did not pay back any debt; the debt to GDP ratio dropped as the economy grew. This country had some of the best economic growth in a generation created by companies in New Zealand and world trade. It had nothing to do with the previous Labour Government except perhaps the one exception of company tax rate drops which occurred late in Labour’s last term in office. Can members name another policy that really improved economic growth across this country in Labour’s 9 years in office? It was limited. 
Hon Parekura Horomia 
: You had 24 percent unemployment at the same time. 
CHRIS TREMAIN 
: The member said that we inherited a period of low unemployment and I acknowledge that. We did inherit low unemployment. But once again that was a result of the hard-working companies in New Zealand. I ask Mr Horomia to name a piece of legislation that the Labour Government introduced over the 9 years that it was in office that helped to drop unemployment in this country. 
Hon Member 
: No he can’t. 
CHRIS TREMAIN 
: It was companies that did that on the back of high growth. There was no legislation. 
I want to acknowledge through this review where National is now taking the country. We are positioning it on a strong growth path going forward and we have introduced a range of initiatives. I refer in particular to the tax cuts. As soon as we came into office in the first 100 days we introduced those tax cuts on the back of the October tax cuts that were introduced by the Labour Government. We put those in together with those from the Budget 2008. We had one of the strongest fiscal stimulus packages in the Western World—one of the top five nations. Yet we hear from members on the other side that this Government is bleating that we should be spending more and that we should be going out there and borrowing more money to provide a stronger fiscal stimulus package to put more money into our mokopuna and our tamariki to be reclaimed in years to come. We are being practical about the package that we are putting in place; absolutely practical. We are doing it in a way that New Zealanders can afford. Labour members are recommending that we go out and borrow even more money than we have to do so that we can put that cost on our tamariki going forward. 
 I ask Mr Horomia to go out and tell that to his constituency. He should tell his people that we are being practical; we are taking a conservative pathway forward and we know that we still have one of the strongest fiscal stimulus packages in the Western World. I tell the member that that is a good position to go forward with. But not only have we done that with tax cuts; we have been bringing forward our infrastructure spend. I know that in Hawke’s Bay the extension of the southern expressway—a great project—is going on there and there is work on the Matahorua Gorge which is up in Ms Mackey’s area. We are doing great things. Thank you. 
Report noted. 
Ministry of Economic Development 
Report noted. 
Ministry of Health 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 I am pleased to have the opportunity to participate in this financial review of the Ministry of Health. Over the last 9 years Labour focused on investing in health across the entire spectrum of the portfolio from disease prevention to anti-obesity measures record low adult smoking rates increased screening for diseases increased immunisation rates decreased general practitioners’ fees decreased prescription charges increased elective surgery more nurses more doctors record pay increases for nurses and 33 new or upgraded hospitals from Kaitaia to Invercargill. I pay tribute to the three Ministers of Health during those 9 years: the Hon Annette King the Hon Peter Hodgson and the Hon David Cunliffe. 
At the time of the election campaign last year—well for most of it anyway not all of it and I will talk a bit more about that later—National campaigned on the slogan “better sooner more convenient health services”. That was the mantra; that was the Crosby/Textor line from the National Government—“better sooner more convenient health services”. But it is very difficult for any member of the public to be able to say now that that is what we are getting. It is very difficult for members of the public to relate what they heard consistently in that Crosby/Textor messaging—“better sooner more convenient health services”—to what they see when they look at what we actually have. 
Just today in the House for example I gave the Minister several examples of cuts to front-line services and of increased costs for accessing health services by ordinary New Zealanders who will be very very confused by the conflict between the message they heard before the election and what they are seeing now. For example I asked the Minister about his decision to allow MidCentral District Health Board to cancel its clinical services and mobile bus. How could that Minister justify the over 100-kilometre journey on a substandard road with no financial travel assistance available for the good people of Dannevirke? But the Minister had the audacity to say that that was in order to fund better services somewhere else. So the people in Dannevirke should hear that message: “You don’t count; there is nothing at all of interest to this Government in the fact that you will now be paying substantial amounts of money to travel on a substandard road often in very dangerous weather conditions when unwell already.” Obviously because of the nature of people’s visits—they are going to access health services—they are not making those visits when they are feeling 100 percent. But the Minister just said that that was all right because it meant that the Government could pay for something else. 
That response makes an absolute fallacy of the message we heard from the Minister before the election as does the fact that with the latest situation in relation to Capital and Coast District Health Board’s paediatric oncology services our children and families will once again be forced to travel away from Wellington to receive treatment. Rather than try to develop a sustainable response or look for a sustainable solution to the fact that in Wellington there were so few cases that that service would now be considered borderline in terms of providing the service and meeting health and safety measures the Minister suddenly said that it was all up to Capital and Coast District Health Board. He said that the district health board should be working for a solution and he washed his hands of it—as I am showing members now and as he did time after time in relation to health. He washed his hands of Ministerial responsibility. Suddenly the buck is to stop with the district health board. Well I want to tell the Minister that actually he is the one collecting the fat pay cheque. It is his bottom on the seat of a Crown car. He is the one with people working in his—Minister Ryall’s—office not district health board personnel. And it is with that Minister that the buck stops in regard to this vote. 
We have had numerous examples of direct cuts to front-line services. I raised another one in relation to health quite recently which was with regard to access to the mobile breast-screening unit. Previously it had been travelling the whole length of the West Coast including Buller. So the women from Punakaiki right through to Karamea who were eligible for breast screening just had to walk down the road. They just had to go down the road to get their breast screening—in fact in the very same way as staff in the Minister’s office can just walk out to the forecourt of Parliament and have breast screening in the mobile bus. But now women in Karamea in Waimangaroa in Granity and right through to Westport and all the towns in between and down to Punakaiki and Charleston have had that service threatened because BreastScreen South has built a new unit in Greymouth and it wants people to go there rather than to the mobile clinic. Well that makes sense in theory but how can the Minister justify his decision to allow the West Coast District Health Board to transfer the cost of travel on to those women in Karamea Seddonville Granity Fairdown Waimangaroa and right away through to Punakaiki? Why do those women have to bear the cost of the cuts? It is because that Minister has let the district health board do it. 
I had the local member of Parliament Chris Auchinvole running down the corridor after me flapping his arms and saying that he had fixed it: “I have now got a solution to this.” But I went and researched that and I say to the Minister and to the current member—the very single-term I think member of Parliament for West Coast - Tasman—that no solution has been found because BreastScreen South said to the women of Buller: “We will reinstate the mobile service. It will make one more visit to Buller so that women from Buller only have to go down the road for their breast screening. But we will not reinstate it permanently; we will have only one more trip north. And tell the women of Buller ‘Get used to travelling.’ ” That is a direct quote: “And tell the women of Buller ‘Get used to travelling.’ ” 
As I said in my introductory comments before the election we had a promise from National of better sooner and more convenient health services. But we have seen cuts to surgery lists on the West Coast. We have sent cuts to jobs in both the Taranaki District Health Board and the Tairawhiti District Health Board. We have seen cuts to home support services for the most vulnerable people in our community—disabled people and elderly at home in need of support—in South Canterbury and I understand in Southland as well. 
 We have lost the paediatric oncology team at Capital and Coast District Health Board. We lost then reinstated and are going to lose again the breast-screening bus on the West Coast. We have no guarantee of school nurse services in our 10 district health boards. The Minister announced a $10 million ambulance service injection which was one-third of the money that the Ambulance Services Association already had and even that pittance has not arrived yet. In fact 20 percent of the money that was committed by the previous Government for ambulance services—and not even that—has arrived. 
Today just to put the icing on the cake I exposed the fact that last week the Minister in another self-promoting move had announced that he had personally reviewed—I am sure while sitting at the bach in Tauranga—the travel service policy and now in a grand announcement said he was going to increase the funding. He said the increase would be the first one in 20 years but that comment is totally untrue. In 2005 the Labour-led Government reviewed the travel policy and increased that very fund by $36 million. The Minister was wrong in that statement. He was also wrong in his answers to a supplementary question in the House which he had to hastily adjust. It is very clear that he does not have his head around the facts of the portfolio. It is quite sad to be honest that he does not have his heart in or any passion for the portfolio. Everyone in the capital city village as it is knows that he did not want to be Minister of Health. We knew prior to the election that he wanted a different portfolio. 
Hon TONY RYALL (Minister of Health) 
: 
 The previous speaker really is struggling. What we have seen with Ruth Dyson is that she takes an incorrect media report and does a beat-up in order to try to make it the full story. For example she said there had been cuts to elective surgery on the West Coast. But the West Coast District Health Board tells us that there are no cuts to elective surgery on the West Coast. The member then told a story about all the extra money that the previous Labour Government had put into the national travel allowance. Well how come the mileage allowance of 20c a kilometre being paid to people had not increased for 20 years? That is the advice I have received from the Ministry of Health but that is not what the member said. The other week the member talked about the cancellation of the breast-screening unit in the West Coast and Buller areas and she said that women would have to travel. Today she admitted that the service is being reinstated but then she said that the unit is under threat for the next year. She really is struggling. 
Let me educate that member on what her Government’s failed administration did to the New Zealand public health system. After 9 years of doubling the health budget fewer people are receiving elective surgery on a per head of population basis. After 9 years of doubling the health budget there has been only a 0.7 percent increase in the number of people getting a first specialist assessment in a public hospital. After 9 years of doubling the health budget 180 New Zealand men and women were being sent to Australia for cancer treatment. After 9 years of doubling the health budget we have a massive health workforce crisis across the entire public health system. After 9 years of doubling the health budget a whole lot of vulnerable services right across district health boards are hanging by a thread because of the neglect of members opposite when in Government in terms of dealing with those issues. What is worse Labour members stood up and told the country that district health board deficits were only $110 million. We know that those deficits are heading to over $160 million according to the advice I received from district health boards just before Christmas. 
We know that this is going to be a challenging time in health. Not only are we suffering the effects of a workforce crisis that was neglected ignored and denied for 9 years but also we are facing the major financial challenges that are besetting this country. But the Government is taking action. Within weeks we introduced our voluntary bonding scheme which offers student loan write-offs and cash grants to doctors nurses and midwives who agree to work in hard-to-staff areas and communities for up to 5 years. We know that that will make a significant difference. We also acted swiftly to increase the number of general practitioner training places in the wider public health service and we will further increase that number next year. The Government has also announced its plan to increase the number of medical student training places in our universities next year as well. We are taking action to deal with the workforce crisis that we have inherited. 
We have also taken action to deal with some of the major issues that New Zealanders are faced with in the health service. How can the funding double in 9 years yet we end up with fewer services? Well a lot of it is to do with the unchecked massive growth in bureaucracy in the New Zealand public health system where the number of managers and administrators grew by 25 percent over that 9-year period—from 8000 to 10500. That increase is a huge burden on the public health service and it will take a while to fix the problem as we move resources from the back office to the front line. 
This Government is determined that it will not have a doubling of the health budget and fewer people getting care. It just does not make sense. This Government is determined to work with our district health boards and our front-line doctors and nurses in order to improve the services that New Zealanders have. When the Budget is tabled in Parliament in a month or so New Zealanders will see that this is a Government that they can trust with the New Zealand public health service. It is a Government that is committed to improving the services that New Zealanders receive and improving those front-line health services that are so important to our communities. 
KEVIN HAGUE (Green) 
: 
 I want to take this opportunity to take up a line of questioning and thinking that I first pursued with the Health Committee’s review of the Ministry of Health. The Minister of Health Mr Ryall when in Opposition had a particular focus on waiting times for elective surgery. Even though elective surgery represents perhaps 5 percent of what the publicly funded health sector actually does and even though it is a topic that is beset by complications because it lies across the boundary between the public system and the private system the waiting times for elective surgery make for an easy target because of the emotional charge associated with waiting for needed surgery. It did not matter to him that the often-criticised system for prioritising and booking elective surgery was in fact developed under the National Government of the 1990s. 
The health sector has watched with interest to see how a politician with such an expedient political focus while in Opposition would make the transition to ministerial responsibility for the sector. The answer is in and it is “not very well”. The politically easy targets for an Opposition politician—waiting times for elective surgery emergency departments and radiotherapy and railing against bureaucracy—have unfortunately continued to be that Minister’s focus. To compound his failure to adapt to his new role he has adopted a public style from the Joan Collins school of management: “Do it my way or you’re all fired.” 
What is at stake here is not just the Minister’s misplaced enthusiasms. There has been a bipartisan consensus around the need to greatly strengthen our programmes to keep people well in the first place through public health and to treat illness as early as possible and in the patient’s own community through primary care. This necessarily requires a relative deprioritisation of hospital-based care particularly at the most specialised high-tech and expensive end. This is not just some idea of New Zealand’s but rather reflects the common global understanding of what is required to combat in particular the rapidly rising tide of long-term conditions that will otherwise swamp health services. 
I had the greatest of difficulty in obtaining a copy of Minister Ryall’s letter of expectations for district health boards and to date I have not yet received a copy from his office. It is no wonder that is the case. Rather than continuing the practice of his predecessors of emphasising the broad strategic direction primary care merits only a cursory mention in that document. This at least is one mention more than the other issues get such as keeping people well equipping New Zealand to deal with chronic conditions and reducing health inequalities including taking action to address the national emergency in Maori health. This is important because district health boards will take their steer from the Minister’s priorities—if they do not improve radiotherapy waiting times boards will get the sack. So will the district health boards focus on that or on improving access to primary care for Maori for example? 
Nobody is arguing that improving waiting times and moving patients faster through emergency departments in order to maximise productivity and minimise waiting times are not important things to do. The fact is that district health boards have over the past year or so been placing a very great emphasis on quality improvements and workforce development to achieve precisely that. Edicts and threats may convey an action man image but they simply do not help. At some point in the not too distant future the Minister will begin to understand the complexity of the health sector. Let us hope that in the meantime the progress that has been made towards meeting the real challenges does not sustain too much damage from his desire for simplistic and politically expedient solutions. 
NATHAN GUY (National—Otaki) 
: 
 The Committee will be interested to know that the member who has just resumed his seat was the former chief executive of the West Coast District Health Board when its services collapsed. I just wanted the Committee to be aware of that. 
When we review the performance of the previous Labour Government I want the Committee to be aware that when the previous Minister of Health David Cunliffe got to his feet during question time and told everyone not to worry because he was running the show the health budget had been doubled yet services were deteriorating across New Zealand. Waiting lists were allowed to grow and bureaucracy was bloated. It ballooned out of control by 25 percent. There were 8000 bureaucrats in the health departments across New Zealand. That number grew not only under the previous Minister of Health but also under several former Ministers before that member. It grew from 8000 to 10500 which is a growth of 25 percent. The growth was not going into the front line where we want to get more services but into the middle and the back lines. The number of people who sit at desks was out of control and that will be a huge challenge for this Government to address in order to get services to the front line. 
We have some big challenges in the health sector. But I want to back up the very good current Minister for Health the Hon Tony Ryall for what he has done in the first 4 months in his job in Cabinet. He has announced a very good voluntary bonding scheme for doctors across hard-to-staff places around New Zealand. I want the Committee to think about and remember this fact: under the previous Labour Government New Zealand was the biggest exporter and would you believe this the biggest importer of doctors. How ridiculous it is that taxpayers across New Zealand fund doctors through their training to hopefully work in this country—and indeed they are allowed to have choice about that—but that doctors make the choice to leave New Zealand because we do not have the right incentives to keep them here. That is why now people across New Zealand with the 1 April tax cuts are saluting Prime Minister John Key and the National Government and saying: “Yes at last!”. They know we will create the right incentives for people to work harder and get ahead. Is it not an embarrassment that under the previous Labour Government there were more doctors leaving than staying in New Zealand? Thankfully we have a bonding scheme that will work across most of New Zealand. 
I also want to touch on the ambulance services and a pilot that will be provided by Wellington Free Ambulance in the Otaki electorates which will have more paramedics coming into my electorate. They will be looking after people in their homes in order to reduce the services that are required in Kenepuru Hospital and in Wellington Regional Hospital. A great initiative is to be piloted in the Kapiti community whereby Wellington Free Ambulance paramedics will see the sick and the elderly in my community and treat them in their own homes. I think this is a fantastic initiative. 
Across New Zealand there are a whole lot of other issues that the Minister for Health is also addressing. Right now we have to get on and we have to redirect the services provided by the district health boards. We have to focus on the front line and that is where I believe that the Minister is doing a fantastic job. I say “Well done!” to Tony Ryall for getting on and doing things in his first 4 months in office. He has had to pick up the pieces from the mess left by the previous Labour Government and to concentrate on the front-line services needed to look after the most needy people in our community. 
Hon TONY RYALL (Minister of Health) 
: 
 It is worth noting that we are talking about the 2007-08 financial review of the Ministry of Health and the period of time subsequent to that. It would be worth reflecting on the fact that during the financial year that is under review the previous Government tabled its budget for the 2008-09 year. What many New Zealanders do not realise is that in the weeks in the run-up to the general election the Labour Government stripped out $150 million from the future funding path in health. Not a lot of people know that—the Labour Government cut $50 million out of the health budget for next year and $100 million out of the indicative funding path for the following year. So a total of $150 million was cut from future health funding by the Labour Government. Not a lot of people know that. 
I give that information to the Committee because one of the biggest challenges we have inherited in the health service is dealing with a track towards financial crisis right across the district health boards. We have indicated to district health boards that although they are getting more money next year like the previous Government we are expecting them to do their level best to improve services for New Zealanders but we are also expecting them to track towards achieving a financial balance over time. But that is made a lot harder by the fact that Labour cut $50 million out of the future health budget for the next financial year and $100 million out of the budget in 2 years’ time. So Labour cut $150 million out of the health budget. 
But having said that I know that district health boards are committed to working constructively with the Government to meet the many challenges that we are facing in the district health board system. Those challenges are very significant. I reckon the biggest challenge we face concerns the workforce—workforce and workforce. The Government is taking action to deal with the health workforce crisis. Not only do we have the voluntary bonding and the increased numbers of general practitioner training places and medical student places but we are also working across the sector to try to find additional places for nursing and other surgical training. 
This Government is committed to increasing the availability of elective surgery through our plan to build dedicated elective surgery centres across the country. The premise of this plan is based on international and national research that shows that if we can split acute or urgent surgery from elective surgery then we will get much better elective surgery performance. 
Hon Steve Chadwick 
: Tell us about health and wellness not just hospitals. The member knows nothing about the value of primary health. 
Hon TONY RYALL 
: The failed and defrocked member from Rotorua says the issue is not just about hospitals. I have to tell the member that the Government has made it clear that commitment to the Primary Health Care Strategy is important and remains bipartisan. But that is no excuse to allow the intolerable performance that patients have been receiving from our public hospitals in terms of the delays and the frustrations they face. 
That is why the Government is telling cancer patients that it wants to improve cancer treatment waiting times in New Zealand. That is why we are saying to the many patients who front up at emergency departments that we want to improve the timeliness of emergency department performance in New Zealand. That is why the Government also says to the many patients who languish on hospital waiting lists that it wants to improve access to elective surgery. We make no apology for saying that because the message of the election—which the Labour Party never got—is that New Zealanders want improvement in those areas. New Zealanders do want cancer patients to be treated faster than they are currently. What is peculiar is that Mrs Dyson gets up and asks what we are doing about paediatric oncology but in her next breath she asks why we are telling the hospitals to concentrate on cancer treatment waiting times. It does not make sense. That is why she is struggling in her role as the Opposition spokesperson on health. 
 The Government has made it clear that although bipartisan commitment to the Primary Health Care Strategy remains important and we are committed to it we need to improve the waiting times in our public hospitals. The Government is doing that. We have made it very clear to district health boards that we want to work constructively with them to do that because we cannot have a situation where the budget has doubled and the level of service has dropped which is the record of the party opposite when it was in Government. I suspect that what New Zealanders really want from members opposite is an apology for Labour’s performance while running the New Zealand public health service over the last 9 years an apology for neglecting the areas of great priority to New Zealanders and an apology for the fact that those members still cannot accept that failure. 
Report noted. 
Department of Corrections 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 This is an interesting report. I note—because we are also discussing current operations—that the Minister in the chair has adopted on coming into Government a very interesting strategy. The Minister inherited when she came into Government an escape rate from prison that had dropped by 84 percent over a decade. The Minister of course took the credit for that as she went around and told us that she had visited a number of prisons—not to propose measures that she ought to put forward but to ask people how she should do her job. As we have noted in this House under the previous Government there was an 84 percent reduction in prison escapes. If members look at the litany of escapes suicides and assaults that have occurred in the 3 or 4 months since this Minister took office—we will not go into the area of the police because sadly we are not in the position at this point to debate the financial review of the New Zealand Police—we can see that there have been more escapes in that time than there were in the last 3 years. 
This Minister has embarked on a very interesting strategy but I think it will be seen as having been fraught with danger when we review it in the coming years. She paraded around the country and was going to be the tough person. She was the Minister who was going to crack down on everything including when the Auditor-General delivered a very robust report that outlined that procedures in the Department of Corrections had not been put in place. The department failed to do this even though it had been instructed to do so under the previous Government and even though the Wellington Coroner reviewed those procedures and had no recommendations to make because—in his view—the procedures were there and were up and running. This Minister said she would sort that out. On the back of the Auditor-General’s report came a thundering from across the House from Judith Collins. She said heads would roll—members may remember that the Prime Minister was into that as well as her—and there would be accountability. The chief executive officer of the Department of Corrections was put on notice; everybody was put on notice. 
But I will give the Minister credit for this: she did quite rightly call in the State Services Commissioner the employer of the Minister’s chief executive—he reported direct to her—and ask the commissioner to do a report that would tell her what was going on and who was accountable. But prior to that the Minister bagged and gagged the chief executive officer of the Department of Corrections so he could not respond to the Auditor-General’s report. She also pre-empted the report she had asked for from the employer of course. The Minister then put taxpayers’ money in jeopardy. We know this because the chief executive officer told the Law and Order Committee that he had not ruled out legal action at least at the time in respect of his employment arrangements and that would have been a cost to the taxpayer. When the report came out the chief executive officer said he was staying. The Minister stated that she had no confidence in the chief executive officer before the report had come out and no confidence in him after the report came out. 
The question we have for the Prime Minister is who is accountable? The New Zealand people sit there and hear a lot of bluster and bluff and stomping of feet from the Minister. She stomped around the country and said she would get tough and sort the department out. But is the Minister accountable today? Is the chief executive officer accountable? Of course the New Zealand people sit there and wonder who is accountable. The report notes a very interesting thing. It says under the accountability section—I know National members wanted this to be included—that New Zealand Labour Party members asked extensive questions about the working relationship between the Minister and the chief executive. The working relationship goes straight to the heart of public confidence in this department. I say to the Minister as she embarks on her strategy and tries to make a case for private prisons that if she cannot get accountability out of a department that she has direct control of via her chief executive officer—a single report—then how on earth will she get accountability from a private sector organisation with a contract that is far removed from that relationship and in a situation where the chief executive must participate in the tender and also decide effectively who gets the tender? I ask that Minister how on earth she will get accountability because she cannot get accountability now. 
Is this just a case where Judith Collins will be able to say—as she says when anything goes wrong in her departments whether it is in respect of the New Zealand Police or the Department of Corrections—that it is an operational matter and she will wash her hands of it? It was not an operational matter when Labour was in Government according to the speeches that National members made. Not only will it be an operational matter but it will also be a matter that is in the hands of the private sector if the Government goes down the way of contracting with a private sector company. The relationship with the company will be far removed from the Minister. I ask members whether the Auditor-General will be able to investigate such a company in the way that he did in the case of the department or whether the select committee will be able to do so. I ask whether this Parliament will be able to call people in and question them and whether the Official Information Act will be able to come into play. As we were told at the select committee we will now have a layer of highly expensive monitors who will do the Minister’s job and monitor the performance of this department. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 When we took over the Department of Corrections we were left with somewhat of a mess in some areas. This department had five Labour or lackey Ministers in the corrections portfolio over those 9 years. Frankly there is a roll-call of shame. I understand from the department that there was a general feeling that things did not really need to change because staff outlived their Ministers. Well we have news for anyone who holds that view. 
I have read the Law and Order Committee’s financial review of the department and I noticed that a very large transcript of the evidence is contained in it. I cannot see anything there to suggest that the Hon Clayton Cosgrove or anyone else in the Labour Party really seemed to care very much about what had happened in the department during the term of the financial review. The entire transcript seems to be nothing much more than a case of the Labour members trying to make something of the fact that I actually require accountability in the department and that the department is delivering on it. 
Hon Clayton Cosgrove 
: You stomped around but you didn’t get any accountability. 
Hon JUDITH COLLINS 
: The member is making all sorts of comments about stomping and he has previously said “strutting”. Well I do not stomp and I do not strut but he does. 
The report of the Auditor-General was extremely damaging. It said that despite all of the assurances that Phil Goff the previous Minister and the current Leader of the Opposition had made to the coroner’s office and to everybody else—to the public and to this House—the recommendations had not been implemented. There are 20 recommendations from the Auditor-General. In essence those recommendations say to the department that it must follow its own procedures. So what we have had to pick up is a mess. To be fair the department had been given an awful lot more work to do without the proper funding and resourcing to do it. As late as September last year after the department had all the responsibility for community sentences forced upon it it had an emergency situation on resourcing and what was Phil Goff’s reply? One might wonder—there was no reply. He did not even acknowledge that that request had gone through. It is appalling to read this financial review and to see that so much that had been promised had not been done and certainly that the department had not been properly directed by a Minister who was not really engaged in being a Minister. 
The department tells me that not one Labour Minister ever attended a graduation ceremony for corrections officers. Not one of them took a personal interest in what was happening in that department and not one of them ever required the department to change its culture. That is what we have inherited. 
The member has made all sorts of comments about escapes and those sorts of things but since I have been the Minister there have been three escapes from corrections facilities—three escapes. In the 4½ months before then there were nine. That figure has kept the member very quiet has it not? He does not really want to talk about that. 
When I have been going around the prisons and asking prison officers what is needed they have talked to me about prisoner and officer safety about some of the problems they have and about the regulations that need to be sorted out. I have listened to that and some of those proposals are being proceeded with now because this Government listens to what departmental officers are saying. 
When it comes to issues about rehabilitation and reoffending the statistic is that about 70 percent of prisoners reoffend within 4 years of leaving prison. I do not think that any Government should be proud of that statistic and particularly not a Labour Government that was in office for 9 years. I do not think that Labour members should be proud of the fact that 8500 prisoners are locked up right now at this moment or that the corrections system has to deal with 40000 community sentences. I think it is appalling that not enough has been done in terms of rehabilitation. 
I am extremely pleased that under this National-led Government we are working with the Maori Party. We have Dr Pita Sharples as the Associate Minister of Corrections and I am talking to him about what he is doing. He is addressing the Maori reoffending and rehabilitation issues. I think that it is incredibly important to bring Maori into the debate on this issue because 51 percent of our prisoners are Maori. Labour had 9 years to deal with this issue and all it did was to fill up the jails. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to follow the Minister in the chair Judith Collins who is doing an excellent job of showing the leadership that is required in the Department of Corrections. That leadership just was not there under the previous Government. We had 9 long years and what happened? It all went backwards. Not once did Labour members show a level of concern about what was happening in the Department of Corrections. They were far more interested in engaging in character assassination during the financial review of that department. We have only to look at the reoffending statistics. If members of the previous Labour Government had really looked at those statistics then they would have seen there was a problem that they needed to address but they did not. 
It is stated in the Auditor-General’s report that the chief executive and the department were telling the Minister that there were problems; the Labour members had only to read it. If they had listened at the time to what was being said then they might have addressed the problems. After the death of Karl Kuchenbecker corrections officers had to ensure that offenders complied with the particular requirements of their sentence or order and ensure that staff complied with Community Probation and Psychological Services procedures. This posed a significant cultural shift for some staff that could not be underestimated. The Minister of the day was told that at the time—and I understand that that Minister was Phil Goff the current Leader of the Opposition—but he was not listening. He did not take on board that advice and he did not recognise that it was a significant issue. 
So what did we end up with? We have 20 recommendations from the Audit Office and I will just run by members one of those recommendations. I will look at recommendation No. 11 which is that the department completes the required reintegration checklist during the first week of an offender’s period on parole. If we look at the reintegration of offenders into the community we see the report states that out of the 100 files that were examined the department did not complete the checklist fully for 19 offenders and for 30 offenders their probation officers had not determined the actions needed to address the reintegration needs that had been identified—and there is a whole list of reintegration needs. What happens if we do not address those needs and give support for reintegration into the community is that offenders reoffend. All the Minister at the time had to do was to look at the reoffending statistics and to ask himself what the problem was. He was being advised by the department at the time and that is made quite clear in the Auditor-General’s report. 
The report also goes on to state in another part that over the course of the development and implementation of the new community-based sentences introduced by the previous Government that Government had introduced a policy that it had undertaken no planning for. It had made no analysis of the future impacts of that policy. That Government had not given any consideration to the effect on the department or its staff of the whole cultural shift in the way in which the processes associated with offenders and their treatment were to be managed. All of that just compounded. The Minister at the time was told that this was a serious issue and that it should not be underestimated. That was the previous Minister Phil Goff who is the current leader of the Labour Party. He did not listen to that advice. 
Well there has been a whole new change in the department and I have to tell members that it is due to the excellent Minister Judith Collins. Finally someone is sitting up taking notice and saying—along with the Associate Minister of Corrections Dr Pita Sharples—that change is happening. We will not dump on the people who are already in that department. We want to get in there show some leadership and make a difference and Judith Collins is making that difference. The department welcomes that change. From those on the shop floor right through to the chief executive people welcome that change. They are welcoming the interest being shown by the Minister. There were five different Ministers of Corrections in the previous Government which shows us that no one really cared. Well I tell members that National cares about what is happening in the department. We will make a difference. Under the leadership provided by the Hon Judith Collins we will make that difference. When Opposition members decide that they want to take another call to start having a go at the department they need to think about what is happening in the corrections system really care about what is happening there and care about the fact that reoffending went up under their watch. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I was not going to take another call but that was an outstanding contribution by Sandra Goudie. I just want to touch on two— 
Sandra Goudie 
: Thank you Clayton. 
Hon CLAYTON COSGROVE 
: Oh it was outstanding and it will be etched in the annals of the House. The Minister in the chair Judith Collins made a couple of interesting statements. 
First she said that she was ashamed at the number of prisoners who are incarcerated in our prisons and I agree with her on that. Our imprisonment rate is the second-highest in the world per capita I think. But I have to ask the Minister whether she is the same member who in Opposition paraded in this House every day along with Simon Power saying to the then Labour Government that we had not locked up enough offenders. After building four prisons and after having more prisoners locked up—as I said we have the second-highest imprisonment rate per capita in the world—she said we had not locked up enough offenders. 
Sandra Goudie 
: They keep reoffending; that’s why. 
Hon CLAYTON COSGROVE 
: The “Orange Roughy” over there who spoke before me said every day in Parliament that our Government had not locked up enough offenders that we had been too soft and that there were not enough offenders kept inside our prisons. 
But now the Minister has had a road to Damascus experience where she has come in and is trying to portray herself as some sort of Mother Teresa - like figure within the National Government—some sort of humanitarian. I am waiting for the crocodile tears that she was so fond of turning on occasionally in this House when she says she thinks it is a shameful thing that we have so many prisoners in prison. I agree with her on that but there is a word for that sort of statement. It begins with “h” and she knows what it is. She cannot have it both ways. 
Second Judith Collins is a Minister who has demanded accountability. She has demanded accountability from the chief executive and he is still there. She has demanded accountability from the staff and they are all still there. She has demanded that heads should roll and people in the community sat back and watched after the Auditor-General’s report came out—and it was a damning report—and after a report that she called for from the State Services Commissioner in his capacity as the chief executive’s employer was released. She is a Minister who would not express any confidence before during or after that analysis and a Minister who said there would be accountability. I ask the Minister who is accountable after an expensive series of reports and after her bluff and bluster. She wandered around like some sort of female Clint Eastwood in the OK Corral. She was going to sort the situation out and she was given a nickname in this House that I will not use but I ask her who is accountable. I say to the Prime Minister that I do not mind who goes—whether it be somebody from the department or whether it be the Minister—but the Minister demanded accountability and we are still waiting to see it. 
I put this to the Minister. I asked her this question and she would not put a number on it. During  
Q+A 
 on 29 March she was asked by Guyon Espiner “…you’re a Minister who’s demanded accountability from others how should we judge you in terms of your Corrections portfolio …”. It is a good question I would have thought. As we roll into an election in the next 3 years people will want to know that. The answer was “I like to think ah that after my term as corrections Minister that we will have less recidivism we will have fewer prisoners who are taking drugs in prison and we will have fewer assaults on staff and other prisoners”—and I assume but I paraphrase fewer escapes. But when asked by people to put a number on that to tell them what “less” and “fewer” meant and how they should judge her—because she is the accountability queen of Parliament—would the Minister put a number on it? Oh no! Would she assist the New Zealand people in enabling them to judge her? Is the number 1 percent or 10 percent or 90 percent? What is it? Apparently it is “less” and “fewer”. 
I say to the Minister that she has been hoist with her own petard her own rhetoric and her own Dirty Harry Clint Eastwood - type impression that she is going to get tough on everybody: the police and the Department of Corrections. She said she was going to demand accountability. Sadly—or not sadly from our point of view—she had egg all over her face after report after report came out. National said it was going to do away with bureaucracy but we were told in the Law and Order Committee that there is now to be a very expensive layer of monitors to monitor the performance of the Department of Corrections. I think Iain Rennie told us that some of those people will be brought in from overseas. So now we are to have the Auditor-General’s office and the State Services Commissioner who apparently are not responsible or accountable and the Minister who apparently is also not accountable and responsible— 
Sandra Goudie 
: No he is! Clayton Cosgrove is. 
Hon CLAYTON COSGROVE 
: We have the “Orange Roughy” who says she is not accountable or responsible and now we will have a very expensive group of monitors to do the Minister’s job for her. 
In the next couple of years I look forward to re-rehearsing the statements that the Minister has made. The petard is high and she will be hoist with it. 
DAVID GARRETT (ACT) 
: 
 I understand that this debate is supposed to be a financial review debate; it seemed to be about anything but during the speech from the previous speaker Clayton Cosgrove. 
I pay tribute to the Minister of Corrections Judith Collins for her willingness to look at different options in order to save the taxpayer money in this difficult time which I understand is what this debate is meant to be about. I applaud her confirmation that we have seen the end of underfloor heating plasma TVs and other luxuries for prisons and prisoners. 
Mahatma Gandhi once said that a civilisation or society is judged by how it treats its most vulnerable people. The members over the other side may be very surprised to hear that I applaud that statement and agree with it. 
Hon Clayton Cosgrove 
: Would you repeat that? 
DAVID GARRETT 
: I will repeat it. Mahatma Gandhi once said that a civilisation or society is judged by how it treats its most vulnerable people. In my view the most vulnerable people are the hard-working mums dads and pensioners who have worked all their lives—the former being taxed the latter having been taxed—to fund hotel-style facilities for the scum of our society. Getting rid of those luxuries will save taxpayers millions of dollars and more important will send a message to criminals that their lawbreaking will no longer be rewarded by a cushy year or two in jail—and that is only if they already have a lengthy record. 
I also applaud the Minister for her initiative in introducing prefabricated prisons at a cost of about half what we have been spending and without $3 million sculptures for example signifying spiritual rebirth or some such nonsense one of which I understand is at a recently built prison. Prefab prisons are currently in place in many countries around the world and they operate successfully when measured on how many escapes they have and cheaply. 
Under the previous Labour Government prison beds cost approximately $643000 each. That is enough for three homes per bed. Prefab prisons will cost half that and that is still too high. Further luxuries can be cut and further savings can be made. 
I read with much interest a recent report about the Idaho State Correctional Institution. It is a prison that holds some 1500 inmates. There has never been an escape from that prison in 20 years—not one escape. Why is that? Does it have additional electric fences and guard towers manned by dozens of armed guards? Does it have state-of-the-art expensive laser or motion detector systems? Well no it does not. It has several secret weapons three of them called Cookie Bongo and Chi Chi. They are dogs. They are German Shepherds and Rottweilers that patrol the space between the inner and outer fences. Not surprisingly inmates are somewhat wary of scaling or even going anywhere near those fences. 
The cost of that programme for 36 dogs is $100000 a year including food and veterinary care. It saves hundreds of thousands of dollars for the people of Idaho and it has a 100 percent success rate with a reduced risk to the public. From my knowledge of the Minister in the short time I have been here I am sure she will be very interested in the further information I can provide her with on that programme. It is a very common-sense and cost-effective approach to the corrections service. I am very hopeful that with the Minister’s vision more savings can be made and I look forward to seeing them. Thank you. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 Mr Cosgrove asked some questions in his speech. He asked who is accountable. It is great to have an Opposition spokesperson who never reads his papers. If he had read them he would have seen that the report from the State Services Commissioner says quite clearly that “The chief executive is accountable for the performance of the Department.” If only Mr Cosgrove could read! 
He also made some other allegations; he alleged that when in Opposition I was the spokesperson on corrections along with the Hon Simon Power. Actually I was the spokesperson on welfare. I had nothing to do with the corrections area. Mr Cosgrove said that I said that heads would roll. I never made that statement and I challenge that member to table the evidence. He is very good at making allegations and at character assassination but he never ever fronts up with the facts because he unfortunately never reads his papers. Mr Cosgrove should do his homework before he comes to the Chamber. 
I think it is extremely important that we look at the fact that this financial review is a review of the 9 failed years of a failed Labour Government. That is exactly what this financial review is. How can members of a party possibly stand up and be proud that we incarcerate more people than ever before that at the moment 8500 New Zealanders are prisoners in our correctional facilities and that we have to police 40000 community-based sentences? After 9 years how can any party be proud of that? Frankly I think that is a shocking statistic. 
I also think it is shocking that the previous Labour Government never really dealt with rehabilitation. That is why it is great to be part of a Government that has promised to double the number of rehabilitation programmes available to our prisoners. If we just continuously lock up people and Maori in particular—which is what the previous Government did; no wonder its members never want to talk to iwi or to the Maori Party about prisons—we will end up with more and more people completely disconnected from society. We will end up with a more violent society and more people will feel that they are not part of society and that they do not have to care about society. That is one of the most appalling tragedies of Labour’s legacy. What Phil Goff did first in justice and then in corrections and what Annette King did in police was all about locking people up and throwing away the key. Time and time again that was all it was about. 
I am completely in favour of proper and truthful sentences that mean what they say. In 1999 Labour campaigned on tougher sentences. In Government it increased all sentences but then it brought parole eligibility down to one-third of the sentence. That shows us how truthful those members were about sentences. They told untruths about what they would do. 
Mr Cosgrove asked how the public will judge what Labour has done. I think the public has judged it—the public threw Labour out. Frankly the public would be even more likely to throw Labour out if there was another election today. The public has had enough of Labour. It has had enough of Labour’s carping and whingeing and it wants something positive. Do I ever hear anything from Mr Cosgrove about what positive steps we could take together to actually help prisoners get rehabilitated? Do I ever hear Mr Cosgrove saying that he has learnt about a great rehabilitation programme and he would like to share it with me? No; Mr Garrett does that but Mr Cosgrove does not and I think that speaks volumes. It speaks volumes because this Government is committed to rehabilitation of those prisoners who will be rehabilitated—let us not kid ourselves that everybody will be rehabilitated. 
I find working in corrections a great opportunity despite all the problems it has and the fact that it is dealing with 8500 prisoners in jail plus all the others. It has a lot of problems but we have to expect that because corrections staff deal with some of the worst people in New Zealand and sometimes things will go wrong. People who work in corrections are good-hearted people. They are really enjoying having direction and having a Minister who cares about them who turns up who goes to what they want who gives them talks about things and who listens to them which is something that never happened under the previous Labour Government. Labour members never listened to people on the shop floor because they do not respect the corrections officers. They have never respected the corrections officers; they have always talked down to them. They have never listened. 
I think one of the good things in corrections is that we have change. 
Report noted. 
Ministry of Education 
Hon CHRIS CARTER (Labour—Te Atatu) 
: 
 I rise because I care about education. Labour cares about education. In the financial period we are discussing much of the time was actually under a Labour administration and I of course was privileged to be the Minister of Education; we had much to be proud about. Education funding under Labour doubled from over $5 billion to over $10 billion. We saw $3.4 billion go into school property. We saw 20 free hours for every 3 and 4-year old in this country. We saw teachers’ salaries go up by 37 percent and principals’ by 42 percent. We saw interest-free loans for students. We saw tremendous things happening in our education system. We saw an education sector that was optimistic progressive and innovative. We saw a new curriculum come into our primary and intermediate schools. We saw the National Certificate of Educational Achievement refined and improved constantly. There was a sense of optimism in education. 
But what has happened since the election? What has happened since National took charge of education? I have to tell members that I have continued to visit schools as I did regularly as Minister of Education and I am hearing a lot of fear and concern. There is a sense that things have been frozen that things will be cut and that resources will be reduced. There is not a sense of direction any longer. 
I think of my own area of west Auckland and of two projects that were signed out last year. One of them is the Waitakere learning plan which I understand the new Minister of Education will be meeting principals of west Auckland to discuss on 16 April. They were told last year they had $100000 to develop this learning plan across some 93 schools. They had the money signed out and ready to go but were then told it was frozen. We also had the Waitakere Zero Tolerance to Truancy initiative which got a letter from the ministry stating that yes it had $80000 because truancy is an important subject. We heard a lot from the present Minister of Education Anne Tolley when she was in Opposition about how important it was to address truancy and that is a really great project. The project got a letter in early November stating that it had the money and ads were run on Flava the most popular youth radio station in Auckland. The project now has $4000 worth of bills and organisers have been told that the money is frozen. 
We have also been told that the kindergarten teachers collective agreement has now expired and the ministry has not received instructions from the Minister even to begin negotiations. But we did hear in this Chamber an admission from the National Minister of Education Mrs Tolley that pay parity was no longer a given. That is incredibly alarming. 
Hon Anne Tolley 
: No I didn’t say that. 
Hon CHRIS CARTER 
: I heard the Minister say she did not say that. I say to her that she should check  
Hansard 
 because she said that nothing was on the table. Mrs Tolley said that pay parity was not a given. That news was received in the whole primary sector with enormous alarm. 
We are hearing everywhere in education that people are confused about the direction of the new Government. You know we heard so much before the election about how there would be no staff cuts and that any increases in education funding would be met by a reduction in bureaucracy. What a joke! We know of course that in terms of getting rid of a few bureaucrats the Ministry of Education was pretty lean and mean already. I remember answering a question in this Chamber as Minister for which I had asked the Secretary for Education to give me the figures for the entire pay package of every single bureaucrat in the ministry—from the secretary’s own salary to that of the cleaner who helped clean the building—and to add up all the figures. The sum came to $23000 per school in New Zealand. It is no wonder that teachers mostly voted Labour and I am sure that 99.9 percent of them will vote for Labour next time because they have been conned. 
What is happening is that stuff has been frozen. Stuff has been canned. The $1 million for the Manukau Institute of Technology to build a campus on the old intermediate site at Bairds Road—so we could address the real issue of underachievement and the transition between school and work—has been canned by Mrs Tolley. We have been told that the deal for the nine schools in South Auckland that had agreed to have early childhood education on site has been canned yet we have had so many crocodile tears from Mrs Tolley about how Manukau City desperately needs more early childhood education sites. And I agree with her absolutely. When I was Minister I asked what the biggest problem was. It was the cost of land. We found the sites but she has canned the deal. What sort of message does that send to the education sector? 
ALLAN PEACHEY (National—Tamaki) 
: 
 Was that speech we have just heard from the previous Minister of Education Chris Carter a contribution to a parliamentary debate or a eulogy for a failed Government? For the entire 5 minutes— 
Chris Tremain 
: It was a eulogy for a failed Government. 
ALLAN PEACHEY 
: I agree with Mr Tremain that it was a eulogy for a failed Government. In 5 long minutes—replicating the 9 long years of a Labour Government—Mr Carter did not mention once that during the 9 years of the Labour Government not one extra New Zealand child learnt to read write or do maths. The tale that has bedevilled New Zealand schooling for so many years remains. 
The previous Minister skirted right across that issue. But the good news is that New Zealand parents and their children can look forward to a brighter future. They can at long last look to the prospect of this country being very very clear about the standards of reading writing and mathematics that they will have to achieve if they are to find a productive role as adults in the New Zealand community. 
There is a very important underlying message here that for 9 years the Labour Government ignored. All children are expected to and can learn. The 9 years of excuses for why some schools are failing and for why large numbers of children are not learning the social deficit theories and all that sort of nonsense is now in the past. The New Zealand schooling system under the current Government and the current Minister is moving into a new era—an era in which children will be expected to learn and in which they their families and their schools will be held accountable for their learning. For the first time in many many years parents will have a very clear definition of what their children should know and the extent to which they know it. 
Sue Moroney 
: They have that already. 
ALLAN PEACHEY 
: Oh somebody is interjecting from the other side of the House saying that we have that already. Perhaps that member would like to take a call and explain to this House why between 20 and 35 percent of our children are not learning the basics of reading and mathematics. Why is that? The Labour Party has never ever been prepared to face up to the reality that too many of our children are not learning and are not being expected to learn and that schools are not being expected to teach what our young people need to know if they are to find profitable roles in our community in the future. Members opposite do not want to talk about that because their mindset has been so set in this business of making excuses. We know that as long as we are prepared to make excuses— 
Hon Steve Chadwick 
: Not on education. 
ALLAN PEACHEY 
: There are members on the other side of the House who clearly understand this issue and who have a proven track record in not accepting excuses for failures in schooling. It is just a shame that a few more members opposite do not get the point. 
The future for our children lies in the quality of schooling that they receive and that will be enhanced by the move to national standards and to clear simple reporting to parents. Of course the big challenge that the Government will face is what it will do about those youngsters who are not meeting the required standards but at least for the first time we will have got rid of the excuses and put expectations in place. 
Hon MARYAN STREET (Labour) 
: 
 I rise to speak about tertiary education in particular because it is an area that I feel really strongly about. I am concerned at the lack of grip the Minister of Education seems to have on this part of the education portfolio. Tertiary education will be the vehicle by which we recover rapidly from a recession. More than any other single component in the New Zealand economy this will be the vehicle by which we upskill the labour market existing and future and prepare the labour force of the future to participate in order to assist the economy to recover from recession. 
I want to raise a couple of points of concern about tertiary education. Given that it is part of my professional background along with others in this Chamber I have a particular attachment to the tertiary education provided through the universities as well as that provided through polytechs private training establishments independent tertiary institutions and the industry training organisations in their capacity as a link between skills in the workplace and the training that is required to provide those skills into the economy. As part of that concern I have a concern for the students who participate in tertiary education and who are represented by a nationwide students association. Those students have been trying for many weeks—in fact for 4 months—to get an appointment with the Minister to talk about issues that relate to tertiary students and their prospects as well as the current hardships that they are experiencing largely because of a decline in the number of jobs in the labour market. 
In an article that has gone far and wide across a number of student newspapers students said on Monday 16 March: “Tertiary Education Minister Anne Tolley last week wasted $400 of student money when she failed to keep an appointment with national tertiary student representatives.” The article further stated: “NZUSA had sought a meeting with Tolley since she was appointed and even invited her to address their January conference but ‘it’s taken her four months to get back to us’.” Students then embarked in this article on what they called “The Great Tolley Hunt II: The Sound of Silence”. It has been very difficult for the students to connect with the Minister for Tertiary Education but finally they did. Students have made that information available in subsequent university student publications notably  
Salient 
 on Monday 30 March where students said “Success in the Great Tolley Hunt”. The article stated: “The Great Tolley Hunt has finally achieved some success thanks to Jackson Wood editor of  
Salient 
.  
Salient 
 managed to do what all of us in student media thought impossible and get Tertiary Education Minister Anne Tolley to respond—sorta—to some questions.” 
The article then goes on to say that “National’s policies concerning tertiary education have done little to prove that Tolley understands the complexities of the university system.” Certainly it is a complex system. I do not dispute that for a moment but axing jobs from the Tertiary Education Commission is not the way to get a handle on the tertiary education portfolio. It is not the way to get a handle on the complexities of what is a very complex portfolio. It is very clear that money is of no consequence to this Minister. Obviously $400 means a lot to the New Zealand University Students Association. I wonder whether $1800 to run a helicopter from Auckland International Airport across the expanding empire of the Auckland University of Technology or whatever it was that she was viewing with the helicopter going into the central business district and down to Mechanics Bay was also a worthwhile use of public money. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Less than 2 months ago the latest education report to hit the news gave rise to two shocking but unsurprising facts. The first was that nearly 40 percent of Maori students left school before turning 17 a whole 10 percentage points more than the national average. The second was that most Maori students—56 percent—leave school before completing the second level of the National Certificate of Educational Achievement compared with 34 per cent of all learners. That is a gap of 22 percentage points. Those facts are shocking because they reflect high levels of disengagement and a subsequent impact of low achievement and unsurprising because well tell us something new. 
Nga Haeata Matauranga 
 the annual report on Maori education of 2007-08 puts into print ideas that should be well known to all members of this House by showing a level of systemic dysfunction that no one can ignore. Yet when we turn to the 2007-08 financial review of the Ministry of Education it appears that the dysfunction continues.  
Nga Haeata Matauranga  
revealed that Maori learners are three times more likely to be stood down suspended excluded or expelled than their Pakeha peers and are a massive four times more likely to be frequent truants. 
The section on truancy in this financial review then tells us “the most recent attendance survey undertaken was in 2006—a survey had been planned for 2008 but was not carried out as deficiencies that had affected the 2006 survey had not yet been addressed.” That is shocking. There were 2 whole years to address the deficiencies and the small matter of whether we are talking about 30000 or 3000 children missing from school. Is that not something that the Ministry of Education would want to get right? All studies show consistently that students who are truant not only miss out on school work and have their educational achievement affected but also run the increased risk of becoming alienated from the educational system and of dropping out of school. 
In the ministry’s own research officials point to data from the Smithfield project which revealed that student attendance during year 11 was one of the most significant variables affecting student achievement in senior school. If that is not bad enough longitudinal studies of Christchurch and Dunedin children from my electorate of Te Tai Tonga produced evidence that truancy was a strong predictor of violence later in life and predictive of delinquency substance abuse suicidal risk and unemployment. 
 The Ministry of Education’s performance on truancy fails to provide me with the confidence that it is truly committed to addressing the measures of participation such as retention early leaving exemptions suspensions expulsions exclusions and truancy. We in the Maori Party really want to see that happening today. However one bright moment in the 2007-08 review of the ministry was the brief section on Te Kotahitanga. The Education and Science Committee described this project as being aimed at addressing under-achievement in Maori students in mainstream schools. I would however like to point out the obvious: although under-achievement—and for that matter truancy rates—reports on the performance and situation of individual students the failure we are observing is a failure of the education sector to succeed in actively engaging all of its learners. Without engagement achievement will not follow. 
We must do better as a nation to confront the poor performance of schools in engaging and retaining Maori students. Te Kotahitanga is one of the projects that we hope will make the difference—and we know the influence of the Hon Pita Sharples as an Associate Minister of Education will be particularly important in revitalising the focus on Maori achievement. And a critical part of making the difference is in the quality of staff that we have to actively engage with whanau hapu and iwi in the improvement of outcomes for Maori students. 
Last Friday I had a fantastic morning with the Maori students at Aranui High School in Christchurch which showed me that our young people succeed when the programmes are tailored to their needs and when it actually matters to the school that the learning is both meaningful and relevant. 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Chairperson. Tena koutou katoa. This is my first opportunity to reflect on the Ministry of Education and the Education and Science Committee’s reporting experience. As a very new member of a select committee I have been fascinated by the ritual of accountability that we call financial reviews. Very well-dressed and understandably defensive officials present us with glossy reports. In between the outcomes and outputs—blah-blah-blah—there are issues of the wise use of resources but I am not sure whether we get close to that conversation. 
What really matters to the Green Party are the questions behind the financial reviews. Such questions are to the Minister and they ask who benefits and what is changing. It is nearly 20 years since Tomorrow’s Schools was foisted on to an unsuspecting public under the guise of greater parental involvement and soon it will be time to acknowledge that this particular emperor is damn near naked. 
We now have a system where half the class in any given State high school goes to Paris for its school trip while the other half is lucky if it gets to go to McDonald’s. As Professor John O’Neill of Massey University recently said in his speech to the Quality Public Education Coalition: “Agreeing to use money”—which he is referring to in terms of monetarist values—“in schooling as we have done since 1989 destroys the idea of education as a public good where benefits are owned and shared equally by everyone. Introducing money creates the idea of education as principally a private good the aim of which is to create personal wealth through the buying and selling of educational commodities or services. This is commerce not education.” 
I know that some people in the House think that everything is commerce and that the creeping privatisation of the education system is a logical manifestation of the sacred concept of choice. The strange thing is that poor whanau and families do not get choices because they cannot afford them. To quote Professor O’Neill does the Minister accept “that children of rich families are deserving of a better education than those of poor families”? The marginalised young need more than a trip to McDonald’s; they need an equitable education system that values them instead of obsessively measuring them. They also need healthy basics in schooling starting with food. The Green Party was appalled to discover the Minister did not seek any advice or gather any evidence from either the Ministry of Health or the Ministry of Education before she ditched the school food and beverage guidelines. 
Teachers as reflective practitioners already know who needs help; they just do not have the time and resources to give it. The whole special-needs funding formula debacle is a case study in inequity as is the resourcing of early childhood education. 
Professor John Hattie is right in saying that the quality of relationships is the key to learning. Those who simplify his work and say that smaller classes are not needed probably have not experienced the difference between 30 wired 13-year-olds bouncing off the walls and 18 students with whom it might be possible to create a cooperative learning environment. Size does count in education at least. That is why the private schools put class size in all of their brochures. We do not need to change class size everywhere but we need to put State resources where the need is greatest. 
We might also like to start preparing our children for a different economy based on the reality of a finite world and a profound need for cooperation and non-violence. We need to teach them that we are fundamentally connected to the earth and what that relationship means. There is a whole economy to rebuild based on those principles. 
Last week I asked some young people who had been expelled or who had walked out of school what they needed and it sure was not a $3000 fine to their whanau. They said they needed no racism from teachers or from each other safety and respect and practical and relevant learning. If we want them to respond to us then we in this Parliament have to model these values. That is what I want to talk to the Minister about—not just the numbers. From the helicopter it is difficult for her to see the damage to the public school system but she will eventually have to come back down to earth. My fear is that when she does she will just bail out the private schools and ignore the real education funding issues. Kia ora tatou. 
SUE MORONEY (Labour) 
: 
 Financial reviews are fascinating processes because they require the select committee to take a helicopter view of what is going on in that particular portfolio. I need to inform the Minister in the chair Anne Tolley that when one is invited to take a helicopter view of the sector or advised that that would be a good idea it is not an invitation to hop in a helicopter and fly over buildings in order to look at them from the top; it is actually an invitation to look at the big picture and take a broad-brush view of what is happening in the sector. It is not an invitation for the Minister to take a helicopter ride. 
When one takes a proper helicopter view of the education sector it is difficult to take that helicopter view without realising the absolute importance of the early childhood education sector in the whole education process. I want to focus on that point because under Labour huge momentum was gained in the early childhood education sector. It came from being a very low-status sector to being one that was very highly valued by a Labour Government because Labour understood the importance of getting it right from an early age. We understood that if we invested in quality educational services very early on in people’s lives we would get better outcomes with in fact fewer resources as those people aged. 
The importance of the early childhood education sector gained hugely in status under the previous Labour Government. The 20 free hours policy that Labour put forward increased participation in early childhood education. In fact we heard in the financial review that the increase in participation was so high that it was larger than what the Ministry of Education had budgeted for. It had budgeted for a smaller number of 3 and 4-year-old children taking up the 20 free hours’ early childhood education. I know that was really disappointing for the incoming Government because National had campaigned long and hard to try to make sure that first of all providers did not buy into the 20 free hours concept and then it tried to convince families that they did not need it. So I know that National was very disappointed about the high uptake and the subsequent increase in participation in quality early childhood education for 3 and 4-year-olds. However despite National’s best efforts not only was it a success but also it was a raging success so much so that it outstripped the budget that the ministry had put aside in the financial year we are reviewing. 
But there was not only the 20 free hours policy there was also Labour’s policy to ensure that all staff in the early childhood sector would be qualified and registered teachers by the year 2012. That policy seems to have gone out the window. Pay parity also made a big difference in this sector because it acknowledged for the very first time in our history that the pay for teaching should not depend on the age of the child being taught. In fact some would argue that because it is so important that we get it right very early on we should be valuing more highly our early childhood education teachers. 
Under Labour this sector became very used to being highly engaged with Government planning. But no longer. Under the new Government the sector is completely unsure of the direction of the new Government in this regard because the sector has had no signs there has been no discussion and it has had no involvement in the future direction. I even found this in the Minister’s own electorate. It would not be that hard to go down the road and engage with the early childhood education providers in Gisborne but the Minister does not appear to have done even that. 
What has happened under the new Government? The first thing is that the funding for the nine new early childhood education centres in South Auckland that had been put aside by Labour has been put on hold by this Government. The Minister said she wants to increase participation in early childhood education and the first thing she did was to put on hold nine new centres for South Auckland the very area that is most in need in regard to increasing participation in early childhood education. 
What is another action that the Minister has taken? She has completely scrapped the improved staff ratios that were due to come into being on 1 July for children aged over 2. On 1 July this year improved staff ratios were on their way but the incoming Government has scrapped them. We questioned the ministry about the importance of having improved staff ratios in quality early childhood education. It said that there is no doubt that there is a very strong link between the quality of the education and the number of staff per child. 
COLIN KING (National—Kaikoura) 
: 
 When we compare the previous Minister of Education with the current one we see that today the National Government can be very confident that we have more character and get up and go in our Minister of Education the Hon Anne Tolley in the sense that she is going to make a difference. We are very pleased to see that. 
Let us have a look at the failed 9 years of the Labour Government when looking at the 2007-08 financial review of education. Education is recognised as the very foundation on which we build the opportunity and inspiration of a generation. When we look at the outcomes from that failed Government we see that one in five of our children is totally inadequate when it comes to being able to cope read write and do maths. What an absolute failure! The Hon Anne Tolley talks about parental involvement in education and being able to get a school report that is understandable so that parents can be engaged in education. But we hear the previous Minister of Education the Hon Chris Carter saying that teachers are fearful. I think we are seeing light at the end of the tunnel and we will see education growing and going onward and upward. 
Let us consider just for a few moments some of the debacles that occurred under Labour. Labour destroyed the technology teachers curriculum. The Correspondence School has been wrecked; it is no longer the iconic school that it used to be. What is happening to the agricultural curriculum in our secondary schools today? It has been totally wrecked and has been undermined. 
When it comes to truancy again Labour attempted to sweep it under the table to ignore it all together. It is very very disappointing to see that. We are now at a stage where we can do some improvements and look forward to some real achievement. Labour’s attempts were quite knee-jerk at the very end. When there were far too many early exemptions what did the Minister do? He just shut them down immediately without any consideration of what could happen. From that point of view a perverse effect was created. 
It was very exciting to go to schools in South Auckland like the decile 1 Southern Cross Campus which needed the opportunity to have hands-on learning. What did we see occurring under the previous Labour Government? That Government totally ignored the needs of the people in South Auckland. It was very very obvious to those people who had stood back and heard the rhetoric and the nonsense from the previous Government that that particular school was crying out for help. When we looked for its technology provision we found that it did not exist. It was an absolute failure. That is an indictment on the Labour Party member who represented that electorate. 
When we look through the education cycle over the last 9 years and particularly at the period of the financial review we see that Labour was strong on rhetoric. It was a very command-and-control environment. National has brought inspiration and opportunity to the table. It is about engaging in learning in a multitude of ways in a partnership between teachers parents and children so that we get some go-forward. 
One thing that really did disturb the Education and Science Committee during the financial review was the ongoing consideration of yet lack of substance around teacher training. We found that teachers were coming out from their teacher-training institutions and going into schools without even being able to operate assessment tools such as asTTle. That kind of assessment is very very important. If a teacher cannot clearly tell parents where their children are sitting in the education system we are failing that generation of children. 
It was a breath of fresh air when the Hon Anne Tolley announced that those schools that are performing very very well will have relief from the Education Review Office reports. I think that is a wonderful breath of fresh air. It allows the attention to be focused on those schools that need to be uplifted and inspired. I think that certainly is the way to go. 
Hon ANNE TOLLEY (Minister of Education) 
: 
 It certainly is an odd feeling to be standing in this House as the Minister of Education during a financial review covering a year over which I had no control whatsoever. In fact I may not even agree with some of the things that were done as they were done by the previous Government. 
If I have to use one phrase to sum up the Government that was responsible for this financial review 2007-08 I would say it was “promise and hope”. That is what the previous Labour Government was very good at especially in education. It made lots of promises hoped they would work and hoped the money would be there when the time came to implement them. The reality is that the money is not there and lots of promises were made for which no dollars were put up. One of the schools concerned was in Upper Hutt and I am looking at the local member over there but we will come to that. 
Let me talk through just some of the issues that have been raised in the House today. Early childhood education is a classic. The previous Government went out to South Auckland said it would build nine centres and named nine schools. One of those schools was a high school and one was an intermediate school. They are not very interested in having— 
Hon Trevor Mallard 
: What’s wrong with that? 
Hon ANNE TOLLEY 
: The schools were never asked whether they wanted to have an early childhood centre and whether they would work with one. The communities were never asked whether those were the places where the early childhood centres were needed. This new National Government will work with the community. We will not just build a great big centre and hope that people will come because they may well come but if we listen to the community we may find that those people come from another suburb and not necessarily from the ones where children need to attend an early childhood centre. 
This Government’s main priority for early childhood education is to increase participation particularly for Maori and Pasifika children. We are working very hard with the communities across South Auckland to develop what they want and what they think is appropriate for their children their whanau and their families. That is the first point. 
Secondly we heard the previous Minister of Education beating his chest about truancy. You know it was all promises. As the Maori Party speaker said the previous Government did not even make sure that an updated truancy survey was done last year. The only figures we have to go on are the 30000 students who are truant on any one day at the moment. 
Hon Trevor Mallard 
: Who was truant today? Who didn’t have the backbone— 
Hon ANNE TOLLEY 
: This Labour Party whose members are so vocal and keen on making jokes about it does not understand—and has never understood—that if young children are not at school they cannot learn. If they cannot learn they have no future. That party was prepared to condemn up to maybe 30000 students a day to that for the rest of their lives. 
I want to talk about bureaucracy because as I get around schools the one thing that I constantly hear about from principals and teachers is the amount of bureaucracy. I was at a school today where staff told me they are putting in $19000 worth of carpet—$19000 worth of carpet. It took 21 pages of forms and a property manager to manage it. That is just ludicrous. We will fix it and members will not see any of that in the next financial review. 
Let me come to national standards. The previous Minister of Education has been out there and he says he is hearing a lot about fear. I say to the previous Minister that he is talking a lot about fear. He is talking rubbish. Labour is misrepresenting what is a very good policy. In fact half the schools in the country are already doing what we are proposing they do so it is hard to understand what this kerfuffle is all about. One of those Labour members is very effective at using assessment to get effective teaching and student learning. He has already used it so we know that it works. You see we are a Government that is about doing what works—doing what works. 
The national standards will be in place by the beginning of next year. The first round of consultation with the sector will start at the end of next month and we are looking to lift educational achievement for every single student in New Zealand. We believe that whether they are Maori Pakeha Pasifika or Asian they all deserve an excellent education. 
Report noted. 
Crown Law Office 
Dr KENNEDY GRAHAM (Green) 
: 
 I speak to page 4 of the financial review of the Justice and Electoral Committee on the Crown Law Office and address one issue that was explored—namely the application of universal jurisdiction for war crimes. During the select committee’s review the Solicitor-General Dr David Collins provided an explanation of New Zealand’s approach to a person who may be in this country and who is suspected of having committed a war crime elsewhere. I appreciate the constructive response of the Solicitor-General to the questions that were put to him and the material that he subsequently supplied. Under the Geneva Conventions Act 1958 and the International Crimes and International Criminal Court Act 2000 New Zealand has established universal jurisdiction for the prosecution of anyone in that position the stated objective being to end impunity for perpetrators of serious international crimes. Yet in the only case to date where the issue has arisen we may have faltered at the first hurdle. 
When a former Israeli Chief of Defence Force was issued with an arrest warrant by a District Court during his visit to New Zealand the then Attorney-General stayed the proceedings the very next day. His decision rested on advice from the Solicitor-General that the evidence “could not be relied upon to show a prima facie case”. I hesitate to pronounce on that judgement by Mr Collins whom I hold in high regard but I note four points. 
First the Israeli Government had acknowledged to the United Nations Security Council that 14 civilians had been killed in an air attack for a targeted assassination in Gaza and the suspect had publicly admitted a decision-making role. Israel claimed self defence as legal justification yet council members including the US condemned the attack as being heavy-handed action. Israel knew that at least one civilian was with the targeted militia leader and that others might be in the vicinity. The action it appears constituted incidental loss of life disproportionate and excessive to any anticipated military advantage and thus there was a prima facie case for a war crime. Second under the 1958 Act the Attorney-General’s obligation is not simply to pronounce on the substance of evidence that a New Zealand resident may have supplied and that a judge may have decided upon but rather to search for suspected persons and bring them before our courts. Third although the consent of the Attorney-General is required before an information can be laid under the 1958 Act that is not the case under the 2000 Act. Fourth New Zealand cannot engage in self-absolution from such a criminal prosecution on the grounds that the International Criminal Court was not active on the matter because the primary responsibility under the principle of complementarity rests with national courts. For these reasons and having consulted extensively with legal scholars I come to the unavoidable conclusion that New Zealand failed its international obligations on this matter. 
That is history. I now address the current Attorney-General Christopher Finlayson who is held in high esteem throughout this country with the following points to ensure that we meet our responsibilities in the future—for these kinds of issues are certain to recur. I ask whether he can confirm the following: first that an information may be laid and an arrest warrant issued under the International Crimes and International Criminal Court Act 2000 without his consent; second that independent of the evidential merit of such an information the Government has an obligation under the Geneva Conventions Act 1958 to search for suspected persons and bring them before the courts of this country; and third that in deciding upon consent for prosecution his judgment of the national interest and the public interest will faithfully reflect the legitimate claim of any New Zealand resident in ensuring natural justice over suspected war crimes committed anywhere over and above any political interest in our bilateral relations with any other country. Thank you. 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 I thank the honourable member Kennedy Graham for raising those questions and for having given me advance notice of them because they are important questions and are worthy of consideration. 
The first question is answered thus: under section 13 of the International Crimes and International Criminal Court Act 2000 the consent of the Attorney-General is required before any proceeding for an offence under sections 9 to 11 of that Act can be instituted. As with all prosecutions requiring prior consent a person may be arrested on warrant before an information is laid but no information may actually be laid. In relation to the issue concerning the Israeli officer an information had been placed before the District Court and a warrant to arrest was issued on that information. That in fact made the proceeding a nullity because there was no jurisdiction to issue the warrant on the information and there was no evidential basis to arrest either. 
The second question the honourable member raised asked whether the Government had an obligation independent of the evidential merit of the information to search for suspected persons. If there is reliable information that a war crimes suspect is in a particular jurisdiction—say this country—then the State party has an obligation to locate that suspect. I understand that New Zealand did exactly that a decade or so ago in relation to a possible World War II genocide suspect. But the key point is that the Government can take no formal step without evidence of a standard necessary to arrest and detain. That principle applies whether or not the trial would be in New Zealand and whether or not the suspect would be extradited. The principle or obligation had no application to the Ya’alon case; the Government knew where the general was but until the evidence was sound it had no possible authority to detain him. My understanding is that whatever the relevant international obligation the obligation to search for war crimes suspects is subject to the usual safeguards in our criminal procedure. The material supporting the criminal allegations in the case the member has raised was essentially an information pack that had been emailed from a source in London and that contained no admissible evidence. So if the person concerned had been arrested there probably would have been an application to the court for habeas corpus and I imagine that it would have been granted. 
The third question the honourable member raised was about what steps the Attorney-General must take in determining whether the prosecution is to proceed and whether his judgment of the national interest will faithfully reflect the legitimate claim of any New Zealand resident in ensuring natural justice over suspected war crimes committed elsewhere over and above any political interest in our bilateral relations with any country. I agree that that is a very important question. The issue of national interest in relation to a criminal action is always a matter for the Attorney-General in Cabinet acting as the senior law officer. The nature of the relevant national interest will differ from case to case so no particular assurances could be given to the member as to the weight to be given to particular values. That approach was recently endorsed by the House of Lords in a decision about the BAE Systems bribery scandal—the member may well be aware of it—involving Saudi Arabia and The Corner House litigation where the Director of the Serious Fraud Office took steps in relation to a prosecution. 
I hope those answers satisfy the member. The matters are of great moment. I am grateful to the member for giving me the opportunity to at least reflect upon some of those questions and I would be happy to take the matter up privately with him at any time. 
Report noted. 
Ministry of Foreign Affairs and Trade 
Report noted. 
Department of Conservation 
METIRIA TUREI (Green) 
: 
 I want to address two issues in the financial review. The first is the Community Conservation Fund and the second concerns biodiversity protection. The Community Conservation Fund which was discussed at the financial review is a Green Party Budget initiative from the 2008 Budget. I am very pleased with the success of that conservation fund. In fact just last week the Department of Conservation announced the first round of successful funding applications whereby a million dollars was distributed to a large number—nearly 30 I think—of community organisations runanga and other organisations doing conservation work on public land. This fund is designed to support the work that is being done on public land such as dune lands wetlands and other areas that traditionally miss out on funding. It helps to build relationships between local communities councils and iwi. I note two particular projects: the Tomahawk Smaills Dune Restoration project in my area in Dunedin and the Hokonui runanga who received funding to do restoration work on the banks of the Mataura River—one of the most polluted rivers in the south of the South Island due to the high industrial pollution that goes into that river. I congratulate all of those who received funding from their applications and encourage all those who did not to apply again to the Department of Conservation because further rounds will be distributed. 
The second issue is around biodiversity protection which was mentioned in the review and I note that today the Parliamentary Commissioner for the Environment has released the report  
Change in the high country: Environmental stewardship and tenure review 
. This is a very serious report and it highlights a great deal of the concerns that the Green Party has expressed about the tenure review process and its failure to protect biodiversity values of the South Island high country. The South Island high country is public land it is owned by the Crown there are long-term leases for that land distributed to farming families for the purposes of farming that land and tenure review is the process for dividing that land between leaseholders for productive use and the retention of land of high biodiversity value in public hands for public use. 
The biodiversity land of much of the South Island high country is absolutely huge but it is also hugely threatened. It is not that the public would necessarily know that because the commissioner has reported that the 2008 Government audit of the tenure review process did not mention any of the adverse effects of tenure review and only highlighted where there was an advantage. But in fact we know that for every 6 hectares of high-value conservation land in the high country only 1 hectare is protected by the tenure review process. I say again that only 1 of every 6 hectares of the most highly valuable conservation biodiversity land in the South Island high country is protected by the tenure review process. Tenure review is failing to protect the biodiversity values of the South Island high country and as a result New Zealanders are losing their most valuable biodiversity in the high country because the tenure review process favours privatisation of public land. 
The impact of this privatisation on water quality is extremely serious and that was also noted by the commissioner in the report. The report identifies the serious risk that farming practices have for water quality even those in the high country which are often different kinds of farming practices than one might find elsewhere. None the less there is significant intensification of those areas of land that are privatised. The report states that the continued intensification of privatised leases will inevitably result in “significant adverse impacts on adjacent water quality” contrary to the primary objective of the Crown Pastoral Land Act which is to promote ecologically sustainable land management. 
The tenure review process is failing our country. It is failing to protect the water quality of those very important areas and it is creating a serious risk to biodiversity protection and water quality. The commissioner’s report also notes that it is threatened by the weakening of the Resource Management Act by National. As we know the National Government is engaged in the process of weakening the Resource Management Act to make it more difficult for New Zealanders to be involved in ecological protection. That is a disgraceful position for this Government to take. 
Hon TIM GROSER (Minister of Conservation) 
: 
 It is a great privilege to be involved with the Department of Conservation—I say “Conservation” because the speaking order has me listed down as the “Minister for Conversation”. 
Hon Darren Hughes 
: That’s true too. 
Hon TIM GROSER 
: Yes but I would like to reassure the member there is no truth that I am thinking of trying to become the “Minister of Silly Walks” as well. 
The conservation estate is a very considerable part of New Zealand’s heritage and we look at it across a whole variety of issues. The member who has just spoken Metiria Turei raised some of the most important issues and I acknowledge many of the points that she made. The conservation estate is a work in progress and there will always be issues that require us to address them. The tenure review which has just been published today requires very serious consideration by the Government and I absolutely take that member’s concerns on board. I will be working through some of those recommendations from the Parliamentary Commissioner for the Environment over the coming months. 
The issue of biodiversity is a massive responsibility for New Zealand as I have learnt from becoming the Minister of Conservation and getting excellent advice from the department. We have a unique country. The reason that New Zealand has this amazing biodiversity although so much has been lost since the intervention of people and the mammals that came with them is the unique circumstance whereby New Zealand became separated 80 millions years ago and floated away from Gondwanaland before the rise of mammals in large numbers. The result is that 25 percent of the remaining birds in New Zealand are not found anywhere else in the world. It is a great responsibility for us to manage but it is also a major economic advantage for us. 
We should not just see the country just in terms of promoting it for its own sake. It is also the infrastructure behind New Zealand’s most important industry and that is tourism. Tourism employs one in 10 New Zealanders. When I went on a familiarisation tour—much of it by helicopter I would like to remind members— 
Hon Darren Hughes 
: There’s tomorrow’s question. 
Hon TIM GROSER 
: Absolutely! I would like to remind the member that even on Friday Mr Finlayson the Minister for Treaty of Waitangi Negotiations and I were up in a helicopter above the Ureweras. Now members understand that being rugged outdoorsmen we did think about walking through the Ureweras and asking for leave from Parliament until about mid-2010. 
Hon Darren Hughes 
: I would’ve given that! 
Hon TIM GROSER 
: I know the member would have but we were not sure that the Prime Minister would have granted us leave for about 18 months. So we took a helicopter to look over Te Urewera National Park a magnificent dark and mysterious part of New Zealand. It is another aspect of the whole responsibility that goes with the conservation lands held in perpetuity for our ancestors to come. 
The marine environment is something that needs closer attention. I think it is now pretty much an accepted consensus in New Zealand society—and it is certainly a view shared by all political parties—that we have to maintain conservation values on the estate. It is always going to be a struggle to manage essentially one-third of the country on a budget of around $300 million. Imagine if one was maintaining property with the equivalent asset value on $300 million! But the financial reporters do an excellent job they have been doing an unqualified audit and I think that we are very privileged to have New Zealanders who are dedicated to this. 
It is not just the people who work permanently for the department. I recall from the briefing for incoming Ministers which I studied pretty carefully that there were 1858 full-time equivalent employees in the Department of Conservation. Volunteers are also important and that is the point the previous speaker made. There are something like 7000 volunteers across the country so there is huge buy-in to the work of the department from our communities. I think that together they do a pretty good job but there are great challenges ahead. 
I have been told that the estimate of the cost of fixing up Lake Taupo and the Rotorua Lakes is $223 million. I do not know how much flexibility there is around the estimate but that is the figure I have been given. Yet against that I have another estimate which is that the value from the trout fisheries to the Tongariro-Taupo area is $80 million a year. I think it puts into perspective the sums of money involved and it reminds us that we should look at this in terms of it being a great economic asset to New Zealand. 
When I went down to the South Island to try to get a better handle on the issues and visited the Fox Glacier after the tragedy of the two Australian people of Indian ethnic descent I found that— 
Hon Darren Hughes 
: “Minister of Conversation”! 
Hon TIM GROSER 
: —yes the “Minister of Conversation” is continuing—650000 people of whom the Department of Conservation believe 75 percent were probably foreign tourists visited the Fox Glacier and the Franz Joseph Glacier. The Milford Sound had 440000 visitors of whom 96 percent were estimated to be foreign tourists. That gives some idea of the huge economic investment that we have as well as other responsibilities we will have in the future. 
Hon Steve Chadwick 
: We look forward to the Budget Minister. 
Hon TIM GROSER 
: Indeed. 
Thank you very much for the opportunity to make some initial comments on the department. I look forward to working with it in the next year. 
Report noted. 
Ministry of Transport 
Hon DARREN HUGHES (Labour) 
: 
 It is a pleasure to speak to the financial review of the Ministry of Transport and to follow on from the self-described “Minister of Conversation” the Hon Tim Groser. When I was listening to him speak about the Department of Conservation I found it hard to believe that he had delegated the entire thing to the Hon Kate Wilkinson. He seemed to be so keen on it—but there we are; that is not what the schedule of delegations revealed last week. 
 The period under review by the Committee of the whole House was a quite exciting period for the transport portfolio. Quite a lot of important decisions were made and there was vision and a strategic view about where the New Zealand transport sector could be heading. When we compare that period with the one we find ourselves in today we can see what a good period that was for New Zealand. Some true decisions were made across a whole range of issues that matter to the people the businesses and the community and social organisations in this country. That is the period that the Committee finds itself looking at. It seems that many of those very fine decisions and the direction we were heading in have been abandoned in the current period and the Committee should be asking the Government to account for that. 
Hon Members 
: Oh! 
Hon DARREN HUGHES 
: Members opposite laugh but when some of the figures are thrown out at them they will realise that the Government they are supporting has abandoned a balanced view towards transport. That is the great tragedy of this: they have allowed a balanced view—a view that looked at a whole range of forms of transport—to be thrown out the window. They laugh and throw off at that because they are interested in roads alone. 
Roads are a very critical part of the transport system for New Zealand. Every single member agrees with that but we say that it is not the only form of transport that is important. The Hon Parekura Horomia points out to me that it looks as though the only multimodal approach the Government is prepared to take is with regard to helicopters. When it comes to helicopters Tory Ministers cannot wait to climb into them. We know that the Minister of Education was unable to be held to account today because she was busy in a helicopter. Tim Groser made it a point of great privilege that he was in a helicopter and the Minister of Internal Affairs is leaving the Chamber right now to go in a helicopter—it may well be that he is bungy jumping from it rather than actually taking a trip. Of course the Minister of Transport has been going around the Wellington region in his helicopter presumably right along the fence line he sits on with regard to any decision about transport for the people of this region. So Mr Parekura Horomia is quite right in that respect. 
So what did the Minister inherit in terms of this financial review? He inherited a transport system that focused on how we can manage a system consistent with the environment. 
Hon Members 
: Oh! 
Hon DARREN HUGHES 
: The National members laugh and there is a smirk on the face of the Minister in the chair the Hon Steven Joyce. I am yet to work out whether that is a permanent affectation or whether it is in response to some of the points being made in the Committee. I guess time will tell in that respect. 
The previous Labour Government put sustainability at the front and centre of the transport sector and that has been thrown to one side by the way in which the Minister has a focus on roads only at the expense of public transport and alternatives to roading. 
I ask the Minster whether he is in support of the previous Government policy statement with regard to the halving of greenhouse gas emissions for the transport sector by 2040. That is what he has inherited in the financial review. He has inherited a commitment to reducing greenhouse gas emissions by half by 2040 and I would like to know from him whether he will meet that commitment and if so how he is planning to do it. 
I would also like him to explain to the Committee why he has cut $15 million of expenditure from cycleways and walkways as is shown in his very own ministerial Cabinet paper. The increase in that mode of transport has been cut by him when at the same time we are told by the Prime Minister that one of the great saviours from the global financial crisis will be a bicycle lane across New Zealand. Those of us who were up in time to watch  
Q 
+ 
A 
 on Sunday morning saw that the Minister of Finance had very interesting body language and quotes about that particular project. Once that idea was handed to John Key by a real estate agent—it had been given on the back of an envelope to the Mayor of Auckland who handed it to the Prime Minister—it became Government policy for the economic recovery. We are holding the Government to account on that and I would like to know from the Minister of Transport why he has reduced funding for cycle and walking facilities by $15 million which was projected in the Government policy statement. 
I would also like to know from him whether he is interested in safety on the roads. He has cut $50 million from future spending on road safety according to his recent announcement. 
Hon Parekura Horomia 
: How much? 
Hon DARREN HUGHES 
: He has cut $50 million. I would like to know from him whether he is in support of the moves by the previous Government to reduce the road toll in New Zealand. 
DAVID BENNETT (National—Hamilton East) 
: 
 After that speech from the Labour member Darren Hughes we need to get some facts straight. It is simply rubbish that National is planning to cut out public transport. 
Hon Darren Hughes 
: It’s true. 
DAVID BENNETT 
: It is not true at all. The reality is that National is committed to all forms of transport. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
DAVID BENNETT 
: Just before the Committee rose for dinner I spoke in reply to what Labour members had been saying about transport planning and funding under this new National Government. They were concerned about what they perceive as a lack of focus on public transport and environmental initiatives. We need to dispel those rumours straight away because National is very much focused on public transport and environmental concerns. The transport portfolio gives us a manner in which to focus on those concerns. 
Hon David Carter 
: Sensible. 
DAVID BENNETT 
: I think Mr David Carter is saying that it is a sensible solution and that is quite true. When we look at public transport we see that the National Government has committed to the electrification in Auckland which is the big public transport issue in Auckland at this time. The Labour Party members stand up and say that we are not committed to public transport but that is not true. National has made that commitment; we are very much in the mode of wanting to see that commitment to that public transport element through the electrification of the trains in Auckland become a reality. 
If we look at the environmental concerns that were raised by Labour members we see that they need to look forward at how transport planning will be in the future. One can see the movement that the US has made through the Obama regime to get cleaner greener fuel sources for cars. In New Zealand we will adopt that technology at some point in time and we will find that in 10 years’ time the cleanest greenest form of transport will be electric cars on roads. That is the future of transport solutions. It is not far away. There have been developments in some of the big US universities in the last couple of weeks; they are moving towards that technology and trying to make it a practical reality. The US administration is supporting that and I think that National’s endeavours to get some of our main structural roads finished will actually have big environmental paybacks in the future. New Zealand is setting itself up to take advantage of that clean green technology in the future. 
That leads on to what is probably the biggest initiative and something that the Minister needs to be wholeheartedly congratulated on: identifying roads of national significance. That is a major structural change to the thinking of transport solutions in New Zealand. New Zealanders traditionally thought of all roads all public transport and all other forms of transport together and dealt with them in one process through the regional land transport committees. We have found that some major strategic roads need to be taken out of that process and put into a much more simplified and quicker process that enables the investment the Government makes in nationally significant roads and other structures to become roads and structures that get built on time and for the future of the economy. That will provide efficiency and economic growth for this country. The Minister of Transport has taken that very bold step and it reflects what has been done in many other countries like Australia. He should be congratulated on his bold approach. He is showing vision and direction for an industry and a portfolio that has really lacked that in past years. If we look at what will happen with Auckland’s governance issues and put that together with those bold steps that the Minister has pronounced we will see some major solutions coming forward that will deliver for New Zealand transport in the future. 
If we look at what the previous Labour Government did we see that it went through a series of transport Ministers none of whom achieved anything in their portfolios. Those transport Ministers were really just biding trying to blame the previous transport Minister or past Governments. They did not have any visible solutions and it was not until the National Party came into office that we saw some reform in process and some delivery that will bring about the necessary completion of roading projects and of the public transport network throughout New Zealand. The Labour Party initiated a series of reviews to try to hide the issues around public transport. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 It is a pleasure to speak on the transport portfolio this evening. I first congratulate the Opposition spokesperson on transport Darren Hughes on his fantastic haircut. It is very impressive. I recommend something a little more utilitarian; perhaps something like Mr Bennett’s might be more in keeping. 
We are of course referring to the 2007-08 year and I think the trouble with the previous Labour Government is that a lot of the stuff it talked about was puffery if I may say so—puffery. There were so many things—there were so many strategies within strategies and reviews within reviews—that we ended up with a lot of very impressive bits of paper and not a lot to show for it. By way of an exhibit because we are referring to the 2007-08 year I refer to  
Sea Change: Transforming Coastal Shipping in New Zealand 
 which I think is a fine document in that I obviously support coastal freight and freighting generally. This particular document is 36 pages in duration. Over the dinner break I took the liberty of working out that there are 14 full pages of photos in this 36-page document. There are four pages of maps and the equivalent of seven pages of white space. So of the whole 36-page strategy document that the previous Government oversaw 25 pages are what one might generously call illustrations. 
I think that was a little bit the story of the previous Government’s approach to transport. The honourable member opposite Darren Hughes mentioned an approach to road safety. He was I thought quite negative about the new Government’s approach to road safety. One of the big things we need to do is improve the quality of our highways. I refer to one that was in his former electorate of Otaki which is the road from Foxton to Paremata. There were 81 fatalities on that highway over the last 10 years and 256 serious injuries. We can tackle that in many ways but one of the ways we have to do it is to improve the quality of the State highway infrastructure. I make absolutely no apology for taking that approach. 
I draw attention also to the actual growth figures in the National Land Transport Programme going forward because those are the ones that have been criticised so much by the Opposition. There are some interesting numbers. The actual allocation for walking and cycling facilities is up 42 percent for the next 3 years over the allocation for the last 3 years—a 42 percent increase. I freely acknowledge that that is not quite as much as it would have been under the previous Labour Government but it still remains a 42 percent increase. It is not a cut. Renewal of State highways is up 12 percent maintenance and operation of State highways is up 16 percent renewal of local roads is up 19 percent and maintenance and operation of local roads is up 16 percent. 
Road policing is a very interesting one that is often talked about. The allocation for road policing in this country 2 years ago was $232 million. This year it is $273 million—it has gone up $40 million over 2 years and I salute the party opposite for actually bringing that forward. We have said that that is a lot of growth in 2 years. We are now taking it to $291 million then to $300 million and then on to $309 million yet the member opposite stands up and says during his 5 minutes that we are cutting road policing. We are not cutting road policing; we are growing it. 
More important we are also committing to public transport. The commitment to public transport is huge over the next 3 years. Public transport services are going up from $484 million—forget what Opposition members say this is what they actually did over the last 3 years—to $633 million over the next 3 years which is a 30 percent increase over 3 years. 
Hon Paula Bennett 
: How much? 
Hon STEVEN JOYCE 
: Thirty percent. It is a 30 percent increase over 3 years. The Labour members are trying to say that there is some sort of decline but there is not. 
On top of that the Government is committed to the Wellington railway. It is committed to the double tracking in Auckland which I freely acknowledge is an initiative started by the previous Government. It is also committed to electrification and to KiwiRail purchasing the trains. All up around $1.6 billion has been allocated in Auckland alone. 
So members should pity the poor motorist who finally gets a deal under this Government! Members should pity the motorist who will finally having paid his or her road taxes get an investment back on the roads from this new Government! Instead of a 9 percent decline in State highway infrastructure spending which was projected by the previous Government for the next 3 years we will see a very significant increase because of this transport reality. As much as we would like it to be something else it is not different. 
Hon DARREN HUGHES (Labour) 
: 
 It is a great privilege to follow the Minister of Transport Steven Joyce. I appreciated his flattery. The problem at the moment is not that I have had a haircut but that I need one and I have also completely run out of hair product; the Minister has probably never found himself in that scenario. 
We cannot quite see eye to eye on that issue nor can we see eye to eye on his commitment to public transport. Steven Joyce just stood in the Chamber and said that he was increasing the amount of money available for public transport service; he said that he was increasing it to $633 million. But according to the previous Labour Government’s policy statement for the 3 years we are heading into the funding was meant to be $666 million which is probably quite a good figure for the Minister’s more sinister political motivations. That is a cut of $33 million out of public transport at a time when Governments all over the world are looking to public transport not only to try to make a difference in their economies but also to move more people by public transport. This Government will spend less on public transport and on alternatives to roads than the previous Labour Government had projected funded and budgeted for. What other country in the world is doing that? 
Hon David Parker 
: Zimbabwe. 
Hon DARREN HUGHES 
: Zimbabwe is doing that apparently. Well that could be the kind of political intrigue we would be expected to believe. 
We can see in the figures that this Minister is presiding over a cut in public transport services—that is certain. I also point out that the road policing allocation which the Minister waxed eloquent about falls from $949 million to $900 million. That is a $49 million cut in road policing in our country. The previous Government had committed to reducing fatalities on our roads to 200 per year. I asked the Minister whether he would address road safety but he said nothing. 
The point I am most surprised about with regard to Steven Joyce is that he did not mention the Waterview Connection whatsoever in his speech to the Committee. We know that the Government is not committed whatsoever to the Waterview Connection in Auckland. 
Hon Paula Bennett 
: You could run for Mt Albert. 
Hon DARREN HUGHES 
: If the Minister does not stop squawking I might come and run against her in Waitakere. That would wipe the smile off her face. I tell members that if ever someone got lucky in that respect it is the Hon Paula Bennett. I invite her not to take me on too seriously in that particular respect. 
We need to know what the Minister is planning to do with the tunnels in the Waterview Connection. We know that that road was fully consulted on with the people of Auckland but it is not as if he pays much attention to that consultation. He rode roughshod over what the people of Auckland had planned for their transport. He will be taxing the whole country an extra 6c a litre more than they are paying for petrol today in order to fund half of the transport projects that Auckland requires. When it comes to Auckland’s western ring route the Minister through his plans for the Waterview Connection will be cutting out 400 homes. We know that he is not committed to the tunnels despite the fact that the public was committed to them. 
What is he doing to try to complete the project? Well first of all he is blowing out the costs himself. One of the things that we have learnt about the star of John Key’s Cabinet—mind you that is not much praise really when we consider what the alternatives are; it is only the fact that we do not know much about him that makes him a star—is that he has completely turned all the funding for that project on its ear. For example he has said that he would like to add additional traffic lanes to those that people were consulted on. He said that he wants to include the north-western motorway at a cost of $240 million in the cost of the Waterview Connection. He then threw in $500 million worth of financing costings for that project which no other project is subjected to. He said that he would put that extra half a billion dollars in and then he went on television and said that the cost of the Waterview Connection had exploded from $1.8 billion to $2.27 billion. 
Well it is just not credible. It is not credible for the Minister because he wants to try to mow down people’s homes—hundreds of homes—in Auckland to play skulduggery with the figures in order to change the facts that the community has been consulted on. He may be a marketing genius—we know that—but he has to start playing on a level playing field with the figures with regard to transport. Whether it is public transport in rail water services buses or an alternative to roading like coastal shipping this Minister is not being up front about the costings he is putting into the transport proposals that he is riding roughshod over. 
The Waterview Connection is critical for Auckland as it completes the western ring route yet this Minister is not showing any commitment to it whatsoever. He did not even mention it tonight. He tried to get out of the fact that he is cutting $49 million out of road policing. He said that he was spending more money on roading but he did not tell the country that he had redirected $420 million away from what he calls non - State highway classes. Most of us call that public transport—buses trains ferries cycleways and walkways. Most of us common people call it that. [ 
Interruption 
] Oh I keep forgetting the helicopters that the National Government is so proud of. 
Hon STEVEN JOYCE (Minister of Transport) 
: 
 There are a few things we cannot let pass completely there. Firstly the previous Labour Government’s commitment to the Waterview Connection project did not involve any money. That is the unfortunate part of it. There was no money involved in it at all. It was a commitment to the extent that those members liked the idea and they also called for a report on the business case for that particular road. 
Hon Darren Hughes 
: So did you. 
Hon STEVEN JOYCE 
: No that was the report of members opposite. I actually quoted from the previous Government’s report prior to Christmas. The one with the funding in it was the previous Minister of Transport’s report which was ordered before I arrived. So all I did was to dutifully roll up and say: “Here is the report that was asked for before I turned up.” Any references to the funding costs are there because the previous Government asked for the report. 
The $2.77 billion—which I think we can all agree is a lot of money—that includes the element of funding was in the report that was asked for by the previous Government. The opportunity cost if you like to go to three lanes in each direction is $3.2 billion and I think it is fair enough. 
Hon Darren Hughes 
: That was never the plan. 
Hon STEVEN JOYCE 
: If members have travelled on that road in that part of Auckland—and I take it from that comment that the Hon Darren Hughes has not—they will know that if we were to open that road within a very short period of time we would have what is known as gridlock in Auckland. A lot of people have experienced that because Wellington politicians think they know what is best but they do not actually go to Auckland to find out what the situation is. The situation in Auckland is that if we do not plan for that road to go three lanes in each direction then truly we have no understanding of the way that that part of the city is developing. 
The likely cost is around $3.2 billion. 
Nathan Guy 
: How much? 
Hon STEVEN JOYCE 
: It is $3.2 billion if we go to two three-lane tunnels. The cost goes up from $2.77 billion to $3.2 billion. 
Hon Darren Hughes 
: What rot! 
Hon STEVEN JOYCE 
: The member opposite is critical because the new Government might wonder whether there is another way as that figure just happens to be somewhere between 1.6 percent and 1.8 percent of New Zealand’s GDP. 
This is a small matter but it is an important matter. I understand completely the issues that we have with community problems when we do roads—I absolutely understand that—but we also have to have an understanding of the opportunity costs of such large investments particularly in this case when there was no budget for it. 
Another project that did not really have a budget was one that is—or was—very dear to the Hon Darren Hughes’ heart which is the Transmission Gully project. The previous Government notionally provided $400 million towards that project on the ground that the other $600 million be provided in some way shape or form by the Wellington Regional Council doing raffles and things and by a regional fuel tax that would not have even come close. That was Labour’s funding of Transmission Gully. 
Then there were a lot of other projects that the previous Government did not fund. It did not think of the Puhoi to Wellsford project. There are some Christchurch motorway projects which my colleague the Hon David Carter would know about. Those took years and were not happening. 
Hon David Carter 
: They kept promising. 
Hon STEVEN JOYCE 
: They kept promising. There was the Tauranga eastern corridor; the Waikato Expressway which I am sure Labour announced would be completed quite quickly a number of times; and the Auckland Victoria Park bottleneck which I was informed by the New Zealand Transport Agency only a week ago might have had to go back further if we were to have stayed with the previous Government’s funding plan. We have had to bring it forward by 10 months and if Labour had stayed in office it would have been put back further. 
Hon Darren Hughes 
: That’s wrong. 
Hon STEVEN JOYCE 
: Well that is what the New Zealand Transport Agency told me. 
Hon Darren Hughes 
: We announced that in our election policy. 
Hon STEVEN JOYCE 
: The member can announce it all he likes but if he does not fund it then nothing happens. That is the reality of it. I think we need to get that point across: the member can announce whatever he likes but if the Government does not put up the money it does not happen. That is the reality unless we put up some decent funding. 
What we will do over the next 10 years is go from spending $6.6 billion to spending $10.7 billion on State highway infrastructure. That will make a difference. That will see some of those projects completed and some others significantly advanced and that is the deal. If one is to talk about doing things then one has to be prepared to step up and do them on behalf of taxpayers. That absolutely has to be done alongside public transport projects in Auckland Wellington and Christchurch. I completely understand that in particular because there is no way that there is a single modal solution in those cities. Once the Waterview Connection and Victoria Park projects in Auckland have been done there are some arterial roads to do but after that the focus is public transport. We all have to understand that and we accept that. That is why the new Government has committed to the $1.6 billion that is involved in public transport. Thank you. 
Report noted. 
Ministry of Social Development 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 In 2007 during the period of this financial review the Maori youth unemployment rate was a massive 23.7 percent. As this Chamber will know the youth unemployment rate records the number of unemployed youth aged between 15 to 19 years divided by the total number of youths in the labour market aged between 15 to 19 years. For the European population the rate was only 11.4 percent. That is a 12.3 percentage difference. The Maori youth rate is more than twice as high as the European one. 
I want to set the context for looking at the review of the Ministry of Social Development by placing our rangatahi firmly in the centre. At this point in time there are almost 4000 young Maori job seekers out there. In the Maori Party our biggest concern is that they are active and engaged in further education training and employment in society. The report of the Social Services Committee into the financial review of the ministry gave considerable focus to the area of unemployment. It is of interest that just as the previous Government ignored the very substantial inequalities related to the Maori unemployment rate so too did the committee’s report. It is silent on the Maori rate. This is of such concern because the committee’s report puts the microscope on to the strategies in place to prepare for a possibly large rise in unemployment. 
It was interesting to hear of the twin dilemmas facing the ministry: the challenge of being able to absorb unemployed people while also staying on top of its workload. We know that the ministry prides itself on measures such as being able to quickly place job seekers into either a transition service or a training seminar within the space of 28 days. For us we think those measures are vital to keeping the workforce dynamic and to responding quickly to the needs of the people. But we simply say that if we value the diverse populations that comprise the New Zealand workforce we must ensure their specific needs are considered. 
There is no dispute that Maori unemployment given all available scenarios is likely to be at least double the general rate. Te Puni Kokiri suggests that Maori unemployment will rise from 8 percent to something like 12 to 15 percent by the middle of next year. We know the history and we also know that the initial signs of an economic slow-down are being felt in construction tourism and primary industries. Those are all industries in which Maori are strongly represented. We know the dramatic overrepresentation amongst Maori youth. 
With all of this information in front of us it was disappointing that not one of the Labour Green or National members on the Social Services Committee raised issues to do with Maori unemployment. Fortunately we are now in the position where a Maori Party Minister the Hon Tariana Turia has the delegated responsibility for Maori and Pacific employment issues within the social development portfolio. I believe that this is a very positive development for Aotearoa. 
Mrs Turia is someone who used to be the southern regional coordinator of the Maori Access training programme who managed the Whanganui Regional Development Board Trust who was a service broker for Te Puni Kokiri and who was a founding team member of the Te Awa Youth Trust. Above all she is someone who is passionate about whanau ora. I am optimistic that the genuine concern Mrs Turia has for Maori and Pasifika employment will be vital in ensuring that the Ministry of Social Development in preparing for unemployment truly prepares for the needs of all New Zealanders in managing any rise in unemployment beneficiaries over the next year. 
There are hard times ahead; none of us deny that. The key point I have been making within our communities is that the onus of responsibility must not be that of the State alone. This is the ideal time for collaboration to be the buzzword. It is good to see in the committee report that the ministry is developing industry partnership with a large number of companies and industries. What we in the Maori Party would like to see is the initiative taken to establish partnerships with iwi and Maori-owned business enterprises to achieve better employment outcomes for all Maori and in particular youth. There are iwi out there with all the infrastructure and enormous enthusiasm for working together to mitigate the impacts arising from the recession. Thank you. 
JO GOODHEW (National—Rangitata) 
: 
 I rise to speak in this financial review of the Ministry of Social Development. Top of the list for the Social Services Committee when we conducted the financial review was capacity within the ministry capacity that currently existed during the financial year under review and capacity that we were able to look at in the 6 months since the review. Each of the committee’s members were very interested to hear what the ministry’s capacity was and how it would meet needs within the current economic climate. Topmost of just about every front page publication around the country is either a story about a potential redundancy or a business going under or things the Government or the community is doing to alleviate or deal with the current needs of those businesses and communities. 
First of all the select committee questioned the chief executive about the ministry’s capacity when it came to social workers. We were advised that its social worker numbers had stabilised and its turnover had significantly reduced. Although there was talk of a pay equity investigation for social workers it had become increasingly not necessary. At one time there was a difference of some 9 percent between male and female social workers’ pay but it was now down to just over 1 percent making the decision to can that pay equity investigation most appropriate. 
We also questioned the chief executive about value for money and we were heartened and very impressed to hear that there had been two value-for-money studies since 2005. In fact it was a priority for quite some time for this particular ministry to prepare itself to better meet the needs of New Zealanders. This sharpened the ministry’s pencil for the onslaught that has subsequently come and will continue to confront the ministry head-on. In gearing up for meeting the challenge the ministry told us about Community Link Centres and there are now five of those open around the country: in Flaxmere the original—I believe—in Linwood in Christchurch in Huntly in Naenae and in Ashburton. 
Hon Ruth Dyson 
: You’ve done nothing on those. 
JO GOODHEW 
: Members opposite are becoming rather upset. I have not for one minute claimed that this initiative is the work of the Government though I was absolutely delighted to welcome the Community Link Centre to Ashburton. It was the work of the community and the Ministry of Social Development and I was very pleased about that. Some 560 families have already been through Community Link Centres around the country and that is something to celebrate. In Community Link Centres those families can have their needs addressed all in one place. They are not traumatised by having to tell their story over and over again. 
The ministry also supported the Prime Minister’s Job Summit in Auckland and the regional and local summits around the country. It was at my local summit—the Aoraki summit—that I was really heartened by the number of fantastic ideas that came out of that community collaboration with community non-governmental organisations community business leaders and other types of community leaders all getting together and coming up with some great ideas of how they could work together and use Government resources to help that community to keep people in jobs. 
 I will also briefly touch on a programme called PATHS—Providing Access to Health Solutions. This is a programme that has been running for some time now. I am told that 1072 clients have participated in the programme in the year under review. Of those clients 20.1 percent found work 13.8 percent ceased to be on benefits and 6 percent increased their part-time earnings. Not for one minute am I pretending that the initiative was an initiative of this National Government. We are very supportive of a very good initiative that is working in New Zealand and we can certainly recognise good things when we see them in action. But it is apparent that this National Government needs to sharpen the focus because the ministry will have to do so much more work and will have to be very very clearly focused on the people in our community who will need assistance. In this time of economic hardship when families are under stress we know that Child Youth and Family must be more responsive than ever before to the stress within families and to rising unemployment. Thank you. 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Mr Chairperson thank you for the opportunity to take a call on the financial review of the Ministry of Social Development. First of all I recognise the speech from Mrs Katene and her comments on youth unemployment particularly Maori unemployment and on how important that issue is. When we were discussing delegations we looked at where the commitment and interest were directed. Certainly from Minister Turia that interest was directed towards Maori unemployment rates and how she could help with employment which is certainly what she is knowledgable about. 
I assure the Committee and anyone out there who is listening that not a day goes by in a meeting with her that she does not mention whanau ora what that means and what she believes it can mean for Maori. We certainly support her in that area and we have some work to do on it over a period of time in order to get where we want to be. The fact is that if we keep doing what we are doing in respect of Maori unemployment we will keep getting the same results. In these tough economic times that will mean more Maori falling by the wayside. We are very aware of that and know that we have to look at some different initiatives. 
I am heartened by the Youth Guarantee and the youth transition services. We have seen some of them working quite well in the past and we have an opportunity to do some of them a bit differently in order to get them back to grass roots to give a level of flexibility to different communities and to see how they run unemployment for those young people and how they look at that transition. The reality is that some young people may need only a little help and others will need a lot more help. We need to have those sorts of contracts with that sort of flexibility. That is where our attention will be going. 
There is no mistaking that the attention of this Government has been on unemployment numbers and on people who are losing their jobs hence within weeks we saw the ReStart package. It was only ever meant to be a backstop and targeted to those who need it most but we thought it was just so critical to lend that helping hand when people are at their most vulnerable and have just discovered that short sharp shock of losing their job. It was with a sense of pride that before Christmas we brought in that ReStart package to acknowledge that situation. 
Unemployment numbers are currently at about 36000. We expect that number to keep growing. We see it fluctuating from week to week. We saw a week about 2 or 3 weeks ago when we had about 960 new people on the unemployment benefit. That dropped back down again—thank goodness—last week. Seasonal workers are still coming through. The numbers we see at Work and Income New Zealand show that about 37 to 38 percent of people who are walking through the door to go on the unemployment benefit are actually doing one of the seminars or courses and then not needing to go on the unemployment benefit which is great news. To have those sorts of numbers turning over tells us that the labour market is still working. It may not be working perfectly—certainly we are seeing people lose jobs and I do not want to undermine that point—but we are here to offer assistance for those who need it. 
Before Christmas we moved another 60 people into the front line to work with people who are coming in to go on the unemployment benefit. We are in the process right now of moving about another 100 on to the front line. Not all of them are coming from the back office to the front; some are moving from different front-line office roles into that unemployment benefit role. We expect to do that again and to see more moving into that role. 
Our focus is very much on people keeping their jobs where possible but if that is not possible our focus is on those people getting a job as quickly as possible. It means that some people will have to shift their expectations sometimes salary-wise and in terms of what that job actually looks like but we believe in New Zealanders’ ability to dig a bit deeper and to come across with that real Kiwi grit. I actually think most New Zealanders want to work. They want to be providing for themselves and they have that sense of pride in looking after their own families. There has been a shift in Work and Income New Zealand to supporting those people in that respect so that there is a helping hand when they need it while ensuring that their focus is on getting a job and keeping a job—any job. That is what we have to do over these next few months which will just get tougher quite frankly. 
We are aware of the situation we know what we need to do and we have confidence in New Zealanders and their abilities—[ 
Interruption 
] We can hear a bit of harping coming from members on the other side. We saw a Labour Government that did nothing. For three consecutive quarters—that is three consecutive quarters—we saw unemployment rising. We saw numbers going up from March 2008 to November 2008 from 3.7 to 4.2. What did Labour do? Labour did nothing. That is the reality: Labour did nothing. In fact one of the members in this Committee was known to say that 29000 people losing their jobs was “not a bad thing”. We saw people losing their jobs under a Labour Government Labour members shutting their eyes and putting on their blinkers and nothing happening. 
Report noted. 
Department of Labour 
DARIEN FENTON (Labour) 
: 
 It is a pleasure to take a call on the financial review of the Department of Labour in this Committee stage. I will focus on three or four areas in the review report from the Transport and Industrial Relations Committee. Those areas were interesting to the Labour members of the select committee because they are about issues that have arisen in the operational period since the National Government was elected. 
I will start with the 90-day bill on probationary employment. One of the questions the select committee asked is what is happening with the 90-day bill. It asked what protection there is and what measurements there are for ensuring that the 90-day legislation is having if you like the desired effect although on this side of the Chamber we would say that the desired effect of the legislation is opposite to what we want. The select committee asked what protection and what advice the Minister of Labour Kate Wilkinson and her department are giving workers on this legislation. As far as we could tell from the answers from the Department of Labour the answer is none. Employers are certainly getting plenty of attention and advice including a make-up contract or employment agreement on the website about how they can implement this very very unfair and unreasonable law which by the way was passed under urgency before Christmas without select committee input. We on this side of the Chamber say the law is completely unnecessary and unfair. 
The other thing is that there are still many many outstanding questions about the 90-day bill—or about the resulting Employment Relations Amendment Act 2008. I must say that at the select committee the National members got quite upset when I called it the fire-at-will bill. However that is how it is known in the community by workers and that is what they will continue to call it. As I said I am concerned that there is nothing for workers. As far as we could tell there is no advice and no monitoring of how this Act is affecting workers. We cannot see anything and that was confirmed by the department. 
There are still many questions around the operation of the 90-day bill—or the fire-at-will bill. One is about its impact. This question has certainly been raised by members of the public coming to us and discussing with us issues around immigration and work permits. They have asked what happens if someone gets a work permit and then they get fired under the 90-day legislation and no reason is given because the boss does not have to explain what it means. What happens to those workers? We still have not had a satisfactory answer from the Minister about what happens to workers who are fired under the 90-day legislation who then go to Work and Income to apply for the benefit—or perhaps the wonderful ReStart package that we have heard so much about but that nobody seems to qualify for. What happens to them? The employer does not have to give a reason for why a worker has been fired. Under the current situation those workers are classed as “dismissed” and therefore have a 13-week stand-down period. 
The second issue I want to mention that came up in the report was the New Zealand Skills Strategy. We have heard in this House after questioning by members on this side of the Chamber that the Government is completely up in the air about this strategy. The strategy was carefully worked out between the New Zealand Council of Trade Unions Business New Zealand the Industry Training— 
Hon Paula Bennett 
: That is so last year. 
DARIEN FENTON 
: There we go. I invite the member to tell the Council of Trade Unions Business New Zealand and the Industry Training Federation that the strategy is so last year. The Minister Paula Bennett thinks everything is so last year because she has no new ideas of her own. That is disgraceful. 
The select committee asked the Department of Labour about what has happened to the New Zealand Skills Strategy and it was told that the department was holding resources on the strategy and awaiting advice from the Government. In fact that was the department’s answer on many of the strategies and things that the department has been working on. The Government has no idea. It does not understand skills implementation. It does not understand the need for skills development as part of our future. It was quite amazing; we have heard the Minister confirm that. 
The third thing in the report that I will mention was questioning from Labour members about the Pay and Employment Equity Plan of Action. If we cast our minds back those who have been around a while—and I have been around a while—will remember that the first thing the former National Government did when it was elected in 1991 was to get rid of the pay and employment equity legislation. Under this administration they have done exactly the same thing. 
MICHAEL WOODHOUSE (National) 
: 
 As we know the Department of Labour is funded through Vote Labour but its responsibilities are quite broad. They include responsibilities for Vote Immigration for Vote Employment and for the oversight of New Zealand’s accident insurance framework. It is on the last point that I will talk. One very important role of the Department of Labour is in managing expenditure on behalf of the Crown in Vote ACC. More than any other this vote represents the woeful mismanagement of Crown resources by the previous Labour Government on behalf of the people of New Zealand. 
I certainly do not blame the Department of Labour for the huge blowout in accident compensation costs. In times past the department was the Crown’s watchdog in respect of the non-earners account. It is sad to see the systematic disempowerment of the department to a mere conduit between the Accident Compensation Corporation and the Minister and more significantly between former Ministers and the corporation. Labour Ministers had a plan to soften and to socialise the scheme and no amount of advice from the department on the cost implications to the non-earners account was even listened to much less taken. 
Once a watchdog the department was debarked under the previous administration. The list of ill-conceived poorly planned badly managed policies in accident compensation is a long and sorry one. They include among many others the massive opening up of the medical misadventure provisions now called the treatment injury account and I do not believe it has made one bit of improvement to the prevention of adverse events in health. The Department of Labour warned that the cost estimates were materially understated and that the changes would open a Pandora’s box. That advice was ignored and a budget of $8.7 million was put in place. What do we have now? We have a budget of $87 million and it is climbing. 
What has been the cost of these changes to the New Zealand taxpayer? Well the non-earners account alone is facing a $300 million increase this year and a massive $1.5 billion increase over the next 3 years. According to the recently tabled MartinJenkins report the deteriorating trend had been evident since 2005. It was evident in December 2007 when the Department of Labour provided the then Minister for ACC and the then Minister of Finance with the revelation that Vote ACC would be woefully inadequate to manage the scheme’s cost blowout. It was also evident again in May 2008 again in July 2008 and again on 18 August 2008 when the corporation advised the Minister for ACC that it needed additional funding of—wait for it—$305654000 in the 2008-09 year. 
The Labour Cabinet decided that such information should not be included in the Pre-election Economic and Fiscal Update. Why was that? It said that it was because the information had not been subjected to sufficient detailed scrutiny. I wonder what the previous Government actually wanted from the department. Perhaps the Swedish rounding system was in place and the department had failed to round the estimate up to the nearest 10c. 
What was the previous Labour Government’s response to the revelation? Firstly there was denial. Labour members said that there was no problem here and that it was just a glitch; it was Treasury’s fault or it was the fault of a downturn in the economy. That is nonsense. Yes a portion of the increase in the unfunded liability has been the result of the downturn in investment returns and changes to discount rates. But Labour has used the downturn to mask its failure on accident compensation. High investment returns early in its term of Government masked poor performance and now it attempts to mask its woeful performance in the last 2 years by blaming the downturn. 
Does the previous Government even care? Well not if the comment by the Hon Ruth Dyson in a recent financial review is anything to go by. After a simple question on financial performance Ms Dyson asked me why I was so fixated on deficits. Well I tell that member that deficits are bad big deficits are really bad and accident compensation deficits are terrible. I am pleased to be part of a Government that understands that that will expect the Department of Labour to turn things round and that will change the softening policies of the previous administration. 
Hon Dr Jonathan Coleman 
: Mr Chairperson— 
The CHAIRPERSON (Eric Roy) 
: I have a little difficulty Mr Coleman in that it is my understanding that there is some kind of proportionality between the calls. The only call left now for National are for the Ministers in the chair. I think the Hon Kate Wilkinson rose to her feet at the same time so I will honour that call. 
Hon KATE WILKINSON (Minister of Labour) 
: 
 It is my pleasure to be the Minister in the chair for the debate on the 2007-08 financial review of the Department of Labour. I thank my colleague Mr Woodhouse for outlining some of the legacy that has been left by the previous Labour Government in the area of accident compensation. It is a shame that the Minister of Immigration Dr Coleman could not also elaborate on the tragic legacy left by the previous Labour Government in the field of immigration. 
In the field of industrial relations and labour I would like to answer some of the questions by the member who spoke earlier Darien Fenton. I thank her for those questions. I must say though that those questions have been answered several times before but I appreciate that sometimes memories are very short in this Chamber. Ms Fenton was fixated—and has been for some time—on the 90-day probation legislation which was introduced as we all know last year. That was a great bill. That bill was welcomed by businesses. It has been welcomed actually by workers who can now knock on the door of an employer and say: “Give me a chance. I have not worked before.” or “I’ve had a bit of a break in my employment. Please give me the opportunity and I will prove myself.” 
That legislation actually works. I was talking to representatives of the Equal Employment Opportunities Trust which was I have to say set up by a National Government and they said it was a great bill. They were concerned about barriers to employment. The 90-day trial period will lift those barriers. Darien Fenton asked what sorts of protections are in place. That member knows full well—she has the ability to read the legislation—that plenty of protections are in place. We are concerned to balance what is fair to both the employee and the employer. If one looks at the protections—and we can repeat them day in day out and one day they might sink in to the Labour Party—we see that the good-faith provisions still remain. They are untouched. So the employer still has to act in good faith. Secondly employees must agree to that 90-day trial. If they do not want it they do not have to have it. That is called choice. Their rights in relation to discrimination still remain. 
We have also put in additional protection so there cannot be an 89-day rollover if one likes. So a 90-day trial period will apply only once. Furthermore we have limited it to those small businesses with 20 employees or fewer because those businesses are least likely to have the human resources capability to make those recruitment decisions. In relation to benefits if a person on a benefit gets a job with a 90-day trial period and that trial period does not work out then the stand-down period will not apply. We see this as a real positive in these times of economic challenges. That provision will give people on a benefit some confidence to get on the job market and say “Give me a try.” If it does not work they still have the safety net of the benefit and therefore they do not miss out. 
If we are looking at protections we can see that we now have one from the New Zealand Council of Trade Unions. We welcome this. The New Zealand Council of Trade Unions has come up with a “name and shame” campaign and we welcome that campaign if it is against unscrupulous employers who are not complying with the law. We will not welcome it though if it tries to take any action against law-abiding businesses that are just trying to get ahead employ people and survive these economic times. 
The National Government appreciates the importance of workers to businesses but we also appreciate the importance of businesses to workers. We want employment law that is fair. We recently increased the minimum wage by 50c. It is interesting that when Labour increased the minimum wage by 50c it was generous but when the National Government increased it the Labour Party said it was mean measly and miserable. 
Hon Ruth Dyson 
: You said “Do nothing” in your Cabinet paper. 
Hon KATE WILKINSON 
: We had three recommendations to increase the minimum wage. We increased the minimum wage which resulted in more workers getting an extra $20 a week in their pocket. 
Report noted. 
Department of Internal Affairs 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 When the Minister of Internal Affairs went to India in February of this year returning I think on 2 March of this year he did a range of things that by the kindest analysis could be described as unusual. First of all— 
Nathan Guy 
: Point of order— 
The CHAIRPERSON (Eric Roy) 
: I know what the point of order is. Before we commenced this debate I read an instruction to the Committee and let me just remind the member that this debate on the Government’s financial position may be a wide-ranging one but debates on the individual financial reviews of departments and Offices of Parliament and non-departmental appropriation should be relevant to their performance in the 2007-08 financial year and their current operations. So the member must confine himself to the departmental report on that period. 
Hon PETE HODGSON 
: In respect of the current operations of the Department of Internal Affairs the Minister was in charge for example of the New Zealand Fire Service as part of his duties. It was when he was in India that Australia was alight with fires and indeed a bunch of firefighters had gone to Australia in that time. Then on his return the Minister who is shouting uncontrollably from the chair released a press statement to say that the second batch of firefighters was to go to Australia. This proves my point that the Minister of Internal Affairs has something to do with firefighting in Australia—except he was in India at the time. 
The first unusual thing was that the Minister went to India during the Government’s 100 days of action— 
The CHAIRPERSON (Eric Roy) 
: This debate is not about the Minister’s conduct; it is about the department. The member will contain himself to those issues. 
Hon PETE HODGSON 
: On the Minister’s departure date to India—on 24 February—his department opened a website about births deaths and marriages. The Minister put out a press statement about the births deaths and marriages website on 24 February or thereabouts; and on the day of his return the Minister put out another statement about further activity within the Department of Internal Affairs which was about the second tranche of New Zealand firefighters going to Australia to help put out the fires. In the meantime the Minister put out no press statements about the ongoing activities of the Department of Internal Affairs because he was not around. What is more he never put out a press statement to say he was not around. So no doubt most people thought that the Minister of Internal Affairs was still in New Zealand running the Department of Internal Affairs when he was not. He bookended his trip with a press statement about a website on births deaths and marriages on his departure and another press statement about the— 
Nathan Guy 
: I raise a point of order Mr Chairperson. This financial review is about the department’s performance in the previous 12 months. This member is straying well outside the mark. I suggest to you Mr Chair that you rein in the speaker and remind him about this debate. 
Hon Darren Hughes 
: I am very surprised Mr Chairperson that a good 3½ hours into the debate there is now quite active refereeing of what should be in and what should be out with regard to what members are saying. I point out that the Department of Internal Affairs is responsible for Ministerial Services for Ministers’ staffing and for the facilitation of Ministers through customs at airports. That is the point my colleague was trying to get to but he has been stopped a couple of times by you Mr Chairperson and then by interference from the Government. This is the first time in the debate that a Minister has been protected in this way. 
The CHAIRPERSON (Eric Roy) 
: The member will please sit. It is not the first time in the debate. I have already ruled that one member was getting outside the realm of the debate. The reason there has not been any other such ruling is that members have stayed inside— 
Hon Darren Hughes 
: No they haven’t. 
The CHAIRPERSON (Eric Roy) 
: Well they have while I have been in the Chair. 
Hon Darren Hughes 
: It’s not been right while you haven’t been here. 
The CHAIRPERSON (Eric Roy) 
: Well irrespective members know that if there is an issue it should be raised at the time. The issue is clear here. The Minister’s conduct or perceptions thereof is not at issue. It is about the department’s performance. 
Hon Clayton Cosgrove 
: Speaking to the point of order— 
The CHAIRPERSON (Eric Roy) 
: No I have ruled on the point of order. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Chairperson. It is a new point of order. In the light of your comments you may wish to reflect on the part of the financial review in respect of the Department of Corrections. Without rehearsing that in that debate for instance reference was repeatedly made by a number of speakers to the Minister’s relationship with the chief executive which forms part of Standing Order 334(1) which includes current operations. I am not sure who was in the Chair at the time but that was ruled as being completely correct. It was a contemporary issue it was current operations and it was direct ministerial conduct in respect of the chief executive. With respect I fail to see how you can rule out my colleague because exactly the same points are being made about the current operations. My colleague Mr Hughes has talked about Ministerial Services for which the Minister is responsible. I ask you Mr Chairperson for some consistency. 
The CHAIRPERSON (Eric Roy) 
: I will reflect on the point that the member makes and if I deem that any member is outside the range of what must be debated then I will rule it out of order. 
Hon PETE HODGSON 
: The trip to which I am no longer allowed to refer was unusual in this respect: the Ministerial Services facilitation of Dr Worth at least on his arrival back through Auckland was in conflict one could argue with the fact that he was travelling as a private individual and not as a Minister. However— 
Hon Dr Jonathan Coleman 
: I raise a point of order Mr Chairperson. The member continues to trifle with the Chair. You have ruled on the matter; he continues to ignore your ruling. I think you have to take action because frankly he is determined to ignore you completely. You have to assert your authority otherwise it looks like the Chair— 
The CHAIRPERSON (Eric Roy) 
: It is out of order to tell the Chair to assert his or her authority. That is out of order. I am listening very carefully to what the member says. I think we have made that point. I will now monitor it as I do with every other speaker. 
Hon PETE HODGSON 
: Let us take a look at the facilitation services that are provided by Ministerial Services which is part of the Department of Internal Affairs and let us ask ourselves—[ 
Interruption 
] Those members cannot shut me down with points of order any more so they are going to try pure volume and the problem is I have the microphone. The fact of the matter is that it is unusual for a private individual to be facilitated and to have the car draw up at the airport. That is an unusual thing for Ministerial Services to do but on the occasion of the Minister of Internal Affairs returning to New Zealand that is exactly what happened. Private individuals were facilitated across the tarmac by Ministerial Services. Whether this happened at all during the year under review I am not sure but I do know that it is a current operation because it was done for the Minister of Internal Affairs and for a couple of his rough mates who went on the trip with him. 
Hon Dr Richard Worth 
: Wrong wrong! 
Hon PETE HODGSON 
: What is more the Minister is now losing his cool. He is yelling into the microphone. You will have to bring him under control Mr Chairman. Oh he has got him under control; that is great. Let us look then at whether that action of Ministerial Services is a normal activity or whether that is an unusual activity for the Department of Internal Affairs. I would assert that it is unusual. I am sure it has happened before but probably with a trade mission led by a trade Minister not with a trade mission led by the Minister of Internal Affairs travelling privately and forgetting to tell his boss that he had a conflict of interest about which I may not talk. 
There is another matter that arises in respect of Ministerial Services and that is I cannot find any record of who was the Minister of Internal Affairs in New Zealand when the Minister of Internal Affairs was not in New Zealand because as soon as he goes through the 12-mile limit there is supposed to be some other Minister and Ministerial Services did not put out a press statement about that. 
Hon Dr RICHARD WORTH (Minister of Internal Affairs) 
: 
 The Department of Internal Affairs is the mother of all departments. It has direct descent from the days of the Colonial Secretary and this mother gave birth in due course to public works justice health and social welfare and continues to manage a diverse array of functions. The modern department is very much part of the fabric of New Zealand society. It touches the lives of citizens literally from birth to death and supports every community. 
All members will be keenly aware of the challenging economic environment in which we find ourselves. This new Government is focused on steering New Zealand through the global recession. To do that we are obviously looking for everyone to play their part and the Department of Internal Affairs is focused on this. 
In the context of this debate I would like to overview and highlight what has occurred in the past reporting period which is the topic of this debate. The department’s responsibilities are closely related and are in the areas of critical importance for our future—security safety identity local government and community. All these responsibilities contribute to the department’s purpose of “serving and connecting citizens communities and government to build a strong and safe nation.” 
If I look at the financial overview for 2007-08 I see that expenditure for the department is appropriated through six different votes and covers a wide range of services and activities. Just to take last year for example the department’s revenue totalled $215.2 million with 56 percent of that revenue or approximately $120.6 million coming from third-party sources such as fee income. 
If I could talk just for a moment about the departmental initiatives then I would say to members tonight that the highlights of work within the internal affairs portfolio include first of all passport redevelopment. The plan as members may know is to introduce a new passport book and a processing system for better service and security. This is now a virtually constant process of improvement in meeting international demands. 
Another area that we are involved in is anti-spam. The department is making progress on fighting spam. It will not of course stop spam but there is the hope that it will be able to say with some confidence that a spam operation cannot be run in this country without detection and prosecution. 
Then there is also the third area the report of the Royal Commission of Inquiry into Auckland’s Governance. As well as having responsibility for this work as part of its local government activities the department in the last period provided administrative support to the royal commission during 2007-08 and until the report was released at the end of March 2009 as part of its executive Government support role. 
A lot of work is also being done on centralisation work within the department. The department is more efficient because it has been centralising business functions like human resources and information technology. 
Hon Clayton Cosgrove 
: Old Tories being caught out eh? 
Hon Dr RICHARD WORTH 
: As members might know and that member in particular will know one of the new challenges for the department is to take on this aspect of Government Technology Services. Government Technology Services is transferring to the department creating an information technology shop of considerable size and skill. I hope there may be a really good opportunity to advance the causes that are so critical in the context of interoperability of computer services. A whole lot of legacy decisions are now coming to maturity and we need to make decisions that will enable the prospect of interoperability of computer systems within the Government service. 
If I were to highlight the work of the department in other portfolio areas I would say these things. First of all the work that was done in connection with the civil defence exercise which some members will remember—Exercise Ruaumoku—was highly successful. It played a big part I believe in raising awareness of the volcano threat. Also in this same period was the Edmund Hillary funeral and the department was able to use its expertise in the organisation of that service. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am happy to take a call on the financial review of the Department of Internal Affairs. I would like to talk in particular about Ministerial Services and about the fact that Ministerial Services employs the staff who work in Ministers’ offices who among other things organise ministerial travel and prepare draft answers to Ministers’ written questions. We know that they are paid significantly more under this National Government than they were paid under the last Labour Government so one would think we would get a higher output. I am not convinced. One of the ways that we can hold departments and Ministers to account is through the asking of written questions. I have asked many questions of the Minister of Internal Affairs which he continues to refuse to answer. He says it would take too many resources to answer them. He will not say whom he has met with and he will not say what reports he has received. I have to wonder why that is. What exactly is he trying to withhold? 
The other thing that I would like to talk about is VIP Services provided through Ministerial Services and in particular the facilitation of Ministers at airports. It would be very inappropriate would it not for a Minister to use those facilitation services provided by the Department of Internal Affairs to shepherd his or her business cronies— 
Hon Clayton Cosgrove 
: Mates. 
CHRIS HIPKINS 
: —business mates—through immigration so that they could go prospecting for business overseas for companies that the Minister himself has an interest in. 
Report noted. 
Clauses 1 to 9 and schedules 1 to 4 agreed to.  
Bill reported without amendment. 
Report adopted. 
Appropriation (2007/08 Financial Review) Bill 
Third Reading 
Hon SIMON POWER (Associate Minister of Finance) 
 on behalf of the  
Minister of Finance 
: I move  
That the Appropriation (2007/08 Financial Review) Bill be now read a third time 
. 
Bill read a third time. 
Trade Marks (International Treaties and Enforcement) Amendment Bill 
First Reading 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Trade Marks (International Treaties and Enforcement) Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Foreign Affairs Defence and Trade Committee for consideration. Trademarks are an important intellectual property right and a key business asset. A trademark is a unique identifier such as a word brand or logo that distinguishes the goods or services of one trader from those supplied by other traders. Trademarks enable consumers to instantly recognise and associate the quality of a particular good or service with a business that uses the trademark. One of the aims of giving legal protection to trademarks is to prevent low-quality firms or counterfeiters from passing off their products as being those produced by well-known high-quality producers. Trademarks are registered by the Commissioner of Trade Marks under the Trade Marks Act 2002 after an examination process. 
This bill has three main purposes. The first is to ensure that New Zealand is able to join three international trademark treaties. In 2006 the then Government agreed to pursue accession to three treaties administered by the World Intellectual Property Organization. These are the Singapore Treaty on the Law of Trademarks— 
Hon Lianne Dalziel 
: Is India covered by that? 
Hon SIMON POWER 
: —that is a good question—the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks and the Madrid protocol relating to the Madrid agreement. The bill makes a number of changes to the Trade Marks Act to enable New Zealand to implement the requirements of each of those treaties and therefore to be able to join the treaties. 
Although each treaty has its own particular objectives their collective aim is to reduce business compliance costs associated with protecting trademarks. This is achieved through the simplification and international harmonisation of the procedures for registering trademarks. Joining these treaties will also assist in moving New Zealand’s trademark registration procedures into closer alignment with Australia’s. It therefore represents a further step towards the Government’s objective of creating a single economic market with Australia—an important objective which I know my predecessor shared the same level of enthusiasm for advancing. 
The second purpose of the bill is to deter trafficking in counterfeit goods and pirated copyright works by strengthening the enforcement of criminal offences under the Copyright Act and the Trade Marks Act. The trade in goods bearing counterfeit trademarks and pirated copyright works is a growing global problem to which New Zealand is not immune. The manufacture and sale of counterfeit goods is a crime that is depriving our manufacturers exporters and retailers of their legitimate earnings. Their productivity and financial viability are being threatened by cheap—and sometimes unsafe—fake products and that also means that jobs are at risk at a time when the economy can least afford it. 
Counterfeit goods can be shoddy products that unsuspecting consumers are deceived into buying; thereby in some instances unwittingly exposing them to significant health and safety risks. Among the people benefiting from the sale of counterfeit goods are organised crime groups—potentially terrorists—that have been implicated in their manufacture and global distribution. Compared with the distribution of drugs counterfeit goods are increasingly being seen as an easy and safe source of income by criminals. 
The bill provides the Ministry of Economic Development and the police with standard investigative powers—but also limited non-warranted powers—to search for and seize counterfeit goods being displayed for sale in public areas. This power has been developed to specifically address the sale of counterfeit goods in markets and fairs as well as their sale by street vendors where the transient and itinerant nature of traders make the obtaining of a search warrant impractical for enforcement purposes. Furthermore the bill extends the powers available to the New Zealand Customs Service to enable it to play a more active part in enforcing criminal offence provisions against the importers of counterfeit goods. This measure builds upon the Customs Service’s existing trademark and copyright enforcement role and recognizes that its officers often have specialist knowledge relating to offending importers and may be in possession of counterfeit or pirated goods those offenders have tried to import. These moves to enhance enforcement of the criminal offences for trading in counterfeit goods and pirated copyright-protected works have been welcomed by trademark and copyright owners. 
Thirdly the bill contains a number of minor amendments to the Copyright Act and Trade Marks Act. One of those amendments is intended to improve the efficiency and effectiveness of the Customs Service’s administration of the border protection measures against the importation of counterfeit goods into New Zealand. It will also assist small businesses to take advantage of those measures. The border protection measures are a notice regime administered by the Customs Service and are designed to facilitate copyright and trademark owners taking civil action against the importers of counterfeit goods. Under the regime notice the Customs Service can detain shipments of suspected infringing goods described in the notice pending civil action by rights-holders against the importers of those goods. The bill includes an amendment to provide the Customs Service with the discretion to suspend enforcement of a border protection notice when a rights-holder fails to reimburse the Customs Service’s costs related to the enforcement of a notice. This measure will help to phase out the $5000 bond that guards against the possibility of a rights-holder defaulting on a Customs Service invoice. This bond has been a significant barrier for small businesses taking advantage of the border protection measures. 
The introduction of the bill also provides an opportunity to address a number of technical issues that have arisen since the Trade Marks Act came into force in August 2003 in order to clarify the intent or improve the effectiveness of those provisions. Finally the bill will amend sections 87 and 188 of the Copyright Act to restore an exception to copyright infringement that was inadvertently removed by the Copyright (New Technologies) Amendment Act 2008. Without the exception an establishment like a hotel bar or restaurant showing its patrons a broadcast of for example a Sky Network Television channel for which it had paid a subscription fee to do so could be required to pay an additional licensing fee to copyright owners for any copyright material used in the broadcast. I commend this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I congratulate the Minister in charge of the Trade Marks (International Treaties and Enforcement) Amendment Bill Simon Power on changing some of the words in the first reading speech that had been prepared for him and congratulate him on getting around to having the bill’s first reading. I am actually very pleased that the bill is having its first reading and that it will be referred to the select committee for consideration. But I missed the beginning of the speech so I am not a hundred percent sure which committee— 
Hon Simon Power 
: Foreign Affairs— 
Hon LIANNE DALZIEL 
: That is actually a perfectly sensible committee for the bill to go to given that we are very busy at the Commerce Committee and it also makes sense given that the Foreign Affairs Defence and Trade Committee has assessed the national interest analyses on each of the international treaties mentioned by the Minister in relation to the legislation that is being amended by the bill in accordance with those treaties. 
 We have had a lot of debates over recent months in respect of copyright and perhaps what has occurred there demands that we all pay careful attention to detail when we are discussing those important issues. The copyright amendment bill to which I refer was deliberately couched in non-prescriptive terms so that industry would produce guidelines that protect copyright in this modern Internet age where everything that is viewed is technically reproduced albeit for a moment in time. This bill obviously is not as complex as that one was but it does raise for the House’s consideration just how complex some of those issues are. The existence of legislation that was designed in an earlier age before we had the modern technologies that we have today really means that we have to keep thinking in the present and the future rather than perhaps reflecting entirely on the past. This bill as we have heard from the Minister gives effect to the Government’s decisions to accede to the Madrid protocol relating to the Madrid agreement— 
Hon Clayton Cosgrove 
: What about the Indian one? 
Hon LIANNE DALZIEL 
: —to accede to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks and to ratify the Singapore Treaty on the Law of Trademarks. My colleague the Hon Clayton Cosgrove interjected from the front bench to ask whether there is any Indian component to this and I can understand why he would ask that question. Of course there are certain source countries in respect of counterfeit material that we have to be very aware of and tragically India is one of them. India is one of the countries that has been rather— 
Hon Clayton Cosgrove 
: Visited often? 
Hon LIANNE DALZIEL 
: Yes it has been visited recently. Unfortunately it is one of those places that thrive on counterfeit products and unfortunately other countries in the world do as well. That is why I am pleased that this bill also empowers the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions under the Trade Marks Act and the Copyright Act. 
The Minister in his comments traversed the implications of the various instruments and of course the treaties themselves. Their accompanying national interest analyses have been examined as I said before by the Foreign Affairs Defence and Trade Committee which is why it makes sense to send the bill there for its consideration. If I were looking for themes to ascribe to the instruments themselves though I would use words like “user-friendly” “compliance cost reduction” “flexibility” simplification” and “international harmonisation”. I guess that is a win-win win. I think it is good when the House can look at legislation that is able to produce such significant benefit. 
During the time that I was Minister of Commerce I came to appreciate how important it was for New Zealand not only to sign up to international standards but also to play a part in both developing and indeed leading in many of those areas of standards development as well. There are so many areas where New Zealand punches above its weight and standardisation is one of them. The fact that the previous chief executive officer of Standards New Zealand now heads the International Organization for Standardization is something that is worthy of mention in this context. 
Harmonising our laws with international standards simply makes good sense. The benefits are obvious when one considers in respect of the Madrid protocol that a single application for registration will obviously reduce the cost of protecting a trademark across multiple jurisdictions in a single hit. There will be a fee set according to the number of countries that are expected to be covered by the application for registration. Then of course there are the enhanced enforcement provisions and it is worthy of making the point that there really is no protection of trademarks or of copyright unless that protection is claimed and enforced. 
There is an enormous problem worldwide with counterfeit goods and as I mentioned before there are the “Rolex” watches the “Dolce and Gabbana” handbags and the “Armani” suits that one buys in the markets. Of course none of the members on the other side would have ever heard of any of those labels! Any designer label one would care to mention has been subject to counterfeit. There is a considerable amount of money to be made from counterfeiting designer labels although I do think— 
Hon Darren Hughes 
: Big problem in India. 
Hon LIANNE DALZIEL 
: I mentioned before that it is a large problem in India. 
Hon Clayton Cosgrove 
: Did Richard bring it back for his colleagues? 
Hon LIANNE DALZIEL 
: I do not know how much a certain member brought back to New Zealand that is probably counterfeit. I would say that he probably has more on his mind at the moment because I am sure that the “bollocking” did not cover any of his designer label purchases that he might have made en route. I think acting as a Minister on a private trip might have caused him a little bit more concern than counterfeit designer labels. 
I think it is an important issue and the Minister made a very good point and perhaps one that I had not appreciated myself. That is that when an organisation is trying to find illicit ways of gathering sufficient funds to undertake its various terrorist and criminal activities counterfeit trade is obviously one that fits in very well with the general criminal intent of the organisation but one that perhaps slips in under the radar. Everyone is obviously concerned about the illicit trade in drugs the illicit trade in arms the illicit trade in human beings— 
Hon Clayton Cosgrove 
: Aircraft? 
Hon LIANNE DALZIEL 
: —the illicit trade in aircraft— 
Hon Clayton Cosgrove 
: Aviation? 
Hon LIANNE DALZIEL 
: Oh yes that is right! I thought there was a link there somewhere. 
The point I am making is that there are obvious forms of illicit activities that the world is very much aware of—and aware of the consequences of—but this illicit counterfeit trade is one form that can produce a significant amount of money and as I say basically operate under the radar. So New Zealand by signing up to those stricter controls and higher penalties becomes part of this worldwide commitment to protect what are in essence property rights. 
I am sure there will be submissions though about the enforcement provisions and I again mention the New Zealand Manufacturers and Exporters Association formerly the Canterbury Manufacturers Association which has expressed views in this area quite firmly. I note that copyright and trademark owners need to be able to request assistance from the Customs Service to identify shipments of infringing goods coming into or transiting through New Zealand. But the Manufacturers and Exporters Association continues to raise an issue about the responsibility for policing at the border. There are countries where essentially the responsibility for that policing activity is undertaken by the border control authorities and essentially the importer is obliged to prove that the goods are not breaching copyright trademark or any of the other provisions or undermining any of the standards that apply in those countries. [ 
Interruption 
] I know that my colleague Clayton Cosgrove is going to take a call on the bill very shortly because he just cannot stop interjecting. But there we go! 
I just want to make the point that the phase-out of the $5000 bond may assist in that regard but I know there will be businesses that would expect a much more proactive stance at the border. As a former Minister of Commerce I delegated responsibility for all intellectual property matters to my colleague the Hon Judith Tizard in whose name this bill was originally introduced. I am pleased to be able to acknowledge her work in this vital area and indeed to commend this bill to the House. 
Mr DEPUTY SPEAKER 
: I call John Hayes. 
Hon Clayton Cosgrove 
: This will be good! 
JOHN HAYES (National—Wairarapa) 
: 
 Yes it will be good. The Trade Marks (International Treaties and Enforcement) Amendment Bill is arcane and will be rather over the top of the short head of my colleague from somewhere down in the South Island. The bill is an omnibus measure and will amend the Trade Marks Act 2002 and the Copyright Act 1994. It is intended that the bill be divided into two separate bills when we get to the Committee stage: a Trade Marks (International Treaties and Enforcement) Amendment Bill and a Copyright Amendment Bill. The issues addressed in this legislation were considered by our Foreign Affairs Defence and Trade Committee last year. 
The first thing I would like to explain to the Minister from central Christchurch— 
Hon Clayton Cosgrove 
: Not a Minister any more. 
JOHN HAYES 
: —the previous Minister from central Christchurch—is that a trademark is a unique identifier such as a word. It could be “Punch ‘n Grow” for example if one were growing small seeds. It could be a brand a logo a colour a slogan a three-dimensional shape or even a sound that enables a business to easily distinguish its goods and services from those supplied by other traders. It is the difference between for example the “N” for National and the “L” on the desk over there for Labour. It is the blue against the red—yes blue won; red lost. Trademarks are registered by the Commissioner of Trade Marks under the Trade Marks Act 2002. 
The bill that we have before us gives effect to the Government’s decision firstly to accede to the Madrid protocol. For the edification of the House that protocol I recall was adopted originally on 14 April 1891. It has been revised six times since then most recently in 1967. Not very many countries belong to that protocol. Then we have to accede to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. And then we will ratify the Singapore Treaty on the Law of Trademarks. The bill will empower the Ministry of Economic Development and the New Zealand Customs Service to enforce the criminal offence provisions under the Copyright Act 1994 that relate as the member who has just resumed her seat was saying to counterfeit goods and pirated works. The bill will also address one or two miscellaneous issues with the Trade Marks Act. 
I would like to explain to my colleagues that the Madrid protocol provides a system that simplifies the procedures required for a trademark owner to protect his or her trademarks overseas. Joining the Madrid protocol will allow New Zealand owners of trademarks to have their trademarks protected abroad by filing an application for registration of a trademark with the Intellectual Property Office of New Zealand and designating one or more overseas countries that are also members of the Madrid protocol where protection is sought. There is a bit of a gap here in the sense that the counterpart country in which one may want one’s wheelchair for example to be patented needs to be part of the Madrid protocol or that will not be possible. Overseas trademark owners would also be able to use the Madrid protocol to protect their trademarks here in New Zealand. So joining the Madrid protocol will simplify the management of overseas-registered trademarks. It will be possible to renew or record subsequent changes to the trademark registration in each country by using the Madrid protocol through a single procedural step rather than making a request directly to each member country of the protocol. The bill will introduce amendments to the Trade Marks Act to facilitate that happening. 
The Nice agreement provides a classification system for goods and services for the purpose of registering trademarks. Those countries that are parties to the Nice agreement must apply the Nice classification to a registered trademark although those countries that are not a party to it may still apply the Nice classification if they want to. So one does not actually have to be a member in order to use the Nice classification system. New Zealand has applied the Nice classification to registered trademarks for many years. The Nice classification is updated every 5 years and the parties to the agreement meet on a semi-regular basis to consider amendments to it. The advantage for New Zealand of becoming a party to this agreement is that we will be able to participate in those meetings and potentially influence the future development of the Nice classification so that it best meets the needs of businesses in this country. The bill will clarify that the latest edition of the Nice classification must be used with all new applications for the registration of a trademark under the Trade Marks Act. 
I had some doubts about the Singapore treaty during the select committee process. I found that a number of intellectual property lawyers thought there would be no benefit from our joining it. But the point of signing it is that we can use the Singapore treaty to make national trademark registration systems more user-friendly and to reduce business compliance costs for trademark owners. It will do that through the simplification and international harmonisation of national registration procedures. The Singapore treaty does not however seek to harmonise substantive trademark law. The majority of the standards and rules of the Singapore treaty relate directly to the procedures of trademarks and in particular are constructed to make it clear what a trademarks office can and cannot require from applicants. By ratifying the Singapore treaty New Zealand will be able to contribute to the realisation of the treaty’s aim to make national and regional trademark registration systems more user-friendly. It will provide an opportunity for New Zealand to send a clear signal to the international community of its commitment to provide efficient and effective trademark registration arrangements that are consistent with international practice. The bill will allow regulations to be made for the purpose of giving effect to New Zealand’s obligation under the Singapore treaty. 
As one or two speakers have already said there is a growing problem around the world relating to the manufacture distribution and sale of counterfeit goods. I have seen it in Iran where Russian-produced wool has been passed off as New Zealand wool by Russian traders and I have seen locally produced butter in Iran with New Zealand’s Fonterra labels on it even though it was not a New Zealand product. We have experienced in New Zealand a steady growth in the sale of counterfeit products sourced from overseas and in our products being counterfeited in overseas countries. The illegitimate sale of counterfeit products deprives trademark and copyright owners and their licensees of legitimate income and therefore ultimately undermines the profit of businesses. If people step out of line the rules here will be consistent with our obligations under article 61 of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights as well as the Trade Marks Act and the Copyright Act. The penalty for people who do step out of line is a maximum of $150000. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I rise to support the Trade Marks (International Treaties and Enforcement) Amendment Bill at its first reading. Labour supports this bill. It is another Labour initiative. The bill is underpinned by some important principles—namely to deter counterfeiting of registered trademarks and to prevent piracy of copyright-protected works both of which are essential to protect legitimate business in this country. 
The bill has three main purposes: firstly to allow New Zealand to join three international trademark treaties; secondly to enhance the existing enforcement provisions in the Trade Marks Act and the Copyright Act in order to further deter counterfeiting of registered trademarks and piracy of copyright-protected works; and thirdly to address several minor and technical issues within the Copyright Act the Trade Marks Act and the Trans-Tasman Mutual Recognition Act 1997. This bill is an omnibus bill that will amend the Trade Marks Act 2002 and the Copyright Act 1994. I understand that it is intended to be divided into two separate bills at the Committee of the whole House stage. 
In 2006 the Government agreed to pursue accession to the Singapore Treaty on the Law of Trademarks known as the Singapore treaty; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks known as the Nice agreement; and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks or the Madrid protocol. The treaties and their accompanying national interest analyses were examined by the Foreign Affairs Defence and Trade Committee. The committee reported back in November 2006 and did not identify any matters to bring to the attention of the House. I will talk just a bit about those three treaties. 
The Singapore treaty aims to make the national trademark registration systems more user-friendly and to reduce business compliance costs for trademark owners through the simplification and international harmonisation of national registration procedures. Accordingly the bill provides more flexible arrangements for recording changes in registration of trademark ownership. It repeals provisions that concern registration of a person as a licensee of a registered trademark and it allows for the division of registration of a trademark. 
The Nice agreement provides a classification system for goods and services for the purposes of registering trademarks known as the Nice classification. The bill clarifies that the latest addition of the Nice classification must be used with all new applications for the registration of a trademark under the Trade Marks Act thereby facilitating accession to the Nice agreement. 
The Madrid protocol provides a system that allows a trademark owner to have a trademark protected in up to 76 member countries by filing one application for the registration of a trademark through the local trademarks office and designating one or more member countries where protection is sought. The Madrid system also allows an owner to effect subsequent changes to the trademark in each registered country through a single procedural step. The bill introduces amendments to the Trade Marks Act to allow the Madrid system to be implemented in New Zealand through regulations. 
Currently there is a growing problem around the world relating to the manufacture distribution and sale of counterfeits. Rigorous enforcement of the criminal offences under the Trade Marks Act and the Copyright Act is essential to protect the interests of New Zealand rights-holders—something that Labour holds very dear. The second purpose of the bill is to empower the Ministry of Economic Development and the Customs Service to play an active role in enforcing these criminal provisions alongside and in cooperation with other enforcement agencies and rights-holders. The bill provides the Ministry of Economic Development with enforcement powers which include the ability to apply for and execute search warrants and also to share information with the police and the Customs Service to assist in identifying persons who are involved in committing criminal offences. It also provides non-warranted powers to search and seize counterfeit goods and pirated works for evidential purposes for a prosecution but only where works are being offered for sale in public places and where entry is made when they are open to the public; in places of business and entry is made when they are open for carrying on business and only those parts that are open to the public; and also places where the occupier of the place consents to the entry and examination. 
The bill proposes to give the Customs Service the ability to seize without a warrant counterfeit goods and pirated works that are subject to the control of customs. That is in accordance with section 20 of the Customs and Excise Act 1996 and includes for example goods in a customs-controlled area. It also gives the power to require an importer or agent to provide information about those goods to require an importer or agent to appear to answer questions to apply for a judicial order that authorises the production of documents and other recorded information by any person and also to apply for and execute search warrants. 
The bill also includes protection for the Ministry of Economic Development the Customs Service and police staff and persons who assist them from liability for reasonable actions that are taken in good faith during a criminal investigation into the manufacture distribution and sale of counterfeit goods and pirated works. These moves to enhance the enforcement of the criminal offence provisions have been welcomed by trademark and copyright owners and their representatives. 
It also should be noted that the provisions in the bill reflect Government decisions in 2006 and 2007 to amend our domestic legislation to enhance the enforcement of criminal provisions in the Copyright Act and the Trade Marks Act. The bill should not be confused with the Government’s recent decision to participate in the development of the Anti-Counterfeiting Trade Agreement otherwise known as ACTA. The aim of that agreement is to provide an international framework to deal with large-scale counterfeiting and piracy activities. 
I will speak just a little bit about the Anti-Counterfeiting Trade Agreement because it is quite important. It is a cooperative effort by Governments to respond to the increase in global trade of counterfeit goods and pirated copyright-protected works. Its goal is to establish a common standard for intellectual property rights and enforcement to combat global infringements of those rights particularly counterfeiting and piracy on a commercial scale. Why develop it? Well counterfeiting and piracy are a global problem and that is why a global solution is needed. There has been a lack of progress in various international multilateral areas such as the World Trade Organization in tackling the problem. The aim is essentially to develop new international standards and to develop enforcement that is combined with global cooperation. Multilateral agreement is desired but it is not always achievable. It is about combining action by a small number of like-minded countries to develop an enforcement agreement that most buy into. 
The Anti-Counterfeiting Trade Agreement is about international cooperation establishing best practices for enforcement and strengthening the legal framework to combat breaches of intellectual copyright especially copyright and trademarks infringement. A lot of countries are involved and they include Australia Canada the European Union Japan Korea Mexico Morocco New Zealand Singapore Switzerland and the United States. New Zealand is participating because we recognised that strong intellectual property rights make an important contribution to our economic development and that our geographic isolation does not protect us from the effects and consequences of counterfeiting and piracy. New Zealand businesses are targeted by counterfeiters and pirates and New Zealand cannot afford not to participate. 
I come back to the Trade Marks (International Treaties and Enforcement) Amendment Bill. It contains a number of minor technical amendments to the Copyright Act the Trade Marks Act and the Trans-Tasman Mutual Recognition Act 1997. It is a Labour bill and therefore we support it. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Declaration on the Rights of Indigenous Peoples has a very clear statement in article 31 about the interest that we hold as indigenous peoples in the concept of a trademark. It says: “Indigenous peoples have the right to maintain control protect and develop their intellectual property over such cultural heritage traditional knowledge and traditional cultural expressions” and that “in conjunction with indigenous peoples States shall take effective measures to recognize and protect the exercise of these rights”. An overwhelming majority of nations—143 countries—adopted this declaration on 13 September 2007. Just last Friday Australia added its endorsement—a move that the Maori Party is greatly heartened by. The only countries to sit outside on the issue of indigenous rights are Canada America and Aotearoa but we are hopeful that this Government will address that appalling lack of confidence demonstrated by the previous administration. Why would we not want to keep up with the advances across the world as indeed is expressed in this Trade Marks (International Treaties and Enforcement) Amendment Bill? 
The amendments before the House tonight are specifically to update our legislative framework within the Trade Marks Act and Copyright Act to be in line with the agreements and protocols already mentioned by other speakers: the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks and the Singapore Treaty on the Law of Trademarks. 
 These protocol documents establish an international registration regime and a classification system for trademarks and it is extremely positive that this Parliament will be giving effect to commitments that are consistent with international practice. There are some pressing reasons for us doing so. This bill responds to the growing problem around the globe that represents a burgeoning market for the manufacture distribution and sale of counterfeits. The bill will require the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions related to counterfeit goods and pirated works. 
Why is this so important? Clearly the existence of counterfeits undermines the viability and profitability of legitimate businesses. But for many businesses the compliance cost to register trademarks often prevent them from taking action to protect their unique brands—their logos their slogans their marketing edge. The amendments in this legislation will help to make it easier for consumers to recognise the given quality of a particular business while also enabling that trader to protect its unique goods and services. 
I want to focus on this issue of “the unique quality” as it pertains to indigenous peoples. Just as the Madrid Nice and Singapore treaties have advanced international trademark protection the World Intellectual Property Organization or WIPO has been progressing great innovations in indigenous models to protect indigenous knowledge and intellectual property. Specific protections for Maori traditional knowledge and intellectual property have emerged within indigenous declarations on cultural and intellectual property such as the Mataatua declaration so it is extremely surprising that this body of work appears to have been overlooked in the evolution of this bill. 
This is particularly concerning in that what has consistently happened to date is that non-indigenous local and overseas businesses have trademarked and exploited Maori images words names etc. and those of other indigenous peoples to brand themselves internationally with impunity because there are no actual laws preventing them from doing so. We have seen a French security firm take on the name “Maori” because it represented a famous rugby team a Maori tattooed face kit sold on an American Halloween website and the New Zealand Rugby Union take on the branding campaign of the fearless Maori warrior complete with the death-defying haka to promote the All Black team yet in the same breath discard the New Zealand Maori rugby team from the 2009 draw. We have seen Philip Morris use Maori designs on its cigarette packaging and as recently as a couple of weeks ago a Lion Red billboard was spotted in Te Karaka with the slogan “Rangatira liquor”. These are but just a few of the deplorable examples where Maori traditional knowledge and intellectual property have been vulnerable to exploitation. And yet still there is no movement in New Zealand law or policy development despite the Ministry of Economic Development being very aware of the work and funding draft model indigenous intellectual property laws for various Pacific nations. 
There is a very impressive foundation readily accessible to Parliament through the form of the Maori Made Mark Toi Iho which is a registered trademark. We are all looking forward to the insights of the Waitangi Tribunal which is expected to report back on the Wai 262 claim by the end of the year. 
But the message that the Maori Party brings to this debate is to really honour the unique place of tangata whenua within this land by addressing Maori-specific issues of cultural and intellectual protection. The previous Government lacked the political courage to progress protections for Maori traditional knowledge and intellectual property in domestic legislation. This was unsurprising for a Government that had introduced the Foreshore and Seabed Act rejected the Declaration on the Rights of Indigenous Peoples and stood by while terror attacks took place in the tribal nation of Tuhoe. But we are in new times with a new Government and we hope a new will to recognise the importance of mana maintenance and enhancement. 
This is a Government that has been prepared to state in print that it will act in accordance with Te Tiriti o Waitangi—the Treaty of Waitangi. Te Tiriti o Waitangi held up the promise of a strong unified nation. It is a promise that is best expressed in relationships of mutual respect and of good faith. In essence this is what is meant by mana-enhancing behaviour—when we give expression to values that are uplifting and enriching. And so this is what we want to see in further iterations of this important legislation—the implementation of sui generis systems of new systems to protect Maori knowledge. We see this as a solid step towards supporting the Maori partner to the Treaty to once again be distinguished by our vibrant growing and prosperous economy as indeed we were in 1840. 
The bill may provide benefits to Maori business owners wanting to apply for trademarks particularly if they are wanting to trade internationally. It is currently quite expensive and cumbersome to register trademarks given that it needs to be done separately in each country that a business wants to trade in so we welcome the relief the legislation offers in that regard. 
We want to see Maori-specific indigenous knowledge and intellectual property protection legislation that gives due regard to the unique value of the indigenous brand. We have seen many bills such as this and other amendments to intellectual property laws that express a willingness to sign up to international agreements that protect Western business and the cultural mainstream. What we are now calling for is a proactive approach in supporting Maori intellectual property protections. Where there is a will there is a way and it seems that the will is just not there yet but we remain optimistic that the opportunity provided by the select committee process is an excellent way to find the right way to protect Maori traditional knowledge and intellectual property rights. 
In order to enable that opportunity to happen the Maori Party will support this bill at its first reading. Kia ora. 
JACQUI DEAN (National—Waitaki) 
: 
 In speaking to the first reading of the Trade Marks (International Treaties and Enforcement) Amendment Bill which was introduced by the Minister of Commerce Simon Power earlier this evening I say that the purpose of this bill is to amend the Trade Marks Act 2002 and the Copyright Act 1994. I note that a trademark is a pretty unique identifier and often a pretty hard-fought-for identifier. A trademark can be anything. It can be a word. In the case of Nike it looks like a tick but is known as a Swoosh apparently. It can be a colour as with Cadbury’s in New Zealand which fought for the right to use the colour purple. It can be a shape or it can even be a sound and quite frequently it is. 
A trademark allows a business manufacturer or a person who has developed an idea a product or a service to easily distinguish its products goods services or food from those products or services supplied by other traders. That is of course incredibly important to the people who have gone through the development of a product or service and it is closely defended. 
I think about a young designer in New Zealand in recent times Tamsin Cooper who was working out of Arrowtown in the South Island and developed some clothing items. She was challenged by another more established designer—Trelise Cooper—who is also a designer of some wonderful women’s garments. There was a very hard fight for the right to distinguish one product from another. We get a sense that it goes perhaps beyond the trade in those products and right to the heart of who a designer in particular is and how that designer feels about his or her product. It is incredibly important not just to New Zealand and not just to trade but also to the individual in some instances. 
A trademark is used most importantly for marketing purposes to provide consumer recognition that goods services or whatever of a given quality—and that is so very important in the scope of this bill—originate from one particular trader. If we think about products such as cosmetic brands we see that for examplea trademarked pot of cold cream can be many hundreds of dollars right down to a knock-off brand which can go for $4.50 or $5. We are not to know whether it is the same product inside but traders who have the trademark of the good-quality product will very jealously guard the right to have the exclusive use of that trademark and so they should. 
Trademarks are registered by the Commissioner of Trade Marks and that is done under the Trade Marks Act. This bill gives effect to the Government’s decisions to accede to treaties administered by the World Intellectual Property Organization. The treaties that the Government is to accede to are the Madrid protocol relating to the Madrid agreement. The Madrid agreement will provide New Zealand trademark owners with the possibility of having their trademarks protected overseas by filing an application for registration of a trademark with the Intellectual Property Office of New Zealand and designating one or more overseas countries that are also members of the Madrid protocol where protection is sought. Overseas trademark owners will also be able to use the Madrid protocol to protect their trademarks within New Zealand. 
This bill also gives effect to the Government’s decision to accede to the Nice agreement which concerns the international classification of goods and services for the purposes of the registration of trademarks. The Nice agreement provides a classification system for goods and services for the purpose of registering trademarks which is known as the Nice classification. The countries that are party to the Nice agreement must apply the Nice classification to registered trademarks although those countries not party may still apply the Nice classification. New Zealand has applied the Nice classification to registered trademarks for a number of years. 
This bill will also ratify the Singapore Treaty on the Law of Trademarks. The Singapore treaty aims to make national trademark registration systems more user-friendly and to reduce business compliance costs for trademark owners. That surely has to be good news for those who work so hard in the development of their products. The treaty does those things through the simplification and international harmonisation of national registration procedures. This bill empowers the Ministry of Economic Development and the Customs Service to enforce the criminal offence provisions under the Trade Marks Act 2002 and the Copyright Act 1994 related to counterfeit goods and pirated works. 
One of the aims of giving legal protection to trademarks is to prevent producers of low-quality items—counterfeiters—from passing off their products as those produced by well-known high-quality producers. We only have to think of items of clothing that are very familiar in our own lives such as the T-shirts that are coveted by our children or shoes where there can be a great divergence in quality between branded shoes and knock-off shoes. Clothing is another item. I have already mentioned designers within New Zealand but there is a vast difference between a quality brand that is made from quality cotton and uses quality cotton in its manufacturing and a knock-off brand that sometimes uses less than ideal products to make it and will tend to fall apart very quickly. Consumers need protection from that as do the manufacturers of those trademarked brands. 
The productivity and financial viability of our manufacturers our exporters and our retailers is being threatened right now by cheap and sometimes unsafe fake products. Of course that also means that jobs are unfortunately at risk at a time when our New Zealand economy our workers and our manufacturers can least afford it. Joining the treaties will help to move New Zealand’s trademarks registration procedures into closer alignment with Australia and therefore represents a further step towards the Government’s objective of creating a single economic market with Australia. That will also most importantly reduce compliance costs for business. 
I have spent most of my time talking about the first purpose of the bill. In the remaining time I will mention that the second purpose of the bill is to deter trafficking in counterfeit goods and pirated copyright works by strengthening enforcement provisions. I know that one of my colleagues will fully expand on that provision of the bill. I have pleasure in commending the first reading of the Trade Marks (International Treaties and Enforcement) Amendment Bill as introduced by Simon Power to the House. 
RAYMOND HUO (Labour) 
: 
 I rise to support the Trade Marks (International Treaties and Enforcement) Amendment Bill at its first reading. First of all I thank the Hon Lianne Dalziel and the Hon Judith Tizard for the great work they did to introduce the bill in September 2008. The bill was introduced to address certain deficiencies in New Zealand’s current intellectual property regime and to allow New Zealand to join three international trademark treaties. This bill amends the Trade Marks Act 2002 and the Copyright Act 1994. 
This bill has three main purposes: firstly to enable New Zealand to join three international treaties administered by the World Intellectual Property Organization including the much-awaited accession to the Madrid protocol; secondly to enhance the existing enforcement provisions in the Trade Marks Act and the Copyright Act to further deter counterfeiting of registered trademarks and piracy of copyright-protected works; and thirdly to address several minor and technical issues within the Copyright Act the Trade Marks Act and the Trans-Tasman Mutual Recognition Act 1997. 
Under the bill amendments to the Trade Marks Act will allow New Zealand to accede to three important international trademarks treaties: the Singapore Treaty on the Law of Trademarks or the Singapore treaty; the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks or the Nice agreement; and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks or the Madrid protocol. 
The Madrid protocol is much awaited because it provides a system that simplifies the procedure and reduces the cost for trademark owners seeking trademark protection internationally. It provides a system that allows a trademark owner to have a trademark protected in up to 76 member countries by filing one application for the registration of a trademark through the local trademarks office designating one or more member countries where protection is sought. The bill introduces amendments to the Trade Marks Act to allow the Madrid system to be implemented in New Zealand through regulations. Among the 76 countries that are currently party to the protocol most of them are our leading trading partners including the European community the United States of America Singapore and China. 
A 2007 figure released by the World Intellectual Property Organization showed that a record number of international trademark applications were filed—up by 9.5 percent from the same time in 2006. Currently a New Zealand trademark owner who wishes to protect a trademark overseas must file separate trademark applications in each country and comply with each country’s specific requirements. 
Joining the Madrid protocol will mean that New Zealand trademark owners will be able to file international trademark applications by filing a single application for the registration of a trademark with the Intellectual Property Office of New Zealand. The application will be able to select the overseas countries for trademark protection in that single application. Of course that overseas country must be a party to the Madrid protocol. The advantage is obviously the cost saving. The process of protection under the protocol is also likely to be much faster as there are strict time limits for intellectual property offices to examine trademark applications under the protocol. 
However there are perceived disadvantages. Simpson Grierson published a very informative paper that stated two such disadvantages. The first one is that accession to the protocol would result in more trademarks being filed in New Zealand leading to a clogging of the register with trademarks that are not actually in use in turn making it more difficult for New Zealand businesses to clear a trademark for use. Another concern or a procedural disadvantage is in relation to a concept of a central attack whereby an international application is dependent on the home application or registration for a period of 5 years. If the home application does not succeed or is removed an applicant’s international application will also fall over. 
The protocol currently only partly addresses this issue by allowing an applicant to re-file national applications. It will be interesting to see what more we can debate on this issue at the bill’s second reading and its Committee stage. The Singapore treaty aims to make national trademark registration systems more user-friendly and to reduce compliance cost for trademark owners through the simplification and international harmonisation of national registration procedures. 
The Nice agreement governs the international classification of goods and services for the registration of trademarks. A single international classification system will obviously provide efficiencies in respect of monitoring conflicting trademarks and processing pre-filing clearance searches. It is odd to see however that although New Zealand has been using the Nice classification system for decades it is not a party to the Nice agreement. 
The second purpose of the bill is to empower the Ministry of Economic Development and the New Zealand Customs Service to play an active role in enforcing the criminal offence provisions for trafficking in counterfeit goods alongside and in cooperation with the New Zealand Police. The importation and sale of counterfeit goods is a growing problem in New Zealand with the majority of counterfeit goods being sourced from overseas. Since July 2000 the number of counterfeit goods that have been detained by the New Zealand Customs Service has increased by over 400 percent. 
The bill amends both the Trade Marks Act and the Copyright Act in order to provide the Ministry of Economic Development’s national enforcement unit the Customs Service and the police with standard investigative tools including the ability to apply for and execute search warrants. Currently trademark and copyright owners may make a request to the Customs Service for it to detain imported goods at the border if it suspects that those goods infringe the owner’s trademark and/or copyright rights. The poor trademark or copyright owner will then have 10 working days from notification of the detention either to persuade the importer to forfeit the goods on a voluntary basis or to issue court proceedings for infringement. The importer would normally get a letter from the lawyer acting for the trademark or copyright owners. 
Hon Simon Power 
: Come on Raymond! Throw away the notes! Speak from the heart! 
RAYMOND HUO 
: Of course. Normally those letters would be worded in legally strong language. Despite that and especially when the size of the shipment was relatively small it might not be worth issuing court proceedings. The importer would likely not voluntarily forfeit the goods. Is that right? 
Hon Simon Power 
: That’s right. 
RAYMOND HUO 
: I am very happy to see that members opposite concur. These moves to enhanced enforcement of the criminal offence provisions have been welcomed by trademark and copyright owners and their licensees. Therefore I commend the Trade Marks (International Treaties and Enforcement) Amendment Bill to the House. 
TODD McCLAY (National—Rotorua) 
: 
 It gives me pleasure to rise this evening to speak on the Trade Marks (International Treaties and Enforcement) Amendment Bill. 
Hon Darren Hughes 
: Briefly. 
TODD McCLAY 
: No this will not be a brief speech; this is an exciting issue to talk about. It was a bill like this that drove me each morning last year during my campaign in Rotorua to get out of bed knock on doors and talk to people of Rotorua so that I could come here and support such an important measure. 
Hon Member 
: And in Miramar. 
TODD McCLAY 
: And in Miramar most certainly. This is another bill that brings us closer to other countries of the world and importantly to meeting international standards. Indeed I congratulate the honourable Minister Simon Power on giving this bill priority and for bringing this measure before the House in such a timely fashion. When I was talking to local people in Rotorua last week people said that they were not yet sick of hearing about that Minister Simon Power and all the good work he is doing for New Zealanders—these important bills he is bringing to us and the priority he is giving them so that he can deliver them on behalf of New Zealand thus making New Zealand businesses manufacturers and consumers safer in the process. I believe we will hear much more about the Minister in the coming months as he delivers more for New Zealanders. 
Are trademarks protection of rights and intellectual property important? Well there are a large number of counterfeit goods in the world and indeed in New Zealand. They have the potential to do great harm to New Zealanders and importantly to local businesses in this country when they are imported. I am talking here about some of the medicines that we receive advertisements for through email and that we can see on the Internet. People might think such medicines are cheaper and better. In many many instances of course they are not and can do great harm to New Zealanders. Let us also look at bad-quality pirated DVDs that are easily available via the Internet. An unsuspecting New Zealander might think he or she were buying a product that had been produced by the manufacturer and the rights-holder and would be quite disappointed when that product turned up in the mail. 
Hon Clayton Cosgrove 
: How long did it take you to perfect that accent? 
TODD McCLAY 
: What is a trademark? Very importantly a trademark is any sign or combination of signs capable of being represented graphically or distinguishing the good or service of one person from those of another. Examples of this can be found in my electorate where the people of the wider Rotorua area not only understood my accent last year but also enjoyed it and voted for it in great great numbers. 
An example of a trademark can be found in Te Puke. Of course we know Te Puke is the kiwifruit capital of New Zealand. The kiwifruit are big and strong and they are good. People all over the world want to buy them. The brand the trademark that is used there is Zespri. It will come as a shock to members opposite that others in the world grow kiwifruit of inferior quality that do not taste as good and that they try to pass off as kiwifruit from my electorate under the Zespri name. This does great harm to kiwifruit farmers who invest large amounts of money time and energy. They employ people and create many jobs. These kiwifruit of inferior quality are passed off as Zespri’s fruit doing harm to Zespri’s business and therefore to the New Zealand economy as a whole. 
 We also have Fonterra and Anchor butter. We have many fantastic dairy farmers in my electorate in areas like Reporoa Rerewhakaaitu Galatea Paengaroa Pongakawa and many other areas of the electorate where people get up early in the morning and work hard. They are great farmers they are proud to be farmers and they produce fantastic products for Fonterra under the brand name of Anchor. Anchor butter Anchor milk-powder and many other Anchor products are known all over the world. They are known to be of high quality to have been produced by hard-working New Zealanders and to be enjoyed very well in different parts of the world. It will not surprise members opposite if they have been paying attention that indeed others in the world produce milk products and try to pass them off under the Anchor brand. They do this so they can get greater funds and piggyback on the back of our farmers’ great names. This bill will help to protect our farmers and to protect Fonterra and therefore the Anchor brand. 
I will tell members opposite about another great product that comes from my electorate from the town of Rotorua. It will surprise many of them to know that we have a lot of mud in Rotorua and it is therapeutic. People come from far and wide to enjoy it buy it and take it home with them. We have a new hotel that the Prime Minister opened when he was Leader of the Opposition—of course he is no longer Leader of the Opposition but the Prime Minister—and it is the Wai Ora Lakeside Spa Resort. It is a fantastic new hotel in Rotorua and it is great for tourism. It produces a product that people around the world are already buying and taking home with them. The word is spreading about this product which does wonders for people’s complexions. We also have the Polynesian Spa in Rotorua which is another place where people can spend a few enjoyable hours—or days—and buy wonderful mud products to take home. We all know but of course I have to say that Rotorua is the geothermal capital of New Zealand. Others would like to say that their mud comes from Rotorua so that they too can make money from our great name. This bill will help protect employers and producers in Rotorua. 
Trademarks are important because they protect creative rights. I have already mentioned that this intrinsically relates to the registration of trademarks when they denote intellectual property and personal property rights. This bill allows New Zealand to accede to and ratify three conventions. The first is the Madrid protocol to enable New Zealand trademark owners to protect their trademarks overseas by filling in an application for registration of that trademark. Then we have the Nice agreement which provides a classification system for goods and services for the purposes of registering trademarks. Finally there is the Singapore treaty named for a wonderful place. I say to the chairman of the select committee that when this bill comes before us we had better go and look at some of these places and see why such wonderful countries get to sign such importantly named bills! The Singapore treaty makes the system more user-friendly. It reduces business compliance costs and therefore I suppose bureaucracy—something that our Government knows much about the reduction of and something that members opposite care little about. 
Once a trademark is registered the owner has exclusive rights to use that trademark. This means that another person is not permitted to use that trademark the trademark identification with it or the trademark as it is clearly identified. Trademarks of course can be protected for up to 10 years and this bill will mean that the protection of trademarks within New Zealand will be recognised in other countries. The treaties before us have previously been consulted on by the Ministry of Economic Development in its international trademark treaties discussion paper. Nine submissions were made and they were all largely supportive. The International Trademark Association when talking about the Madrid protocol went into some detail to stress the financial benefits that would be available for New Zealand businesses exporting to at least two or more overseas markets if they were able to use the Madrid system and of course this bill will allow that. 
 The Madrid protocol signed by 80 countries was ratified by only 78. It is a great shame that New Zealand is not on that list. I notice the other two countries that have signed but not ratified are Egypt and Senegal. We are not in the same league as them but as we look at the other countries on the list we see that it is right and proper and fitting that New Zealand features with them. Eighty-three countries have signed the Nice agreement and 83 countries have ratified it and it has entered into force. Of course New Zealand’s name is not on that list. The first signatures came in 1972. Finally of contracting parties to the Singapore treaty 55 countries have signed including New Zealand and 11 have ratified and it has entered into force. Australia is signing in March of this year and New Zealand because of the good work of the Minister Simon Power and the work that the committee will do will be one of the next on the list. 
I have a moment left to summarise and I want to tell a very short story for the members opposite. I know they will pay attention as I know they enjoy listening to me. 
AARON GILMORE (National) 
: 
 I rise to talk about the Trade Marks (International Treaties and Enforcement) Amendment Bill. I will take just a few minutes to tell members a little bit about an experience of mine with trademarks. Unlike the members on the other side of the House I have had some experience with trademarks when importing and exporting products with and without trademarks— 
Hon Darren Hughes 
: What kinds of products? 
AARON GILMORE 
: All sorts of products—cables. I used to operate a business with about 400 staff and $100 million in exports. We used to export cables around the Pacific region. When we recently had the ability to expand into China about 18 months ago we ran into some problems. We set up a factory in China because that was the best way to get our product into China with our own trademarks. We found we had the ability to set up production in China using our own trademarks. It is a global business and a global trademark. General Cable was a multinational firm with a major company logo and trademark that was known all around the world for industrial products. It was all going fine there and when we came to importing the product from China back into New Zealand we did not have any problems; we imported the product back from China and that worked out quite well. We were importing about $5 million to $10 million a year of product. But we ran into a company that we had never heard of. After about 6 or 7 months that company started importing products and it was selling about $1 million worth a year via TradeMe using a product and a definition that was very very similar to our company’s trademark. Instead of using the initials GCC the company used the initials GCE. That is just an example of one of the things that this bill is designed to fix in many ways. 
If we can have a bill like this put in place to solve these sorts of problems then I think that would be wonderful for New Zealand. I commend this bill to the House in many ways. If it can save a number of jobs in importing in New Zealand I think it will be a good thing. Thank you. 
Bill read a first time.  
Bill referred to the Foreign Affairs Defence and Trade Committee. 
The House adjourned at 9.58 p.m.