Appropriation (2014/15 Supplementary Estimates) Bill Imprest Supply (First for 2015/16) Bill — Second ReadingsText is incorporated into the Bound VolumeAppropriation (2014/15 Supplementary Estimates) Bill Imprest Supply (First for 2015/16) Bill — Second Readings[Sitting date: 17 June 2015. Volume:706;Page:4502. Text is incorporated into the Bound Volume.]Appropriation (2014/15 Supplementary Estimates) BillImprest Supply (First for 2015/16) BillSecond ReadingsHon PAULA BENNETT (Associate Minister of Finance) on behalf of theMinister of Finance: I move That the Appropriation (2014/15 Supplementary Estimates) Bill and the Imprest Supply (First for 2015/16) Bill be now read a second time. The Appropriation (2014/15 Supplementary Estimates) Bill relates to the financial year about to end on 30 June 2015 and seeks parliamentary authority for variations to appropriations authorised by the Appropriation (2014/15 Estimates) Act 2014 and for new appropriations that were not in that Act. The Imprest Supply (First for 2015/16) Bill relates to the new financial year starting on 1 July 2015 and seeks parliamentary authority or supply for Government expenditure during the first 2 months of that financial year in advance of the passing of the Appropriation (2015/16 Estimates) Bill which was introduced of course on Budget day. On behalf of the Minister of FinanceI thank the Finance and Expenditure Committee and the Intelligence and Security Committee for their prompt consideration of these supplementary estimates.Budget 2015 was delivered against a backdrop of sustained economic growth rising wages more jobs low inflation and low interest rates. It focused on sticking to a plan that is working: careful management of public spending going hand in hand with investment in public services and support for the country’s most vulnerable. Budget forecasts show an annual GDP growth of 2.8 percent on average over the next 4 years keeping New Zealand among the faster-growing developed economies. That growth is of course working for New Zealanders. By mid-2019 a further 150000 people are forecast to be in work and the average wage is expected to rise by $7000 to $63000 a year. Unemployment is expected to drop below 5 percent in the next 2 years and then fall further. Inflation and interest rates are expected to be significantly lower than previously forecast. This is good news of course for consumers because their income will go a bit further. But as I have outlined previously lower than expected inflation is impacting the Government’s revenue.The Budget forecasts a deficit of $684 million for 2014-15 which is $2.2 billion less than last year’s deficit. But my are not things already changing? A surplus of $176 million is expected in 2015-16 with increasing surpluses in following years. Of course you may have noticed that these are forecasts with some degree of uncertainty around them and we saw this with the $448 million surplus in the 10 months to 30 April—around a billion dollars better than forecast in the Budget.Grant Robertson: Don’t get too excited.Hon PAULA BENNETT: Let me assure the member that I am not excited yet. The surplus target has been successful in applying greater discipline to Government spending which has turned the Government’s books round and the fiscal outlook remains very positive.What really matters is the overall trajectory of improvement. We have come a long way from a deficit of $18.2 billion just 4 years ago following the global financial crisis and the Canterbury earthquakes. We are focused on ensuring that that trajectory continues by delivering better public services which will reduce vulnerable New Zealanders’ long-term dependence on Government interventions. We have got 10 Better Public Services results and we are seeing improvements. There has been a 38 percent reduction in youth crime since 2011. The number of teenage sole parents on a benefit has dropped by 40 percent since 2011 and immunisation rates for Māori are now almost as high as for the rest of the population. Budget 2015 builds on that with a $790 million package to reduce hardship among children in New Zealand’s poorest families and that is the next step in the Government’s commitment to addressing the long-term drivers of deprivation.This package includes several important initiatives such as increased work obligations for sole parents on a benefit more childcare support for low-income families a $25-a-week increase in benefit rates for families with children and an increase in Working for Families payments to low-income families not on a benefit. That entire package really is targeting around 160000 families—with 300000 children—earning less than $36350 a year. As in previous Budgets we have been able to spend a bit more on this because we are focused on reprioritising spending to programmes that deliver results. We have continued to increase spending on health and education but with a growing focus on the effectiveness of programmes for those in need.I will not go through all the Budget initiatives here today but I will highlight on behalf of the Minister a couple of other key programmes. Budget 2015 includes a $1.7 billion health package taking the total annual health spend to $15.9 billion. This includes $1.3 billion for district health boards for extra services cost pressures and population growth. The Budget also provides an additional $680 million for compulsory education taking the annual early childhood education and schools’ budget to $10.8 billion. Outside the child hardship package the Budget also provides over $100 million for further initiatives to support vulnerable children. This is a responsible Budget delivered by a responsible Government. New Zealand is well placed but there is more to do. We will focus relentlessly on a strong economy and jobs continue investing to support families in need manage spending and revenueresponsibly and increase resilience to global risks. We will build on a plan that is already working.The ASSISTANT SPEAKER (Hon Trevor Mallard): Grant Robertson.GRANT ROBERTSON (Labour—Wellington Central): That is right.The ASSISTANT SPEAKER (Hon Trevor Mallard): I nearly gave you an “Hon”.GRANT ROBERTSON: That is right Mr Assistant Speaker. I have not changed that much.It was interesting that the Minister acting on behalf of Bill English could not quite get through her statement about the Government’s surplus/deficit without a little snigger. The truth is the new language fed to Government Ministers by Lynton Crosby is to talk about trajectory. That is the answer. It is not about whether you are actually going to get to a surplus or not. It is a little bit like Nick Smith’s conceptual house. It is all about the trajectory that we are going on despite the fact that as the Government staggers towards the end of the financial year covered by the supplementary estimates it staggers towards a failure for the seventh time to reach a surplus.It is not about trajectory; it is actually about the integrity of this Government. Before the last two elections this Government told New Zealanders that there would be a surplus in 2014-15. It may have been a legitimate debate for the Government to have gone to New Zealanders before the 2014 election and say: “Do you know what? There is a range of serious social issues facing this country that mean we can’t make surplus.” The Government could have gone there. The Government could have gone there and said: “We failed over the last few years to actually deal with child poverty. We failed to invest enough in health to ensure that budgets are kept up and that people can get the basic health services they want.” The Government could have come to New Zealanders and been honest and been up front and said that. But it did not. The Government went to New Zealanders with its No. 1 economic priority being to be in surplus for 2014-15. That date was there; that promise was there. It had been there for two elections. That promise has been breached.Members on the other side of the House might think it is not important. They might think they can just change the language and talk about trajectories and conceptual ideas but the reality on the ground is that they broke a promise to New Zealanders. They have failed to reach that surplus.As they do stagger towards the end of this financial year the year in which they promised New Zealanders there would be a surplus they sit alongside an economic record that the Reserve Bank Governor has now been clear is one that is struggling and staggering along. There are members on the other side of the House who like to say perhaps when my back is turned Jami-Lee Ross that I talk the economy down. The reality is that this is not me Mr Ross. This is not me. This is the Reserve Bank Governor coming along to New Zealanders and saying that there is no sign that exports are going to recover. The Government having outsourced housing policy to the Reserve Bank now outsources economic policy and says: “Well you had better sort this out as well because we haven’t got any ideas as a National Government.” So Graeme Wheeler has to be able to say: “Well I will cut interest rates now. I’m worried about whether that is going to pour petrol on the overheated housing market in Auckland but there is no sign of this Government stimulating the economy.” He has to act.So this Government has failed to deliver to New Zealanders the kinds of benefits that would be expected from an economic growth rate of around 3 percent. In 2006—which you might recall Mr Assistant Speaker Mallard—the Government at that time had a growth rate of around about 3.5 percent and that delivered a multibillion-dollar surplus and had unemployment as the second-lowest in the OECD. Fast forward to 2015: a similar growth rate but a deficit; 41000 more people out of work than when National came into office; a failure to lift exports; and a failure to invest in core areas like education and health to the extent that is needed.This kind of economic growth that the Government currently has is not delivering to New Zealanders across the board. One of the reasons for that is that economic growth is built on something very soft and very shaky and that is the recovery from the Canterbury rebuild. That recovery is important for the people of Canterbury but it is not an economic plan—it is not an economic plan. If we remove that from the growth figures and then we take into account the high levels of migration real growth per head of population is under 2 percent now. That is why right around New Zealand people are not feeling the benefits of this growth.In the Northland by-election and Mr Bishop is very familiar with this the message that was given to the National Party was: “Don’t come up here and tell us we’ve never had it so good.Don’t come up here and say: ‘There’s 3 percent growth. Isn’t it great?’.”Hon Ruth Dyson: Wasn’t it just: “Don’t come up here.” to Chris Bishop?GRANT ROBERTSON: That is right. For Chris Bishop it was just “Don’t come up here.” but it was a message to the National Party from the regions of New Zealand. It does not matter whether you are in Dunedin or whether you are in Gisborne or whether you are in Whanganui what you will hear from New Zealanders in the regions is that they are working hard but they feel like this Government has neglected them. You take a look at the Budget the imprest supply bill and the supplementary estimates and you ask yourself: “Where in the investment in New Zealand’s regions? Where is the investment in diversifying the economy away from our reliance on commodity prices?”.Hon Christopher Finlayson: What about the wharf at Waitangi?GRANT ROBERTSON: That is right. I will give Mr Finlayson credit for this: the wharf at Waitangi. There is the plan to turbocharge the New Zealand economy from Chris Finlayson. I understand Mr Finlayson has had a large print of himself put on the wharf design so it will be there and people will see his beaming face on arrival at the Waitangi wharf in the Chatham Islands. Good on Chris Finlayson for helping the very hard-working MP Annette King achieve that long-held dream of the wharf at Waitangi.Hon Christopher Finlayson: She did nothing.GRANT ROBERTSON: I will tell her you said that—I will tell her you said that. But that is it. That is it in terms of regional economic development from this Government and in this Budget. I will wait for one of the members on the other side of the House to get up and say: “No the regional research institutes are here.” Well this deserves a little bit of unpicking does it not? The regional research institutes—up to $25 million. That “up to” phrase got left out when Steven Joyce made those announcements during the Budget period. And also there are only three of them. So only three regions in New Zealand are going to benefit and I will bet you they already know which regions those are. There are going to be a lot of disappointed regions in New Zealand because that “up to $25 million” is not going to stretch very far.That is the problem because today we saw for the seventh consecutive global dairy auction a drop in the global dairy prices. That is a 55 percent drop since February last year and a 30 percent drop since March this year. To turn that into real numbers that is billions of dollars not present in regional New Zealand. It is tough work for the farmers concerned and some of them have got very high debt levels and will have struggles over the next 2 years but it is also tough work for that wider rural community. Take a small place like Ōpōtiki in the Eastern Bay of Plenty—$30 million will not be in that community next year. In a small community like Ōpōtiki $30 million makes a huge difference.. That is jobs in the service sector. That is jobs in a community that struggles without that.That is what is missing from this Government—a long-term plan to say: “We can grow the regions of New Zealand to deliver jobs.” We know there is huge pressure on Auckland housing and Nick Smith makes the problemonly worse. He puts the pressure on. But if we want and we expect people to go and live in the regions of New Zealand there must be job opportunities there for them and that will happen only when the Government partners up with regional communities. There is no sign of that from this Government. Instead it is distracted by its own pet priorities. Nothing is a bigger symbol and emblem of that—and it is in the estimates here—than the flag. The flag referendum—the $26 million flag referendum—says everything you want to know about the priorities of this Government. A $28 million social bonds pilot for a project that nobody knows whether it going to work—that is just a gross ideological experiment. That is another $28 million. This Government has its priorities wrong.If this Government were to introduce a Budget to this House that was about investing in the future supporting opportunities for future generations of New Zealanders and giving them the chance to actually own their own home then we would be in there supporting it but that is not the Budget that has come to us. These supplementary estimates are the last gasp of the 2014-15 financial year which was a failure of a financial year for this Government—a failure to reach surplus a failure to grow jobs and a failure to invest in the regions which now have another year of neglect from this Government. This bill will be opposed by the Labour Party because it is a continuation of this Government’s failure to deliver to New Zealanders a sound economic plan.DAVID BENNETT (National—Hamilton East): There is only one failure in this House and that is Grant Robertson. If the person who is the economic spokesperson for the Labour Party cannot go 8 minutes without having to delve into the flag debate in one of the biggest economic speeches of the year that shows his competence around economic management. That guy has no idea of what is going on in economics. He is always going to be behind the eight ball on this.But look at this. I have got news for the people of New Zealand. I have got news for the people of New Zealand that comes from the last election. I went on to the website for the Labour Party. I know nobody does this and I know I should not do it but if you go on to its election website and you have a look at it it has on there a statement: “Everything is paid for plus we’re in surplus.” Under the Labour Party everything in its alternative Budget is paid for and it is surplus. So under Labour there would be a surplus now. I want to know from the Labour Party what it would cut. Would it cut that $25 to those beneficiary families who had not had anything for 43 years? Is that what the Labour Party meant when it said everything will be costed and in surplus? That was the promise of the Labour Party at the last election—that there would be a surplus. There would be a surplus no matter what. No matter what there would be a surplus. [Interruption] And we are talking about the appropriation bill Mr Assistant Speaker as the last member did. Under that policy there would be a surplus.The other line that is really important to look at is: “Labour will balance the budget and run surpluses every year.” That is a direct quote from the Labour Party. I want to know from the Labour Party what it would cut. Under the Budget and under the appropriation legislation what would the Labour Party be cutting for hard-working New Zealanders? What would it be cutting for beneficiaries? What would it be cutting for the people who are going to benefit from this legislation today? I look forward to hearing that from Labour because it was telling us it would have been in surplus this year. Every year it would be running a surplus. Every year there would be a surplus. There would be no extra social spending under Labour.The Labour Party goes out there and tells people that it is there for the people in most need. Well the people in most need would have got nothing under the Labour Party Budget in the last month because it would have had to be getting a surplus of a large amount. Under the National Government we actually went out there and delivered for those people in need. We delivered for them.Dr David Clark: Where’s the surplus?DAVID BENNETT: Where is the surplus? It is coming. That surplus will not be far away.The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am going to draw the member’s attention to the bill—I think he knows which bill it is because he chaired the select committee that dealt with it—and ask him to at least occasionally make passing reference to the supplementary estimates or the imprest supply legislation.DAVID BENNETT: Yes and for that legislation it is very important that we look at some of the funding that was talked about in it. The previous speaker spoke about that in regard to regions and wanted to know what was happening in the regional areas. Well I say come to Hamilton. Come to Hamilton as a test of what that regional funding is. Come to Hamilton and see a $2 billion expressway being built. Come to Hamilton and see a $500 million redevelopment of a hospital. Come to Hamilton and see $100 million spent on new schools in my electorate. Come to Hamilton and see that we are the first city to have broadband done across the city. Come to Hamilton and you will see the investment in regional New Zealand that this bill is part of and see that this Government is delivering financial support for the regions. We have delivered for our region. We have delivered the strongest economic base for that city to grow and prosper unlike the Labour Party whose members come into our city only at election time and when they do they leave before 2 o’clock because they know that they have got nothing to say. The people of our city understand that our Government through bills like this has delivered the infrastructure that is needed for our city to grow.When we hear from the Labour Party members one of the other things they talk about is moving away from primary industries. Well I would like to see anybody in the Labour Party who has actually milked a cow who actually knows how to get their hands dirty and who actually knows how to do anything—especially Grant Robertson the member from Wellington Central. It would be lovely to see whether he has actually done any farm work and all that. It is pretty rich for Labour members to come in here and tell us and the rest of New Zealand that we should be divesting away from the industry that we are the most competitive in around the world. Our most competitive advantage is in the dairy industry and those members bag it day after day in this House. They bag it day after day. That is not good for New Zealand and it is not good for our people going forward.When we look at economic growth it is interesting to have the New Zealand First Party there because the last speaker spoke about economic growth and said that if you took away Christchurch and you took away immigration economic growth would be very small. Well there are factors in creating economic growth. And I look over there at the New Zealand First Party. Those members want to take away immigration. They want to close New Zealand down and go back to the 1950s. They do not want new people coming to this country and I say to the members on that side—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! This is now the second strike for the member. The member will now address one of the two bills that are being debated for the rest of his speech.DAVID BENNETT: When we look at the Appropriation (2014/15 Supplementary Estimates) Bill—there were a number of comments made by the other side and I am just trying to deal with those comments—The ASSISTANT SPEAKER (Hon Trevor Mallard): New Zealand First has not spoken Mr Bennett so you cannot try—DAVID BENNETT: No but there were comments made by the other parties. The Budget was delivered against that background of sustained economic growth and that economic growth is based on a number of factors. Many people have said that immigration is one of those factors. Well it is and it is a good thing. We need immigration. We need new people coming to New Zealand and we need that for the growth of this country going forward.When we look at it unemployment is supposed to drop considerably in New Zealand over the next few years. That is a direct result of the plan that is in this bill. When we look at it New Zealanders having good economic growth rates going forward is a result of the economic plans that have been put forward. When we look at it New Zealanders are going to go into Budget surplus either this year or next year. It is a very short-term difference between now and when it will be happening but it will happen and that is in the best interests of New Zealanders going forward.With those surpluses going forward we have choices as a country and as a community. Those choices are important because that is where you deliver the social services that bills like this deliver and that the Budget delivered for New Zealanders. That is an important part of what we do in this House. We cannot put that at risk. We cannot put that plan and that direction for New Zealand at risk by making petty promises and by trying to stop people coming into this country who will actually benefit and build this country to be even stronger. It is very disappointing when other parties do that.When we look at it this bill and the Budget itself included a lot of things out there for hard-working New Zealand families. They included things for people in the beneficiary space. It was a Budget for New Zealanders. It was a Budget for ordinary New Zealanders and it was a Budget that we should be proud of.Dr David Clark: The whips say: “Sit down”.DAVID BENNETT: No the whips do not say: “Sit down”. The whips say: “Go after the Labour Party.” but I will not do that. I would be unfair on the Assistant Speaker if I did that to him because he is a very fair Assistant Speaker sometimes I would imagine.In the end this is a bill that is important for New Zealanders because it relates to the Budget it relates to the finance policy advice Vote Finance and our supplementary estimates. It is important going forward for New Zealanders that we have legislation like this because if we pass this New Zealanders can all benefit. We can all benefit and we do not have promises that are made that are untrue unfair and will not deliver for New Zealanders. That is what the Opposition was pretending in its promises.When we look at this Budget—and we look at a Budget that has gone through this House in a very good way—then we look at the way that the public has responded to that Budget. They understand the financial implications of the Budget. They understand that at a time when it is most difficult we have given to most New Zealanders and have given them an opportunity going forward. When you look at that $790 million package at the heart of the Budget that is for the poorest households it is the thing that New Zealanders understand and believe in. They have bought into it and find it very helpful.Fletcher Tabuteau: They’re confused to be fair.DAVID BENNETT: New Zealand First members may say things over there in that corner but the thing is that New Zealanders do get it. They do get it. They understand that this is the sort of thing that they want to see happen. They are not going to have a Labour Party coming in here and saying that surpluses have not been achieved when the Labour Party promised surpluses and under its own planning it would never have been able to deliver them because you cannot have a surplus and at the same time deliver that expenditure—unless of course we get that good revenue in the next few months that could actually enable New Zealand and this Government to go into surplus even though we have had to deal with it in the Budget. This is a good piece of legislation for New Zealanders going forward and we look forward to it passing through the House.Dr DAVID CLARK (Labour—Dunedin North): Well there was one thing that member David Bennett got right in his speech.Hon Clayton Cosgrove: Oh really?Dr DAVID CLARK: I spotted it. He said that this bill relates to the Budget. For anyone at home looking for a factoid in that speech he suggested that this bill relates to the Budget. I cannot fault him on that. It may not be exactly about the Budget but it does relate to the Budget. The member is quite right technically. I look across the House to catch his eye but I cannot catch it any more. He must be hiding under his desk and I might have been doing the same thing in his position.In the imprest supply bill we do have some money set aside for capital injections which is a standard thing that Governments do and so I wish to talk about some of those. I also wish to talk about the mental health spending that is related in the supplementary estimates and also about the alterations in revenue relating to KiwiSaver all of which are related to the Government’s attempt to get into surplus. As my colleague Grant Robertson—not yet “the Hon Grant Robertson”—noted in his contribution this desperate attempt to get to surplus and the failure again—for the seventh time in a row—for this Government to get to surplus was in fact the central plank of its election campaign.Hon Clayton Cosgrove: No. 1 promise.Dr DAVID CLARK: It was its No. 1 promise as my colleague the Hon Clayton Cosgrove points out in the last election campaign. Therefore this issue cuts to the heart of National’s credibility as a Government. It failed to get there despite—despite—making a number of changes. In fact if we look closely at the changes to KiwiSaver the amount saved in the first year is roughly what brings the Government’s projections into line to finally—finally—achieve surplus in the next round. We will see whether that really happens because it does not have a plan for the economy. That is what is clear in these supplementary estimates. It is jiggering things around. It is trying to make things fit together with a tactical plan without any kind of strategy over the top of it other than to get re-elected. That is what we have seen in this Budget of broken promises that it brought to the electorate.We have seen of course the promises broken around the number of jobs created. National has pushed that promise out by 3 years in the Budget. We have seen the wage rises get pushed out by 3 years in the Budget. There is $7000—it said every New Zealander would be better off. It had promised that previously by the end of next year. Well it has pushed that out another 3 years. This is becoming a pattern. It is always jam tomorrow with this Government—unless of course it is a television screen for a Government department in which case $140000 is no problem at all. That is chump change when it comes to this Government. It has got its eye off the ball. It is out of ideas and so we see in these documents the moving around of small bits of expenditure here and there.But the really big thing in this Budget and the big broken promise is the KiwiSaver change. It does however fit a pattern. It is the eighth change this Government has made to KiwiSaver. It has never liked savings. It has never liked savings although New Zealand has an acknowledged problem with capital debt. Businesses struggle to get the money and capital they need to get off the ground as compared with Australia where it has had much more proactive savings policies. Of course Labour introduced them in the 1970s and Muldoon with his propensity for debt—similar to this Government’s—got rid of them. There would have been many hundreds of billions of dollars in savings in this country were it not for that Muldoonian movement back to cancel that savings regime. Australia—noting by the by—has $1.3 trillion in its retirement savings as a result of adopting a similar scheme after us. But this Government is the Government of record debt—more debt than Muldoon. In its attempt to get to this wafer-thin surplus that it failed for the seventh time to get to it cut KiwiSaver again. The first cut it made if members cast their minds back was to reduce the member contribution rate from 4 percent to 2 percent in 2008. It—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member is not being quite as blatant as the member preceding him but I am going to attempt to get him to talk to either the supplementary estimates or the imprest supply. The member might be getting to it but it would be good if he got to it promptly.Dr DAVID CLARK: I will leap ahead and point to page 25 of the supplementary estimates bill where the KiwiSaver changes and these supplementary estimates are recorded because that is where I am coming to. I am wishing to point out that there is a pattern to this changing behaviour and this whittling away of KiwiSaver.The changes noted in the Budget—and if any member wishes to correct me I would be interested—relate to the Government’s refusal to allow new members to sign up with any notice period. In the Budget the Government cut off the $1000 kick-start contribution on Budget day and that is why we have had an alteration to the kick-start payments recorded in the supplementary estimates. As I said that does fit the pattern of this Government which reduced the member contribution rate from 4 percent to 2 percent then reduced the member fee subsidy of $40 per annum—it discontinued that completely. Then it capped compulsory employer contributions at 2 percent then it discontinued the employer tax credit and then it halved the maximum member tax credit to just $521 a year. Employer contributions were subject to additional tax under this Government and then the minimum employee rate was reversed. It had reduced it from 4 percent to 2 percent then it put it back up to 3 percent—it does not know quite where it is on this particular thing.Then in this estimates document we see that it has removed the kick-start payment and that has had an effect on this Budget. It has removed that first $1000 that incentivised kids to start saving and incentivised first-time workers to start saving. It has removed that and with it the incentive for people to save despite the acknowledged savings challenge that New Zealand faces. It really is short-sighted. It is indicative of a Government without a plan; it is indicative of a Government that is willing to break promises at a drop of a hat. I bet that just about every member over on that other side had that $1000 payment before they stopped this scheme and before they stopped future generations—in fact before they stopped 500000 New Zealanders in the next 4 years—receiving that $1000 KiwiSaver kick-start. It is a tragedy. It was a sad sad day when the Government broke that promise to future New Zealanders’ earnings.This Government also broke the promise around the surplus—we have noted that. It broke the promise in terms of not introducing new taxes. In this Budget we had three new taxes: a tax of capital gains on property investors an airport tax that was introduced and a broadband tax. The Government’s own department said that these were taxes while the Minister stood up and tried to deny it. This is a Government in disarray. It snatched at a grab bag of window dressing opportunities. There is the housing agenda that is falling apart at the seams as we see Nick Smith’s—Hon Clayton Cosgrove: Debacle.Dr DAVID CLARK: —debacle or fiasco. The superlatives fail us as Aucklanders struggle to find affordable homes. The Government is saying that they will be affordable to someone—they will be affordable to someone—but most hard-working Kiwis in Auckland certainly in the younger generation can no longer see themselves owning a home. That is because this Government has sat on its hands for 7 years delivering seven failures to get to surplus running for two elections on the promise of surplus breaking promises left right and centre without a vision and failing to reach its own export target of lifting exports as a percentage of GDP to 40 percent. It is a Government out of ideas that is failing New Zealanders.I am running out of time so I will not be able to mention in too much detail the changes to mental health funding but I will note that the mental health cuts in Dunedin that are being faced by NGO providers are going to result in a reduction in the volume of services—that is what the providers say. This Budget is cutting health services. It is cutting future savings. It is window dressing to do a little bit for really hard-up people. Good on those members for taking some steps to alleviate the suffering of some of the most hard-up beneficiaries although it goes only a small way towards the damage that they did in the 1990s to that very same group of people.CHRIS BISHOP (National): The Budget delivered by this Government is a confident Budget of a confident Government in charge of an increasingly confident nation. It comes on the back of six impressive Budgets before it. My contention is that collectively these Budgets are reshaping the political landscape in New Zealand. This is because politically and historically in New Zealand politics the Labour Party has liked to think of itself as the party of progressive even radical social change. Sometimes that is true—the 1980s were a time of radical social change in New Zealand led by the Labour Party for the better. Conversely sometimes it is claimed that the National Party is the traditionally conservative party—that we manage the status quo and we build on the changes that Labour has made. But whatever is the truth of those claims—and I think they are contested—there is no doubt that the political situation today differs markedly from these perceptions.The traditional roles of the parties have been reversed. The Labour Party is now the real conservative party. It is fearful of innovative social policy and afraid of new ideas. It is the party that says no to everything as it is saying no to this Budget. Meanwhile it is the National Party that is the genuine reformist party. National is determined to enter the social policy realm that the Labour Party has selfishly assumed it owned for itself such as the welfare system social housing and education.This Budget continues National’s quiet revolution in State services such as getting Government departments to focus on results—a radical concept for State services. We are asking the Government departments and the people who work in them to focus on getting results through our Better Public Services programme. That drive is having demonstrable results as the regular target reports that we publish for ourselves show. There has been a 38 percent reduction in youth crime since 2011 the number of teenage sole parents on a benefit has dropped by 40 percent since 2011 and the immunisation rate for Māori is now as high as it is for the rest of the population.The previous Government measured success by how much money it spent—by how much money it spent—whereas we as a Government are prepared to measure success by the actual outcomes that spending delivers for New Zealanders. We are prepared to look at different ways of doing things and this Budget and the bills that we are debating today reflect that. We are prepared to look at different ways of doing things because simply throwing more money at social problems does not necessarily solve those problems.Between 2003 and 2008 Government spending under the previous Labour Government rose by 50 percent in 5 years. What did the Salvation Army say when we came into office in 2008? It said that there had been little to no impact on social outcomes for that increased expenditure. Hence we as a Government are embracing new approaches to old problems. We have things like Whānau Ora things like contracting and evaluation tools through social sector trials and things like social impact bonds.We are transforming the welfare system towards one designed around an investment and liability prism. Rather than taking a traditional year-on-year cash view of the welfare system we are looking at the lifetime costs of clients in the system. By taking a look at the lifetime cost the opportunity is created to spend more today to get a better long-term outcome for individuals and households. This is leading to quite profound changes in Government policy towards people receiving welfare. We are encouraging the Government to invest in people particularly the young and particularly to do it early in their lives. This social investment approach which is reflected in this Budget is about targeted evidence-based investment to secure long-term results for the most vulnerable New Zealanders. As a Government we are willing to spend a bit more now to get real sustainable change and we can generate sustainable savings for the Crown and for taxpayers.In social housing—and this Budget reflects this—we are breaking down the near-monopoly that Housing New Zealand has on social housing in New Zealand. We are growing the community housing sector and the social housing sector more generally all with the objective of making sure tenants receive better care.What is the response of the Labour Party to these innovative approaches to social policy? Well the first response is often silence. That party opposite has nothing to say about social investment approaches to policy it has nothing to say about the Better Public Services targets and it has nothing to say about Whānau Ora other than to complain. You will not find many press releases from Labour about social investment. Those members do not talk about it they do not mention it and they do not understand it. You will not find parliamentary questions on it and you will not find press releases about it so it is almost as if it is too difficult for those members to engage on the genuine issues.So the first response from the Labour Party is often silence. When those members do have something to say they often use tired and trite clichés such as calling the Government neoliberal which is the social democratic politician’s favourite term of abuse for centre-right Governments notwithstanding that the term is devoid of all meaning and is hilariously inaccurate when it is applied to this Government. Often we get “neoliberal” thrown in with “Crosby/Textor”—and we just heard it from Grant Robertson not 20 minutes ago—as if just mentioning the name of Crosby/Textor and saying “neoliberal” is a legitimate argument.Labour’s response to the Productivity Commission report about social services that was released a few weeks ago was to just simply talk about the Government introducing vouchers in social services and those members seemed completely unaware that we have a voucher system throughout a lot of our social services. That just means funding is following people when they go to particular services. They are all around us. The early childhood education system is a voucher system. Tertiary education is a voucher system. Those members have little or nothing to say about that.Then we come to social impact bonds and Grant Robertson talked about this in his speech just before. Labour talks about people profiting from social services but again profit exists throughout our social services already. For example in the health system private hospitals exist. They provide surgery that is funded by the public. Private pharmacies exist which profit by filling Pharmac scripts. Private medical manufacturers exist by developing better replacement hips as Eric Crampton pointed out through the New Zealand Initiative. So profit exists already. That is not a legitimate argument against it. Then there was the nonsensical claim from people like Annette King that social impact bonds were experiments that had been proven to fail—a nonsensical claim. On this critique the Government would never do anything new.So let us look at social impact bonds. Where have social impact bonds been trialled? Radical countries like Swaziland which—Eugenie Sage: I raise a point of order Mr Speaker. I understood that we were dealing with the Appropriation (2014/15 Supplementary Estimates) Bill and that is a new initiative—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am the judge of that.CHRIS BISHOP: Thank you very much. We are also dealing Ms Sage with the imprest supply bill and I am also responding to the ridiculous criticisms that Grant Robertson made about social impact bonds. So let us look at countries that are dealing with social impact bonds. Swaziland for example is doing a social impact bond to try to reduce the number of people contracting HIV. Uganda has to try to increase access to early childhood education; Columbia to try to reduce teen pregnancy rates; and India to close the gender gap between males and females in that society.Which country introduced social impact bonds in the first place? The United Kingdom. Under what Government? The Labour Party under Prime Minister Gordon Brown—the doyen of social democratic parties. So the complaints from the New Zealand Labour Party on this are simply silly. What has become clear—and this is my overall point—is that in the last few years the Labour Party opposite has been fundamentally uninterested in new approaches to old problems. It is stuck in an ideological time warp. It insists despite all evidence to the contrary that the Government has the answers to everything that the bureaucratic monolithic State can effectively address social problems and that all that is required is yet more Government spending.Social democratic parties around the world have moved on from this 1970s’ view of government. As I mentioned before social impact bonds are being trialled all around the world often by social democratic Governments but in New Zealand the Labour Party appears to remain stuck in the past. My core contention from this Budget which is reflected in the supplementary estimates and the imprest supply bill that we are debating is that the traditional roles of the parties in New Zealand have been reversed by this Budget and the Budgets that have preceded it.These days it is National that is the progressive equitable force for change and for good in New Zealand society. We are willing to accept that more Government spending does not necessarily solve every Government problem. We are willing to look at innovative approaches to social policy like our social housing reforms like social impact bonds and like generally the investment approach that we are embedding at the heart of the Government in this Budget.It is the Labour Party that is the conservative party in today’s society. It is unwilling to look at change it wants to say no to everything and to the extent that Labour members have anything to say they simply want to engage in the debate by using tired and trite clichés. The Labour Party opposite is out of touch and out of ideas. This party and this Government is creating a brighter future for all New Zealanders. Thank you.EUGENIE SAGE (Green): I am pleased to take a short call on the Appropriation (2014/15 Supplementary Estimates) Bill. I strongly dispute the clichés that Mr Bishop was rolling out there and his assertion that this is a Government that is a progressive equitable force for change. A number of the appropriations that are in this bill deal with the anchor projects and earthquake recovery in Christchurch and there the Government is the very opposite of being a progressive force for equity. Instead a lot of these anchor projects and the cost-sharing agreement that the Crown has made with the Christchurch City Council are about burdening the council with substantial debt. For big projects like the stadium and the convention centre where the Government is putting a large amount of money into facilities like the convention centre and requiring the council to do the same for the stadium that is burdening the council with debt. It is forcing the council in its long-term plan to look at selling the city’s assets. That is not promoting equity because rates will then increase if we do not have assets like Orion Christchurch International Airport and Lyttelton Port of Christchurch to provide dividends to the city in order to reduce the number of assets that Christchurch residents need to pay for.In this bill we see quite a few changes: an increase in allocation for earthquake recovery land ownership and management and nearly $69 million for the development of the central city anchor projects. Here there has been total opaqueness by the Canterbury Earthquake Recovery Authority and the Government over the increasing costs of some of those anchor projects such as the convention centre. When we put in Official Information Act requests what do we get? Pages of redaction even when we are asking about what additional funding was allocated in previous financial years to assist the procurement process for the anchor projects. We get denied the business cases. Indeed at the select committee the Canterbury Earthquake Recovery Authority has said that there will not be any information provided on the business case for things like the convention centre until all the major contracts have been signed. That is not good budget management. That is not sound management of public money when costs for things like the anchor projects—the convention centre in particular—look from the various comments that have been made in the mediaas if they are spiralling out of control yet the public cannot see where that $300 million is likely to be going.In the bill we also have $40 million for the ownership and divestment of the anchor projects and again there has been a total lack of information from the Government over who will own facilities like the stadium the convention centre and the Metro Sports Facility. We put in Official Information Act requests and they get answered with very little information about the sorts of public-private funding arrangements that the Government may be entering into. When we have the chair of the Canterbury Employers’ Chamber of Commerce calling for private sector providers to own libraries in Christchurch how is there any guarantee that the hundreds of millions of dollars of public money that is in these appropriations and is going into things like the convention centre will actually end up with an asset that is publicly owned? Or is it being used to subsidise businesses like Accor Hotels which the Government wants to operate the convention centre and to subsidise private interests rather than having publicly owned facilities? There is another item here: $241 million for the procurement and preparation of land and other assets for the development of the anchor projects. Again there have been large areas of land that have just been acquired from the Christchurch City Council for the convention centre—part of Gloucester Street—but without full recompense being paid to the council.Then further on in the bill there are changes to the appropriations relating to the Avon River Papa o Ōtākaro precinct that cover more than one financial year. A petition has been signed by over 6000 people calling for the Avon/Ōtākaro park to be extended beyond the central city out to the sea yet the Government is totally silent on what the future of the residential red zone will be when all the former houses have been cleared and people have moved on. Instead of focusing that Avon River project just on the central city and spending some $98 million on 2.5 kilometres of the river in the central city the Government should be looking at how we can have a full river park that goes from the city to the sea that provides space for natural hazard management in terms of the flooding issues in the Avon/Ōtākaro River and that provides space for community gardens and for public art. But no again there is absolute silence on what the Government’s plans are for the future of that land despite the hundreds and hundreds of millions of dollars that have been well spent in purchasing the land from the former owners so that they could move on.Again in the bill there is a reduction in expenditure for the cost of the bus interchange. That may be because that project has been brought in on time but there is additional funding being provided for the convention centre. We need to have much more accountability from the Government over how these big anchor projects are to be funded. We need the Government to actually renegotiate the cost-sharing agreement with the Christchurch City Council. There has been a major review of the costs of repair of sewerage stormwater and local roads—that report is not public—but the Government should be contributing more to the repair of horizontal infrastructure rather than capping its contribution to those costs and rather than putting all of this money into a big stadium that people in Christchurch have clearly signalled the city does not want and does not need and that is an extravagance rather than something that is vital to the recovery of the city.Similarly with the convention centre international experts have said that with the Queenstown convention centre the Wellington convention centre and the Auckland convention centre we will have a glut of convention centres in New Zealand. Yet this bill is continuing to provide for large amounts of public money to be put into a convention centre in Christchurch that there has been no opportunity for the public to have any say in the design of because it has all been pushed through under emergency legislation rather than through the Resource Management Act process and there has been no opportunity to scrutinise and see a business case that sets out whether there is actually even a sound financial basis for this investment of hundreds of millions of dollars of public money. So there are details about figures in the bill but not a lot of detail about where this money is going and the Government needs to be much more accountable for the spending of public money.FLETCHER TABUTEAU (NZ First): Minister Bennett spoke of the plan that is working. The trust assumed in this phrase is huge given that no one has seen the plan. Minister Bennett has certainly not seen the plan. That is an example of the arrogance of this National Government. Everyday New Zealanders are losing their trust in this Government at a rapid rapid rate. For all New Zealanders trust has been eroded in all number of issues: for example the trust that was lost on the countering terrorist fighters legislation and the trust that was lost on the oversight of the Government Communications and Security Bureau where the person in charge of holding the bureau to account actually reports back to the Minister. In a by-election the Government made promises that it has no intention of keeping. Then there is the biggest undermining of New Zealanders’ trust with the Trans-Pacific Partnership arrangement and New Zealanders having to rely on the American political system to see them through to the other side of this negotiation safely.The Minister for Tertiary Education Skills and Employment—coming back to appropriations—Steven Joyce was forced to admit that the sums provided for in the last Budget to be fair were misleading. The Government’s Budget announcement of a further $113 million for tertiary education was an incredible exaggeration. The actual increase was a mere $7 million. New Zealand now ranks because of the lack of appropriations—and perhaps this could have been an opportunity laid out in this legislation for a capital injection but no—near the bottom of OECD rankings in terms of tertiary education funding per student. This is what the National Government has provided New Zealanders looking to better themselves. Instead of trying to increase productivity through appropriations through a clever Budget—instead no money.We know from research that there is a positive correlation between people using online technology and business success but yet again there is a divide between the haves and have-nots. Again the 2014 Budget did not address it and there is nothing in this appropriations legislation that deals with the significant problem where the timing of the issue could not be more important. What we are seeing is a roll-out of broadband that is not effective. We are seeing a roll-out of broadband where those in our rural communities and those in the regions are missing out right now but this has not been addressed. What we know is that the roll-out of the broadband is a conversation that is being had now. I use this example because hard data has just been released from Mind Your Own Business analysis. Rural communities have the lowest engagement levels in online services. Only 10 percent of rural businesses have websites and 73 percent of them have no presence whatsoever. The logical conclusion from that is that they are missing out on revenue. Rural operators are significantly unhappier with the speed and reliability of their service.On the matter of transport the Minister spoke out yesterday about increased spending in the regions. Our New Zealand First spokesman Denis O’Rourke described the Minister’s words as perhaps not ringing quite true. The reality is if you adjust what was being spent in the 2008-09 period for inflation in real terms land transport spending in the 2014 Budget was actually less in Gisborne Hawke’s Bay Northland Bay of Plenty Manawatū Wanganui and the West Coast. In Northland New Zealand Transport Agency investment in local road maintenance this year for example is $14.6 million—significantly lower than the $15.5 million average over the last 7 years. Even the $5.8 million investment in local road improvements is significantly lower than the 7-year average of near on $10 million.Whānau Ora has been identified as an issue in this appropriations legislation and New Zealand First has consistently raised concerns over Whānau Ora spending. Scrutiny by the Auditor-General has clearly shown that it has fallen seriously short of expectations. These appropriations have ignored official findings. The Auditor-General’s report found absolutely no evidence that good value for money has come out of the $140 million so far spent on Whānau Ora.It is clear that this Government has got it wrong for our regions. Social services are disappearing in the regions under this Government. Under National there has been a flow of regional closures including services to veterans and youth provided by the Salvation Army and recently Relationships Aotearoa was forced to shut down. It had branches in the regionsthroughout New Zealand. Government support for social services has fallen away. It is clear in this Appropriation (2014/15 Supplementary Estimates) Bill. It was clear in the Budget. It has fallen away under the Government’s investment approach—widely touted over the past 6 years but it is not working. There is little in the way of increased funding for police—after 5 or 6 years another frozen Budget in real terms. Too many small rural isolated police stations from the far north to the deep south are squeezed for staffing.I put it to this House on behalf of many concerned New Zealanders that our electricity prices have been rising constantly but there was nothing in the Budget and there is nothing to be discussed today unfortunately for the people of New Zealand in the appropriations. There has been nothing from this Government in its policies that even recognises the growing depth of real despair from more and more everyday New Zealanders or as recently coined the working poor. Yesterday we heard that West Coasters and Northlanders are facing higher proposed charges by the Electricity Authority. New Zealand First asserts that big business will be the winner with lower electricity line changes per year and households will be missing out.Here we seem to be seeing a case for the building of corporate welfare particularly for foreign-owned companies—surely a hallmark of this National Government. How on earth are regions like Northland—ignored in this bill—and the West Coast supposed to develop when the likely price increase will be massively greater than inflation? In fact it is unfortunate that what we see going forward is that the lines companies did not actually demand a price increase but we know that they will be blamed for it anyway. The resultant increased electricity line charges will then be used by right-wing elements especially in Auckland to demand the breakup of energy consumer trusts thus enabling private interests to gain access to the trusts’ billions of dollars of assets.I conclude by putting it to this Government that our regions our small businesses our famers the elderly and the working mums and dads will be paying a higher price to bolster private profit. These are the very same people who have been ignored by this Budget by these appropriations and so New Zealand First cannot support this bill today. Thank you.JAMI-LEE ROSS (National—Botany): It is always a bit interesting when I get to follow on from Fletcher Tabuteau. I got to do that yesterday in the House actually. We like to call him the professor after his great revelation during the Budget debate that he was an economics professor but the problem is that if he calls himself an economics professor we on this side would like to think that he could actually support policies that would help to grow the economy grow more jobs or be beneficial for New Zealand. Last night New Zealand First was the anti-jobs party along with the Greens when those members were opposing greater growth and greater job creation through the Korean free-trade agreement. Today we hear that they are opposed to much of what the Government is doing in the finance situation as well.Unashamedly I say to Mr Tabuteau that we do say that this is a plan that is working because it is seeing New Zealanders benefit from our plan. It is a plan that is working because 150000 people are expected to get a job from the policy programme we are putting in place. We know the plan is working because in the last 4 years 194000 people gained a job under the economic settings this Government has put in place. For Mr Tabuteau’s benefit I can say again that the plan is working because we are one of the fastest-growing economies in the OECD. Average growth is projected to go up to 2.8 percent over the period of the Government’s Budget and that is a growth rate that many countries envy. So I say to Fletcher Tabuteau that our plan is working.I want to also respond to Grant Robertson. He was a bit unhappy at the Finance and Expenditure Committee meeting this morning. He asked his questions and then he had to depart. I asked the Minister of Finance for the benefit of Mr Robertson who did do a lot to try to talk down the New Zealand economy how we are tracking compared with other countries in the OECD the countries we compare ourselves with on a regular basis—for example the UK the eurozone the US Australia and Japan. I asked how we are tracking. Compared with every single country we are doing better when it comes to debt and our surplus target that we are aiming towards is better than those countries as well.We must remember that 4 years ago the Government had to post because of the difficult economic circumstances an $18 billion deficit. There has been a huge change round that we have seen in the past 4 years. Now we are just about to reach a surplus. I know that the guys and girls on the other side like to complain about the Government not being able to quite reach the surplus we were projecting last year and yes it is their job to hold us to account but they should just remember that 4 years ago there was an $18 billion deficit. Now we are just about to hit surplus. I think that when New Zealanders wake up in the morning they do not ask themselves: “Oh is the Government is going to reach surplus this year?”. They do not ask themselves whether the Trans-Pacific Partnership agreement has progressed much further. They do not ask themselves whether or not the Government Communications Security Bureau is doing certain work.The Attorney-General made an interesting point. When Fletcher Tabuteau referred to the counter-terrorism bill earlier in this Parliament Mr Finlayson said that New Zealand First and the Islamic State of Iraq and Syria (ISIS) are probably the only parties in the world that opposed that bill.Hon Christopher Finlayson: And the Greens.JAMI-LEE ROSS: Oh the Greens as well. But it is a plan that is working. It is a plan that is being implemented.When I was reading through the Appropriation (2014/15 Supplementary Estimates) Bill I found a few points that I would just like to touch on. There is provision in the bill for work around the deposit subsidy scheme through the KiwiSaver HomeStart scheme which this Government is implementing. I want to highlight this for the House because I think it is a fantastic scheme that is leading to more young New Zealanders more first-home buyers getting the opportunity to purchase their first home. Housing is an issue that many New Zealanders do care a lot about and this Government is putting in place plans and taking steps to tackle housing affordability. We know that under Labour house prices doubled when it was in office. So Labour members cannot get up on their hind legs in the House and claim to be holier than thou and claim they did everything to solve housing issues because they did not. This Government is working hard to ensure that we build more houses particularly for those in Auckland who need more houses and we are assisting them into their first home through the KiwiSaver HomeStart scheme.I was pleased to see in this bill that there is additional funding for that scheme. Over the next 5 years it is expected that 90000 New Zealanders will benefit from that scheme. We have doubled the amount of the subsidy for those purchasing their first home and purchasing a brand new home. For those who are interested in taking up the scheme there is up to a $20000 grant available. That is a huge amount for young New Zealanders and if we couple that with their own KiwiSaver deposits which they have had in stock for some time—5 years would enable them to maximise the deposit subsidy that they get from the Government—that is a huge amount of support we are putting in there.If you put that alongside the extra homes that are being created through the special housing areas and put that alongside the work that Dr Nick Smith is doing to try to build housing on Crown land that is available to be built on I think this side is happy to stand up be proud and support that policy. If Labour Party members were actually serious about the 100000 homes they wanted to build when they went to the election last year they should actually be telling us where they were expecting to build those homes. They are quite quick to say: “We would have built 100000 homes. We had the solution for housing. We knew what we were going to do around housing.” despite the fact that prices doubled under their watch. If they really thought they could build all those homes where were they going to do it? Where were they going to do it? They would be going through exactly the same process that we are going through identifying tracts of land that are available and tracts of land that New Zealanders can build on. So they should not stand up in the House at question time and they should not stand up in the House during these types of debates and give Nick Smith a difficult time as they have been doing because he is actually fronting up with policy. He is actually fronting up to get more housing built in Auckland. I am happy to support the work he is doing in that area.I also want to touch on the fact that the Opposition parties are quick to try to criticise the Government when it comes to children and when it comes to families. If those members were serious about trying to help families then they should have come over to this side of the House and supported the Budget and the plans we are putting in place around those who need assistance. The $790 million child hardship package is something that 160000 families around the country will benefit from and they saw that this Government is willing to front up and support families. There is $790 million that will be supporting those children living in hardship. It is something that this Parliament probably should have done a long time ago. The economic circumstances have now improved so we can invest in that area in a much greater way than we have been able to in the past. But $25 a week in the pockets of those who are living in the most difficult circumstances will actually go a long way. When it comes to those living in difficult housing situations the answer to helping them to ensure they can heat their homes is through the schemes we have in place to insulate homes but it is also about trying to get more money into their pockets so they can afford the heating.Let us not talk about schemes that will probably put people out on the street. A warrant of fitness scheme which the Labour Party and the Green Party are proposing that would see houses actually being taken off the market and see New Zealanders ending up on the street is not the way to help those who want to have a warmer home. The way to help those people is to have an insulation scheme in place. It is also to have in place a scheme that sees those families able to afford the heating costs for those families and afford the cost of putting food on the table. The best way to do that is to help them through the benefit scheme or more important to help them get a job. This is a plan that is working. More people are getting jobs under this plan. Higher wages are seen under this plan. Less unemployment is seen under this plan. We are proud of this plan and all that it is achieving for New Zealanders.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Gareth Hughes—5 minutes.GARETH HUGHES (Green): Kia ora. Ngā mihi nui ki a koutou. I heard a lot about housing from the member Jami-Lee Ross but it is a house of cards that Government members are building and they cannot seem to get it right. In fact it is like they are building a house on a sand foundation: there are hardly any houses being built the land that the Government is going around and showing off is not actually the Government’s land and we are talking about exploding substations. Now today we have seen the Minister for Building and Housing disappear into the backblocks but I am sure he will be happy that he has got Jami-Lee Ross defending him. We face a housing crisis.We heard from the member that things are getting better in the Budget for young New Zealand families. They are not. In fact what has happened is that a whole new term has been coined for what is facing the current generation which is Generation Rent. We are seeing a whole generation locked out of the dream of homeownership. In fact for them it is only a dream. We are seeing in Auckland at the moment capital gains per annum greater than the average annual salary. Something is wrong in New Zealand when we see such a pervasive housing crisis happening in our biggest city. You see the Reserve Bank cutting interest rates because of the slow-down in the rest of the economy. Sure the Government did a few good things in the Budget. It is hard to remember them and the National members have spent more time talking about New Zealand First and the Labour Party than what they achieved in the Budget. But I will take my hat off and say that it was good to see beneficiaries actually get some additional funding. It had been too long so it was right. Obviously the way it is being implemented with the abatement costs will see a lot of people getting a lot less than the $25 a week but it is good to see that beneficiaries are not just being harangued but also getting some good support.What we have seen in the wake of the Budget is that the country is facing some serious structural economic problems. This has been highlighted: once upon a time we were talked about as a rock star economy but we are seeing those serious structural economic problems. You see one in the price of milk and you see the impact that that is having on the economy. Jami-Lee Ross was triumphantly talking about debt. The last time I looked our net overseas debt position was in the same ballpark as some of the European countries that are having serious problems. When I looked into it earlier in the year we were spending $7.7 billion a year just on interest payments flowing offshore. We have seen a dependence on dairy which when those low-price commodities plummet has serious national impacts. We are seeing it with the lack of a surplus. It was not the members on the Opposition benches who made a mountain out of the surplus idea; in fact it was Bill English himself. He set this as the exemplar of what he was aiming for. There have been seven in a row—seven deficits in a row. Obviously there is also a deficit of ideas and a deficit of innovation because we are seeing real problems come through.What we have not heard about is growing inequality. We have seen a small measure which in real terms will not have a significant impact for beneficiary families but we have seen fantastically high inequality. The OECD estimates that inequality rates at the moment have slashed 10 percent off our GDP. If you look at say the mid-1990s the average chief executive officer was getting about 15 times the average wage. Now it is 119 times more according to the economist Susan St John. It is having a real economic impact it is having a real social impact and we also see the generational inequality. We have seen it in housing. For many older members of this House who grew up in a different New Zealand free education an affordable home and a good job were considered the norms. For my generation and Jami-Lee Ross’ generation they are considered luxuries now. We see a surplus of inequality a surplus of generational inequality and a surplus of omissions.What the Budget did contain were additional subsidies for fossil fuels despite all the work the Government is doing railing against them internationally. We saw a tiny increase in research and development funding but not enough to even move us from where we are which is in the bottom half of the OECD. We have a serious innovation problem. Just today a new report has come out in Australia warning that it could be losing 5 million jobs over the coming decades because of automation and other global challenges. These are where we need to be addressing some of the structural challenges facing our economy and the answers are in terms of innovation investing in our universities and tertiary education investing in research and development and science and investing in smart Green technology like clean energy. That is what the Greens have advocated for an awfully long time. Thank you.CHRIS HIPKINS (Labour—Rimutaka): The people at home will be asking: if the Government thinks this is a plan that is working who is it working for exactly? It might be working for the chief executives of the energy companies that the Government has sold off who are getting multimillion-dollar pay rises but it is certainly not working for young Kiwi savers who have had the $1000 kick-start payment cut from KiwiSaver. It might be working for the landlords who are continuing to overcharge for cold damp mouldy houses but it is not working for the tenants who are living in those houses. It might be working for the people who are trying to sell a house but it is certainly not working for the people who are trying to buy one who are finding themselves priced out of the property market and it is certainly not working for workers and small businesses who are continuing to be overcharged for their ACC levies.So let us look at what this bill does and what it signifies in terms of the Government’s track record and let us weigh it up against the Government’s own promises and commitments at the last election. What was the No. 1 promise that it made at the last election? John Key said that the Government was back in surplus. He did not say it was going to get back into surplus; he said that it was in surplus—$372 million worth to be precise. How has that actually turned out in actual reality? It is a $684 million deficit. It does not take a mathematician to work out that that is a $1 billion failure on the Government’s part when it comes to delivering on that particular promise. That is broken promise No. 1 which is signified by what we are debating here today.Let us look again then at what that is going to mean in the long term for the Government’s track record. It is getting back into surplus next year. Well it claims that it will be back in surplus next year with a $176 million surplus. Let us be clear about that: $175 million of that comes from cutting the KiwiSaver kick-start. That leaves $1 million. If the Government can turn a $372 million surplus into a $684 million deficit what is it going to do with a $1 million surplus which is effectively what it is leaving itself in this year’s Budget? It promised that it was going to be paying down the debt. Let us remember that this Government has clocked up more debt than any other Government in New Zealand’s history. Government debt is at its highest level ever and it has only taken the National Government 7 years to get there. It said that it was going to get net debt down to 20 percent of GDP by 2020. It is abundantly clear that that is another broken promise because it is not even close to making it.John Key promised New Zealanders that the Government would create 150000 extra jobs—failed. It is not going to deliver on that. It is at least 60000 jobs short. He promised New Zealanders that the average wage—Andrew Bayly: Rubbish.CHRIS HIPKINS: “Rubbish” they say over there. It is their own Budget documents that show it. Anyway the Government promised that the average wage would move from $55000 to $62000. It is going to fall at least $3000 short—another broken promise. John Key said that the $1000 KiwiSaver kick-start payment would remain as it is now. Oops—another broken promise by the Government. The $1000 KiwiSaver kick-start payment was removed. That is where $175 million of the $176 million surplus is coming from—the cut to KiwiSaver. The Government said that it would not be increasing taxes on hard-working New Zealanders and we have seen that it has broken that promise already with talk of a capital gains tax for property speculators airport tax charges for those entering and leaving New Zealand and a broadband tax all in this year’s Budget and all of which signify yet another broken promise.So if this is a plan that is working as the Government claims it is whom is it working for? It is certainly not working for the New Zealanders who believed the Government and the promises that it made at the last election and voted for it based on those promises because it is failing to deliver on the cornerstones of its own election ledgers. This is a Government that purports to be a good economic manager but that really cannot walk the talk because it is not delivering on it. It is driving New Zealand further and further into debt and as the debt piles up the Government does not have a sustainable plan to turn that round. What it is hoping for is a recovery in dairy prices—a recovery that is highly unlikely to come. Let us be clear—the fall in dairy prices has left a massive massive hole in the New Zealand economy and the Government does not have any plan to plug it. We are going to be back here again next year almost certainly debating yet another deficit by this Government because it does not have a plan to turn round New Zealand’s economic fortunes.ANDREW BAYLY (National—Hunua): I am pleased to be able to speak on the Appropriation (2014/15 Supplementary Estimates) Bill that is before the House today. The terms of this bill make me proud to be a National MP as it is easy to see that the provisions of our Budget are so wide ranging reaching our regions reaching all sections of our communities improving our infrastructure and providing for better services.The Labour Party always presenting itself as the defender of low-income New Zealanders did not come close to providing the economic measures and planning that this Government was able to present to New Zealand last month. Labour notably short on social innovation had already made response to many of the improvements and packages to be introduced in order to make the lives of New Zealanders better. That response was always “Don’t do it. Don’t do it.” Well this Government thinks otherwise and we are determined to implement these measures designed to assist and relieve New Zealanders and their families in all areas of their lives with help as needed.It is perhaps just useful to recap on the main elements of the Budget. The first bit I think is an excellent piece of innovation. The $790 million child hardship package is a balanced piece which provides low-income earners and families with an increase in their benefit rates. It also increases the benefits in terms of childcare assistance and out-of-school care but balances this with the obligation to seek employment as soon as possible when children get to a suitable age. The Budget also puts significant new resources into health. There was another $1.7 billion taking the Health vote to a record $15.9 billion and an increase of nearly $700 million taking again the education vote to just under $11 billion. The social housing provisions were great particularly around the Tāmaki development increasingly seeing those 7000 homes that we want to see built there as soon as possible and some of the other funding initiatives that were related to that. There is the $500 million of ACC cuts that come in over the next couple of years which will be great not only for employers but also for working New Zealanders. This is all good stuff.I have on previous occasions spoken at length about what this Government has done to support working New Zealand families. Tonight I do not intend to repeat this other than to say that not only is there a social imperative for us as a Government to support our vulnerable families there is also a financial incentive. Quite simply it is good business to have a fairer society where every child growing up in New Zealand has the opportunity to pursue their own dreams and aspirations. Instead what I want to focus on tonight are two things: Government debt which our Opposition loves to talk about and growth rates including regional growth rates. These are two themes that I hear repeatedly coming forward from the Opposition.The first priority of this Government has always been to ensure that Government’s finances are responsibly and efficiently managed. We inherited accounts from the previous Government that showed that spending had risen by 50 percent over 5 years. This was obviously unaffordable; it was also unsustainable and also irresponsible. What our fiscal strategy has been is to support the economy in the short term by reducing deficits over time and we have succeeded in that. The Crown books are in good shape and are showing operating balances increasing over time and debt reducing. As at 30 April this year gross Crown debt stood at $85.5 billion but if you subtract the student loans and other such provisions we are talking about a net debt level of $64 billion or just under 27 percent of GDP. Forecasts show that by 2020 Crown debt will drop to 20 percent.I find it fascinating looking at this and comparing it with the debt figures of our major trading partners. Australia—apparently the Lucky Country—has a current debt to GDP ratio of about our level but by 2020 it will be at 40 percent of GDP. Forty percent represents double New Zealand’s debt levels. The UK economy is currently at about 90 percent of debt to GDP but by 2020 it will have reduced that only to 80 percent—i.e. four times New Zealand’s debt levels. That 80 percent is broadly in line with the EUthe European countries in total at four times New Zealand’s debt. Although the US economy is growing strongly it has even higher debt currently just under 110 percent of GDP and by 2020 in 5 years’ time it will be just over 100 percent of GDP. Those are staggeringly high amounts of debt and thankfully through good financial management by Bill English we are in a strong financial position to weather future financial storms and economic circumstances.The other area I want to turn my mind to is the GDP growth rates and the regional growth rates. The reality is that the New Zealand economy has been growing strongly and is expected to continue to grow strongly. As at 31 March this year we achieved a growth rate of 3.3 percent and the Reserve Bank’s recent forecast showed that over the next 3 years we will average 3 percent. That is a good strong consistent growth rate. The 2015 growth rate compares favourably when you look at our trading partners. Again the highest performing one is China of course which has been growing very very strongly and for the same period recorded a growth rate of 7 percent i.e. just over double ours and this year is forecast to be between 6 and 7 percent. Australia again—the Lucky Country which people love to quote—recorded a mere 2.3 percent which was close to America’s GDP growth rate of about 2.5 percent. But Europe again is growing poorly. Its growth rate is less than 2 percent and forecast to be still at those levels. Again all those rates are significantly lower than New Zealand’s current and forecast growth rates over the longer term.What is interesting is to look at the regional growth rates. Contrary to the uninformed view of the Opposition the regions are in general growing strongly. Based on the ANZ’s latest forecasts the areas growing most strongly are first of all Bay of Plenty at 4.8 percent Canterbury at 4.4 percent and Auckland at 4.3 percent. But Northland—and it is an interesting one that always seems to be quoted—is growing strongly at 3.4 percent Gisborne at 3.5 percent Otago at 3.3 percent and Southland at 4 percent. They all belie Opposition claims that this strong economic growth is being localised only in the Auckland and Christchurch economies.These comments by the Opposition actually do a disservice to the hard-working people of these regions. They are resourceful they are strong and they are getting on with the job. Where this Budget has helped to continue that growth in the regions is in the areas of the roads. We have announced another $100 million for regional highways. As for broadband we have got this massive spend. We have put in another $210 million into the ultra-fast broadband roll-out and another $140 million in the rural broadband roll-out. Health facilities—we heard earlier today how we have poured $140 million into Southern District Health Board over the last few years. The child hardship package the $790 million one—interestingly the member for Rangitīkei was saying the other day that he estimates that that will generate $1 million of extra income put into Taumarunui every year. That is a significant boost to that local economy. There is a focus on regionally based research institutes and there is $13 million that we have provided to help Māori people further develop their lands and make them far more productive.There is a whole suite of packages that is designed to help our regions grow. This is all about creating a fairer economy. This is a Government with a plan. This is a Government with a heart.Hon CLAYTON COSGROVE (Labour): In the seconds that remain before the dinner break I just say to that member Andrew Bayley that that speech proves how out of touch he is. He rattled off about 5 minutes’ worth of international statistics and could I say this to him: it does not move a young person any closer to the dream of homeownership. It does not build one new house and you have built only 170 since 2013 in your own special housing areas. It does nothing. He can rattle off statistics for the next 3 or 4 hours if he likes to but it does not address and he did not address the very human concerns of individuals and families in our community. He is so out of touch that he has wandered around the regions and not seen the impact of his Government’s policies—the negative impact on those regions. If he wanders around with the blinkers on he proves how out of touch he is.Sitting suspended from 6 p.m. to 7.30 p.m.Hon CLAYTON COSGROVE: Before the dinner break I followed—I cannot remember the gentleman’s name—a National Party member of Parliament who took us on a sort of whirlwind tour of the OECD and rattled off about 5 to 6 minutes of statistics in trying to make a proposition that this was somehow exceedingly relevant to the lives of perhaps young New Zealanders who were trying to execute the dream of making a first-home buy as if these statistics would somehow keep people warm in their State houses or in their private accommodation that may well be damp under-heated and pretty disreputable. I have got to say to that member that he can throw statistics around for hour after hour but what actually counts in Struggle Street out in the communities is the here and now the income in the pocket—or the lack of it—the ability to put food in the mouths of your kids and the ability to have decent housing and the basic basket of goods and services that probably all of us or most of us in this Parliament had the privilege of growing up with over the years.The member then also waxed eloquent about how the surplus—in fact I think it was Mr Bennett. Mr Bennett made a wonderful proposition actually. He attacked the Opposition for claiming that the Government had not met its No. 1 promise of going into surplus and then admitted a couple of minutes later that it was edging towards surplus and that it had remained in deficit for the last 7 years. So he attacked us for telling the truth and then did not provide any sort of evidence or proposition as to why the Government broke its premier gold-plated No. 1 promise to the electorate that it would. In fact the Prime Minister I think—as Mr Hipkins pointed out—said before the election campaign not that it would be in surplus but that it was in surplus to the tune of $300 million - plus. And then we found out it is the other way round—it is $680 million - odd in deficit.So although Mr Bennett attacks the Opposition for holding the Government to account and telling the people of New Zealand that it continually on seven occasions broke its promise—you know that is our job Mr Bennett. That is our job. And if we are bandying around statistics I would just offer one for the historians in the audience and among those listening tonight which is that when we left office in 2008 we had had 9 years of surpluses. Net Crown debt was zero and there had been 9 years of surpluses. Compare that with a Government whose debt outstrips that of Sir Robert Muldoon the great National Party hero—and my word we thought he was the last of the big spenders. The debt outstrips him and we have had 7 years of deficit.Of course the next proposition that National members put up in the Budget was that there would be a $176 million surplus they said. As Mr Hipkins pointed out if you do the basic math on that—and I know the member Mr Scott who is prone to telling the truth in this Parliament will want to get to the KiwiSaver home loan stuff in a moment which is his favourite topic—you work out that the KiwiSaver $1000 kick-start which has now gone equates to $175 million and so by cutting that out they somehow achieve a surplus. That gives them a surplus of a paltry 1 million bucks.For those people who might be tuning in tonight $1 million is a lot of money—I accept that—but in the whole scheme of the Government accounts it is wafer thin tissue thin transparently thin and I doubt whether that will be achieved. But you have got to look at some of the spending in the Budget and the supplementary estimates.I made an interesting discovery. I note that the Minister of Police in answer to a proposition put to him this afternoon that there had been a cut in the police vote denied it. I know that Mr Deputy Speaker of course given his previous occupation may indeed take a passing interest in this but if you actually look at the Budget documents you will note that there is a cut to the police operational funding of $44 million over 4 years—44 million bucks over 4 years. Then if you flip over a few pages you will see that Whānau Ora gets an additional $50 million for something called navigators. I do not know what that means and I bow to those in the House like Mr McClay and others who are far more proficient on Government policy than I. But at the same time as you cut 44 million bucks out of the Police vote you bung $50 million into Whānau Ora for something called navigators and with no rebuttal and no examination of the effectiveness of Whānau Ora to the point where the Auditor-General said: “It was not easy to describe what it is”—that being the policy of Whānau Ora—“or what it has achieved.”We had a lot of members over there talking about the effectiveness of Government spending. Well when the Auditor-General who is an Officer of Parliament and is independent of everybody here including the Government and who is charged with examining the Government accounts and the appropriateness and the effectiveness of spending came out and said about one of the biggest expenditures in this Government’s ongoing Budget programme one of its flagship policies which has been given an additional $50 million: “It was not easy to describe what it”—that is the policy—“is or what it has achieved.” I would be really grateful if somebody in the Government would stand up and explain and give the answer that the Office of the Auditor-General has been unable to find.I note in the media that somebody—and I am not sure whether it was the Māori Party or somebody else—then demanded that the Auditor-General apologise for what she said. Well why should she? She is actually charged with examining the effectiveness and appropriateness of expenditure. She could not work it out and she is a pretty learned individual. The Office of the Auditor-General is a pretty formidable office with an independent world-class reputation. So I would like somebody over there to sort of get up and perhaps explain to the New Zealand people what the programme is about whether it has been effective and if it has been where the evidence is and what the additional $50 million is for.Equally I just note for the record that I find it interesting that the largest expenditure in Whānau Ora went to one particular seat. It was the seat of the former member Hon Tariana Turia the author of the policy. Happenstance? Maybe. Coincidence? Possibly. But I do not particularly believe that not when 8 percent of the Māori population reside in that electorate and the largest bulk of Whānau Ora money just happened to land inside those boundaries. There may be a good reason to be fair—I make no judgment—but I think an explanation is due.When we get into looking at the sort of histrionics of this Budget I think it was a number of the other colleagues who said: “Who is going to benefit from this grand plan?” because we have got expenditure cuts we have got expenditure that cannot be explained sort of poured down the toilet and nowhere in this Budget or the supplementary pieces of legislation can I find an effective plan to house those people in derelict and substandard accommodation. Nick Smith had a crack. As I said this afternoon you know the cheese has slid off his cracker a couple of times over the last 6 months or so—170 houses since 2013 in his so-called special housing areas when we need 10000 houses a year in Auckland to keep pace.Mr Scott’s wont to sort of wax eloquent about the KiwiSaver proposition—well it equates to $521 per year of extra funding. That is about $10 a week and when we had this debate a few months ago it was Mr Scott the only honest man in the National Government who got up and actually admitted that that is what it was. He said that it is $10 a week extra when Auckland house prices are going up by $17000 a month or by 90 grand a year. So I ask those members as they celebrate their KiwiSaver HomeStart—whatever it is—policy to answer me this question: how is it going to affect and assist in a positive way those people who are up against housing inflation of $17000 a month in Auckland when they get $521 of their own money to spend per year?Mr Scott you have done this Parliament a service. You are the only honest man on that side to tell the truth.ALASTAIR SCOTT (National—Wairarapa): I was going to start by responding to some of the comments of the previous speaker Clayton Cosgrove but I could not think of anything to respond to so there is no need. I would like to focus on two themes: productivity which is the theme throughout this appropriations legislation and value for the taxpayer dollar.First of all productivity. Productivity needs to be explained. It is where a smaller amount of input is put into something to receive the same amount of output or the same input receives a greater level of output. That is an increase in productivity an increase in wealth and an increase in living standards. I wanted to clarify that because the Leader of the Opposition is against the idea of increasing productivity. I will explain that in a minute. Increased productivity can come about by new inventions—like the steam engine for example. It enabled massive increases in productivity because instead of having labourers weave and spin we had machines to do it. Telephones enabled increased productivity because we no longer needed the pony express or pigeons. It put people out of work but it enabled people’s standards of living to rise. It certainly put the pigeon breeder out of business and it certainly put the horse breeder out of business but these machines and this increase in productivity enabled people’s standard of living to rise.It was disappointing to hear the Leader of the Opposition Andrew Little last month when Xero a high-tech company in Wellington won the top award at the Hi-Tech Awards. That was no mean feat. Xero is part of this age. It is part of the electronic age. These phones have put people out of business. These things have put torch makers and battery makers out of business. They have put photography companies and video companies out of business. That is because these things are enabling people to be more productive. So it was disappointing to hear the Leader of the Opposition say last month that this application that Xero was developing—this application that was going to increase people’s time availability and contribute to the wealth of all New Zealanders—for all its brilliance accountants would be losing work as a result. That is exactly the point. Who is concerned about having fewer accountants in the economy? That is what productivity means. This legislation the Appropriation (2014/15) Supplementary Estimates) Bill and this Budget are focused on increasing productivity.What I would like to talk about now is the fact that we are using technology more and more to increase productivity. We are having more police time on the streets for example because police officers have got access to technology. That is smart investment. It is smart investment that we need to be put in place by the Government in a productive manner. What I would like to say is that this economy that we have which is increasing at 3.5 percent per annum this economy that has produced 190000 new jobs this economy that has one of the highest participation rates on the planet at just under 70 percent is the economy that enables us to provide more hip replacements have better teachers and have more efficient cops on the street. That is why I am supporting this appropriation legislation. This is the 21st century not the 20th century and not the 19th century which the Labour Party continues to set itself in. Labour has to get out of that quagmire and think laterally think innovatively and think about the taxpayer dollar in the most productive way.The taxpayers who are working hard to support their families and community are also increasing their productivity to increase their wealth and their incomes for their families. They need us to invest in what we can to increase productivity. What we need to do today is focus on the cause of our social problems. Rather than spending our way out of trouble we are focusing on the bud of the problem. We are not spending lots of money too late at the bottom of the cliff. That is why we are investing in the 38000 single parents who have come off the benefit in the last few years. If you think about that from a business proposition if you can take—and I am generalising—a single mum off the benefit and potentially her kids and her grandchildren off the benefit there is not going to be this vicious recycling of beneficiaries. That is going to save the taxpayer millions of dollars thereby increasing the strength of the Government’s balance sheet. That is just one aspect. Of course the social aspect is that we have got more people in work participating setting an example for their children and their grandchildren to contribute to their families’ welfare and to the community’s welfare. That is the piece that Labour is missing. That is the ground that Labour used to claim that it had. But Labour can no longer claim that. Labour can no longer claim that it cares for the people at the bottom of the pile. This Budget invests in families that are worse off than everyone else. That is part of the $790 million investment in families.I will get to the Budget and the surplus or lack of it because I think it needs to be addressed. Grant Robertson and Mr Cosgrove continue to focus on the swings and roundabouts of what it means to make a surplus or a deficit—whether it is up $100 million or down $100 million or whether it is up $200 million or down $200 million. But they are missing the whole point. The whole point is that we are heading in the right direction. If you want to use the analogy of one’s own income—if one was on an income of $80000 and had the prospect of an increase in income an increase in salary or wage or whatever it might be then does it really matter at the end of the year that one’s bank balance is up $100 or down $100? Does it really matter? What really matters is the focus that you are on. The focus of this Government is the future. The focus is not on today; the focus is on tomorrow. That is what this Budget sets up for future generations. These investments today are not just about the people of today; they are about the economy and the well-being in the future of those at the bottom of the pile. What I say to Opposition members is “Don’t focus on the surplus or the deficit. It’s really just a little swings and roundabouts.”—as they know. The important thing is the direction. We are heading in the right direction for the people of New Zealand. Productivity is important. It is the very strong focus of this legislation. Taxpayer money and the concern for that is a focus of this bill. The right direction for this country is being set up by this bill. Thank you.SIMON O’CONNOR (National—Tāmaki): I believe that this may well be the last speech in the second reading of the Appropriation (2014/15 Supplementary Estimates) Bill and it is a pleasure to follow the penultimate speech by my colleague Alastair Scott. As he said we are moving in the right direction. This Budget was delivered against a very positive backdrop. This is an economy that is growing and it is sustained growth over many years. We are seeing rising wages and real wage growth. There are more jobs low inflation and so forth. If I think particularly of my own electorate it is important for things like low interest rates not only to the wider demography but also I think to some of the younger people in my electorate who are even younger than myself who are moving on to—[Interruption] Indeed younger than myself. That is fantastic. It is more a reflection on me than on them.The lower interest rates are incredibly important but for me what I think illustrates where this Budget lands is a small anecdote. The other day was actually the commemoration for Bomber Command at the Auckland War Memorial Museum and that in itself was quite a moving moment. As I was leaving the museum I went through what is known as the Minecraft exhibition which is about the whole Gallipoli landings and is a wonderful way for our young people to engage. As I am wont to do as a constituent MP I started talking to people and there was a young family there who said thank you for the difference that has been made by the whole benefit changes. The Government has made a lot of changes and rightly so.For the first time in 42 years the real rates of benefits have changed. Talking to this young family on a benefit the word was “thanks” and I do not say that with any sort of sense that we need to be thanked—there is no sense of that. It was more that they felt that something had been achieved here and that the Government which they would not normally associate with these changes had made a difference. That little anecdote that little conversation has stuck with me—that this Government has rightly made the changes necessary in the benefit structure in order to help those most in need. Talk is cheap as the adage goes and we have much of it and we have heard much of it from the other side tonight but this Government has acted particularly on the social development side.Look if I turn somewhat selfishly to my own electorate the Budget delivers for Tāmaki. We often hear a lot about housing. Tremendous work is going on around housing in Tāmaki. The taxpayers of New Zealand are effectively providingmillions and millions of dollars in funding for what is known as the Tāmaki Redevelopment Company. New homes are popping up right throughout the electorate particularly in Glen Innes. It is tremendous to see. For a while the communityhas understandably been a bit reticent about the changes because they were being asked to move into changes that they did not understand but now as these new homes are being built—warm dry homes that are the right size for the families be they large or small—real differences are being made. If you go down Line Road in Glen Innesnow you will see the most wonderful new music and arts centre Te Oro. Again it is a really fantastic facility that our young people in particular have been crying out for and I want to thank the local board and others who were behind that.We hear a lot about transport and we know that there has been further spending on transport by this Government. Just one small expression of it for us in Tāmaki is around public transport. I think about $9 million is going to be spent on cyclewaysnot only connecting people of the electorate to the city but also connecting the communities together so that those in Glen Innes can go through Meadowbank and Oraki and on to Tāmaki Drive and the other way around. So there are some real substantial differences and changes there that this Budget has brought and is bringing.We have also heard a lot tonight about the whole element of the surplus. I think actually that the analogy that my colleague Alastair Scott gave around income and whether you are a hundred below or a hundred over is quite apt. What I think the Opposition has probably found most difficult is that we said—quite rightly honestly and transparently—earlier this year and through the Budget that actually we cannot quite make that surplus. We are in the right direction and we are working hard on it. I think some members have used that oft-used scholastic analogy of Jonathan Swift’s about the angels on a pin and in this case how you could put a Boeing 747 on one but we said: “Look it’s going to be jolly difficult.” Of course the Opposition has delighted in that and has trumpeted it. And of course in more recent weeks—if not days—we have heard that it is actually possible that we might make surplus. I want to be clear—I have used a conditional there—that we might make surplus. I am not going to trumpet that myself.Dr Megan Woods: You’re making an announcement Simon?SIMON O’CONNOR: That is right. The MP for Tāmaki is making an announcement. That is right. Thank you to the honourable member there Megan Woods. No that is slightly beyond my pay grade. But we are moving in the right direction. I also think that it shows the volatility in predictions. In fact we only need to think of the election where the predictions said one thing and then we came home not just by a nose but by a head—just to put an analogy to my father who is possibly listening. Speaking of those who are listening just to embarrass the chief whip I just want to do a shout-out to Mrs Macindoe a fine constituent. Your son is doing a good job tonight.But look what we are seeing is a Government moving in the right direction. The last thing I want to talk to—and it will be no surprise to the House—is around health.Scott Simpson: Tell us about Tāmaki.SIMON O’CONNOR: Well Tāmaki is a fine place—a fine place—but no I am going to move to health Mr Simpson.Hon Member: You look like Robert Muldoon.SIMON O’CONNOR: Well I am not quite sure how I could look like Robert Muldoon but anyway—[Interruption] Dearie me. Anyway the health spend is $15.9 billion the largest it has ever been. Look at some of the highlights: $320 million more to district health boards. In doing so with the extra spend to district health boards I want as the chair of the Health Committee to acknowledge what has been happening in Southlandtoday. I want to acknowledge what I think is a good and right decision by the Minister of Health. I know in the committee particularly when we had the Southern District Health Board come before us to talk about the challenges that they were facing that the board themselves understood the problems and I understand today of course as they are asked to step aside that that will be a challenging decision—but I think the right one. Also moving around in the electorate down in Clutha Southland and the likes the challenges are there and so I applaud that decision and the extra funding—the $320 million that is going to district health boards. I noted in a previous speech about the appropriation legislation that there is $76 million for palliative care and hospice care. I think that is a really great initiative. One initiative that people may not know so much about partly because it is one of those topics that you do not want to talk about is bowel cancer screening. Another $12.4 million I think—Scott Simpson: How much?SIMON O’CONNOR: $12.4 million—Scott Simpson: To what?SIMON O’CONNOR: To bowel screening Mr Simpson. Let us hope that for some of us it remains a theory rather than an experience but it is something that is relatively important actually. The initial pilot for this screening has been seen to be efficacious. A pre-Budget announcement—and as is the wont in politics it is often forgotten days afterwards—but just before the Budget we announced $98 million—Chris Bishop: How much?SIMON O’CONNOR: $98 million Mr Bishop. Look I am flattered by the encouragement of my colleagues heretonight. It is a team effort. That is probably a sign of what is different about this side of the House from the other side when it comes not only to this Budget but also to the appropriations which are ultimately appropriations about bringing things together. This National Party and this Government is a team and they bring things together competently and strongly unlike the other side and I will end there.A party vote was called for on the question That the Appropriation (2014/15 Supplementary Estimates) Bill and the Imprest Supply (First for 2015/16) Bill be now read a second time.Ayes 63New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 58New Zealand Labour 32; Green Party 14; New Zealand First 12.Bills read a second time.