Estimates Debate — In Committee 
Estimates Debate — In Committee 
[Volume:632;Page:4337] 
Estimates Debate 
In Committee 
Debate resumed from 20 July on the Appropriation (2006/07 Estimates) Bill. 
Vote Social Development ( 
continued 
)  
ANNE TOLLEY (National—East Coast) 
: 
 First I say to the Minister the Hon David Benson-Pope that it is no good reflection upon him that his department has performed so poorly during this estimates process. The Social Services Committee was unable to get answers to questions in time for it to deliberate as part of the normal select committee process. That is a very poor performance from the ministry and in fact the members of the select committee had to come back during the adjournment in order to further progress this estimates process. I say to the Minister that I hope he will take that up with his department and make sure we do not have to endure that next year. 
Today I want to talk about the merger between Child Youth and Family Services and the Ministry of Social Development. The Minister said at one stage that the stars were in alignment so the merger took place. Actually the Minister knew that those stars were going to be in alignment back in December of last year. Once could almost say that the Minister moved heaven and earth to make sure it happened. There was no analysis of the impact of that merger and during the entire estimates process we saw no analysis completed by any department on the impact of merging Child Youth and Family Services with the Ministry of Social Development. There was no consultation with any of the staff in Child Youth and Family Services. That meant there was no consideration of any gain in or loss of quality of care for Child Youth and Family Services and the vulnerable children and babies under its care and protection. They certainly came a dismal last in the consideration given to this merger. So we have no idea and no indication that there will be any consideration of the impact of the merger. It is not just me—as a member of the Opposition—who is saying this. In fact the audit report said that given the amount of change within the ministry within recent years the merger may increase the degree of risk to existing ministry services. 
This fragile department—Child Youth and Family Services—has a budget of $464 million and is responsible for 5000 children in its care. This year it is budgeting for 79000 notifications of abuse of children and babies and is planning to carry out 58000 investigations into such abuse. It has been reviewed and restructured every year since this Government took office because of poor performance. It has had four chief executive officers in the last 2½ years. In fact the State Services Commission’s paper to Cabinet stated: “… stakeholder reviews have consistently found there is a culture of ‘resistance’ amongst some front-line CYF staff. In the SSC’s view this reflects ‘professional disregard’ for management.” 
That same review went on to identify five major problems with Child Youth and Family Services none of which will be addressed by the Ministry of Social Development in any shape or form that we could find that we asked questions about through the coming year. The first problem is that there is no management of referrals or notifications. There is very poor understanding. In fact an internal review questioning why there has been such an increase in notifications came to the conclusion that it was a victim of its own success when in fact its own figures show the graphs the Minister himself presented to the select committee show that the majority of the increases come from police reports. In other words the increases are coming from the discovery by police of actual cases of abuse or neglect. The department does not have any understanding of why it is getting those referrals and how to manage them. 
The second query from the State Services Commission concerned the department’s need to improve the management of children in care. Because the department cannot manage the huge increase in notifications it drops the ball in looking after those most vulnerable children and babies in New Zealand. 
SUE BRADFORD (Green) 
: 
 In looking ahead at the Government’s plans for the Ministry of Social Development over the year ahead one of the biggest questions the Green Party continues to have is around what exactly the proposed single core benefit is going to look like. Since 2000 the previous Minister for Social Development and Employment Steve Maharey and the current Minister David Benson-Pope have been promising a total overhaul of the social welfare system in this country. At the Social Services Committee this time round the latest news is that legislation for the new system is currently being drafted and that Cabinet will make its decisions in the next few months. I have lost count of how many times the Social Services Committee has been told that but I look forward with interest to seeing exactly what the Government does have in mind sometime before the end of this year—maybe. Meanwhile the Green Party continues to have considerable anxieties about what exactly the new single core benefit system will look like especially in light of what has already happened with the special benefit and temporary additional support. 
As part of the original Working for Families package in 2004—much lauded by the Government as the solution to family poverty—the special benefit was abolished to be replaced by temporary additional support. This change has come into force only recently but already the impacts are starting to seep through. For example last week I was contacted by a beneficiary whose benefit had been cut by $37 a week when she was put off the special benefit and on to temporary additional support despite the Minister saying that existing recipients would have their income protected by grandparenting provisions. The change from the special benefit to temporary additional support is a benefit cut carried out by a Labour Government and the impacts of that cut are only just now starting to come through. 
As it beds in the sort of deep and hopeless poverty referred to in the recently released  
New Zealand Living Standards 2004: The Report 
 will only get worse. That report showed that those worst affected by inadequate incomes between 2000 and 2004 were income-tested beneficiary families with children Maori and Pacific Island families and people with large families. The proportion of all children in severe and significant hardship increased from 18 percent to 26 percent in that period. The cutting of the special benefit and its replacement with temporary additional support will only make things worse for those people especially as it comes on top of the discriminatory in-work payment which means that beneficiary families miss out on an income top-up that is available only to those homes where at least one parent works 30 hours a week or more. 
Although the Government shrugs this off as being an excusable part of its welfare to work strategy the Green Party says it is inexcusable that a Labour Government continues to structurally entrench discrimination against the children of the poorest people in our country—and I hope Labour members read Chris Trotter’s article last week. We are delighted that beneficiary numbers are coming down and that unemployment has fallen to its lowest level in decades. We are pleased with the genuine work that the Ministry of Social Development is doing in helping a lot more people move from benefits into work and that it is doing that work better than it did in the past. However what we in the Green Party are not at all happy about is that those remaining on benefits because they cannot get work due to being sick injured or disabled or because they are sole parents should be pressed even deeper into a cycle of hopeless poverty despair and alienation. It is imperative that the new single core benefit regime if it is actually going to happen in this term of Parliament does not make things any worse. 
The Minister does give constant assurances inside and outside Parliament that the new system will not involve benefit cuts. However after what has happened with the special benefit I remain dubious. I fear that what will in fact happen is that there will indeed be a single core benefit bottom rate but it will be set at the level of the lowest work-tested benefits rather than at the higher rate that applies to for example invalids beneficiaries. The Government may then say that no one will lose out because it will grandparent existing beneficiaries so that their income does not go down but this only disguises an actual benefit cut for people who come into the system after the cut-off date as has already been done with the move to temporary additional support. 
Labour is at a turning point right now. It can choose to continue down the benefit-cutting path that it has already embarked on or it can take this opportunity to genuinely reform the benefit system so that it not only is simpler but also is fairer and actually pays enough for people to live on. The Shipley-Richardson cuts to benefits in 1991 were never restored. Benefits like wages remain far too low. Those who live on high wages and in warm homes and who have cars that go have no idea what it is like living in a freezing overcrowded house bach or garage without enough money to get from one end of the week to the other yet that is the reality for tens of thousands of New Zealanders in July 2006. I call on the Minister and his department to take this opportunity as they continue to work on the details of their new benefit system to end discrimination within Working for Families to reverse the impacts of the abolition of the special benefit and to use the single core benefit reform to lift rather than lower benefit levels and make the system a lot fairer for everybody. 
When the Social Services Committee looked at the estimates for the Ministry of Social Development this year we also heard evidence about the merger of the Ministry of Social Development with the Department of Child Youth and Family Services. This has now happened and I would like to acknowledge what I believe is the serious intention of the Ministers David Benson-Pope and Ruth Dyson and the chief executive officer Peter Hughes to do everything they can to build Child Youth and Family into a far more sustainable and sustaining organisation than it has been for the past decade. I still cannot help but feel aggravated by the virulence of National’s criticism of Child Youth and Family Services at times knowing that it was National that deliberately underfunded it in the late 1990s and doomed it to fail through the chimera of private sector management philosophy at that time. The Ministry of Social Development is still picking up the pieces now. 
But it has been a long time since then and I am sure that the staff of Child Youth and Family more than anyone else are heartily exhausted by endless restructurings and reviews. Each year at the select committee many of the same questions are raised and dutifully answered yet the same problems continue. This has all been made much more acute this year by the heightened awareness of child homicides in our community and the unresolved Kahui murders sitting sombrely in the back of all our minds. I do wonder to what extent Child Youth and Family and the Minister are looking at how they are going to deal with the ever-increasing number of referrals that result from heightened public and professional sensitivity to violence and neglect of children without blowing the Government’s Budget. How will the new differential response model actually work in practice at the interface between non-governmental organisations and statutory social work practice? Will the non-governmental organisations which increasingly carry out critical work on behalf of the State actually receive the funding they need to do their work properly or will they start off with a bang and die with a whimper as funding is gradually cut back as has often been the case in the past when the State devolves big hunks of its traditional functions to the third sector? I hope that apart from anything else Child Youth and Family and the Ministry of Social Development will have the capacity now to learn from the more successful models such as the SKIP programme that operate from a more community development orientated approach and that they will transfer that learning to the way they work with groups at the frontline of non-statutory intervention with the new differential response model. 
I would like to take a moment to congratulate everyone involved with SKIP—that is the short name for the Strategies with Kids - Information for Parents programme. During the process of debate and hearings around my bill to repeal section 59 of the Crimes Act we have heard many individuals and organisations speak glowingly about what is being achieved in terms of providing practical information and support to parents and caregivers of children under 5. The Green Party is right behind SKIP and hopes the Government will continue to fund and in fact extend it so that it can provide even broader coverage than it does now. 
In terms of Child Youth and Family the Green Party also has some big questions about staff salaries and conditions following this latest restructuring and about the balance and resourcing between what goes into the various layers of management and what goes into the frontline. Social workers and those who work supporting them are the lifeblood of Child Youth and Family’s actual work yet their salaries are still well below what they should be. It is no wonder that we lose so many social workers overseas and that not enough new people are coming through our social work training courses. 
The Green Party will be watching developments with the Ministry of Social Development - Child Youth and Family Services merger closely over the coming year. We wish all concerned well with their steps forward but I do hope that by this time in 2007 some of the questions I and my colleagues on the select committee have raised here will be visibly and substantively answered so that the work that Child Youth and Family does is maximised for the benefit of all the children and young people it is there to serve. 
The CHAIRPERSON (Ann Hartley) 
: I have been advised that Hone Harawira is going to speak in Maori. Just so everybody is aware the member is going to give his whole speech in Maori and then the interpreter will give the interpretation of the whole speech. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe. Tena tatou te Whare. Na te panuitanga i te ripoata tautikanga ora ka marama te ahua o nga tari toko i te ora i raro i tenei Kawanatanga. Kia mohio ai tatou—kua rahi ake mai i te 7 o-rau i te tau 2000 ki te 27 o-rau i te tau 2004 nga Maori e noho ana ki te pohara rawa. A ko a tatou whanaunga o Te Moana-nui-a-Kiwa kua rahi ake mai i te 15 o-rau ki 27. Ko nga whanau kei te tino raru ko ratou me o ratau tamariki kei te penihana. E te iwi—30 o-rau wa tatau tamariki kei te “pohara rawa” atu. Tangi ana te ngakau i tenei tu ahuaranga. E taka haere ana nga tautikanga ora mo te pani me te rawakore a ko te Kawanatanga ka noho ka titiro noa iho. Hara tenei i te pohara noa iho he rawakore me tona tahuhu korero.  
I a tatau e wananga ana i nga kaupapa whakapakari tangata me huri me aro ki nga akonga o nehera. I timata ai nga tikanga toko i te ora hei penihana kaumatua i te tau 1898. Ko era kahore i awhinatia ko te pohara te koretake te haurangi te paruparu me te taurekareka. Ko te tino pohara kua warewaretia. 
I whakauruhia e te kawanatanga “nga tikanga Maori” ki nga ture tuku penihana kia kaua e whanui atu te penihana ki te Maori. Kahore te ture whakahirahira o aua ra ara ko te Ture Putea Toko i te Ora o te tau 1938 i whakatinana ai nga painga ki te Maori. Kei kona tonu te rereketanga o nga utu penihana ki te Maori me te Pakeha. Na tera ka hangaia e Eruera Tirikatene tetahi ope kia haere ki te Minita mo Nga Penihana hei tautohe i nga mahi takatakahi i nga Maori. I korero ia mo te Pa o Ratana—ka riro e nga Pakeha te katoa o te penihana a he iti noa iho te utu ki te Maori. 
Engari ko te kaupapa a tauiwi ko rereke—ko to tatau iwi Maori kei waho tonu. A pera i enei ra ko nga tangata kei a ratau nga rawa ka hanga keti i mua i o ratau whare me te panui “kia noho atu ki waho”. Ngari hakoa te aha he iwi pakari to tatau iwi Maori. E orite ana ki te marama—hakoa ka ngaro ka ara mai ano.  
Na te Roopu Wahine Maori Toko i Te Ora i maranga ai tatau i te tau 1951 a ko nga korero whakamiharo i runga i a ratau mo nga mahi i waenganui i nga Maori o aua ra. I toro ake o ratau awhina ki te pani me te rawakore a na te werawera o o ratau rae ka rewa ake te tautikanga ora. I a ratou ripoata ka tuhia nga ahua whakaiti i te tangata; ka ki ratou “90 o-rau o aua ra 
  
ehara na aua tangata te raruraru engari na wahi ke atu.” 
Ko tetahi o nga mahi tuatahi i mahi na Whina he tirohanga ki te ahua o nga whare i Tamaki kei reira nga Maori e noho ana ka kitea he kainga koretake. Ma te kaha o Te Roopu Wahine Maori ka whakaae Te Kaunihera o Tamaki kia turakina aua kainga koretake kia hangaia nga whare pai mo te Maori. Koia nei nga tahuhu korero mo nga mahi toko i te ora. 
I kotia tuturutia e Nahinara nga penihana i te tau 1991 hakoa te tini o nga pohara. Mai i taua wa kua piki ake te putea mo te awhi pohara mai i te 5 miriona taara ki te 10 miriona i tenei wa. He korero ta tenei? Me wakama tatou ki te nui o tenei pohara roto i a tatou ano. Ko te kaupapa “Mahi ana mo nga Whanau” i wehewehe ano ra i te tu o te pohara ki te iwi kei a ratau nga rawa. Kua whakarerea ki muri nga whanau tino pohara. 
Ma tatou o te Paremata e whakatika nga takanga he o nga tikanga i whakaritea mo nga kaupapa toko i te ora. Me tautoko nga whanau me nga tamariki i nga wa pohara me nga wa e kore mahi ana nga matua. Koia nei nga kaupapa o te tautoko i te whanau. Ma te iwi ano e rapa tona whakamaramatanga. Kia ora tatau katoa. 
[An interpretation in English was given to the Committee.] 
[ 
Greetings to you. Greetings to the House. The living standards report released last week reveals the true picture of the state of social services under this Labour Government. Let us recall: the proportion of Maori living in severe hardship rose from 7 percent in 2000 to 17 percent in 2004. The proportion of Pasifika persons living in severe hardship rose from 15 percent to 27 percent. The state of the nation means particular strife for income-tested beneficiary families with dependent children. More than 30 percent of beneficiary children are in “severe hardship”. These results make me weep. The living standards of our most vulnerable are lurching dangerously into deprivation while the Government sits and watches. This is poverty in its worst extreme poverty which is indeed making history for all the wrong reasons. 
And when we are considering social development it is important to pay heed to history. The social welfare system started in 1898 as an old-age pension. This system though discriminated against the poor the undeserving the drunk the dirty and the immoral. Many poor people were ignored.  
For Maori “native custom” criteria were included in pension entitlement and became a basis for restricting Maori pensions. The famed Social Security Act 1938 failed to bring immediate benefit payments to Maori; clear-cut differences in benefit rates between Maori and Pakeha were maintained leaving Eruera Tirikatene to lead a deputation to the Minister of Social Security to protest against the victimisation of Maori. He talked of Ratana Pa—describing Europeans who lived in the pa as receiving the full benefit while Maori were on reduced rates. 
The so-called civilised social security system discriminated. And people our people were locked out as in today’s times where people of privilege build gates around their residences that say “keep out”. But our people are nothing if not resilient and like the moon that disappears and rises again we rose again no matter what the adversity. 
We rose in the form of the *Maori Women's Welfare League which at its time of establishment in 1951 was commended for its vigour in attacking the social welfare problems of contemporary Maori. Its welfare work extended to giving aid to members and others in need providing practical help to improve the standard of their living. In its reports the league recognised the stigma attached to a low standard of living stating: “Ninety percent of the time the causes lie beyond the control of the people concerned.” 
One of the league’s first initiatives instigated by Whina was a survey of Maori housing in Auckland revealing insanitary dwellings. It led the Auckland City Council and the Department of Maori Affairs to demolish slums and provide a higher quota of State and council houses for Maori tenants. This is our history of social services. 
Benefit rates were slashed in 1991 by the National Government. Huge numbers of beneficiaries became increasingly dependent upon hardship assistance. Hardship grants have blown out from around $5 million or $6 million to over $11 million in the past few years. Does that not tell members something? The  
level of deprivation for those most affected by poverty is shameful. The Working for Families package exploits this burgeoning inequality even further.  
Our poorest families are being left behind.  
We in this Parliament must take responsibility to address the abject failure of the system that characterises our social security. Families with children should be consistently supported including during hard times when parents may not be working. This was what the whanau development programme was set up to do—to  
allow our people to determine their own solution. Greetings to us all. 
] 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise to speak to this estimates debate on behalf of ACT New Zealand and I will spend some time talking about children at risk in light of the estimates. Is money being spent in the right places and on the right things? 
I recently asked some parliamentary questions of the Minister for Social Development and Employment and the results were quite disturbing. The year 2006 has in fact been the most dangerous year for child abuse—the most dangerous year to be a child in New Zealand. The months of February March and June this year had the worst figures ever for child abuse along with August and November 2005. At the end of June there were 16173 people receiving social work services under the Children Young Persons and Their Families Act—an increase of 12 percent on last year 2005. 
Over one-third of the referrals to Child Youth and Family Services last year were for Maori families. But it should be pointed out that domestic violence is not just a Maori problem. It is a problem for the whole of New Zealand. There is no gene for domestic violence and that is something that we should remember. Domestic violence and abusing are learned behaviours. There is no gene for them; they are not something that people inherit. Like the last speaker I would like to refer to the release of the recent Ministry of Social Development  
New Zealand 
Living Standards 2004  
report. I will focus on different things than the speaker from the Maori Party did but the report itself was actually very enlightening and highlights some very important facts that I think we as a Parliament and as policy makers should look to for the future when we are planning our welfare services. 
 For many years for far too long in fact we have looked at the problem of risk for children abuse domestic violence—whatever we want to call it—as a problem that has been brought about solely by poverty. That has traditionally been the view of the left—and I do not really like using the terms left and right because they make the field very murky—that poverty has been something that people always blame child abuse on. If this was the fact then being more generous with money funding families that live in poverty more generously and making that funding more widely available should have seen a decrease in child abuse. But as I have just pointed out this is not happening. The figures are continuing to worsen and as I said 2006 has been so far—and we are only halfway there—the most dangerous year in which to be a child in New Zealand. So we have a much bigger problem. 
The only positive thing to come out of the Kahui twins disaster is that we can now legitimately talk about the role of welfare dependency in the problem of child abuse. The Ministry of Social Development living standards report was enlightening in the following way. Children who are part of a two-parent family where one or both parents work are the least likely to suffer abuse. We might say that there is nothing surprising in that. We have always known that children growing up in a one-parent family are more likely to suffer abuse. But the report showed for the first time that children growing up in a one-parent family where that parent works are less likely to suffer abuse than a child growing up in a two-parent family where that family is dependent on welfare for its income—dependent on a benefit. 
It seems as many of us have been postulating for quite some time that work is very very important when it comes to lessening risk for children in this country. So even if families are not receiving a great income but one of the parents or the sole parent in that family is working it is a much healthier environment for children to grow up in. When we are formulating policy for the future we must look very carefully at this. Making people independent of the Government not only benefits them as adults but also it benefits their children. 
There is no doubt that the Working for Families package has made more and more families dependent on the Government for their income. The fact that someone in those families is working is a good thing but the attention is being focused in the wrong area. Those families already have children who are much less likely to be abused. The focus needs to be on the welfare families where nobody is working. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 Earlier in this debate—I think it was on Thursday of last week—I noted the huge success the Labour-led Government had had in getting working-age people back to work and I want to elaborate on that a little on this occasion. 
The ministry has played a key role in getting people back to work. Since March 2000 the number of people employed has increased by 316000 to just over 2 million—to 2108000. That is an extraordinary achievement of 144 more people in work each day every day since 1999 giving a labour-force participation of 68.5 percent which I am pleased to tell members is the highest ever for this country. Overall since the Labour-led Government took office in 1999 combined working-age benefit numbers that is all working-age benefit numbers—unemployment sickness invalids and domestic purposes benefit numbers—have dropped by over 30 percent so it is good to have the opportunity to put to bed the grand lie that the deckchairs have been moved. Those numbers have dropped from 372000 to 280300. Unemployment has dropped from over 160000 people in 1999 to fewer than 39000 people today. That means of course that perhaps the most pleasing factor in all of this is that the number of children in benefit-dependent households is already down by around 20 percent. 
The Ministry of Social Development is continuing its push in 2006-07 to help reduce the number of people who are unemployed. This Government is continuing aggressive work to ensure that our social support system is increasingly active in supporting even more people into work. The new work-focused approach is about providing enhanced job opportunities for all clients and focusing on what clients can do rather than what they cannot do. Having trialled that approach across 12 sites and two contact centres since May last year with very strong results I can tell members that we have rolled it out to all new clients and indeed will do so to the whole community from September this year. For example up to 20 percent of clients who would previously have received a non-unemployment benefit are being identified as able to work now. I am talking about sickness and invalids beneficiaries potentially who do not even apply these days for such support because they would prefer to work and the ministry is able to assist them. As I say that approach will be rolled out to the whole client base from September. 
I take this opportunity to say thank you on behalf of members of Parliament and the wider New Zealand community for what is a remarkable achievement. These things do not happen just because of Government policy; they happen because of the dedication the professionalism and the sheer hard work of the front-line Work and Income staff who are doing a wonderful job for people in this country. 
One of the other really successful initiatives is the expansion of the Youth Transition Service. We have been increasing and will continue to increase our efforts in supporting young people in the critical and often quite vulnerable transition from school to working life. To date we have launched six Youth Transition Services and by the end of this year 14 will have been rolled out. It is widely acknowledged that good support systems are needed to ensure that young people make the best transition from school into training into further education or into the workforce. In the 2006 Budget we are committing $7.5 million to expand youth transition services to support young people into work training or further education when they leave school. 
As I am sure many members know the Youth Transition Service works with local providers in giving support to young people. Each Youth Transition Service provider has experience in working with young people and helping them make good choices for the future. Through this initiative we have already worked with 5200 young people to date. I am sure members would agree that this is a key initiative that contributes to the youth-focused goal of Government and it is certainly one that is shared by the Mayors Task Force for Jobs which has a goal jointly with Government to have all 15 to 19-year-olds in work education training or other activities by 2007. 
Recent events have highlighted the serious problem of violence that we face as a society. Sadly those events are not new; nor are they isolated. Family violence impacts on thousands of New Zealanders. In 2005 29 of the 61 murders were recorded as being family violence related. Child Youth and Family Services and groups such as Women’s Refuge deal every day with children who have been subject to abuse or sadly who have witnessed family violence. The Government is absolutely committed to addressing this critical problem but we cannot do that alone. That is why we are taking a collaborative approach with Government and non-governmental organisations. Work on this is being led by the Taskforce for Action on Violence within Families and we have engaged in good faith on a multiparty group on this serious issue. 
It is important at this point that I say to Ms Tolley who earlier spoke quite critically of Child Youth and Family Services that she has not applied a large amount of the facts to the comments she made. In terms of assessment and analysis what else were the baseline reviews about including the baseline review of that organisation? I find it sad that Ms Tolley chose to blame Child Youth and Family Services and its staff. The reality is that child abuse and family violence are problems we have in our community. We have to move past blaming a Government agency or claiming that it is responsible. It is not until we move past that sort of antiquated attitude that we will be able to address this problem together as a community. This is a societal problem and I find the sorts of attitudes we have from the National Party—the people who cut the benefits sold the State houses and constantly want to attack the vulnerable and marginalised—heavily ironic. It is exactly those people who blame Child Youth and Family Services because some sad person out there harms their children. 
Unlike the National Party the Government wants to reinforce the unacceptability of family violence and change attitudes towards violence and abusive behaviour. [ 
Interruption 
] I say to that person interjecting across the House that while I am talking about family violence and violent behaviour he might want to have a second thought about the tone of his comments to the whip across the Chamber. 
In this year’s Budget we have put $9 million into strengthening expanding and improving access to family violence prevention and support services. That will help to start to address the funding concerns of service providers that work with victims of family violence. We have also set aside funding of $11.5 million for a community prevention programme which will be led by the Taskforce for Action on Violence within Families. Most important we have funded the continuation of Strategies with Kids—Information for Parents (SKIP) which has been so successful in providing parents with practical information for effective non-physical discipline to set limits and boundaries for their young people. SKIP supports parents in developing and having loving and healthy relationships with their children. It is aimed at parents and caregivers of children from birth to 5 years and resources have been developed to promote SKIP. They include information on practical ways to manage children’s behaviour child development and the management of parental stress. 
As the chairwoman Ann Hartley knows from her own personal experience this is an extraordinarily successful programme. It is only one of the programmes that the Ministry of Social Development is funding to improve outcomes for children. It is part of our early intervention approach that focuses not just on preventing family violence but on giving our children the best start in life they deserve. Through that early years approach we are looking to provide better support early on in the life of the child and earlier intervention in the life of a problem. 
In 2006-07 the Budget will see us building on the successes of our Family Start programme. Family Start provides assistance to families with children aged up to 5 whose family and social circumstances place their health education and well-being at risk. The service helps families to set goals for the future assists them in developing a plan to meet those goals and provides parent education and in-home assistance to get them on the right track. Family Start will be available in 32 locations by the end of this financial year. That includes the one Early Start programme in Christchurch and also five that are funded from Vote Education. The 32 locations are an increase from 17 in 2004. 
Family Start sits alongside other early intervention programmes that are funded out of other votes such as Vote Health’s Well Child programme which is very topical after the initiatives of the Children’s Commissioner yesterday and the Social Workers in Schools programme funded from Vote Child Youth and Family. Although the programmes sit in different votes and are administered in a different number of departments they all share the aims and objectives of the early years approach—namely to give our children and young people the start in life they deserve. 
Before I conclude I would like to return to the matters raised by the member from the Maori Party Hone Harawira who spoke earlier. I think it is sad that that member and some of his colleagues seemed to focus on what was by even a charitable assessment a litany of Maori failure. What I see in the history of the last 10 years is quite the contrary. Maori in this community with the support of this Government have achieved considerable success and a great deal of social change. So I would like to ask that member to be a little more responsible and to acquaint himself with the reality of what has happened in this country since 1999. I will begin by talking about the unemployment figures for that sector. In 1999 there were 41500 Maori unemployed in this country. Year on year that has reduced with only a minor increase in 2002 to the current figures. I will just run through them. From 41550 on the Maori unemployment register in 1999 I tell Mr Power that number dropped to 39000 in 2000 and to 35000 in 2001. In 2002 there was a slight increase to just over 36000. In 2003 there was a major drop to 32104. In 2004 it was 22000—from 32000 to 22900-odd. In 2005 it was 17659. I remind members we are moving at a downward progression from 41550 in 1999. Maori unemployment currently in this country is 13482. In addition to quite an extraordinary movement of Maori into the workforce and extraordinary achievements in employment for Maori—it is still not satisfactory and is still a focus for us of course—there has also been a significant improvement for Maori in housing affordability with a fall in the share of households with housing costs that exceed 30 percent of their income. 
There has been a huge improvement in Maori participation in tertiary education with around 24 percent of Maori aged 18 to 24 enrolled in tertiary education in 2005 compared with fewer than 20 percent in 1996. There has been a great increase in the share of Maori school-leavers with higher qualifications by 10 percentage points for school-leavers having greater than level 1 National Certificate of Educational Achievement in 2004 when the last figures were available. There has also been a pleasing increase in participation by Maori in early childhood education from 85 percent in the year 2000 to over 90 percent in 2005. 
Contrary to the sad tale that the member speaking earlier invented Maori have also had improvements in life expectancy they have had a reduction in Maori road deaths they now suffer from less household overcrowding they have higher median earnings and there is a reduction in suicide in the Maori community—a most significant social change for the better indeed. It is true that there has been no improvement around the area of obesity; nor in terms of Maori cigarette smoking. But indeed that is very much the focus of those health improvement programmes that my colleague the Minister of Health has also announced as part of this Budget. 
In conclusion I am delighted at the success of the ministry through Vote Social Development in making such strong progress in supporting our whole community into employment in supporting young people into training or further education and in making sure that as much as we can all New Zealanders grow up in safe and secure families particularly the focus of recent work which is building on what has been in the last three or four Budgets to ensure that every New Zealand child where possible has the very best start in life. It is vital that all families young and old enjoy such opportunities and share the security and progress that our fine country is making. 
A party vote was called for on the question  
That Vote Social Development be agreed to. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 50 
New Zealand National 48; ACT New Zealand 2. 
Abstentions 6 
Green Party 6. 
Vote Social Development agreed to. 
Vote Commerce agreed to.  
Vote Women's Affairs agreed to.  
Vote Corrections 
SIMON POWER (National—Rangitikei) 
: 
 I have been looking forward to making a few comments on Vote Corrections and I look forward to the Minister’s response to some of my concerns. 
First of all I send my condolences to Barry Matthews for landing the job of CEO Department of Corrections and probably getting himself into a department where he had no idea how bad things were before he got there. I quite genuinely wish him well in his attempts to right what have been a number of historic debacles in that department although I have to say they do not appear to be getting better at all. 
The estimates process is an opportunity for the Committee to ask the Minister a couple of questions. Could the Minister explain to the Committee and the public of New Zealand how the building of four new prisons originally estimated to cost $400 million ended up costing $890 million? I think the public of New Zealand would be quite interested to know the answer. Could he also tell us how in the building of those four prisons the average cost per bed across those four prisons is $535000? I think the public of New Zealand would be very interested to know that—in particular those people who live in Otago and are waiting for the completion of the “Milton Hilton” where beds are costing over $600000 each and in an environment—Milton—where one would imagine that sum of money could buy two or three homes for each prisoner not provide one prison cell. 
I think it would be useful if the Minister were able to explain how inmates have been able to go to the beach for a day supervised by the Department of Corrections. Because a number of inmates from Hawke’s Bay Regional Prison had “behaved well” they spent a day at the beach. I think the public of New Zealand would be interested to know how that occurred. I also think they would like to know how it is that prostitutes were phoned and invited to Rimutaka Prison in recent weeks. I think they would be interested to know how it is that people in South Island prisons are able to access steak eggs and chips lollies and ice cream for good behaviour. More particularly I think the public of New Zealand would like to know these two things: the first is how it is that $11 million of taxpayers’ money has been spent landscaping those four new prisons and second why that $11 million has not been spent on rehabilitation and employment programmes for those inmates so that when they come out of prison and as we all acknowledge they are all coming out of prison they are at least able to make some attempt at constructively being reintegrated. 
I would also like the Minister to tell the public of New Zealand and me how it is that with 7600 prisoners 83 percent of whom have drug and alcohol problems there are only 44 specialist drug beds in our prison system. I would like to know how it is that since 2004 when the Corrections Act was passed $2.6 million of taxpayers’ money has been spent on transferring the management of the Auckland Central Remand Prison back to the public sector when that money could have been spent on rehabilitation employment programmes and drug and alcohol specialist beds in those prisons. 
I want to know how the Minister can keep turning his back on an utterly incompetent department over which he has no political management at all relying only on the bumbling efforts of senior management of that department to get things wrong on a daily and hourly basis. The only person who has had anything to do with corrections in the last 12 months—who sits here smiling—is Paul Swain. He knew the day he got out of that portfolio that it was all turning to custard. He laughs every time I say that because he knows that is right. 
I say to the Minister that these are serious questions. The department for which he has responsibility is in a shambles. The public of New Zealand are saying to the Minister that these questions are serious. His department is in a shambles. The public of New Zealand know it is in a shambles. I ask him to stand and explain to the public of New Zealand how it is that that level of money continues to be wasted in that department yet prisoners are not being rehabilitated and society is becoming no safer. The responsibility for that rests on his shoulders. 
CHESTER BORROWS (National—Whanganui) 
: 
 I have been knocking around prisons for a while now and have been in and out of jail for about 30 years and thankfully it has been my choice to come and go. But over that time I have come to know a bit about inmates and I have put my fair share behind bars and done my fair share in preventing some from getting there. I have been in jails as a visitor a cop and a lawyer. I have represented inmates in prison hearings and in courthouses and on occasions I have had them out for the day and taken them home for lunch. So as fast as I am being pushed in one pigeon-hole by the other side of the Chamber I am doing my best to struggle out of it. I reckon that although I have a lot to learn about criminals and offending I think I have my head around a lot of things that set some people on the road to a life of crime. 
The Sentencing Act 2002 in respect of the purposes of sentencing is about denunciation and deterrence protection of the community rehabilitation and holding the offender to account for the harm done. The golden thread of custodial sentences must be “they’ve got to come out better than they went in”. My criticism of the Government is that in respect of this golden thread it has been an abject failure. In 1999 I took a group of National Party members to Kaitoke prison especially to look at the enterprise schemes operating within the prison. One of the schemes we looked at was a shoe factory. The shoe factory employed about 100 inmates a year and almost all of them had never worked before. Anecdotally the supervisors told me that they had never had one of their shoe factory inmates back on a custodial sentence. At the time the cost was about $55000 a year to keep an inmate in jail; the shoe factory prevented those people from reoffending. One could argue it saved New Zealand over $5 million a year. With expected recidivist rates it saved at least $3.5 million in any event but the contract ended and in 2002 the Labour Government decided not to renew it because the scheme did not make a profit. 
About 6 weeks ago I attended a Sycamore Project graduation in a prison. I have attended two such programmes which are marvellous for addressing the restorative element essential in turning an offender’s life round. I was talking to a man who was doing his first prison sentence. I understand it was for his first crime and it was for a serious offence obviously—a drug offence. He had heard the cell door slam behind him and knew straight away that he had stuffed up big time: that he had failed his family and those who cared about him and would be spending at least another 6 years in jail. He was a drug dealer and I have no sympathy for him or his kind. I do not believe that drug offences are victimless crimes and we need to deal swiftly and harshly with them to expedite the purposes of sentencing as I have already laid them out. But that man who wants to change his ways and wants to get off the drugs needs help to stay clean even in jail. But he cannot get on a drug programme until he has done two-thirds of his 8-year sentence. He needs help right now but he cannot access it. So 44 beds for 7600 prisoners 83 percent of whom have drug and alcohol problems is not going to cut it. Temptation is everywhere even in jail. But this Government withholds any assistance for another 4 years. 
What is more we know that almost every one of those offenders has multiple problems and multiple needs. They cannot read or write. They abuse substances and/or have big violence problems or sexual and physical abuse histories and frequently beat the hell out of women and children or have the hell beaten out of them. 
With prisoners it is not a chicken-and-egg quandary—we know which comes first. We know that violence begets violence and that the sexually abused become sexual abusers. We know that children of alcoholics and drug addicts breed children dependent on alcohol and drugs. Yet under this Government the treatment is withheld for no good reason other than that it is not a sufficient priority. We should get people into jail if jail is where they need to go and turn some lives round. One day we will see prisons shut for the want of inmates because people really will come out better than when they went in. We know that it will not happen overnight and it is not rocket science but it just has to happen. 
Hon DAMIEN O'CONNOR (Minister of Corrections) 
: 
 I welcome the opportunity to outline a few of the things that the Department of Corrections has ahead of it. I firstly acknowledge the good work of my colleague Paul Swain who is in the Chamber. I thank him for his incredible effort in getting from Dr Cullen—and it is not easy—a huge amount of money to build four brand new prisons that this country desperately needs. It is a sad indictment that we need them but none the less we are committed to a huge building programme. The programme initially started out at 1000 beds and has now ended up at 1600 beds—in fact we are moving to over 2100 new cells in this country. It is sad but it is necessary. This Government is absolutely committed to locking up dangerous and violent offenders for longer in order to keep society safe from those people. 
I welcome the new level of knowledge and awareness from the National Party because I have said as have my colleagues that there are a number of people currently in jail who we think may be better able to serve their sentence and repay society in other ways. In fact I read just today the statement: “It could be with some white-collar crimes that much more serious fines and the taking of people’s assets would be a more effective use of taxpayers’ money …”. That came from John Key. Well he may choose white collar criminals. I will not say whether people are white collar or blue collar but I accept there are people who could serve their sentence in perhaps more innovative ways. That is what the Department of Corrections is committed to do and that is what Barry Matthews is committed to do to help this Government to move forward. 
Since Labour came into Government in 1999 and after the Department of Corrections went through years of neglect and lack of investment by the previous National Government we have reduced by 80 percent the number of break-out escapes in our prison system. We have reduced by 90 percent the number of serious inmate assaults on staff. That is the true measure of how effective we are. Rather than listen to the garbage spoken by Simon Power about the department being ineffective and in chaos I say that the department does an outstanding job every day as do all the staff. But there are areas for improvement. I acknowledge the work that Chester Borrows has done in this area. I think he is doing a very good job to try to swing around a fairly narrow-minded National Party caucus—good on him; he should keep up that good work. Yes we do have insufficient numbers of drug treatment programme places and we are expanding them right now. 
Nick Smith as a former Minister of Corrections spent nothing and Labour has had to put in a huge amount of money to try to compensate. We are putting more money into drug and alcohol units. We are opening up one in the South Island we will have another one in the lower North Island and we are expanding the drug and alcohol units at Waikeria Prison. I acknowledge that there were cutbacks in employment opportunities within the prison system and that that has not been the best thing. We are turning that round and we are telling corrections inmate employment which is a part of the Department of Corrections to go out to work with industry and to work with regions to try to find employment opportunities related to those industries that are crying out for labour—because we have a very vibrant rural provincial economy because of this Government. 
We now have opportunities that were not there 5 or 6 years ago in regional and rural New Zealand and the prisons by virtue of their location are ideally placed to provide workers be it in horticulture agriculture forestry engineering or other areas where there is a desperate need for well-trained people. We cannot just turn prisoners from inmates into well-trained workers without rehabilitation without drug and alcohol treatment and without providing them with the opportunity to go through criminogenic programmes that identify the cause of their offending. We have evaluated one of the programmes Straight Thinking which was the mainstream programme. It was deemed not to be as effective as we need. The member Anne Tolley laughs. Well we are going to check all the money we spend and make sure it is being spent wisely. We have done so. We are re-evaluating the rehabilitation programmes so that they work better so that we get better outcomes and ultimately so that people come into prison once and go out and stay out. That is what we want to do. 
We do not want to keep building new prisons because more and more people are being thrown in prison. It is a difficult situation. In a wonderful country like ours where we know most people in our small communities—even Auckland is a small community by international comparisons—and know most of what is happening we lock up more people than we should. We do so at the second-highest rate in the Western World. I think we are embarrassed because people like Nick Smith did not put money into basic social services. He cut benefits in 1991—that is the kind of thing that severely impacts on the prison population over time. We are moving to address that. We are committed to more—and more effective—rehabilitation programmes more drug and alcohol treatment more effective criminogenic programmes and more work and skills training in prisons. 
We have a big task ahead of us—a wonderfully exciting challenge. I now welcome the new awareness of the problem and the change in attitude from the National Party in the latest statement by John Key. If there is still debate within the National Party caucus then I hope that sensible people like Chester Borrows and John Key obviously win the day and swing in behind us as we move through a process of shifting the prison system into one of proper rehabilitation and of reintegration back into society. We welcome the support from the National Party for that. We have had wonderful support from other parties to move in this direction but we still have a lot to do. 
Finally I again applaud the incredible efforts that all the staff from top to bottom of the Department of Corrections make. They work in very difficult situations with at times very difficult people. If we look at the cold hard facts we see the 80 percent reduction in escapes and the 90 percent reduction in serious assaults on prison officers. That has to indicate that the system is working but over time we have to reduce the number of people in this country whom we lock up and who are in prison for too long a period. 
A party vote was called for on the question  
That Vote Corrections be agreed to. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 6 
Green Party 6. 
Vote Corrections agreed to. 
Vote Tourism agreed to.  
Vote Communications agreed to.  
Vote Immigration agreed to.  
Vote Climate Change and Energy Efficiency 
Hon Dr NICK SMITH (National—Nelson) 
: 
 In 17 years in this House I know of no area of public policy that is as big a botch-up as what we have with regard to energy and climate change. I am reminded of the debate we have just had in respect of corrections and the fact that in the era of straight thinking we have a policy whereby people who did the rehabilitation programme had a higher rate of reoffending than those who did not do it. Well in the area of energy efficiency we have it just as bad. Labour came to Government in 2000 and said in the great proud words of Pete Hodgson that we did not need to spend money on transmission or power stations because we had it with the great National Energy Efficiency and Conservation Strategy. 
Over the last 5 years the Government has poured $100 million into this vote on that policy and in March this year we had a review. The review showed that gains in energy efficiency have been less than when we did not have a strategy—that is for the 5 years from 1995 to 2000 we had improvements of 0.7 percent a year in energy efficiency. Since we have spent $100 million and we have had this flash bells and whistles strategy energy efficiency has become worse. The Minister of Energy at the time Pete Hodgson must take responsibility for that fiasco and failure. 
But the situation is worse than that. In the area of climate change we had the Government powering in and ratifying the Kyoto Protocol. The Minister Pete Hodgson told the country that we had to race in and ratify it because we would make hundreds of millions of dollars. In fact he said that for members like those in the National Party who opposed that early ratification it amounted to burning a multi - hundred million dollar cheque. Well what has happened? We now have a projected bill of nearly $500 million because of that. 
Let us look at the track record for the environment. This Government rejected the Dobson hydro scheme on the West Coast. That scheme would have been producing power as we speak if it was not for the stupid decision of Chris Carter in that respect. We had Project Aqua a very large renewable power scheme which the Minister in the chair David Parker campaigned against and passed dopey laws in this Parliament to defeat. Would we not prefer right now that Project Aqua was under construction to deal with some of these concerns? 
Well let us see what we did fund. The Government signed off $150 million to build an oil-fired power station in Napier. Its own State-owned enterprise has proposed building—and has received consent with the Government’s support—a coal-fired power station at Whangarei. The bizarre thing is that while we have had Pete Hodgson David Parker and Helen Clark giving speeches all around the world about how we have to move on climate change simultaneously the biggest change in energy generation is a threefold increase in the amount of power that we are producing from coal. Hang on the great greenies have given so many speeches—and we have trebled the amount of power produced from coal. That is madness! 
In fact it is very interesting to look at the latest data under the United Nations Framework Convention on Climate Change. This Government has been keen to damn Australia and the United States. Well let us compare the figures. Australia’s greenhouse gas emissions have gone up by 3 percent. The United States’ emissions have gone up by 2.5 percent—and they are the bad guys. They are the ones that Helen Clark damns. How much have our emissions gone up over the same period? They have gone up by 10 percent I say to the Minister. I ask the Minister to take some responsibility for the failed policies that have done just that. I also draw his attention to the damning comments coming from every corner of the energy sector in respect of his policies. Dr Keith Turner has said that the state of the transmission system— 
Hon DAVID PARKER (Minister responsible for Climate Change Issues) 
: 
 My understanding is that we are debating the climate change estimates not the energy estimates— 
The CHAIRPERSON (Ann Hartley) 
: Vote Climate Change and Energy Efficiency. 
Hon DAVID PARKER 
: —so I will not respond to the energy points that the member Dr Smith made. 
Hon Dr Nick Smith 
: But they’re quite relevant. 
Hon DAVID PARKER 
: They are relevant to the energy sector and I will respond to them later. But dealing with the climate change issues the National Party is criticising the adoption of the Kyoto Protocol which was essentially designed by that very party when it had better representation in the form of Simon Upton. We have done no more than implement what that party when in Government thought was a good idea. 
There is no doubt that climate change for policy purposes has to be seen to be a real and pressing issue that demands a policy response. This Government has advanced a policy response to it through the Kyoto Protocol at the time when National having negotiated the terms of that protocol then said for reasons of political advantage that although climate change problems might exist we should do nothing about them. That is the essential difference between what Labour has done and what National did. 
In terms of the increase in the proportion of thermal generation over recent years the member is correct in quoting those statistics that show there has been higher utilisation of existing fossil fuel - based capacity. Although a small amount of that has been from the additional capacity this Government caused to be built at Whirinaki most of it has resulted from the increased utilisation of existing plant. And that of course was one of the objectives of the Bradford reforms which that member voted in favour of because it was true that levels of overcapacity in the generation sector were being inefficiently used. 
Hon Dr Nick Smith 
: Why did you stop Dobson? Why did the Government stop Dobson? 
Hon DAVID PARKER 
: This Government did not stop Dobson. 
Hon Dr Nick Smith 
: Yes it did. 
Hon DAVID PARKER 
: No what it did was it declined— 
Hon Dr Nick Smith 
: I seek leave to table the letter from the Minister of Conservation Chris Carter to TrustPower refusing to allow the use of the land adjacent to the Arnold River which saw the rejection of the Dobson power scheme. 
The CHAIRPERSON (Ann Hartley) 
: The member seeks leave. Is there any objection? There is objection. The member should wait until the end of a speech to seek leave to table something. 
Hon DAVID PARKER 
: I was going to say that the Minister of Conservation declined to allow the dam to inundate areas of the conservation estate. That is not the end of the matter though because TrustPower having been turned back on that particular version of use of water from the Arnold River has redesigned its scheme and is presently pursuing a consent for a similar amount of power to be generated from the same water from the Arnold River but with a lesser environmental impact that would not inundate the conservation estate. 
Hon Dr Nick Smith 
: It has no storage. 
Hon DAVID PARKER 
: Well it may have less storage but it has run-of-river capacity that is still capable of generating a similar amount of total electricity for the benefit of New Zealand’s power system and indeed for the particular benefit of supplementing the supply on the West Coast. So I disagree with the member’s characterisation of that. 
He talked about the Whirinaki power station being built. The reason Whirinaki was built was that it was needed to cover dry year risk. One of the characteristics of New Zealand’s electricity system is our reliance on hydroelectricity. It is a wonderful resource that we are lucky to have but in a dry year when the amount of water stored in the lakes is less we have an additional need for generating capacity. The market did not deliver that dry year security of supply so the Government intervened by building the Whirinaki facility to cover that dry year risk. 
Criticisms are made of that Whirinaki facility. Some say it would be better sited elsewhere. Those criticisms are made with the benefit of firstly hindsight and secondly— 
Hon Dr Nick Smith 
: Why didn’t you put it in the right place the first time? 
Hon DAVID PARKER 
: At the time the reason why it was set up at Whirinaki was that it needed to be done urgently and Whirinaki was a consented site. Therefore the facility was sited at Whirinaki. The reason why it needed to be set up urgently was that the imperfections of the market model which Dr Nick Smith voted in favour of—Mr Bradford’s reforms—left us with dry year risk that was not properly accounted for. 
Turning to climate change more generally this last week we have seen a re-estimation of the balance of the Kyoto obligations of the Crown during the first commitment period which runs from 2008 to 2012. Last year we had great hoopla from the National Party when it made great mileage out of the fact that New Zealand’s projected deficit during the first commitment period had increased to 68 million tonnes. It has now been reduced to about 41 million tonnes and I think that that is good news. 
A party vote was called for on the question  
That Vote Climate Change and Energy Efficiency be agreed to 
. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 6 
Green Party 6. 
Vote Climate Change and Energy Efficiency agreed to. 
Vote Energy 
PHIL HEATLEY (National—Whangarei) 
: 
 I was intrigued by the Minister’s explanation today to the House of Representatives—and I guess to those in the country who are enthusiastic enough to listen in to it—as to why power prices for every home commercial enterprise and industry in New Zealand have skyrocketed over recent years. I was involved in the 1999 election campaign 7 years ago—the Government having been in office for 7 years now. Labour said then that it would effect a change to power prices—that it would stabilise power prices and bring them under control for New Zealand voters. All we have seen in that time is a 40 percent increase on average across the country in power prices for residences throughout New Zealand. Labour has been in Government for 7 years and that is what we have seen. 
I was intrigued by the Minister’s answer to a question today in which he said that the reason why power prices have skyrocketed under Labour over the last 7 years is the cheap cost of Maui gas prior to that and the rundown of Maui gas in recent times with cheap gas becoming more and more scarce. He said that for that reason power companies are starting to build other facilities that are cost-effective and cost-competitive in their use of resources whether they are burning coal or oil or whether they are into hydro or wind generation and that electricity is being generated at a much higher cost than before. In other words he conceded that one of the solutions to keeping power prices low is to find a replacement for Maui gas—to discover other massive gas reserves which we know exist around this country. 
I ask the Minister why he has allowed the Associate Minister of Energy Harry Duynhoven to oversee a bleak rundown of exploration enthusiasm around the country. The block offers—the offers put up off the coast of Northland in recent months—have not been taken up by exploration companies. Around Taranaki and the East Coast of the North Island block offers have not been taken up in recent months by exploration companies. I know that Trevor Mallard said in the House that that was because of tornadoes or hurricanes off the coast of America. That is funny because an awful lot of exploration by rigs seems to take place everywhere else in the world regardless of tornadoes and hurricanes off America while no exploration is done in New Zealand. So that cannot be the reason. I will tell members what the reason is. Here is a headline from the  
Independent 
: “Govt drags its feet on oil exploration”. Bryan Gundersen a partner at Kensington Swan stated that overseas investors “highlighted barriers to investment” in oil exploration and gas exploration in New Zealand. Another headline from the  
Independent 
 is: “Explorers’ begging bowl goes unfilled”. 
No enthusiasm exists for exploration in New Zealand for two simple reasons. Firstly the Government’s regime of taxation and royalties is such a burden to investors that they are not bothering to invest here. Secondly the Government has clamped down on work programmes for exploration companies so much that they cannot meet the goals the Government sets. The hurdles are just too tough; the bureaucracy is too stern. The exploration companies are being ground under the heels of bureaucrats. That is why exploration companies across the world and even in this country will not take up the challenge of finding more cheap gas under our territorial seas which would help to keep electricity prices under control. The Minister will stand up and brag about a whole lot of block offers that have been taken up recently but he will exaggerate the truth. The number of block offers put up compared with those that have actually been taken up is absolutely appalling. We have seen a rundown in exploration enthusiasm in this country. 
Hon DAVID PARKER (Minister of Energy) 
: 
 Dealing with that last point there is no doubt that the overhang of the price controls on Maui Gas suppressed exploration for new oil and gas in New Zealand. That is why the very good work which the industry acknowledges widely of the Hon Pete Hodgson as the then Minister was so important to get through the impasse so that companies would start exploring for more gas—and they are. Indeed already this year we have seen announcements of increases in gas reserves as a consequence of those initiatives. 
It is true also that fossil fuel prices around the world have close to doubled. We have seen that at the petrol pump. We have seen also the influence of rising prices in terms of the effect of the rise in gas prices on electricity. It is true also that we have problems in the electricity sector not the least of which are those caused by under-investment in the transmission part of the electricity sector where for many many years Transpower was stymied in its investment in new infrastructure by the rules imposed upon it by the previous National Government. That Government directed through a policy statement that Transpower not invest in upgrades to its grid notwithstanding increases in demand for electricity unless it had agreement from its consumers—effectively local lines companies and major generators. Those local lines companies and generators would not reach agreement with Transpower as to its being paid extra for the extra money it had to spend so Transpower did not spend that money. 
Again that problem was remedied by the Hon Pete Hodgson who caused a change in the rules to allow Transpower to charge for the extra investment it had to make in lines. As a consequence the diminishing expenditure on lines in the late 1990s which had dropped to as low as around $52 million in capital expenditure in 1998-99—and $63 million $61 million and $84 million in the following years—has now risen to over $300 million per annum as Transpower does some of the upgrading that is so overdue. 
In terms of other energy issues it is true that the country needs to use its energy more efficiently. In a prior call Dr Smith criticised the performance of the Government but he should acknowledge that it was not until the first National Energy Efficiency and Conservation Strategy was drafted that we actually had a meaningful strategy to pursue. It is true that pursuit of the strategy has not been perfect and that the Government thinks better can be done. That is why the Government has called for the National Energy Efficiency and Conservation Strategy to be recast with sectoral targets that it anticipates will lead to more efficiency within each sector by better identifying who is responsible for achieving those targets. 
It is true also that some of the other measures the Government has in place in climate change policy have brought forward renewable energy. Indeed one of the great successes of the Hon Pete Hodgson when he had responsibility for climate change and energy issues was to bring forward the development of wind power. Had the Projects to Reduce Emissions programme not been in place it is likely that much of the wind power development that we now see already being brought to the market and also being planned to be brought to the market in the next 2 to 3 years would not have occurred. 
As a consequence of Mr Hodgson’s lead in those areas the Government through the projects to reduce emission has quantified New Zealand’s wind resource. We have proven that it is probably the best wind power generation resource in the world. We have brought it to market in probably the most cost-effective manner in the world and now wind competes at the margin for new generation in a way that would not otherwise have occurred. As a consequence as we build more generating capacity in New Zealand—and more generating capacity is necessary; we cannot rely completely on improved energy efficiency—it is likely that a very significant proportion of new generation in the next decade is likely to be wind generation. That is good because it takes pressure off our gas resources and it is good also because wind generation does not produce greenhouse gas emissions. Both of those outcomes are very desirable. 
It is true that for four main reasons energy policy is experiencing a rethink around the world. We have had a very fast rate of increase in fossil fuel prices. We have had energy security concerns as a consequence of civil unrest in places like Iraq and Nigeria and problems in Venezuela for example. We have also had the peak oil debate where people are concerned that the production of oil is peaking and that as a consequence of its peak it will become unavailable. My own view is that that is not realistic. I do not think we are facing a future shortage of oil but what is true is that we have seen a peak of cheap oil. There are large additional reservoirs of oil in oil shales and deeper wells and there is also coal to liquids technology. But each of those technologies and sources is considerably more expensive than the traditional sources of oil that the world has had over the last decade or two. So I say that we have had peak cheap oil. 
As a consequence of those factors plus the fourth concern about the effects of greenhouse gasses on the atmosphere—or the ability of the atmosphere to absorb greenhouse gasses without the world warming—we have heightened concern around the world about energy policy. That is why this Government is grappling with those issues through our climate change policy settings and in particular through the New Zealand Energy Strategy through which New Zealanders will have an ability to submit on what they think should be the future direction of New Zealand’s energy sector. I think we will see an increased emphasis on renewables and increased emphasis on energy efficiency so that in the future we will have an energy system that is not as insecure as reliant on imported fossil fuels; nor as exposed to those energy security and price vulnerability issues that exist for imported fossil fuels. 
A party vote was called for on the question  
That Vote Energy be agreed to. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 6 
Green Party 6. 
Vote Energy agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The time allocated to the consideration of the estimates referred to in the Appropriation (2006/07 Estimates) Bill has expired. I shall now put as one question the remaining votes and provisions of the bill. 
The question was put that Vote Lands Vote Customs Vote Youth Development Vote Statistics Vote Consumer Affairs Vote National Archives Vote National Library Vote Community and Voluntary Sector Vote Foreign Affairs and Trade Vote Official Development Assistance Vote Racing Vote Revenue the preamble clauses 1 to 14 and schedules 1 to 7 be agreed to. 
A party vote was called for on the question  
That the votes the preamble clauses 1 to 14 and schedules 1 to 7 be agreed to. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 6 
Green Party 6. 
Votes preamble clauses 1 to 14 and schedules 1 to 7 agreed to. 
House resumed. 
Bill reported without amendment. 
The CHAIRPERSON (Ann Hartley) 
: I move  
That the report be adopted. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 61 
New Zealand Labour 50; New Zealand First 7; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 6 
Green Party 6. 
Report adopted.